Local Knowledge and the Incredible Bread Machine in the History of Economic Thought

After being recently fooled by a GMU student, I am going to be cautious with the next one… It happens that Diana Weinert, another GMU student, has an interesting research project on spontaneous order and local knowledge heuristics. She is seeking feedback and comments from anyone interested in the subject. Here is her letter:

Dear The Austrian Economists readers,

I am an economics Ph.D. student at George Mason University, working with Professor Daniel Klein. We are pursuing a research project and are trying to compile history of economic thought instances of “the incredible bread machine.” We take that term “the incredible bread machine” from the title of R.W. Grant’s little book about the vast spontaneous order of millions of activities that make your bread. 

Adam Smith used the example of a woolen coat. Leonard Read used the example of a pencil. A description beginning with a concrete article such as bread has been used to awaken awareness of our immersion in and dependence on spontaneous order and the local knowledge of the individual. These passages work as a heuristic to edify readers in the workings and miraculous element of spontaneous order.

We are looking to compile any and all history of economic thought instances of explicating spontaneous order by reference to a concrete everyday good and the vast concatenation of local knowledge flowing into its creation.

We are also interested in your opinion on why this heuristic device has been so recurrent and effective in explanations of spontaneous order.

To be honest, we are not quite sure what we aim to say about the recurrence of this heuristic. We are not sure why it is significant. But we sense that it is. If you have any suggestions about what we might say about the compilation of incredible bread machine teachings, we will be very grateful.

In addition to “I, Pencil” examples, we are interested in notable pre-Hayek presentations or invocations of local-knowledge/disjoint-knowledge arguments for economic freedom (e.g., as found in Samuel Bailey and Jeremy Bentham, listed below).

You can find the instances we have compiled so far here: Download instances_of_spontaneous_order_diana_weinert.pdf. Please reply in the comments part at the bottom or send me an email (dweinert@gmu.edu) if you are aware of any other examples of the usage of such heuristic devices, if possible with a reference.

Thank you very much!

Diana Weinert

PS: And thank you to Pete Boettke and Fred Sautet for letting us post this on their Blog!

Comments

[Rafe Champion]

Nice work Diana! But what about thanking Chris Coyne and Peter Leeson as well:)

PS Don't tell anyone, but I like to think of it as my blog as well.

[Emily Schaeffer]

Bernard Mandeville's example of the making of a piece of crimson cloth - The Fable of the Bees. Many see this example as the inspiration for Adam Smith (Hayek does, Viner doesn't).

[Dan L]

I think St. Augustine used some references to local knowledge and free association in his tome "City of God." One quote I remember is (paraphrased): "The happiness of a city and the happiness of the individual spring from the same source, since a city is nothing else than a multitude of individuals in harmonious association."

[Rafe]

If we are looking at cooperative efforts to produce a product, at a rather different scale from the pencil and the cloth there are examples of motor cars that are put together with bits and pieces from several countries. Details elude me but they would be readily available.