Social order in society appears in many forms, scopes, structures, and dimensions (e.g., economic, social, political, legal, technological, and ecological). As a global community, we achieve social order through diverse societal processes, e.g., evolution, discovery, innovation, communication, exchange, trading, learning, migrating, conflict, peace, other artificial methods, and many other natural processes in Biology, Chemistry, and Physics. Therefore, social order is not a static event but a dynamic, ever-changing, complex system where individuals are constantly entangled. I will explain economic order from an economist’s perspective in this article.
- What is Social Order? Towards a definition of the Hobbesian Problem of Society
- Economic Order as a Dimension of Social Order in Society
- Market Failure versus Government Failure
- Politics, Economics, and Social Order
- Global Dynamics of Social Order
- Further Reading on Social Order
What is Social Order? Towards a definition of the Hobbesian Problem of Society
Defining social order demands deep research in the human understanding of the different schools of scientific thought about the Hobbesian problem of society. How and why does order exist, the Philosopher Thomas Hobbes asked himself. Philosophers, anthropologists, psychologists, sociologists, economists, and political experts have invested tremendous human capital resources to discover a comprehensive definition of social order. From an economic perspective, we might expect social order to capture both equilibria of state of affairs and the dynamic stability of human interactions within heterogeneous social environments. The social settings where humanity forms social order depend on the characteristics of dimensions of social order (e.g., economic, social, political, legal, technological, and ecological) and the human interaction with them.
When jurisdictions set a political and legal system by codifying the rule of law through legislation, the justice system, or executive power, they form a political and legal framework of social interaction as two dimensions of social order or subsystems. From that, they derive all forms of social disorders that the social system in a jurisdiction calls illegalities. Similarly, we can observe that some form of social order forms other social subsystems such as education, health, political, economic, ecological, and technological systems. If a legal system can save a man’s life from the threat (anarchy) of invaders, does the law of the jungle deliver the same for the conflict between the omnivorous and the carnivorous beings in a jungle? Is the world not a wilderness of things, states of affairs, and dynamics?
In short, social order is a collective of coexisting human subsystems of human interactions, either intentionally or randomly designed to shape the stable coexistence of humans in a world full of uncertainty. In the totality of social order, the Homo Oeconomicus and Homo Politicus identify the Homo Sociologicus they incorporate. Are there other dimensions of the Homo Sapiens that research has not integrated into the theory of social order, e.g., the technological, ecological, and psychological dimensions of society? No single science can claim the sole ownership of defining social order because everything that is forgone, existing, and is yet to come establishes the order that existed, currently lives, and is yet to come into existence.
Economic Order as a Dimension of Social Order in Society
When economists discuss economic order (see what economics is) as a social order dimension, they usually examine the controversy between a market order and a government order. No matter where you live, you are globally entangled in shaping the social order through different channels of markets, social networks, and governments. For instance, the election circles in the United States of America (USA) keep the people in a never-ending loop of political evolution. Obama’s politics weren’t Carter’s, Bush senior’s, Bush junior’s, Clinton’s, Trump’s, or Biden’s. Politics, culture, technology, legal framework, ecological framework, and economics can be viewed as dimensions of social order.
Philosophers such as David Hume explored the role of uncertainty, morals, behavior, and politics in society, which are part and parcel of the dimensions of social order:
- “Treatise on Human Nature” (1739)
- “An Enquiry Concerning Human Understanding” (1748, 1777)
- “An Enquiry Concerning The Principles of Morals” (1751,1777)
Others, such as Adam Smith, introduced famous metaphors like “the invisible hand of markets” in “The Wealth of Nations” (1776), which became the foundation of classical and neoclassical theories explaining the role of self-interest in society anchored in the basics of economics as part of social sciences.
Social Interaction forms Social Order within Social Networks
Social order exists as much as people (individuals) must engage in different forms of social interactions within social networks and must therefore be integrated into modern economic theory, as Gary S. Becker explains in “A Theory of Social Interaction” (1974). Becker’s Model of social interaction has helped modern economists analyze the “share economy” in the era of digitalization by constructing a framework that allows economists to explore decision-making in social networks, e.g., money transfer networks in Africa using the MPESA System in Kenya (Safaricom).
Social interactions in the digital world have formed various forms of social order within digital social networks. To understand the role of self-interest, altruism, hate, envy, and other behavioral responses within social media, economists cannot afford to ignore Becker’s extensions of the Homo Oeconomicus to include social interaction and preferences for characteristics. Individuals do not just consume commodities but also the features associated with the social interactions they are involved in satisfying their needs.
