theory which sees the root causes of publicness in the intrinsic logistics of supplying particular goods (can a lighthouse be run for profit? can justice be bought and sold? can passers-by be charged for looking at the statue in the square? can the market hold up a “social safety net"?), we discover a more potent and extensive principle: it is the public that decides what shall be a public good. In doing so, it creates indivisibilities. It requires that contributions to a good and the benefits it can yield should come in critical-sized aggregate lumps fitting their relevant public. Large indivisible units come about even if there is no technical obstacle to divisibility, small doses, private exchange, and hence to the operation of liberal institutions.
If it were true that there is a fatal public-goods dilemma such that voluntary contribution to shared benefits is irrational and self-interest is condemned to be self-defeating, little would be left to say. At best, we could restate, with some gain in conciseness, why a self-sustaining sequence with a steadily expanding role of public provision, marked by the advance of democracy and the retreat of liberalism, must be held to be the best, and ethically least objectionable path for social evolution to take. Political science and economics could each go its own increasingly dreary way, pursuing technicalities of dubious import, as few or no large questions would be worth asking.
Since, however, strong arguments suggesting that the public-goods dilemma is false can be found, at the very least there is some hope for the revival of non-dreary political philosophy and political economy. Beyond that, there is the more sanguine hope that the future need be no drearier than the past.
New discoveries are not to be expected in these matters.
—David Hume, Of the Original Contract
Peaceful, mutually agreeable coexistence of persons is tantamount to a measure of social co-operation whether or not such is their conscious intent. Both by design and by spontaneous emergence, their interactions tend severally or jointly to produce results—"positive” but also “negative” man-made variations in the orderliness, agreement, and riches of their own and other people’s lives. The results may accrue wholly or in part to those who co-operate, though not necessarily to all who do, nor to only those who do, for there are “externalities,” spillovers benefiting or harming bystanders. Production of private goods for exchange and the provision of public goods (including under “goods” as much as we decently can of what people want1 for themselves or for others) are the areas of activity where co-operation owes least to affective ties between persons and where contract, command, or both tend to be relied on to ensure reliable commitment to co-operative acts. The diversity of possible relations, including the absence of any discernible relation, between contributions and benefits in these domains is one of the central themes of ethics, economics, and politics, and an anxious preoccupation of this book.
People of course co-operate informally by making unspoken-for and unrequited contributions to the endeavors of others. They “lend a hand,” or a tool, or money; they help out, chip in, give advice, share knowledge, await their turn, give way, go to the end of the queue, refrain from littering in public, and so forth. Unilateral contributors may or may not share in the richer life they help in some measure to bring about. If they do, their share may not perceptibly vary with their own contribution. In any event, expectation of a benefit may not always or wholly explain a contribution which is made unilaterally. By the same token, people may stop contributing without losing much, or any, of their share in the richer life. However, noticeable non-co-operation, unless it is widespread enough to pass for normal, exposes a person to a range of possible sanctions from blame through ostracism, reciprocal non-co-operation in some other endeavor, to positive retaliation. These sanctions obviously involve some opportunity cost to administer, and therefore constitute, so to speak, a second-order co-operation problem on top of the first-order problem involved in the indeterminate nexus between contribution and benefit.
Behind the informal, spontaneous, and ostensibly sanction-free character of unilateral contribution there lurk tacit understandings, quid pro quos, and probable if uncertain penalties, conferring upon it the features of an incipient, incomplete contract. For all its roots in social history and its potential for teaching people about reciprocity without explicit commitment, this form of co-operation has obvious weaknesses in being indefinite, uncommitted, and (at least formally if not always in fact) unenforceable. Consideration of its weaknesses is of some help in grasping the functions and structure of fully fledged contracts, which commit two parties to agreed courses of action that promote the purposes of both, and of command-obedience relations which commit subordinates to contribute to the purposes of superiors.
An avowedly “reductionist” manner of calling reality to some sort of order is to treat the indefinitely many forms of social co-operation as if they all fell into two uniform classes: contract and command. In opting for this, we claim that at least in non-affective contexts the inclusive binary relation whereby all that is not contract-compliance is command-obedience can describe and explain all commitment to social interactions well enough, though next to the fully fledged specimen each class must be understood to include the incipient, the imperfectly enforced, and the embryonic. Where, then, is the place of custom in this structure?
The substantive content of any contract is a matter of agreement between the parties within the “frame” (broad or narrow as dictated by exogenous factors) of contractual freedom. The frame is exogenously fixed simply in the sense that it is independent of the will of the parties to the agreement, who have to stay within it or not agree at all. Formally, the same statement explains the substantive content of contract and of custom. Custom would not be what it is if those adhering to it preferred no agreement to the agreement embodied in the custom, e.g., if people would rather not marry than agree to some customary property settlement.
The sense of custom as a special case, a subclass of the general class of contracts, is that where a custom rules there is usually no room within the “frame” for terms of agreement other than those embodied in the custom. Keep narrowing the frame of contractual freedom within which the terms of agreement may vary and once negotiation has fallen into disuse, contract becomes custom. A “time-honored custom” carries the authority conferred by repeated agreement over time, one that has proved acceptable to successive generations. Whatever its historical origin, the rational-choice explanation of a custom has its least unpromising start in a range or frequency distribution of freely negotiated agreements, whose central core gradually solidifies into custom embodying unvarying terms, for a host of reasons having to do with “face,”2 the difficulties of negotiation, and the greater convenience of dispute-resolution and enforcement when terms are standard.
The part of custom which, at least in the Germanic cultures, has little by little found its way into the law carries evidence of its consensual origin. The (albeit factually somewhat inaccurate) notion of an evolution from free agreements to custom, from custom to law, explains the high public regard for the common law which, unlike statute law, did not have to be enacted before it was accepted. The same sort of evolution seems to explain
