LITMIR.BIZ

       Commitment to Co-operation

      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.

Custom

      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 the rise of criminal law out of tort law, and of tort law out of agreements to compensate, to buy off revenge—an explanation which is adequate, logically whole, regardless of its contested historical accuracy. Customary terms of the service tenure of land, rents, tolls, wages, professional fees, customs regulating early forms of banking and marine insurance, and, of course, above all the prices and specifications of traded goods all bear plausible traces of earlier contractual or para-contractual origin. Unless we resign ourselves to the idea of an endless chain stretching into the past where every custom is born of another earlier custom, or to the idea that customs can be decreed into existence by command, contract is the only residual hypothesis to account for them. We can then look upon custom as ossified contract whose terms have become standardized. In the case of the just price and the more general scholastic category of the just contract (conceived as the sole morally deserving case of “zero-sum” transactions, where “neither party gains” instead of one losing what the other gains), standard terms have even been invested with moral value.

      There is a demonstrable advantage to any two parties in not having to adhere to custom but having the broadest possible frame within which the terms of a contract can be adjusted to their particular “circumstances.”³ Offsets against the advantage of adjustability are provided by the reduced transaction and information costs, and the greater peace of mind associated with customary terms. If such offsetting advantages predominate, the spontaneous rise and survival of a custom are broadly consistent with rational choice and it can be explained as if it were itself a result of agreement.

      The significant particularities of custom are that terms are standard rather than ad hoc (though, as the great diversity of “customary” medieval and early modern terms and conditions for property holding, inheritance, marriage, master-and-servant relations, commercial ventures, etc. demonstrate, there was usually some

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