From Status to Contract

by Don Boudreaux on April 11, 2009

in Complexity and Emergence

Some of the comments at this post prompt me to quote one of my favorite passages in all of the classical-liberal canon; it is from Henry Sumner Maine's justly celebrated 1861 book Ancient Law:

Nor is it difficult to see what is the tie between man
and man which replaces by degrees those forms of reciprocity in rights
and duties which have their origin in the Family. It is contract.
Starting, as from one terminus of history, from a condition of society
in which all the relations of Persons are summed up in the relations of
Family, we seem to have steadily moved towards a phase of social order
in which all these relations arise from the free agreement of individuals.
In Western Europe the progress achieved in this direction has been considerable.
Thus the status of the Slave has disappeared — it has been superseded
by the contractual relation of the servant to his master. The status of
the Female under Tutelage, if the tutelage be understood of persons other
than her husband, has also ceased to exist; from her coming of age to her
marriage all the relations she may form are relations of contract. So too
the status of the Son under Power has no true place in the law of modern
societies. If any civil obligation bind together the Parent and the child
of full age, it is one to which only contract gives its legal validity.
The apparent exceptions are exceptions of that stamp which will illustrate
the rule. The child before years of discretion, the orphan under guardianship,
the adjudged lunatic, have all their capacities and incapacities regulated
by the Law of Persons. But why? The reason is differently expressed in
the conventional language of different systems, but in substance it is
stated to the same effect by all. The great majority of jurists are constant
to the principle that the classes of persons just mentioned are subject
to extrinsic control on the single ground that they do not possess the
faculty of forming a judgment on their own interests; in other words, they
are wanting in the first essential of an engagement by Contract.

The word Status may be usefully employed to construct
a formula expressing the law of progress thus indicated, which, whatever
its value, seems to me to be sufficiently ascertained. All the forms of
Status taken account of in the Law of Persons were derived from, and to
some extent are still coloured by, the powers and privileges anciently
residing in the Family. If then we employ Status, agreeably with the usage
of best writers, to signify these personal conditions only, and avoid applying
the term to such conditions as are the immediate or remote result of agreement,
we may say that the movement of the progressive societies has hitherto
been a movement from Status to Contract
[emphasis added].

In the edition that I have (the 1986 edition from Dorset Press), this quotation is found on pages 140-141; it appears at the very end of Chapter V.

Maine's optimism about the inevitable march of progress is unfashionably whiggish and, I think, overblown.  But his understanding that progress necessarily involves freeing individuals from their status stations — freeing persons from stations assigned by circumstances such as skin color, family name, genitalia, sexuality, nationality — and thereby allowing individuals to determine as best as each can his or her own course through his or her own voluntary choices — that is, through contract — is smack-on correct.

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  • Unit

    Unfortunately Rousseau used the word contract as in "social contract", that has a completely different meaning. How do we get the meaning of words back? Maybe we should start talking of FAIs (Free Agreements of Individuals).

  • vikingvista

    "freeing persons from stations assigned by circumstances such as skin color, family name, genitalia, sexuality, nationality"


    The degree of free association and integration existing in our society does today occasionally allow a person to literally forget the irrational bigotry of the past and reach a state of true innocence with regard to past bigotry.


    That is ostensibly the goal of those who claim to abhor racism. Unfortunately those individuals who achieve such an innocence also find themselves in a fatal naievete, as villains of interest group politics are ever vigilant to pounce upon and destroy any individual whose mere words can be misconstrued to imply something that previously was not a part of his thoughts.


    Thus the ugliness of irrational bigotry is kept alive.

  • Thus the ugliness of irrational bigotry is kept alive.


    Makes for a handy debate card which no argument can trump.

  • vidyohs

    Thanks for the bigotry comment, Sam, that opens it up for me to post this:


    http://hotairpundit.blogspot.com/2009/04/krauthammer-slams-obama-europe-been.html


    Straight truth about Obama and Europe's status.

  • vidyohs

    Ouch:


    "In Western Europe the progress achieved in this direction has been considerable. "Thus the status of the Slave has disappeared -- it has been superseded by the contractual relation of the servant to his master."


    Clumsy, very clumsy. In a contractual relationship there is no master and servant, there are two parties engaging in agreement to exchange goods and services.


    IMHO


    Forced association and forced intergration is what we have, no one can claim it is free. And, when did a free man give up his right to form his own opinions and live by them, even onto how he lives his day to day life in commerce, in public, and in private?


    We live a life of compliant schizophrenia and think we are fine.

  • Martin Brock

    But his understanding that progress necessarily involves freeing individuals from their status stations -- freeing persons from stations assigned by circumstances such as skin color, family name, genitalia, sexuality, nationality -- ...

    You omit the most critical stations, stately entitlements, like "king" and "subject", "lord" and "serf", "landlord" and "tenant", "state employee" and "taxpayer".



    ... and thereby allowing individuals to determine as best as each can his or her own course through his or her own voluntary choices -- that is, through contract -- is smack-on correct.

