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Ken Binmore on whiggery, the left, and the right
Game Theory and the Social Contract, vol. 1: Playing Fair [chapter 1, section 1.1, pp. 1-7] Ken Binmore
1994
Chapter 1: A Liberal Leviathan
What is Whiggery?
A levelling, rancorous, rational sort of mind
That never looked out of the eye of a saint
Or out of a drunkard's eye.
W. B. Yeats
1.1 Whiggery
Why write a book like this? My own motivation lies in the conviction that
there is a viable and respectable defense for at least some of the liberal ideas
that have been contemptuously brushed aside in the last decades of the
twentieth century.
So thorough is the triumph of conservatism that current newspeak even
makes it difficult to use the word liberal without inviting unwelcome
associations. Bourgeois liberals like myself find ourselves tarred with the same
brush that somehow simultaneously suffices to smear both laissez-faire
extremists of the far right and bleeding-heart welfarists of the far left. It
therefore seems to me that a case exists for reviving the word whiggery to
describe my kind of bourgeois liberalism.
Whigs like myself are definitely not in favor of conserving everything as it
is. We do not like the immoral society in which we live. We are therefore in
favor of reforming it. But the fact that we are not hidebound conservatives does
not make us socialists. Nor is whiggery some wishy-washy mixture of left-wing
and right-wing views. Indeed, a whig finds such a compromise hard to
envisage. How can one find some median position between those who fix their
attention on the wrong problem, and those who do not see that a problem
exists? [p. 1]
In illustration of this last point, consider the following passage that
appeared in the Guardian newspaper of 25 May 1988 during a British general
election campaign. Its author, Bryan Gould, was a leading spokesman for the
Labour Party. Mrs. Thatcher, whom he quotes verbatim (if somewhat out of
context), won the election on behalf of the Conservative Party.
For Mrs. Thatcher, ''There is no such thing as society''. There is only an
atomised collection of individuals, each relentlessly pursuing his or
her self-interest, some succeeding, some failing, but none recognising
any common purpose or responsibility.
This quotation epitomizes the errors of both the left and the right. Both are
wrong at a fundamental level because their implicit models of man and society
are not realistic about "the nature of human nature". [See Game Theory and the
Social Contract, vol. 2: Just Playing (introduction, section 0.2.5, p. 14).]
Consider Mrs. Thatcher's denial of the existence of society. This we may
charitably interpret as a denial, not of the existence of society per se, but as a
denial of the existence of society as interpreted by her opponents of the left. As
Bryan Gould is trying to say, the left shares Hobbes' [117] vision of society as
being more than just a collection of individuals or households. It is rather a
social organism, or as Hobbes would have it, a Leviathan, constructed from but
transcending the human beings that form its constituent parts just as human
beings are constructed from but transcend the organs that make up their bodies.
However, unlike Hobbes, leftists see Leviathan as being moved by a "common
will" or motivated towards a "common good" to which the strivings and
aspirations of its constituent human parts are properly to be subordinated.
Left or Right? I believe that Mrs. Thatcher was right to reject the leftist
Leviathan as a model of what society is or could be. A view of human society
that sees Leviathan simply as an individual on a giant scale, equipped with
aims and preferences like those of an individual but written large, would seem
to place man in the wrong phylum. Perhaps our societies would work better if
we shared the genetic arrangements of the hymenoptera (ants, bees, wasps, etc.),
or if the looser genetic ties that link members of human families extended
across society as a whole, so that rhetoric about all men being brothers were
actually true in more than a metaphorical sense. But this is not the case, and all
that can be expected from "reforms" based on such misconceptions about the
human condition is that they will fall apart in the long run, leaving behind a
sense of disillusionment and a distaste for reformists and for reform in general.
