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The Hole in the Contractarian Theory of the State

One of the ways of justifying the existence of the state, prevalent since the time of Hobbes, has been the idea of the social contract. In brief, as put forward by Hobbes in Leviathan, without a ruling authority, people in a "state of nature" will never be able to trust each other. Contracts signed will not be kept, laws agreed to will not be followed, and each person, fearing for his life, will, in his own self-interest, be prompted to initiate the infamous Hobbesian "war of all against all."

We can imagine that in the state of nature, you promise that if I give you five gold pieces, you'll give me your cow. But if I give you the cow, you now have the cow and the gold. Why shouldn't you just dash off, perhaps after running me through with your knife? Therefore, the contractarians conclude, we will never transact at all. We will either avoid each other or engage in violence. Without an agreed-upon enforcer of contracts, actors face a "Prisoner's Dilemma": each would prefer to be able to trade rather than not, but neither can trust the other to uphold his end of the deal, so no trade takes place.

Therefore, man makes a social contract he agrees to lay down his arms and surrender his sovereignty to a ruler, in other words, a state, provided everyone else will do the same. The ruler, in the meantime, agrees to keep the peace. Later thinkers, such as John Locke, amended and qualified Hobbes's idea by trying to further restrict the powers of the ruler. The US Constitution is an attempt to explicitly lay down the restrictions to which the ruler will be subject.

Sometimes anarchists attempt to reject the contractarian theory on the basis of the fact that no such contract was ever signed by all of the people in a society. While this is true and certainly weakens the theory, contractarians are aware of this fact. Their answer, while not as satisfactory as actually seeing the contract would be, is not unreasonable: True, they admit, no such contract was ever signed. But it can be shown that it is rational for each person to sign it today if presented to him. Therefore, there is no need to go through the brutal war of all against all just to prove this point. The state should exist, and it does exist, so there you have it.

There is, however, a much stronger argument available against contractarianism. One of the brilliant achievements of Anthony de Jasay, in works such as The State and Against Politics, is to point out a gigantic hole in the approach. People cannot trust each other's contracts without an enforcer, so the contractarians say, therefore they all agree to sign a contract with a universal enforcer, a state. But if they could not trust their contracts with each other, what makes them think they can trust their contract with the state? If I couldn't trust you not to steal my gold, how in the world can I trust this other fellow, the new king, especially since we've just equipped him with an army, a police force, and the ability to levy taxes? At least when it was just me against you, I stood a chance, but now I've got a whole army stealing my gold. What kind of a bargain is that?

Minarchists, who may recognize quite clearly the danger that their minimal state will not stick to its contractual limits and instead grow like Topsy, often propose vigilance as the answer. However, there is something contradictory about such a solution. The idea that the people can rise up and depose their subjugator implies that people could solve the problem of trusting each other without the state, for certainly the state will not enforce the contract people signed to overthrow it! In other words, minarchists hold that we need the state to solve the problems presented by not being able to trust each other when undertaking collective action. But then they tell us that, should the state get out of hand, we can collectively agree to overthrow it, and trust each other to adhere to that agreement. So, is there a problem with collective action or isn't there?

De Jasay goes further and suggests that the seemingly insurmountable problem presented by Hobbes is not really insurmountable after all. When looked at as a single-play prisoner's dilemma, things may seem hopeless. But human society does not work like that. There are very few people whom we interact with only once. De Jasay calls these "Transient Tourist" interactions, after someone who gets ripped off on an island he will only visit once in his life. The bulk of our interactions, and by far the bulk of our most important ones, are with people or organizations we will interact with repeatedly. In those cases, cooperation becomes the best strategy, and we can expect to be able to trust others without a sovereign ruling over us. As de Jasay says, "Anyone who has a name, lives in a place, does something for a living that is, anyone tied into the fabric of a society would think twice before treating mutual promises as the single-play prisoner's dilemma says he must."

August 2, 2002

Gene Callahan is an adjunct scholar at the Ludwig von Mises Institute and the author of the forthcoming book, Economics For Real People.

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