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Today’s post is a sort of variation on the response I would give (and have given in the past) to the slur, “You didn’t build that.”

In political matters, I am sure you have had invoked on you, at one time or another, the idea that the government has legitimate authority to coerce an individual because merely by the act of being born into a “society” you have agreed to the political obligations required to sustain that society. Of course, thousands upon thousands of pages have been written on this, so please excuse my very brief summary here. Further, while it is very obvious that none of us actually “signed” such contract, let’s accept the legitimacy of the theory for the purposes of today’s brief argument.


If we are to agree that “tough, you signed the social contract” is a legitimate response to the concern of folks who worry about the legitimacy of government and the threat of coercion, then how come we do not also see the argument accepted, when people are concerned about what happens in their economic lives, “you signed the social contract!” is not invoked as well? Just as being born into a political world was not chosen, and we are expected to “accept it” the same is true for our economic world. When we enter into ANY form of social cooperation (or attempted cooperation) with others, there are all kinds of practical challenges that simply cannot be handled with affirmative assent. Can you ask all 7 billion people on earth if they would be willing to trade with us, if they would be willing to enagage in the division of labor with us, and so on? No. Of course the same is true of our political bonds. So why are not our economic “obligations” aslo dependend upon some non-written agreement among all possible buyers and sellers to form the economy in which we operate?

After all, you still have the ability to opt out of any economy that you do not wish to be a part, so the force of the “economic contract theory” would seem to be stronger than that of the social contract theorists, wouldn’t it? Furthermore, the economic laws that we have discovered in fact are universal – they apply regardless of what form of social and economic organization that emerges or are chosen. Scarcity exists in ALL forms of cooperation. Prices emerge in ALL forms of transactions. Self-sufficiency is costly in all forms of organization and so on.

Again, I am not here to stand in opposition to social contract theory, though here is a quick note on that, I am merely asking what is different about our economic lives than our political lives that would not permit economic theorists from using the same argument?


2 Responses to “The Other Social Contract”

  1. Scott says:

    “It should be noted that in the 1892 re-issue of
    Social Statics Spencer removed this chapter as his
    pessimism about the hope for change was growing. It
    seemed that in late-Victorian Britain social evolution
    was leading to more statism, militarism, and
    colonialism and the prospects for liberty were therefore

    The sun also rises, I suppose.

  2. Mark says:

    this is brilliant and an idea i’ve internally debated with myself these past few weeks. of course you put it more cogently than i could!

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