Indeed, is not this precisely what we have witnessed in recent years? Even as I
wrote this book, the seemingly monolithic Soviet empire at last collapsed under
the weight of [p. 2] its own contradictions and old-time conservatives have
emerged from the backwoods to rejoice at the fall of socialism.1
The truth about society is much more complex than either the left or the
right is willing to admit. As that most conservative of Whigs, Edmund Burke
[142, p. 99], so aptly explains:
A nation is not an idea only of local extent and individual momentary
aggregration, but it is an idea of continuity which extends in time as
well in numbers and in space ... it is made by the peculiar
circumstances, occasions, tempers, dispositions, and moral, civil, and
1 When such reactionaries learn anything from history, they always learn the wrong lesson. What
we have witnessed is not the triumph of the free market economy over socialism. Only rarely in the
Western democracies does the allocation of goods and services approach the ideal of a perfectly
competitive market. We are all welfare states now—and where "free" markets do operate, their institutions
are often badly corrupt. Nor did the Soviet empire that fell come close to the socialist ideal. What we learn
from its fall is only what George Orwell's [198] Animal Farm taught us years ago. Institutions that do not
recognize that their officers' incentives are not consistent with the goals of the institution will necessarily
be corrupted in the long run. Rather than rejoicing at the fall of socialism, we would do better to look to
the motes in our own eyes.
social habitudes of the people, which disclose themselves only in a
long space of time.
However, a conservative avatar like Mrs. Thatcher sees no reason to
consider such a sophisticated Leviathan. For those like her, a rejection of the
naive Leviathan of the left is a rejection of all Leviathans.
This is the fundamental error of the right. It may be true that to speak of
the common will or of the common good is to reify the nonexistent, but there
are other nouns to which the adjective "common" can sensibly be attached. In
particular, nobody is likely to complain that we are reifying the nonexistent in
speaking of common understandings or conventions in society. A conservative
may feel that to concede this is to concede little of importance. No doubt
common understandings exist, but surely they are too fragile and ephemeral to
be other than peripheral to the way society operates? Along with many others, I
think this view is badly mistaken.2 Far from being peripheral to society, such
common understandings constitute the very warp and weft from which society
is woven. Leviathan is more than the sum of its parts precisely because of the
commonly understood conventions stored in the brains of its citizens and for no
other reason. [See Natural Justice (chapter 1, section 1.3, pp. 3-5).]
It is hopeless to think of convincing those on the far right of such a
proposition. They prefer to wear blinders rather than admit that society is based
on such a seemingly precarious foundation. Certain conventional arrangements,
particularly those concerned with private morality and the [p. 3] preservation
and transference of property rights, they recognize; but not as artificial
constructs shaped by social evolution or human ingenuity. They dimly perceive
such matters as being determined by some absolute standard of "right" and
2 Among modern writers, particular mention should be made of Schelling [229], Lewis [152],
Ulmann-Margalit [262], and Sugden [254], but the general contention is that of Hume [128].
"wrong" and hence as immune to change. Other conventional arrangements
that they cannot ignore, they are anxious to sweep away in favor of the
marketer whose intrinsic "rightness'' as a distributive mechanism they will
tolerate no doubts.
But this book is not directed at conservatives from the backwoods. It is a
piece of rhetoric aimed at open-minded conservatives. Those of us who live in
bourgeois comfort need to be continually reminding ourselves that Nature has
not provided us with any warranties for the continuation of our cozy way of
life. All that stands between us and anarchy are the ideas that people carry
around in their heads. Our property, our freedom, our personal safety are not
ours because Nature ordained it so. We are able to hang on to them, insofar as
we do, only because of the forbearance of others. Or to say the same thing a
little more carefully: given society's currently dominant but precarious system
of conventions, we continue in the enjoyment of our creature comforts simply
because nobody with the power to do so has a sufficient incentive to deprive us
of them. Or, at least, not right now.
Such a bleak view of the way things are is admittedly simplistic. But is it
so very far from the truth? If you doubt it, drive downtown to your local ghetto
and watch what goes on when a community's common history and experience
fill people's heads with a set of conventions and customs that are very different
from your own. Or read a newspaper report about those countries in which the
old common understandings have broken down and new common
understandings have yet to emerge. In any case, it does not seem to me that the
conservative thinker to whom this book is addressed can consistently seek to
categorize human behavior in terms of enlightened self-interest and
simultaneously paint a more rosy picture of how society holds together.
