Studies at the Intersection of Philosophy and Economics

 

Rationality, Markets, and Morals: RMM Band 4 (2013)

In this Comment, I examine Christoph Hanisch’s recent contribution to this journal. In commenting on Hanisch’s essay, I offer an interpretation of Amartya Sen’s notion of `commitment‘ which makes committed choices both uncontroversial and quotidian. This interpretation contrasts with those which see some of Sen’s pronouncements on commitment to be obviously false, counterintuitive or psychologically impossible.
I argue that social-contract theory cannot succeed because reasonable people may always disagree, and that social-contract theory is irrelevant to the problem of the legitimacy of a form of government or of a system of moral rules. I note the weakness of the appeal to implicit agreement, the conflation of legitimacy with stability, the undesirability of `public justification‘ and the apparent blindness to the evolutionary critical-rationalist approach of Hayek and Popper. I employ that approach to sketch answers to the theoretical, historical and practical questions about the legitimacy of government or of systems of moral rules.
After almost forty years, Robert Nozick’s seminal right-libertarian classic Anarchy, State, and Utopia continues to stand at the center of much of the discussion regarding property and its initial acquisition. Nozick’s most important contribution to that discussion is the formulation of his entitlement theory. Although the theory has received nearly unparalleled attention, its interpreters have misunderstood and misappropriated its most essential part: Nozick’s proviso. This paper presents a brief selection of the most representative interpretations of Nozick’s proviso, criticizes them, offers a textually well founded alternative reading of the proviso, and discusses its implications for Nozick’s entitlement theory as well as right-libertarian theories of property more generally.
In this essay I argue that one can understand the relationship between those who rule and those who are ruled in civil society as an implicit contractual relationship or contract by convention. I use variations of the extensive form Trust Game to summarize the structures of alternative forms of contracts, and apply these variations to model the relationship between the rulers and those under their rule. One of these variations, the Irrevocable Sovereignty Game, summarizes Hobbes‘ main argument for why it is conceptually impossible for a contract to exist between a sovereign and the subjects under its rule. I argue that Hobbes‘ argument presupposes a common understanding of a contract as a set of promises enforceable by a third party, such as a legally binding agreement. I use another variation of the Trust Game, the Repeatable Sovereignty Game, to show that rulers and ruled can establish and maintain a convention requiring the ruled to obey their rulers‘ commands in return for these rulers providing the ruled satisfactory benefits. In effect, the ruled and their rulers create an implicit contract that is self-enforcing rather than an explicit contract requiring third-party enforcement. I argue that this idea of a governing convention has roots in David Hume’s discussions of government, and is even implicit in Hobbes‘ own treatment of sovereignty.
I defend the claim, made in a previous paper, that a Humean can be a contractarian‘, against the criticisms of Anthony de Jasay. Jasay makes a categorical distinction between ordered anarchy‘ (which he associates with Hume) and `social contract theory‘. I argue that Hume’s political position was conservative, not anarchist. On Hume’s analysis, a convention is an implicit agreement; the concept of convention is more general than, rather than distinct from, that of agreement by exchange of promises. Hume justifies political obligation by treating established forms of government as conventions in this sense.
This paper explores, and rejects, the plausibility–advanced by a number of economists and recently re-affirmed by Robert Nozick–of employing an `invisible hand explanation‘ to account for the existence of money as a medium of exchange. It argues that money is not necessarily more efficient than barter as a means of effecting a multiplicity of desired exchanges, and that its use is not a dominant strategy under standard theoretical conditions of individual rational choice.

Journal Information

RMM is an interdisciplinary open access journal focusing on issues of rationality, market mechanisms, and the experimental method of reasoning into moral subjects. It provides a forum for dialogue between philosophy, economics, and related disciplines, encouraging critical reflection on the foundations and implications of economic processes.

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