The Invisible Contract: Agreement and Convention in Social Life
28 Pages Posted: 6 Jun 2019
Date Written: January 1, 2019
The metaphors of the “social contract” and the “indivisible hand” loom large in the history of political economy and political philosophy. Nevertheless, the two ideas are typically held to be in conflict. Social contracts are “made orders,” while invisible hand processes are not. Social contracts require agreement and will while invisible hand processes work as the result of human action but not design. The tension between these two ideas, I argue creates a disequilibrium between politics and economics in modern thought: either the market or the political order must have supremacy. This tension, I argue, can be dissolved if we understand social contracts as dynamic processes of micro-agreement that are explained as macro emergent or spontaneous orders. This understanding of a social contract is more consistent with political economy and better suited for the “open society” as I describe it. This approach also helps to clarify some puzzles about spontaneous orders and invisible hand processes. In so doing, I argue, that the insights of Adam Smith, Hayek, and the social contract theorists are best understood as different aspects of a unified approach to social theory.
Keywords: Social Contract, Contractualism, Contractarianism, Conventions, Social Evolution, John Rawls, Hayek
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