Nobody would claim that the current systems of commonly understood
conventions that regulate life in the major societies of the West are ideal. It
would be nice, for example, if one could take the dog for a walk in the park
without fear of being mugged. Or if one did not have to be apprehensive about
AIDS and the drug scene when a teenage child is late coming home. And so on.
These are examples of problems that a whig traces to the existence of injustices
and inequalities in the structure of society. There is, of course, no shortage of
other problems. It would be pleasant if the air we breathe and the food we eat
were unpolluted. Or if we were not at risk from war, nuclear or otherwise. Or if
our taxes were not squandered so flamboyantly. But it is problems of justice
and inequality that will be central to this book. [p. 4]
Reform. What is proposed is very moderate. Indeed, it is so moderate that
no conservative need fear becoming tainted in trying on the ideas for size.
Marxists, on the other hand, will have nothing but contempt for such bourgeois
proposals. For progress to be made, it is necessary for the affluent to
understand that their freedom to enjoy what their "property rights" supposedly
secure is actually contingent on the willingness of the less affluent to recognize
such "rights". It is not ordained that things must be the way they are. The
common understandings that govern current behavior are constructs and what
has been constructed can be reconstructed. If the affluent are willing to surrender
some of their relative advantages in return for a more secure environment in
which to enjoy those which remain, or in order to generate a larger social cake
for division, then everybody can gain. To quote Edmund Burke [142, p. 96]
again:
Early reformations are amicable arrangements with a friend in power;
late reformations ... are made under a state of inflammation. In that
state of things the people behold in government nothing that is
respectable. They see the abuse, and they will see nothing else ... they
abate the nuisance, they pull down the house.
People like Edmund Burke, who propose reform with the primary
objective of conserving what they can of the past, have been called reforming
conservatives. They are to be contrasted with conservative reformers like
myself, who actively wish to reform the society in which they live, but are
conservative in the reforms they propose because they see no point in creating a
society that is unstable. However, both reforming conservatives and
conservative reformers are whigs in that they hope to create institutions that
will organize trade-offs between different sections of society, so that the system
of common understandings that form the fabric of our society can be
continually reformed in directions which everyone involved agrees are better. A
conservative who is suspicious of reform may argue that social evolution does
this for us already. But, as Edmund Burke would have been the first to explain,
conservatives did not need to wait to observe city blocks being burned to the
ground before deciding that more in the way of black emancipation was
required. As the adage has it: an ounce of prevention is worth a pound of cure.
[See Game Theory and the Social Contract, vol. 2: Just Playing (introduction,
section 0.2.3, pp. 6-8); Natural Justice (chapter 1, section 1.7, pp. 18-19;
chapter 12, section 12.6, pp. 195-197).]
Social Contracts. It will perhaps now begin to be clear what I have in
mind in practical terms when speaking of a "social contract". However, this
book is not about practical matters. It is an attempt to provide some logical
underpinnings for the species of bourgeois liberalism that I am calling
whiggery. Such logical underpinnings are to be found in the theory of [p. 5]
games. When translated into this language, what I have been saying so far
about whiggery goes something like this. We are all players in the game of life,
with divergent aims and aspirations that make conflict inevitable. In a healthy
society, a balance between these differing aims and aspirations is achieved so
that the benefits of cooperation are not entirely lost in internecine strife. Game
theorists call such a balance an equilibrium. Sustaining such equilibria requires
the existence of commonly understood conventions about how behavior is to be
coordinated. It is such a system of coordinating conventions that I shall identify
with a social contract.
Whigs argue that it is sensible to look at the whole class of social contracts
that are feasible for a society, and to consider whether one of these may not be
an improvement on our current social contract. Left-wing socialists agree that
what we have now could do with being reformed, but do not understand that
there is a feasibility constraint. They therefore propose social contracts that are
unworkable because they call for behavior that is not in equilibrium. The
utopias they envisage are therefore unstable. Right-wing conservatives
understand the need for stability only too well, although they often forget that
what was stable yesterday need not be stable today. However, in concentrating
on the need to sustain our current social contract, they lose sight of the
opportunity to select a better equilibrium from the many available.