Digital social order is in disorder
Digital social order is in disorder because social sciences and informatics have focused on islands of knowledge and stereotyping. On the other hand, artificial intelligence poses a danger to human interaction on social media (Twitter, Facebook, TikTok, Signal, etc.), where trolls are standard weapons used to destroy freedom of speech and create social disorder.
Politicians still need to find a consensus on where the legality of behavior on digital platforms ends and illegalities begin. How much social disorder can a peaceful society withstand? In Becker’s article “Crime and Punishment: An Economic Approach,” (1968) you might find some insights on how to model legal and illegal behavior and explain the optimal allocation of crime in society.
Market Order and the Price Mechanism of Coordination
Probably, a liberal economist will plead for the importance of some liberal economic order in society that respects the ability of market order to efficiently allocate resources between suppliers and the demand side of the market using the price mechanism. A market economy seeks to allocate resources, goods, and services via free will (using contracts) to engage in exchange. Other economists will plead that an unregulated market order goes rogue, that it neither accounts for externalities nor protects the rights of all parties at all times, and that there is a need for resolving market failure.
Would the United States of America accept another form of economic order other than the market economy? During Obama’s presidency, the republican party opposed the democratic party’s Obamacare health policy, terming it a socialist approach and contrary to the American dream in their Tea Party Movement. Years after Obama’s jokes about “imagining Donald Trump in the Whitehouse” turned into reality, Obama peacefully handed executive powers to Donald Trump. Four years later, the USA found itself at a depth of a constitutional crisis due to the January 6th storming of the Capitol in Trump’s quest to forcefully stay in power after losing the reelection bid to Joe Biden. Trump’s presidency has reinforced a culture of “alternative facts” or fake news in the USA and globally, where logic never counts. Still, the personal ideology about factual knowledge is above facts, e.g., if a person is ideologically convinced that the sky is green and the grass is blue, he will ignore visible facts.
Government Order as a Collective Order
Opposers of markets will suggest that the people of a jurisdiction create a collective order called the government that protects people from anarchy. And that the people grant the government some coercive powers, as a protector of the universal rights of its citizens, as a resolver of any form of market failure, as a guarantor of the functionality of complete and competitive markets, and as a monopolist of public interest through some legitimization process of the government’s executive, judicial, and legislative powers, e.g., autocracy, democracy, monarchy, a religious state, a police state or military state, unitary state or federal state.
Would China accept another economic order other than internal communism and external market order?
Market Failure versus Government Failure
Now, the liberal economist would, in turn, blame the collective order or government for occasional failure to allocate resources to the general public efficiently (e.g., public goods, ecological sustainability. On the other side of the aisle, less liberal economists would argue that market failure paves the way for government interventions in society to maximize the social welfare of its jurisdiction. The government uses tools such as taxation, social security, monetary, fiscal, legalization, prohibition policies, etc. In general, there are two broad streams of economic logic, those who prefer the markets as a coordinator of social order pinpoint government failure. In contrast, those who favor the government as a coordinator of social order will argue that there is market failure. Given all the above, how can we describe an optimal social order?
Neither the market nor government order exists in one subform. Still, there are many alternative subforms of markets and governments. Governments operate hierarchically and are either autocratic, democratic, or monarchistic. Places of exchange use the price mechanism and are, on the one side, either complete or incomplete markets, and on the other side, monopoly, oligopolistic, or competitive markets. Symbolically, if all social problems were nails, we might always use the hammer to resolve societal issues. That would instead be naive to use the same tool to solve all societal problems.
Whether taxation as a government coordination tool can resolve an intended imbalance of wealth and income allocation through market activities depends on the collective interests of the citizens and their political abilities to attain representation in government policy. Another analogy is the question about the central bank‘s monopoly on monetary policy and why the government’s fiscal arm should have sole power over the fiscal policy. Why should the central bank and the government’s budgetary arm operate independently? Answering such a question demands revisiting a wide range of interdisciplinary literature on social order.
Politics, Economics, and Social Order
Politics is a dimension of order in society with a long history of transforming how people politicize their interests. Such a study about social order should take an interdisciplinary approach to be as objective as possible and not dwell on the islands of theory but build bridges of knowledge. Sociology, anthropology, history, psychology, natural sciences, and many other sciences can contribute to a realistic view of how economic order in markets and governments evolves and coexist on human development timelines and different social environments.
Global Dynamics of Social Order
The world is not static but dynamic and constantly changing, influencing the evolution of the market order and the government order globally. (Persian, Roman, British, Chinese) Empires and Kingdoms have come and disappeared, while some turned into republics. Even republics have in the past emerged and disappeared again. The same happens to subforms of markets. So what are the drivers of change in the market order and the government order in society?