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Starting from Hayek’s distinction between spontaneous and man-made orders, we attempt to analyze the role of the entrepreneur in business organizations. The business firm shares important elements of both categories, thus we describe it as a hybrid order. We proceed to construct an account of the entrepreneur that is consistent both with the attributes of the firm that reflect its affinity with man-made organizations, as well as those that reflect its affinity with spontaneous orders. We highlight the concept of entrepreneurial leadership as the major factor for the existence of business organizations and we discuss why the actual mode in which entrepreneurial leadership is exercised has important implications for the development of the firm.

Purpose – To present the connection between modern network theory and Hayek's ideas on the brain and spontaneous orders.

Methodology/approach – To show that Hayek's ideas on the brain, spontaneous order, and why socialism cannot work are confirmed by network and self-organization theory, and to use network and self-organization theory to bridge Hayek's theory of the mind to his work on spontaneous orders.

Findings – Spontaneous orders are scale-free networks, but humans evolved a preference for hierarchical networks, which are typical of tribes and firms – and socialism. However, hierarchies only work for teleological organizations, not for ateleological spontaneous orders like economies. Part of the human preference for human-organized networks comes from our “intentional stance,” which automatically sees patterns as evidence of an organizer.

Research limitations/implications – This work acts as an introduction to possible directions in spontaneous order research. New work in bridging evolutionary and cognitive psychology (which includes Hayek's work) with self-organization and network theory acts as a promising development for neuro-Hayekians.

Social implications – Understanding there is an evolutionary bias for certain kinds of networks, even though those are not appropriate for certain kinds of social orders, and understanding the nature of these networks should help us understand the true relationships among individuals, organizations, and spontaneous orders.

Originality/value of chapter – This work brings Hayek “up to date,” with network theory and self-organization, showing to what extent Hayek was talking about these concepts. Seeing the similarities and differences between hierarchical and scale-free networks helps one understand how they come about, and in what contexts.

For current works, agents create social network by drawing on the knowledge of their immediate environment, and they use network for cooperating with one another and for promoting their own economic and social interests. The purpose of this paper is to aid in re-enchanting network study, and present network as spontaneous social construction.

The paper draws on Hayek's spontaneous order. For Hayek, agents have access to a wide knowledge about social system, and use this knowledge to spontaneously coordinate with each other in the pursuit of their self-interests.

The authors develop the idea by presenting and performing an analogy of Hayek's spontaneous order to emergent structures. The result of this analogy is a conception of network dynamics wherein the spontaneous social construction of network structures is achieved by agents who have knowledge of the interaction rules that guide structures production, and who, by drawing on this knowledge, are able to influence the emergence of network structures. Agents thus spontaneously contribute to the emergence of a network, to its growth, and its decline.

This new conception of network focusses on the processes of the social construction of network structures. It provides a better account of network change and development than current works, and because it stresses the spontaneous, fragile and ephemeral character of network, it can prove useful for the re-enchantment of network studies.

Over the past decade or two, the Hayek Studies industry has been in a period of significant growth. A whole variety of books about Hayek, both his life and his thought, have appeared, with each trying to differentiate its product sufficiently to make a mark on both scholarship and sales. Into this fairly crowded marketplace comes a volume edited by two political scientists, neither of whom is known for contributions to the Hayek literature. The volume grew out of a lecture series at Utah State University, and the group of scholars that they assembled is notable as well for not being a cast of the “usual Hayekian suspects,” nor exclusively economists. In fact, there is only one economist contributing to the volume, with a couple of philosophers and one historian, and the rest being political scientists. In addition, all the essays address the concept of “spontaneous order,” which is central to Hayek's intellectual framework. More specifically, each essay approaches that topic in light of its relationship to “liberalism” and “conservatism.” The result is a largely excellent set of papers that offer critical and constructive explorations of the idea of spontaneous order and its place in Hayek's thought and in understanding the social world.

The purpose of this paper is to investigate the impact of the emergence of the network society from the perspective of planned and spontaneous order.

Conceptual analysis based on extensive familiarization with literature.

The network society does not increase either planned or spontaneous ordering of economic activity, but their interplay.

The paper produces a number of research implications at global, industry, relationship and firms levels of analysis.

Businesses should craft practical strategies and policies on the assumption of constant change, build networking capabilities and be reactive to discontinuities in technologies and business models.

The paper is a unique multi‐level account of the impact of the network society on the type of economic ordering it creates.

This chapter explores the ways in which cybernetics influenced the works of F. A. Hayek from the late 1940s onward. It shows that the concept of negative feedback, borrowed from cybernetics, was central to Hayek’s attempt to explain the principle of the emergence of human purposive behavior. Next, the chapter discusses Hayek’s later uses of cybernetic ideas in his works on the spontaneous formation of social orders. Finally, Hayek’s view on the appropriate scope of the use of cybernetics is considered.

Purpose – To show that Hayek's cognitive theory sheds light on Hayek's institutional theory.

Methodology/Approach – Although F. A. Hayek contributed richly to many fields of economics – from capital theory to monetary theory, and from institutions to spontaneous order – one theme is omnipresent in his work: the knowledge problem. This paper examines Hayek's work in psychology, The Sensory Order, and argues that there exist strong parallels between Hayek's cognitive and institutional theories.

Findings – Hayek's institutional (or social) theory makes a lot more sense when understood as a necessary consequence of his cognitive theory. Furthermore, Hayek's cognitive theory allows for rational individuals making choices that are socially embedded.

Research limitations/implications – Three Hayekian themes are explored: (1) institutional implications of limited knowledge; (2) learning and knowledge generation; and (3) mental models. The paper then uses a challenge within Hayek – the tension between microlevel methodological individualism and macrolevel institutional evolution – as a starting point toward resolving the lingering individual-culture methodological puzzle in contemporary economics. These are mere starting points for further research.

Originality/value of paper – Horwitz (2000) writes that “Hayek's thought will have come to fruition when the social sciences abandon rationalist and constructivist explanations of social phenomena in favor of ones that recognize the roles of tacit and contextual knowledge, institutional evolution, and spontaneous order. Such an approach would dramatically improve our understanding of the human mind.” This paper offers a step in that direction.

The market is not the only spontaneous order. Hayek himself drew attention to language and English common law as other examples, noting that they had first been identified as such by Scottish Enlightenment philosophers such as Adam Smith and Adam Ferguson. Hence, such orders “are made with equal blindness to the future; and nations stumble upon establishments, which are indeed the results of human action, but not the execution of any human design” (Ferguson, 1782, sec. II). In the 20th century, Michael Polanyi used the term spontaneous order for the polycentric feedback system that explains the growth of scientific knowledge (Polanyi, 1962).

What I will call the generic theory basically affirms that there often exists a disparity between the intentions of the actors and the outcome of their actions that gives rise to side-effects that are neither expected nor predictable.⁴ Unintended consequences are “incongruent” consequences, because what is in place in this case is a disparity between an action's original purpose and its results (Ermolaeva & Ross, 2011). This occurs because whenever we carry out our intentions in a complex world, there will be countless side-effects that could only partly be foreseen; most of the outcome depends on a series of combined reactions of a largely random nature. In other words, the interplay of forces and circumstances are so numerous and complex that it is impossible to consider all possible outcomes in advance. We can therefore say that any action has immediate effects – to some extent intentional and predictable – along with remote side-effects that are not necessarily intended or predictable. By acting we (intentionally) bring about certain things, while (unintentionally) provoking other things.