In saying these things, I am conscious that the risk of being misunderstood
is very great, but there is no point in trying to elaborate my position at this
stage. What I shall do instead is to reiterate it using the lines of verse from Yeats
at the head of the chapter as a text.
Yeats is right that whigs worship rationality. They believe that the way to
a better society lies in appealing to the enlightened self-interest of all concerned.
Yeats is also right that whigs are levelers, and if this seems rancorous to up-
reconstructed Tories like Yeats, it is because they do not see what is in the best
long-run interests of people like themselves. Yeats also tells us that whigs are
not saints. He is right about this also. Not only are whigs not saints, they do not
think that most of us have the potential to become saints, as the more naive
thinkers of the left would have us suppose. People might be temporarily
persuaded to put the "interests of the community" ahead of their own selfish
concerns. But a community based on the assumption that its citizens can be
relied upon to behave unselfishly much of the time simply will not work.
Finally, Yeats is right that whigs see no reason to behave like drunkards
lurching from crisis to crisis. Planning and reform need not be dirty words.
They do not require the existence of a mythical "common interest". We can plan
to institutionalize new "common understandings". Nobody need make great
sacrifices in the process once it is understood that it is not in the self-interest of
the ''strong" that they always let the ''weak" go to the wall. We can go from the
old to the [p. 6] new by mutual consent. We do not need to set up stultifying and
inefficient bureaucracies along the way. Nothing prevents our planning to use
markets wherever markets are appropriate, but a society that relies only on
market institutions is a society that is leaving much of its potential unfulfilled.
What is being described is a bourgeois conception of a liberal society. One
should therefore not expect it to lead to some kind of utopia. Utopias are
typically founded on misconceptions about human nature and hence are
doomed to fail. Nor does there seem much point in adopting a point of view
that evaluates what we have now by comparing it to such ideal but unattainable
societies.3 All that can be achieved by so doing is to distract attention from
improvements that actually are feasible. [p. 7]
3 Or, worse still, in allowing our foreign policy to be guided by such an attitude. A reform that was
successful in one society need not be successful in another society—i.e. what proved to be feasible here
need not be feasible elsewhere. In particular, it is far from obvious that we act in our own best interests if
we unthinkingly seek to remodel our neighbors in our own image. Reforms need to be tailored to the
system of common understandings that currently operate in a society: not to those which once operated in
our own society.
Natural Justice [chapter 12, section 12.2, pp. 1-7] Ken Binmore
2005
Chapter 12: Planned Decentralization
12.2 Whiggery
History. The Whigs were originally a British political party that arose in
opposition to the Tories of the seventeenth century. The modern Conservative
party is a direct descendant of the Tories. The Whigs were eventually
outflanked by the [p. 187] modern Labour party, and squeezed into
insignificance. Their remnants survived as the Liberal party, which now
continues in a revived form as the Liberal Democratic party. However, in recent
years, Labour has perhaps become even more whiggish than the Liberal
Democrats.
What did the Tories and the Whigs represent? Etymology doesn't help,
since a Tory was originally an Irish bogtrotter, and a Whig a Scottish
covenanter. Nor does it assist to observe that Edmund Burke was the Whig
credited with being the founder of modern conservatism; nor that David Hume,
whose ideas are the inspiration for my own brand of whiggery, was held to be a
Tory by his contemporaries, since he famously confessed himself able to shed a
tear for the beheaded Charles I. It is more informative to observe that the Whigs
are traditionally associated with the Glorious Revolution of 1688, in which the
Catholic and authoritarian James II was expelled in favor of the Protestant and
constitutionally minded William III.
American history also boasts a Whig party, broadly similar in character to
its British counterpart. It was vocal in its opposition to Andrew Jackson's
authoritarian innovations in the use of the presidential veto. Before joining the
newly emergent Republican party, Abraham Lincoln was a Whig. But the true
flowering of whiggery in America came earlier with the founding of the
Republic, which whigs see as a triumphant continuation of an ongoing war for
justice and liberty in which the English Civil War and the Glorious Revolution
were earlier battles.
