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Thursday, June 30, 2005

Operating in an environment of markets rather than centralized bureaucracies

We are moving toward a greater role for markets in schools.

In a centrally planned and bureaucractically managed system, a common way of trying to influence what is done is to use the tools of rational analysis and hierarchical decision making to present plans or memos to authorities and thereby to get their approval.

In a decentralized market system, it is necessary to win an audience in part through marketing but more importantly by providing something that people value enough to choose it when other choices are available. It isn’t likely (but neither is it necessary or even desireable) that everyone choose what one offers.

Hayek wrote of the emergence of self-regulating structures in society via the natural selection of rules of action and perception. Most attention on social order has focused either on the role of human instincts or upon the role of conscious control, but Hayek focused on the role of cultural selection of systems of rules.  His belief seems to be that the unhampered natural selection of rival practices and traditions will result in a general convergence on liberal society.

Social order will allow for the achievement of human purposes only to the extent that it is itself purposeless. The demand that the domain of human exchange taken as a whole should be subject to purposive planning is therefore, the demand that social life be reconstructed in the character of a factory, an army, or a business corporation—in the character, in other words, of an authoritarian organization. When it is unhampered, the process of exchange between competitive firms itself yields a coordination of men’s activities more intricate and balanced than any that could be enforced (or even conceived) by a central planner.

The essential problem for education which arises from the application from Hayek’s views is that the application of market principles may limit the formation of the individual whose judgement, exercised in a multiplicity of choices, creates the market’s evolutionary drive towards perpetual improvement.

In general, devotees of Hayek haven’t answered a major difficulty with Hayek’s thought: if free markets have corrosive effects on the moral traditions which support them, so that capitalism institutions contain cultural contradictions which make them over the long run self-destroying, what is to be done? I think the answer is that socieities are free to destroy themselves and sometimes do. The only consistent way forward it through teaching. Leave people free to operate in markets, but teach the principles needed to prevent markets from turning destructive.

Posted by Michael L Umphrey on 06/30 at 10:40 PM
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