Scientists say that the human brain is the most complex thing we know of in the whole world. A free market society may very well be the second most complex thing in the whole world. If this is so then maybe we can learn something about ourselves and about the free market by comparing the two.
According to Wikipedia “The human brain has been estimated to contain 50–100 billion neurons, of which about 10 billion are cortical pyramidal cells. These cells pass signals to each other via around 100 trillion synaptic connections."
The U.S. Census Bureau estimates the human population of the Earth reached six billion, seven hundred forty-nine million, four hundred seventy thousand, and eleven (6,749,470,011) on 12/25/2008. Despite its complexity scientists understand quite a lot about the brain. Its unimaginably complex operations are performed within an organic structure. Some parts of the brain tend to specialize in certain functions like motor control, spatial awareness, and language. Billions of individual brain cells pass trillions of signals between one another through a type of electrical and chemical transaction. Despite its complexity, economists understand quite a lot about the free market. Its unimaginably complex operations are performed within an organic structure. These structures include widely accepted rules of just conduct such as the freedom to speak and freedom to contract, property rights, prices, profits, and losses, the rule of law and limited government. Billions of individual human beings pass trillions of profit, price, and loss signals between one another through a type of transaction called buying and selling. With each passing moment the human brain organizes trillions of bits of information carried out by billions of individual cells. With each passing moment market economies organize trillions of bits of information carried out by billions of individual people. No one scientist, in fact all the scientists in the world cannot control a human brain. The mathematical complexity of continuously ordering trillions of transactions between billions of cells cannot be approximated even by the most powerful computers imaginable. But, somehow the brain carries out trillions of transactions every few seconds and barring an intervention of some sort, e.g. sickness, madness, drugs, or injury, the brain tends to survive and prosper by making the best use of the body’s limited resources. No one planner, in fact all the planners in the world cannot control even one market economy much less the economies of the entire world. The mathematic complexity of continuously ordering trillions of transactions between billions of people cannot be approximated even by the most powerful computers imaginable. Yet, somehow the individuals who make up the market carry out trillions of transactions every few seconds and barring an intervention of some sort, e.g. trade barriers, nationalization, price controls, etc. market economies survive and prosper by making the best use of the society’s limited resources.
So what is happening inside the human brain that makes the seemingly impossible ordering of unimaginable complexity into such a “no brainer?” Dr. Hermann Haken suggests that the brain is self-organizing. “The human brain is the most complex system we know in the world. . . . The central question is: who or what steers the numerous neurons so that they can produce macroscopic phenomena such as the coherent steering of muscles in locomotion, grasping, vision i.e. in particular pattern recognition, decision making etc.. An early proposal that the brain acts as a self-organizing system according to the laws revealed by synergetics was made by H. Haken in 1983. . . , A similar suggestion was made in the context of dissipative structures by Kugler, Kelso and Turvey (1980).”
And, what is going on inside free market economies that makes the seemingly impossible ordering of unimaginable complexity into such a “no brainer?” Economist Friedrich Hayek suggests that markets are self-organizing. “A spontaneous order is a system which has developed not through the central direction or patronage of one or a few individuals but through the unintended consequences of the decisions of myriad individuals each pursuing their own interests through voluntary exchange, cooperation, and trial and error. This process of spontaneous evolution is not restricted to explaining the growth of the economic order but can also account for the development of language, money, culture, law, social conventions and even morals and ethics.”
The human brain and the free market have some things in common. Both are unimaginably complex and both operate on the principle of spontaneous self-organization. The thoughts created by billions of individual cells in our brains, and the prosperity produced by billions of individuals in the free market are, as Adam Ferguson said, “the products of human action but not human design.”
Our conclusion: Complex systems, like human brains and free markets must be free to operate without undue intervention. Brains and markets cannot be managed by central plan. With that said, perhaps a lesson from nature is in order:
A centipede was happy quite,
Until a frog in fun
Said, "Pray, which leg comes after which?"
This raised her mind to such a pitch,
She lay distracted in the ditch,
Considering how to run. – Anonymous
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