Like James Madison, modern whigs believe that “justice has ever been and
ever will be pursued until it is obtained, or liberty lost in the pursuit”. A mature
free society must therefore necessarily be a fair society. But the world has
moved on from the times of the founding fathers. Their great experiment in
constitutional design was a huge success, but like all social constructs it needs
to be constantly overhauled in the face of newly emerging challenges to justice
and liberty. Our task today is therefore to rethink the thoughts of the founding
fathers of the American Republic as they would be urging us to rethink them if
they were alive today.
Classifying Political Attitudes. The big issues for a society are liberty and
justice. It is therefore natural to propose a two-dimensional classification of
political theories that takes these ideas as basic. It is surely no accident that the
psychologist Eysenck found that the data he used in matching personality types
with political attitudes fits much more comfortably into such a scheme than the
classical one-dimensional political spectrum between left and right.
Figure 32 uses freedom and fairness axes to distinguish four regions that I
could untendentiously have labeled unplanned centralization, unplanned
decentralization, planned decentralization, and planned centralization. But the
language of economics is so dismally dull that I have translated these terms into
neofeudalism, libertarianism, whiggery, and utilitarianism. In terms of the
traditional left-right political spectrum, utilitarianism sits out on the socialist
left and libertarianism sits out on the capitalist right. The same dichotomy
appears in moral philosophy as a split between the consequentialist followers of
the Good and the deontological followers of the Right.
However, far from seeing our problems of political organization as a battle
between [p. 188] the ideals of the left and right, I see utilitarianism and
libertarianism as the Scylla and Charybdis between which reformers must steer
a course if we are to escape our feudal past. Utilitarianism provides no safe port
of call, because nothing can prevent the bosses in an authoritarian society from
becoming acquisitive. Libertarianism is similarly unsafe, because possessions
cannot be held securely in an anarchic society. Those who advocate abandoning
all social mechanisms other than the market simply fail to see that they would
thereby be throwing away the foundations on which the market mechanism is
based.
Figure 32: Classifying political attitudes.
The unworkable utopias of both utilitarians and libertarians therefore
have no more relevance to genuine human concerns than the metaphysical
disputes on the properties of Absolute Morality that divide those who worship
the Good from those who honor the Right. Just as we have to assimilate the
issues that trouble consequentialists and deontologists into a single theory of
the seemly before we can say anything compatible with what evolution has
made of human nature, so we have to separate the feasible from the infeasible
in the aspirations of utilitarians and libertarians before abandoning the
possibility that they may have some common ground on which to stand.
The opposition that I think should supersede the sterile and outdated
dispute between left and right contrasts free societies in which fairness is used
to coordinate collective decisions with societies that delegate such decisions to
individuals or elites. I use the term neofeudal to describe the latter kind of
social contract. In brief, we need to cease thinking outdated thoughts about
where we would like to locate society on a left-right spectrum. Choosing
between utilitarianism and libertarianism makes as much sense as debating
whether griffins make better pets than unicorns. We need to start thinking
instead about how to move in the orthogonal direction that leads from
neofeudalism to whiggery. [See Game Theory and the Social Contract, vol. 2:
Just Playing (chapter 4, section 4.10.2, pp. 503-506; chapter 4, section 4.8, pp.
471-476; chapter 3, section 3.4.5, pp. 337-338; chapter 2, section 2.2.7, pp.
164-167).]
