Classical Theory of Government and the Social Contract

Natural selection favors economic cooperation among individuals, which gives rise to social institutions that protect person and property.  These institutions are formalized in government.  We begin a brief series of lectures on political economy.  We first summarize the classical theory of government, then contrast three modern forms government: democracy, communism and fascism.  In a subsequent lecture we address some alternative theories of the origins and purpose of government, discuss voting systems and summarize modern public choice theory.

We analyze these forms of government as sets of institutions for collective decision-making.  Our goal is to develop an understanding of the interactions between government and economy.  How are the different forms of government conceived and implemented?  Which is economically most efficient?  In what ways do governments impair economic efficiency?  Does a democratic society depend on a free-market economy, or does a free-market economy require a democratic society?  The overall objective is to understand the evolution modern democracy from a long totalitarian tradition.

Niccolo Machiavelli (1469-1527) was a Florentine political philosopher in the court of Lorenzo di Medici.  His book The Prince (1515) is a textbook on pragmatic totalitarian politics largely inspired by Lorenzo's predecessor, Cesare Borgia, a devious, amoral leader whom Machiavelli hoped would reunite Italy.  It is better for the prince to be feared than loved: "...men have less scruple in offending one who is beloved than one who is feared, for love is preserved by the link of obligation which, owing to the baseness of men, is broken at every opportunity for their advantage; but fear preserves you by a dread of punishment which never fails."  While the hatred of his people is a danger to him, "..when neither their property nor honor is touched, the majority of men live content, he has only to contend with the ambition of a few, whom he can curb with ease in many ways."   The prince may resort to any vicious behavior he wishes as long as it ultimately increases his power and the welfare of his subjects.

The Social Contract

The "Social Contract" is the agreement our primitive ancestors supposedly made thousands of years back in the primal "state of nature" to surrender certain liberties in exchange for social order.  Thomas Hobbes, John Locke, and Jean Jacques Rousseau have different conceptions of this primal "state of nature" and the social contract under which government was created, although in all of their versions the social contract imposes upon the government specific responsibilities vis-a-vis its citizens.  The principal functions of government are to protect the lives, remaining liberties and property rights of its citizens.  These liberal conceptions of government provided important ideological foundations for the American and the French revolutions.

The English philosopher Thomas Hobbes (1588-1679) took a distinctly pessimistic view of human nature:

For the laws of nature, as "justice," "equity," "modesty," "mercy," and, in sum, "doing to others as we would be done to," of themselves, without the terror of some power to cause them to be observed, are contrary to our natural passions, that carry us to partiality, pride, revenge and the like.... And in all places where men have lived by small families, to rob and spoil one another has been a trade, and so far from being reputed against the law of nature, that the greater spoils they gained, the greater was their honor."

His book Leviathan (1651) describes a primal state of nature in which human life was "nasty, brutish, and short."  People created government and surrendered individual rights to it largely out of fear.  Hobbes describes a "commonwealth" in which the citizens "confer all their power and strength upon one man, or upon one assembly of men, that may reduce all their wills, by plurality of voices, unto one will: which is as much as to say, to appoint one man, or assembly of men, to bear their person....And he that carrieth this person is called sovereign, and said to have sovereign power; and everyone besides, his subject."  Hobbes argues that, although the totalitarian sovereign originally derives his political power from the people (a contradiction to the "divine right of kings" doctrine), his power is absolute and not subject to review by the people.

The English philosopher John Locke (1632-1704) believed in empiricism, the doctrine that all knowledge is derived from experience rather than from innate ideas.  Locke was an ardent supporter of religious toleration.  His principal publications were his Essay Concerning Human Understanding and Two Treatises on Civil Government (both 1690). 

Locke believes people are fundamentally good, and conceives of the original state of nature as happy, and dominated by reason and tolerance, but insecure because it lacks "an established, settled, known law" dispensed by "a known and indifferent judge" with the "power to back and support the sentence when right."   All human beings retain fundamental rights to "life, health, liberty, and possessions."  The government is created under the social contract, and is obligated to reflect and uphold natural law and guarantee these rights.  Conversely, "...every man that has any possessions or enjoyment of any part of th edominions of any government does thereby give his tacit consent, and is as far forth obliged to obedience to the laws of that government...."

Locke conceived of a government with supreme power in a "legislative" that promulgates "one rule for rich and poor" for the good of the people, and that taxes only by consent of the people.  The day-to-day business of government is performed by an executive; the  power to make war and peace, leagues and alliances," etc. are exercised by a "federative" branch..  (This design of checks and balances between branches of government is a fundamental concept embodied in the US Constitution.)  Locke also developed the doctrine that in some circumstances the people had a right, if not a moral obligation, to overthrow a corrupt government.

To conclude, the power that every individual gave the society when he entered into it can never revert to the individuals again as long as the society lasts, but will always remain in the community, because without this there can be no community, no commonwealth, which is contrary to the original agreement; so also when the society has placed the legislative in an assembly of men, to continue in them and their successors, with direction and authority for providing such successors, the legislative can never revert to the people while that government lasts; because having provided a legislative with power to continue forever, they have given up their political power to the legislative and cannot resume it.  But if they have set limits to the duration of their legislative, and made this supremem power in any person or assembly, only temporary, or else, when by the miscarriages of those in authority it is forfeited, upon the forfeiture, or at the determination of the time set, it reverts to the society, and the people have a right to act as supreme and continue the legislative in themselves, or erect a new form, or under the old form place it in new hands, as they think good.

The French philosopher and political theorist Jean-Jacques Rousseau (1712-78) paints a romantic picture of the primal state of nature.  Rousseau's principal books are the Discourse on the Inequalities of Men (1754) and the Social Contract (1762).  In his view, "natural man" was innately noble and all people were equal.  But natural man was corrupted by property, agriculture, science, and commerce. 

Rousseau viewed the social contract as a response to the inequalities arising in early society.

"What a man loses as a result of the social contract is his natural liberty and his unqualified right to lay hands on all that tempts him, provided only that he can compass its possession.  What he gains is civil liberty and the ownership of what belongs to him.  That we may labor under no illusion concerning these compensations, it is well that we distinguish between natural liberty which the individual enjoys so long as he is strong enough to maintain it, and civil liberty which is curtailed by the general will."

Hobbes, Locke and Rousseau show a clear progression in the conceptions of the obligations of government to its citizens.  Hobbes sees government as the exchange of liberty for peace, and isn't much concerned with citizens' happiness, but Rousseau remarks "One can live peacefully enough in a dungeon, but such peace will hardly, of itself, ensure one's happiness." 

The progressively rosier descriptions of the primal state of nature in Hobbes, Locke and Rousseau parallel the improving standards of living in England and France over the 17th and 18th centuries.  The potato had been introduced from America, and quickly became a dietary staple, increasing food production, improving nutrition and reducing food prices.  Increasing economic surpluses permitted more leisure and new aesthetics.  Neo-classical paintings, sculptures and garden styles reflecting a new sense of nature as orderly and beautiful, not chaotic and hostile.

The basic premise arising in all of these writings is that society involves a compromise in which certain individual freedoms are forgone in the interests of personal health, safety, liberty and property ownership.  Locke's "inalienable" rights became a mantra for American democracy: "life, liberty and the pursuit of happiness."  In the Western democratic tradition, the fundamental purpose of government is to guarantee these rights for its citizens.  (It appears that the "pursuit of happiness" means getting rich.)