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