Game Theory and the Social Contract, vol. 2: Just Playing [chapter 4, section 4.10.2, pp. 503-506] Ken Binmore
1998
Chapter 4: Yearning for Utopia
4.10 A Perfect Commonwealth?
4.10.2 Where is Whiggery?
The anthropology literature on hunter-gatherer societies surveyed in
Section 4.5 uses the word ''egalitarian'' in a broad sense to include both
widespread sharing of resources and freedom from authority. But I guess
nobody would maintain that there is any necessary linkage between the two
notions. Indeed, my own theory suggests that one might usefully classify social
contracts, both real and hypothetical, using the two-dimensional scheme of
Figure 4.16(a), in which freedom from coercion and equality of resources
appear on orthogonal axes. It is perhaps no accident that the psychologist
Eysenck [177] found that the data obtained from attempting to match
personality types with political attitudes fits much more comfortably into such
a scheme than the classical one-dimensional political spectrum between left and
right. Figure 4.16(b) attempts to place some of the great names of political
philosophy within a similar scheme.
With neofeudalism appearing prominently in Figure 4.16(a), followers of
Marx might reasonably expect to see variants of capitalism and socialism
appearing also. It is not hard to place the idealized form of capitalism in [p. 503]
which all social interaction is supposedly transacted through the market in the
libertarian category. Nor is it difficult to place the idealized form of socialism in
which state officials love the powerless as much as they love themselves in the
utilitarian category. But what of communism as once practiced in the Soviet
Union, or the mixed economies of the West?
Figure 4.16: Classifying political attitudes.
Unlike Marx, I don't think we ever graduated from the hierarchical
authority systems that typify feudal societies. We simply found new feudal
forms to practice. The forms of socialism and capitalism that have been
practiced in the world therefore all belong in the neofeudal category. After all,
who were the officials of the Soviet Communist Party if not a self-appointed
aristocracy? What more does a modern democracy offer than the periodic
opportunity to replace one bunch of oligarchs with another? Who is the
president of the United States if not an elected monarch?
Far from seeing the problems of political organization we face as a battle
between the ideals of the left and right, I see utilitarianism and libertarianism as
the Scylla and Charybdis between which reformers must steer a course if we are
to escape our feudal past. Scylla provides no safe port of call, because nothing
can prevent the bosses in an authoritarian society from becoming acquisitive.
Charybdis is similarly unsafe, because possessions [p. 504] cannot be held
securely in an anarchic society. Our choice is between neofeudalism and
whiggery.
As Section 3.4.5 explains, the distinction between neofeudalism and
whiggery is one of degree. Elite groups that blatantly ignore the standards of
fairness currently operating in their societies merely destabilize their own
regimes (Balandier [39]). On the other hand, no society can dispense with the
need for leaders and entrepreneurs to handle decisions that need to be made
quickly, and to seek out new opportunities to exploit. Even the most egalitarian
of modern foraging societies take advice from their more successful hunters on
how hunts should be organized, while the indigenous tribes of the Great Plains
of North America understood the necessity of granting temporary authority to
war chiefs.76
I believe the reason that romantic authors see such savage societies as
noble has little to do with the reasons proposed by Rousseau for admiring the
noble savage. The lifestyle of hunter-gatherers strikes a chord in our hearts
because they do not need to suppress the instincts that make us resentful of the
unfair exercise of personal authority. By contrast, as argued in Section 4.5, we
occupy what Maryanski and Turner [343] call a social cage, constructed by our
ancestors when population pressures forced them to adopt a farming lifestyle.
The bars of this cage mark the front line of an ongoing war between two forms
of social contract, those in which equilibria in the Game of Life are chosen using
fairness as a coordinating mechanism, and those in which equilibrium selection
is delegated to leaders.
Perhaps the distant future will see technological advances that free us
altogether from our neofeudal social cage, but only the most utopian of
anarchists would wish to argue that a large modern society can survive without
76 Like Cincinnati's, they served only for the duration of the emergency.
putting power into the hands of its officials. We cannot dispense with the need
for a human police force and a codified punishment system. While we have
militant neighbors, an army is necessary to defend our freedoms. Taxes need to
be raised and administered. Nor does the evidence suggest that we are capable
of exploiting the returns to scale possible in large commercial or industrial
enterprises without bosses to direct our efforts. Without leaders and
entrepreneurs, the social contract in a large society cannot possibly come close
to the Pareto-frontier of the feasible set.
