Editing Unintended consequences (section)

===Austrian School===
Unintended consequences are a common topic of study and commentary for the [[Austrian school of economics]] given its emphasis on [[methodological individualism]]. This is to such an extent that unexpected consequences can be considered as a distinctive part of Austrian tenets.<ref>{{harvnb|O'Driscoll Jr.|2004|p= 272}}: As Caldwell observes, "Menger's Principle of Economics is the founding document of the Austrian School of Economics, [...]" In it, Menger developed what became "fundamental Austrian tenets: the connection between time and error; the causal-genetic or compositive methodological approach; and the notion of unintended consequences".</ref>

====Carl Menger====
In "[[Principles of Economics (Menger book)|Principles of Economics]]", Austrian school founder [[Carl Menger]] (1840 - 1921) noted that the relationships that occur in the economy are so intricate that a change in the condition of a single [[Goods|good]] can have ramifications beyond that good. Menger wrote:

:{{Blockquote|If it is established that the existence of human needs capable of satisfaction is a prerequisite of goods-character [...] This principle is valid whether the goods can be placed in ''direct causal'' connection with the satisfaction of human needs, or derive their goods-character from a more or less indirect causal connection with the satisfaction of human needs. [...]<br/>Thus [[quinine]] would cease to be a good if the [[Malaria|diseases it serves to cure]] should disappear, since the only need with the satisfaction of which it is causally connected would no longer exist. But the disappearance of the usefulness of quinine would have the further consequence that a large part of the corresponding goods of higher order would also be deprived of their goods-character. The inhabitants of quinine-producing countries, who currently earn their livings by cutting and peeling [[cinchona]] trees, would suddenly find that not only their stocks of cinchona bark, but also, in consequence, their cinchona trees, the tools and appliances applicable only to the production of quinine, and above all the specialized labor services, by means of which they previously earned their livings, would at once lose their goods-character, since all these things would, under the changed circumstances, no longer have any causal relationship with the satisfaction of human needs.|Principles of Economics (Grundsätze der Volkswirtschaftslehre), 1871.<ref>{{harvnb|Menger|2007|pp= 64–65}}:</ref>|col2=|col3=}}

====Friedrich Hayek and Catallactics====
Economist and philosopher [[Friedrich Hayek]] (1899 – 1992) is another key figure in the Austrian School of Economics who is notable for his comments on unintended consequences.<ref>{{harvnb|O'Driscoll Jr.|2004|p= 279}}: [Hayek's] enduring contributions to the study of the unintended consequences of human action are among his most famous achievements. By elaborating that concept, Hayek developed a theory of institutions that spans economics and politics. A full appreciation of Hayek's ideas on unintended consequences would require an essay in its.</ref>

In "[[The Use of Knowledge in Society]]" (1945) Hayek argues that a centrally [[planned economy]] cannot reach the level of efficiency of the [[free market]] economy because the necessary (and pertinent) information for decision-making is not concentrated but dispersed among a vast number of agents.<ref>{{harvnb|Hayek|1996|}}:The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. [...] It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.</ref> Then, for Hayek, the price system in the free market allows the members of a society to anonymously coordinate for the most efficient use of resources, for example, in a situation of scarcity of a raw material, the price increase would coordinate the actions of an uncountable amount of individuals "in the right direction".<ref>{{harvnb|Hayek|1996|}}: The marvel is that in a case like that of a scarcity of one raw material, without an order being issued, without more than perhaps a handful of people knowing the cause, tens of thousands of people whose identity could not be ascertained by months of investigation, are made to use the material or its products more sparingly; i.e., they move in the right direction.</ref>

The development of this system of interactions would allow the progress of society,<ref>{{harvnb|Hayek|1996|}}:The price system is just one of those formations which man has learned to use (though he is still very far from having learned to make the best use of it) after he had stumbled upon it without understanding it. Through it not only a division of labor but also a coordinated utilization of resources based on an equally divided knowledge has become possible. [...] man has been able to develop that division of labor on which our civilization is based because he happened to stumble upon a method which made it possible.</ref> and individuals would carry it out without knowing all its implications, given the dispersion (or lack of concentration) of information.<ref>{{harvnb|Hayek|1996|}}:As Alfred Whitehead has said in another connection, "It is a profoundly erroneous truism, [...] that we should cultivate the habit of thinking what we are doing. The precise opposite is the case. Civilization advances by extending the number of important operations which we can perform without thinking about them." This is of profound significance in the social field. We make constant use of formulas, symbols, and rules whose meaning we do not understand and through the use of which we avail ourselves of the assistance of knowledge which individually we do not possess. We have developed these practices and institutions by building upon habits and institutions which have proved successful in their own sphere and which have in turn become the foundation of the civilization we have built up.</ref>

The implication of this is that the social order (which derives from social progress, which in turn derives from the economy),<ref>{{harvnb|Vernon|1979|p= 64}}: It turns out to be more difficult than may appear at first sight to define what it is that Hayek regards as the "order". Very frequently he refers to it as something "brought about" by multiple exchanges; it is something that "the market system leads to".</ref> would be result of a spontaneous cooperation and also an unintended consequence,<ref name=Vernon/> being born from a process of which no individual or group had all the information available or could know all possible outcomes.

In the Austrian school, this process of social adjustment that generates a social order in an unintendedly way is known as [[catallactics]].<ref>{{harvnb|Vernon|1979|pp= 63–64}}: No word seems quite right as a label for this category of unintended consequences [...] "Catallaxy" is the term which Hayek offers in place of "economy": the latter word, he argues, applies more properly to an organisation such as a business enterprise, and in applying it to the order which such enterprises compose we may be led to see it as a kind of large organisation, which it is not. It is an order spontaneously brought about by multiple transactions or exchanges (katallatein: "to exchange") among organisations. It is not a willed or designed or contrived thing, like an organisational hierarchy, but the unintended outcome of many independent decision.</ref>

For Hayek and the Austrian School, the number of individuals involved in the process of creating a social order defines the type of unintended consequence:<ref>{{harvnb|Vernon|1979|p= 64}}: whereas a spontaneous order rests upon decisions made locally by many actors whose aggregate knowledge is much greater than any single actor could have. Moreover, Hayek (unlike Popper) directs his objections not only against attempts to "organise" in a total or "utopian" way but also against more modest "interferences" with the order, which he alleges, always disrupt it. The role of legislation is only to provide a context of essentially general or abstract rules, rules not directed at particular ends nor imposed upon particular persons, which enable men to conduct their transactions in security. It follows necessarily that the general outcomes produced by the order are unintended. For it is no one's business to intend them</ref>

# If the process involves interactions and decision making of as many individuals (members of a society) as possible (thus gathering the greatest amount of knowledge dispersed among them), this process of "catallaxy" will lead to unexpected benefits (a social order and progress)
# On the other hand, attempts by individuals or limited groups (who lack all the necessary information) to achieve a new or better order, will end in unexpected drawbacks.