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Extended order


Extended order is an economics and sociology concept introduced by Friedrich Hayek in his book The Fatal Conceit. It is a description of what happens when a system embraces specialization and trade and "constitutes an information gathering process, able to call up, and put to use, widely dispersed information that no central planning agency, let alone any individual, could know as a whole, possess or control.” The result is an interconnected web where people can benefit from the actions and knowledge of those they don't know. This is possible and efficient because a proper legal framework replaces trust, which is only practical in small circles of people who know each other socially. The extended order is at the heart of Hayek's thesis, in The Fatal Conceit, where he argues that "our civilization depends, not only for its origin but also for its preservation, on what can be precisely described only as the extended order of human cooperation, an order more commonly, if somewhat misleading, known as capitalism.”

The extended order "is a framework of institutions – economic, legal, and moral – into which we fit ourselves by obeying certain rules of conduct that we never made, and which we have never understood in the sense of which we understand how the things that we manufacture function.” This "order resulted not from human design or intention but spontaneously: it arose from unintentionally conforming to certain traditional & largely moral practices, many of which men tend to dislike, whose significance they usually fail to understand, whose validity they cannot prove, and which have nonetheless fairly rapidly spread by means of an evolutionary selection – the comparative increase in population & wealth – of those groups that happened to follow them.”

The adoption of these practices, by these groups, “increased their access to valuable information of all sorts, & enabled them to be 'fruitful, and multiply, and replenish the earth, and subdue it' (Genesis 1:28). This process is perhaps the least appreciated facet of human evolution.”


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