There is nothing we can do to alter the fact that Pareto-efficient social
contracts in large societies must be authoritarian to some extent. Nor can we
rewrite the history of a society with a view to changing the standards of fairness
it has inherited from the past. But, like the founding fathers of the American
Republic, we can attempt to persuade our fellow citizens not to waste the
opportunities for reforming our social contract as new [p. 505] opportunities for
Pareto-improvements arise. The whig proposal is that we select whichever of
the Pareto-efficient contracts in our current feasible set is fairest according to
current thinking.
Whigs who yearn for utopia therefore propose steering a course away
from neofeudalism, heeding the siren songs of neither the utilitarian left nor the
libertarian right, toward the noble savagery of our foraging ancestors. On the
way, we will give up the unnatural habits of authority worship and
conspicuous consumption that currently keep us locked in our social cage.
There will still be bosses in Ithaca, but they will be seen for what they then will
be people like ourselves, who are paid to help us coordinate on a fair and
Pareto-efficient social contract. [p. 506]
Game Theory and the Social Contract, vol. 2: Just Playing [chapter 4, section 4.8, pp. 471-473] Ken Binmore
1998
4.8 The Market and the Long Run
If Hobbes' Leviathan represents his idea of a just polity, in which
individual citizens coordinate their efforts like the cells in a healthy body, then
the anarchic history of the British civil war he recounts in Behemoth seems an
appropriate metaphor for the operation of the free market.58 No hand, invisible
or otherwise, directs the traders on the floor of the Chicago wheat market as
they scream and shout and throw their arms in the air. But the sum of their
actions takes prices to their market-clearing values with amazing rapidity.
The manner in which order springs spontaneously from chaos in such
circumstances has led to the market being used as a general metaphor for self-
organizing social mechanisms that operate without the intervention of any
central authority.59 So compelling is the metaphor that it has led a generation of
right-wing thinkers to overlook the fact that it is only a metaphor. The mistake
is then made of seeing all self-organizing social phenomena as markets whose
failings must necessarily be treated with the same medicine that one would
58 “What's the market? A place, according to Anacharsis, wherein they cozen one another, a trap;
nay, what's the world itself? A vast chaos, a confusion of manners, as fickle as the air, a crazy house, a
turbulent troop full of impurities, a mart of walking spirits, goblins, the theatre of hypocrisy, a shop of
knavery, flattery, a nursery of villainy, the scene of babbling, the school of giddiness, the academy of vice;
a warfare where, willing or unwilling, one must fight and either conquer or succumb, in which kill or be
killed; wherein every man is for himself, his private ends, and stands upon his own guard”. Burton's [110]
Anatomy of Melancholy. 59 Hayek [241, 242] is commonly credited by libertarian thinkers with having freed political
philosophy from the social contract tradition by inventing the revolutionary concept of spontaneous order.
But the notion goes back at least as far as Lucretius [335], and must surely have been familiar to Hayek
from the works of Hume [267] and Darwin [145]. Nor does the fact that a political philosopher makes use
of a contractarian metaphor imply that he believes that our societies were planned by ancient social
architects. One might as well argue that Adam Smith's use of the metaphor of an invisible hand implies
that he believed in the real existence of the fictional auctioneer of neoclassical economics! In my theory, the
social contract is similarly a metaphor for the spontaneous order generated in a society by the action of
biological and cultural evolution.
apply to an ailing market. Coase [128] even proposes modeling the propagation
of knowledge as a market in ideas!
The most dangerous version of this mistake occurs when the market is
proposed as a model of the way an ideal society should work, with the role of
government reduced to providing public goods and internalizing externalities. I
agree that part of the role of a government can usefully play is to extend the
range of available goods and to assist in the creation of new markets, but to see
a government only in such terms is to wear blinders. Aside from other
considerations, it seems obvious that the existence of [p. 471] a well-developed
social contract is a precondition for the emergence of a market. Even the notion of
a private good would not be meaningful in the absence of some of the common
understandings built into our culture that right-wing thinkers insist should be
envisaged as public goods. The idea that law and order is something that can be
measured adequately only in terms of the amount spent by government on its
enforcement has proved particularly disastrous.