    A "contract" typically is an agreement between stately titleholders to exchange their stately entitlements. If I hold a gun to your head, I may also contractually exchange your life for your wallet, since I hold your life while you hold your wallet. You agree to hand me your wallet, and I agree not to pull the trigger.


    I don't at all agree that we've "progressed" by substituting stately entitlements and contract for familial relationships. This sense of "progress" has given us Social Security and also created an incredible misapprehension of payroll taxes as some sort of "investment".


    Payroll taxes are far more like the yield of investments, but they're the yield of investments not recognized as such by the peddlers of stately entitlement. I make the point more precisely here.


    Revering "contract", abstracted from what we're entitled to exchange contractually, is practically state worship.


  • vikingvista

    "Payroll taxes are far more like the yield of investments,"


    Presumably you meant the taxes are like investments, and the entitlement is like the yield.


    Investment/yield is an...interesting...way to look at tax/entitlement. Your vision is almost the same as Madoff's investment/yield vision, except you would force everyone to invest with Madoff, refuse to ever let anyone cash out, transfer the portfolio of anyone who dies prematurely directly to Madoff, let Madoff dictate irrespective if the size of investment what each holder's portfolio was worth, and you would legalize what Madoff was doing so that he wouldn't have to lie about it, and would not have to worry about ever being shut down. Furthermore, you would let Madoff print whatever money he needed to pay out the ever decreasing dividends.


    Frankly, I'd rather take my chances with the real Madoff. At least there was a chance I'd get my money out if I pulled it out soon enough. With SS and MC, there is no hope that I will get my money back. It is a guaranteed negative ROI.


    Which adds another characteristic to your investment/yield versus tax/entitlement analogy--investments with a guaranteed loss.

  • vidyohs

    "investments with a guaranteed loss.


    Posted by: vikingvista | Apr 12, 2009 8:39:23 AM"




    Once heard a New York City woman, who ran a non-profit organization that had something to do with children, moaning about how finances were tight and that "None of those rich fat cats would invest in her non-profit."


    "Invest in a non-profit", might have been Martin's sister.

  • Martin Brock

    Presumably you meant the taxes are like investments, and the entitlement is like the yield.

    No. That's precisely what I do not mean. The investments financing Social Security benefits primarily are parental investments in their children. Grown children (all of us) pay taxes because we have no other choice, and taxes provide the benefits. The taxes are the yield of an investment, but recipients are not necessarily the investors.


    Essentially, Social Security is a system of entitlement whereby supporting older people entitles us later to support by younger people. Supporting the younger people who later support us is not required to earn the entitlement to later support, but the younger people provide the later support. Right?



    Your vision is almost the same as Madoff's investment/yield vision, except you would force everyone to invest with Madoff, ...

    No. You obviously didn't read my link, and you completely misunderstand my point. I oppose Social Security. I advocate parents supporting children and children supporting parents who supported them.


    Social Security requires children to support all older people and effectively requires children of relatively poor people to support relatively wealthy people who supported few or no children.


    The relatively wealthy people are relatively wealthy precisely because they supported few or no children, also because poorer people tend to have more children.


    Some accumulation of entitlement to more conventional rents would also exist under the reform I advocate but to a lesser extent. Here's the link again.



    Furthermore, you would let Madoff print whatever money he needed to pay out the ever decreasing dividends.

    No. You pretend to have a clue what I'm saying without bothering to comprehend any of it.



    With SS and MC, there is no hope that I will get my money back. It is a guaranteed negative ROI.

    Insofar as SS and MC are equitable systems at all, the money you "put in" supports people who earlier supported you, when you were a child. Expecting a "return" on this money is like expecting a "return" on your mortgage payment. This expectation is nonsense, because the money you "put in" is itself a return on someone else's investments.


    You believe that SS has a "negative ROI" only because you've swallowed the Ponzi scheme, hook, line and sinker. Expecting any return from SS is nonsense. You can rationally expect precisely nothing in return for your payroll taxes. You can't expect a bit more than you "put in" or even a bit less. You can expect precisely nothing.


    You could rationally expect to support your parents because they supported you. Your support is a return of their support. You can return their support only because they first supported you. You are a means of production that they earlier produced.


    You can rationally expect nothing in return for supporting your parents or other people much older than you, because these people are on their way to the grave and are not expected to produce in the future.


    You could rationally expect a return on your support of your children, because this support purchases a real means of production, your children's labor.


    That's the reality.



    Which adds another characteristic to your investment/yield versus tax/entitlement analogy--investments with a guaranteed loss.

    No. The investment/yield versus tax/entitlement analogy is your analogy, not mine. My analogy is precisely the opposite of yours.


  • Martin Brock

    "Invest in a non-profit", might have been Martin's sister.

    No. "Investing in a non-profit" is what I do for my children, but I'm not really investing in a non-profit, because my children are profitable to the rent seekers entitled to their produce by writ of the state's redistribution of tax revenue, like your military pension and Social Security benefits.


  • K

    I differ with vidyohs 8:09 PM about the master...servant quote being clumsy. And about there being no master and servant in a contract.


