A reader asked me to revisit the metaphor I used in my article, 'Spontaneous Order?', likening spontaneous order in the economy to the human body. The metaphor can illustrate how complex systems, like the economy, can function efficiently without central direction. Comparing the human body to the economy reveals striking parallels between biological and economic processes. Both demonstrate the power of decentralized, self-organizing systems to function without the need for central control. The human body is a marvel of complexity, with trillions of cells, most of them not even human, working in harmony without any central planner. You may be thinking that the brain is the central planner, but that's true only to a minimal degree. Each cell performs its specific function without consulting the brain, responding to local signals and environmental cues. Of course, since most of the cells in your body are non-human—they are beyond the control of the brain entirely. Yet collectively, they create a functioning organism. The body's cells have specialized roles; the brain, liver, skin, and muscle cells are built differently and have unique functions. In addition, bacteria, viruses, fungi, and archaea, or the "microbiome," play crucial roles in digestion, immune system regulation, and vitamin production. Similarly, economic actors in a free market specialize in their areas of expertise, whether plumbing, finance, purchasing goods, or selling homes. In the body, neurons transmit signals, red blood cells transport oxygen, and white blood cells defend against pathogens. Similarly, in an economy, individuals and firms specialize in producing goods and services based on their skills and resources. Hormones in the body act as chemical messengers, transmitting information from one place in the body to another to coordinate bodily functions. This intraorganism communication is analogous to the price system in a free market economy. Prices serve as signals, conveying information about scarcity, demand, and value across the economic system as a whole. When these signals are artificially tampered with by outside agents, government, unions, or boycotts, they trigger unintended consequences analogous to injecting hormones into the body that can cause cancer or other serious side effects. Like the human body, the economy exhibits remarkable coordination without centralized control. While the market economy results from human action, it does not result from human planning. Similarly, the human body results from cellular action, but it does not result from cellular planning. In both the body and the economy, decision-making is decentralized. Cells respond to local conditions and signals, much like individuals and firms in a market economy make decisions based on local knowledge and price information. When you go to the store, no central authority tells you what to buy or how much to pay, and you don't base your purchasing decisions upon your perception of the international economy. Both the economy and the body demonstrate remarkable adaptability. The human body can heal wounds, fight off infections, and adjust to changing environmental conditions without taking orders from the brain. Similarly, a free market economy can adapt to shocks, shortages, and changing consumer preferences without central planning. Both the human body and the economy exhibit emergent properties—characteristics that arise from the interactions of their components but are not predictable from studying the components in isolation. The actions various cells take when you cut your finger are not discernable by examining the cells' construction. Consciousness emerges from the complex interactions of neurons in the brain, a property not inherent in any single neuron. Similarly, economic growth and innovation emerge from the myriad interactions of economic actors, not from any single individual or firm's actions. Complex patterns and behaviors arise from simple interactions between individual components. The human body maintains homeostasis through various feedback mechanisms. Your pancreas releases insulin to regulate blood sugar levels in much the same way as a market economy's; the price mechanism acts as a self-regulating force, adjusting supply and demand without external intervention. In both systems, spontaneous order emerges through decentralized decision-making, with individuals or components of the system making local decisions based on their immediate environment and knowledge, allowing the system to evolve in response to changing conditions and feedback. Once we view the economy through the lens of spontaneous order, we immediately discover significant implications for economic policy. Excessive intervention in the body's natural processes via drugs, alcohol, and high-stress levels can do serious harm even if well-intentioned. Similarly, heavy-handed economic policies frequently interfere with the market's self-organizing capabilities. Furthermore, we recognize that just as the body needs an environment that supports the body's needs, the economy requires a government that maintains the rule of law and protects property and investment. Spontaneous order is a complex process that no one can fully understand or predict. This level of complexity implies that policymakers must exercise extreme caution when tinkering with actions that may affect the economy unpredictably. The metaphor equating the human body and the economy as complex systems powered by spontaneous order provides a powerful way to understand the economy. It illustrates the fantastic ability of complex systems to self-organize and adapt and to develop mechanisms to maintain stability and functionality without centralized control. This perspective encourages a more nuanced approach to economic policy that respects market systems' inherent complexity and emergent properties. However, it's important to point out that while this metaphor is helpful, it's not perfect. With its human actors who, unlike cells in the body, have thoughts and feelings, social institutions, and ethical considerations, the economy is ultimately more complex than even the most sophisticated biological system. Imperfection notwithstanding, the principles of spontaneous order, as seen in the human body, offer valuable insights that can help nurture economic environments that promote innovation, adaptability, and sustainable growth without imposing unnecessary and often destructive central controls. Once we recognize and understand spontaneous order in non-economic systems, we can leverage our knowledge to achieve more efficient, adaptive, and resilient economic outcomes than is possible through centralized planning or control.

If you found this article stimulating, please share it with other folks who might enjoy it. And please share your thoughts below. Dr. Cardell would love to hear from you.