Nor does it seem particularly useful to assess social institutions in terms of
how far they are forced to deviate from market ideals by transaction costs that
would be zero in the case of perfect competition. Indeed, the Coasian vision of
the world as a perfectly competitive arena, marred by occasional patches where
the market model does not apply, because transaction costs become prohibitive,
seems to me like a photographic negative. Our arena is the Game of Life, which
is played according to market rules only in a very restricted set of
circumstances.
To deny the universality of the market model is not to overlook the fact
that markets often provide a flexible and robust tool for the efficient
distribution of resources. Nor is there any doubt that Coase was right to
emphasize the importance of assigning property rights unambiguously when
the market mechanism is applied in a new context. But setting up a market is
only one of many ways we can plan to allocate resources.
Whigs like myself are at one with marketeers in our suspicion of
command structures administered by armies of bureaucrats whose selfless
devotion to the service of the community is a precondition of the system's
successful operation. However, markets are not the only alternative to the type
of command economy advocated by old-time socialists. Nor are capitalist
economies at all closely modeled by the paradigm of perfect competition. Many
different kinds of socioeconomic organization are in use, and new types are
being experimented with all the time. Indeed, part of the reason for the success
of game theory is that it provides a language that can be used to describe such
structures as they evolve.
If we are sufficiently clever, we may even learn to use the freedom of
thought offered by the language of game theory to escape the false dichotomy
perceived by traditionalists on both the left and the right. We do not need to
choose between the market and a command economy. It is not necessary for the
left to deny that a stable society needs to allocate resources efficiently, and that
decisions must therefore be decentralized to the level where the relevant
information resides. Nor need the right pretend not to notice that a stable
society must plan to allocate resources fairly lest those who find themselves
unjustly treated seek violent or criminal redress. The subject of mechanism
design suggests that it may be possible to have things both ways by using
game-theoretic ideas on a grand scale. In such a [p. 472] vision of the future, the
virtues of the market would be retained by leaving decisions to be made by the
people on the spot, but with their behavior constrained by rules selected to
provide incentives that make it optimal for decision makers to choose in
accordance with an agreed plan. […] [p. 473] [See Natural Justice (chapter 11,
section 11.9, pp. 183-184).]
References
Binmore, K. (1994). Game Theory and the Social Contract, vol. 1: Playing Fair. Cambridge: MIT
Press.
http://books.google.com.co/books?id=8cDiGo2REBIC&lpg=PP1&pg=PP1#v=onepage&q&f=false
Binmore, K. (1998). Game Theory and the Social Contract, vol. 2: Just Playing. Cambridge: MIT
Press.
http://books.google.com.co/books?id=HZ1hC1MLPeoC&lpg=PP1&dq=Game%20Theory%20and
%20the%20Social%20Contract%20Just%20Playing&pg=PP1#v=onepage&q=Game%20Theory%2
0and%20the%20Social%20Contract%20Just%20Playing&f=false
Binmore, K. (2005). Natural Justice. Oxford: OUP.
http://books.google.com.co/books?id=vV1PuLVl_vsC&lpg=PP1&pg=PP1#v=onepage&q&f=false
Brief overviews of Binmore’s evolutionary theory of fairness:
Binmore, K. (2009). “Fairness as a Natural Phenomenon”:
http://else.econ.ucl.ac.uk/papers/uploaded/332.pdf
Binmore, K. (2007). “The Origins of Fair Play”:
http://else.econ.ucl.ac.uk/papers/uploaded/267.pdf
Binmore, K. (2006). “Justice as a Natural Phenomenon”:
http://www.analyse-und-kritik.net/2006-1/AK_Binmore_2006.pdf
http://analyse-und-kritik.net/2006-1/inhalt.htm
Ken Binmore | Centre for Economic Learning and Social Evolution (ELSE) | Economic and
Social Research Council (ESRC) | University College London:
http://else.econ.ucl.ac.uk/newweb/displayProfile.php?key=2