The origins and the development of markets – spontaneous order versus state control
Institutions such as the European Union and various national governments are convinced that they are considered the only players who are actually able to create the basic framework for the functioning of markets. They claim that without their ordering hand and their targeted measures, people would not be able to cooperatecivilized and would instead be faced with a kind of social relapse or even barbarism. It is often overlooked that markets existed in a natural, spontaneous way long before state structures emerged and before the development of modern bureaucracies. Markets emerged and worked for millennia without central stateorganizations like today existed. The more precisely one deals with the economic history, the clearer how misleading the assumption is that the development of a fully organized state is inevitably the culmination or the crowning glory of early cultural developments.
Markets as a result of spontaneous order – a look into the past
Historical reality shows a different picture than is suggested in many modern narratives. The importance of the state is overrated in most of the accounts, not least because our knowledge of the impact of state-organized activities is much more comprehensively documented than knowledge about the results of spontaneous, uncoordinated cooperationindividuals. But markets have been present since the beginning of human civilization – their origin and functioning are not based on political requirements, but on the natural need of people to achieve advantages for everyone involved through exchange and cooperation.
The self-image of modern institutions and their view of markets
A vivid example of this is the agora in ancient Athens. This served as a living symbol for the marketplace and was in clear contrast to the political power center of the Acropolis. The thriving maritime trade in the Mediterranean region of antiquity also developed without central control by a state; Traders and seafarers independently and together created the basics for theexchange of goods and ideas. In the Middle Ages and early modern times, the Hanseatic League created a widely ramified network of merchants based on their own legal habits and mutual trust, rather than on the laws and specifications of a modern state. The Hanseatic League was characterized by Low German legal customs and coordinated trade over great distances, although it wasthere was not yet a state in the present sense with a comprehensive territorial monopoly on the use of force.
Spontaneous markets in everyday life and in the present
Even today, spontaneous markets can be observed in many areas, regardless of state planning or control. In schoolyards and playgrounds, children start by themselves exchanging collectibles, toys or other small items. A market is created that is based on voluntary exchange and mutual advantage – without any outside intervention. in thesimilar developments can be observed in the digital age: Bitcoin exchanges and digital marketplaces, for example, are becoming increasingly important on the Internet, on which users can act independently and independently. The pursuit of the improvement of one’s own situation through exchange and cooperation is deeply rooted in the human being and forms the basis for markets toSpontaneously arise – without politicians or bureaucrats having to intervene or make specifications.
The role of governments and the myth of market creation
The idea that governments and political institutions are the real creators of markets does not stand up to a closer look. Often the role of governments is to eliminate trade barriers such as customs, price controls or other regulations that they previously established themselves. Then they praise the cancellation of these restrictions asGreat achievement, although basically they only restore the original state in which everyone can do business and act at their own discretion. The existence of trade agreements negotiated by government representatives and industry lobbyists raises the question of whether it is really about promoting a free exchange or rather about certainto provide interest groups and to secure or expand their position on the market. If governments were actually interested in real free trade, they would have to do nothing more than take the existing hurdles to their citizens and companies to prevent them from voluntary, cross-border treaties.
Complexity of markets and limits of government control
Markets are not created on the drawing board of political planners, but as an expression of spontaneous order, which is based on countless individual actions and decisions. There are fundamental differences between complicated and complex systems. The manufacture and operation of a technically mature device such as a laser robot are complicated processes: If a button is pressed, it followsA precisely predictable reaction, provided everything is correctly designed and assembled. In such systems, no unknown interactions occur as long as the planning is right. Societies and economies, on the other hand, are not complicated, but complex. Their structures are not created by central planning, but by the interaction of many decentralized players, whoseknowledge, experiences and goals are very different.
The larger and more diverse a social unit is, the more complex
In complex systems, there are numerous, often unpredictable interactions. The larger and more diverse a social unit is, the more complex the structures become and the more knowledge exists, which is also present decentralized and distributed. The key difference between complicated and complex systems is that in a complicated system the resultknown and planned for an action, while in a complex system the result can never be predicted with certainty because knowledge and information can never be captured or controlled centrally. The more knowledge is distributed in a society, the more difficult and ultimately impossible it becomes to control all processes centrally.
The power of spontaneity and the limits of central planning
Markets are a living example of the power of spontaneous order, which results from the pursuit of mutual benefit and voluntary cooperation. They are by no means products of political planning or government control, but arise where people want to exchange their needs and skills. Historical and current examples repeatedly show that marketsGrow independently, adapt and develop as long as they are not hindered by external restrictions. The idea that they could be created or controlled through central planning hides the complexity of human societies and the decentrality of knowledge. Ultimately, the strength of markets lies precisely in their ability to spontaneously adapt and develop,which eludes any central control.
