The law of least effort

If it was Hayek who introduced us to the notion of spontaneous order — a brilliant intuition — it still took a bona fide scientist — Richard Feynman — to demonstrate that the law of least effort defines it precisely.  Under Hayek it is possible to imagine several spontaneous orders occurring alternatively (or even serially) within a system.  Under Feynman there is only one.

Economic systems always tend to those of least effort — if only governments would leave them well alone instead of constantly stealing for themselves by means of  inflation and money-printing.

2 thoughts on “The law of least effort

  1. Yes, indeed Keith – not to impute any kind of over-arching sentience to the market, but using sentience analogically here, prices are the result of billions of individual units of activity going on in the global market. Prices are, of course, dynamically in flux according to changes in supply and demand, but what all this amounts to is the fact that no politician, ideological group or economist knows the market better than the market knows itself. Consequently, top down management or interference from on high are always going to be inadequate to the task of the way markets themselves know the price signals in response to supply and demand activity. Prices are to markets as the path of least resistance is to the natural world.

  2. I agree. But also note that the Federal Reserve is a bit like a conglomerate of the largest commercial banks, and it does what it can to preserve and extend their profitability. All of the shares of the regional Federal Reserve banks are owned by private, for profit banks, with some non US based. The Regional Banks own shares in the Fed itself. Most people mistakenly think it is a government agency. Central Banks around the world are not all like this, although you can bet that big banks do all possible to influence them just the same.

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