    IMO Maine merely used "master" and "servant" as those words were commonly used at the time. And even today some would use the words in that way.


    i.e. "servant" meaning a person employed to help another, usually in the home.


    But words are tricky, perhaps I am the one who has missed some subtle point.


    At times we see what is not there. In that quote I don't see an impossibility of a contract between master and servant.


    I sincerely doubt Maine was writing of a contract between a slave and an owner.

  • vidyohs

    K,


    And, perhaps I am a might touchy about those words master and servant.


    I object more to the word master than the word servant.


    I did express it all as MHO.


    To me the words master and servant smack of the tradition of aristocracy, not just slavery.


    For me to acknowledge that I sell my service, and therefore I can rightfully acknowledge that I am a servant to whom ever buys my service is one thing; but, should someone refer to me as "my servant", or say "servant come here", I would not take it kindly.


    In other words, I acknowledge that in selling my services I can name myself servant; but, I am not servile.

  • K

    Well, as I said, words are tricky.


    A word really means what each person believes it means.


    And yet somehow a word is supposed to mean the same thing to all of us.


    Mission Impossible!


    FYI, I had overlooked your qualifying IMO. Sorry.

  • vidyohs

    K,


    Don't know if you're a lawyer or a law student, but if you think words are tricky when we all use the Webster's, just pick up a copy of a Black's Law Dictionary and compare the definitions of common words and how knowledge of that difference would apply in a legal dispute or in a court room.


    They know the difference and you don't. How are you going to win when you give them a head start?


    For instance, the little word "in", in Black's means "belongs to".


    Mission impossible, indeed.

  • Martin Brock

    Test quote.

    Test reply.

  • Martin Brock

    Pardon the test. Somehow, when I first displayed this page today, all blockquote tags were filtered out.

  • K

    v: "Don't know if you're a lawyer or a law student, "


    What a fine example of how hard it is to be clear. Does that say I can only be either one or the other?


    Of course not. It is a preparation for what follows about Black's etc.


    Yes, the meaning and history of words interests me. Strictly as an amateur.


    Judge Scalia sometimes applies the test of "Originalism" to constitutional questions.


    i.e. what was the accepted meaning of text when it was written?


    The word "arms" in the second amendmentis where Scalia's method might apply. Today the word "arms" can include atomic bombs, yet no one asserts the second amendment allows me to own one.


    Anyway, this is an economics blog. I am far off topic. I enjoyed our conversation.

  • vidyohs

    K,


    It does not say that. It was said purely out of the possibility that you might be a lawyer or a law student and therefore already know the point I was about to make. I was aware that I might be redunant to your knowledge, but wanted to follow the subject you opened up.


    As to the second amendment, Amigo, did you ever think that the founders deliberately wrote the ambiuous word "arms" simply because the were wise enough to know that what they had to use would likely not be the ultimate? You had imaginative, inventive, and creative people working on the Constitution.


    In MHO the founders used the word arms so that future advancements would fall under that category. They had just revolted against a superior armed force with in general no quantity of superior weapons. In writing the word arms MHO is that the founders intended you and I to possess the same quality of weapons that government has access to.


    As to the possiblity of owning a nuke? If you believe that the our government might use one on you, then you have a right to own one if you can buy one.


    Before you answer, consider, they used Tanks, Apache heliocopters, gas, and skilled Delta Force against the men, women, and children at the Branch Davidian compound at Mt. Caramel. What will they use against you?

  • K

    V: I was using the lawyer or law student phrase to show how hard it is to be clear. And yet you were understood because of context not words.


    My interest lays more in words than in conlaw. I mentioned Originalism and the arms amendment only as an example of how words from the past tie us in mental knots.


    (Better than being tied in metal knots? Who knows? That would depend on the girl.)




    I am more inclined to think the second was kept unclear because federalists hoped that someday interpretation could favor them. And the states thought interpretation would favor them.


    (IMO the states had the better legal case because the arms right existed before the Constitution. As it was not revoked in the Constitution it must have continued to exist after the second was written.)


    Well over two centuries later the Supremes still dance around what it means. The recent decision (Heller?) about the D.C. gun law seems to favor the gun owners until you actually study the details of the ruling.


    Right on! The Branch Davidians no doubt would have let me have my atomic bomb. Alas they haven't returned by phone calls for years.


    Too far OT for me. I like odd discussions but that isn't fair to those who are here for economics.

  • vidyohs

    K,


    The economics of this thread has "done gone and passed us by."


    Have a profitable day.

  • Martin Brock

    This forum rarely delves very deeply into economic fundamentals and practically avoids particular fundamentals altogether. It's mostly about politics, not economics.

  • Martin Brock

    The Austrian theory of the business cycle seems to account well for the current "crisis", but we can't understand the crisis (or the Austrian theory of the business cycle) solely with reference to monetary policy generally and interest rates more specifically. Money is credit. People extend credit presently for future purposes. We overextended credit in recent decades, because baby boomers (who are really baby busters) want to retire as well as their parents. Ignoring the role of demography in this process is incredible.


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