The following is a guest submission by Steve Pemberton, a law student at the University of Oxford:

Jokes have rules. We’re all aware of certain rules about the topic and timing of jokes. If you don’t follow these rules, you’ll likely receive some negative feedback from your listeners and you certainly won’t be getting any laughs. But no single person wrote these rules; no one made you memorize them as a child. But they exist and almost everyone is aware of them. These rules emerged spontaneously.

Adam Smith loved to point out this curious aspect of human existence. In fact, he used it to illustrate that much of human life has effective rules emerge without a central planner. This exists not only in joke telling but also in other large scale systems such as language, morality, and economics. These are what James R. Otteson referred to as “unintended orders” in his recent webinar on the Scottish Enlightenment.

Otteson points out that the Scots at this time were developing an appreciation of markets and how micro motivations can have macro, orderly consequences. Smith in particular thought that these micro motivations were the source of both the order you find in morality and economics. But how do these micro motivations actually result in stable, ordered systems?

Smith starts with a simple premise that humans are self-interested, both economically and morally. As babies, we have no moral system and just engage in self indulgence. As we grow up, we encounter other children who have had the same upbringing. This is when we run into an abrupt reality that we are not the center of everyone’s life. For the first time, we realize that others judge us and can ignore our desires or just ignore us altogether.

Smith introduces a second premise at this point that humans need social bonds. Now we can see why functional, ordered moral, social, and economic systems emerge. If we are to fulfill this desire for bonds we’ll have to seek a harmony with other people. So we’ll compromise and cooperate with one another. This is largely a process of trial and error, but as time goes on people find customs and traditions of behavior that work well and those are transmitted through institutions like parents, friends, schools, churches, etc. So an overall order and regulation for behavior emerges, not from any individual’s design, but from a process of negotiation between individuals in society.

The unique thing about Smith’s account is that everyone plays the role of creator in these systems, but they are not exactly subjective systems. They are subjective in the sense that there is no particular reason that a society needs to develop a certain set of customs. This accounts for the diversity of the world’s cultures; there were different sets of negotiations that lead to different outcomes. But even though they are subjective from a broad perspective, they are objective to any individual. The rules cannot be changed single handedly. Only if you can convince others of a change and that change is replicated enough will the system be modified. This is how the macro systems stay stable; it takes time for changes to filter throughout a society. And these changes will only come about if others are convinced they should be replicated.

Overall, Smith’s account is reasonable. It derives from two premises many people would accept without too much quibbling. It reaches conclusions about macro systems that account for their emergence, evolution, and stability. And it explains society’s seemingly trivial rules about joking and laughing and their importance.

Otteson’s account of the Scottish Enlightenment and Adam Smith, in particular, helps explain the logical underpinnings of many of the ideas behind liberty. Maybe knowing these foundations can help us convince others that orderly and desirable systems can emerge naturally and that central planners that force change only corrupt these systems.