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Spontaneous economic order

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  • Yong Tao

    (Southwest University)

Abstract

This paper provides attempts to formalize Hayek’s notion of spontaneous order within the framework of an Arrow-Debreu economy. Our study shows that, if a competitive economy is sufficiently fair and free, a spontaneous economic order will emerge in long-run competitive equilibria so that social members spontaneously occupy an unplanned distribution of income. Despite this, the spontaneous order may degenerate in the form of economic crises whenever an equilibrium economy approaches the extreme competition. Remarkably, such a theoretical framework of spontaneous order provides a bridge linking Austrian economics and neoclassical economics, where a truth begins to emerge: “Freedom promotes technological progress”.

Suggested Citation

  • Yong Tao, 2016. "Spontaneous economic order," Journal of Evolutionary Economics, Springer, vol. 26(3), pages 467-500, July.
    • Handle: RePEc:spr:joevec:v:26:y:2016:i:3:d:10.1007_s00191-015-0432-6
    DOI: 10.1007/s00191-015-0432-6
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    Cited by:

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    4. Zhao, Guo, 2021. "Determining Capital Structure within Arbitrage-Based Production Framework," MPRA Paper 108492, University Library of Munich, Germany.
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    8. Tao, Yong & Wu, Xiangjun & Li, Changshuai, 2017. "Rawls' fairness, income distribution and alarming level of Gini coefficient," Economics Discussion Papers 2017-67, Kiel Institute for the World Economy (IfW Kiel).
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