Progress can’t be planned, it evolves

James Peron, president of the Moorfield Storey Institute and author of several books, including Exploding Population Myths and The Liberal Tide, is a contributing author for the Free Market Foundation.James Peron, president of the Moorfield Storey Institute and author of several books, including Exploding Population Myths and The Liberal Tide, is a contributing author for the Free Market Foundation.

One of the more important thinkers in the realm of market liberalism was Nobel Laureate Friedrich Hayek. He made some important remarks about the working of markets that should be more widely discussed.

He said, “What a free society offers to the individual is much more than what he would be able to do if only he were free." He also observed, “Civilization rests on the fact that we all benefit from knowledge which we do not possess."

Both emphasize different aspects of how liberal social orders work.

The talent, knowledge and rights of others make all of us better off. It isn’t just about you or me but markets are a system of voluntary interactions that encompass all of us. I think there is a juvenile version of liberalism and a mature version.

Infants are notorious for being very possessive. It’s all about what they want and only what they want with little thought for others.

Soon the child must become an adult, which meant they had to learn how to interact with others. They must give others the same rights and respect they claim for themselves. It goes from “me” oriented to “us” oriented.

But the “us” in question is not some forced collective as is found in dictatorships such as China, North Korea or Russia. It is a web of voluntary interactions between consenting individuals where each, in acting to improve their own well-being also improves the well-being of others. As long as the interactions are freely chosen and not coerced each transaction must benefit everyone involved or it won’t happen.

This is what Hayek meant. That others know how to do things I don’t know how to do means I benefit from their existence provided our interactions are consenting. So I hire the electrician to do what I can’t. He buys food ultimately from farmers though he isn’t a farmer himself. Each of are free to interact and by so doing we each improve our own lives but not at the expense of others, but to their benefit as well.

The thing about free markets is we have no idea where the beneficial ideas will come from. Progress can’t be centrally planned, but is spontaneous. Progress isn’t designed, it evolves. This means we have no idea what the next great idea will be, or where it will come from. Others innovate and seek their own profit by doing so make the rest of us better off.

We can’t know for sure how others will use their freedom and knowledge. Trying to pick the “winners” is open to political corruption and it can’t be done.

Hamdi Ulukaya is a Turkish Kurd and Turkey has frequently slaughtered and persecuted the Kurds, though they have repeatedly denied their own crimes. Ulukaya fled Turkey because of the oppression of the government. He was one of seven children raised by small dairy farmers who made their own cheese and yogurt. At age 22 he moved to the United States to study English and Business. His father suggested he import family-made cheese to sell and it proved popular. Soon Ulukaya opened a small factor to produce cheese which took two years to break even.

He discovered an unused yogurt plant had closed and laid off all its workers. He negotiated to buy it and then sought out used equipment he could afford. He reopened the factory and rehired many of the unemployed workers. In a few years he was worth billions and employing thousands of people with higher wages than his competitors.

No central planner would have given him the freedom to use his knowledge and experience with cheese and yogurt. He was just a college student when he started and now he benefits millions of customers, thousands of employees and donates generously to charity.

Yet there are short-sighted wannabe-planners who would have denied a Kurdish refugee the right to come to the United States.

In Scotland Frasier Doherty was just a 14-year-old kid when he started using his grandmother’s recipe to make jams he sold to neighbors. In a few years time he was a millionaire, gave people jobs, started new companies and actively funded various charitable efforts.

No politician would ever have picked a young teenage boy to do this, but in a free society they couldn’t stop him and he did what others would have thought impossible.

Nelson Mandela said, “To be free is not merely to cast off one’s chains, but to live in a way that respects and enhances the freedom of others. ” That fits well with what Hayek wrote. To enhance the freedom of others doesn’t just make them better off, it makes all of us better off, and the best way to do this is through the freedom of the market and respect for individual rights.