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The Global Future of Contract and Trust

by Christopher Chantrill
January 15, 2005 at 11:40 pm

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IF a global society forms during the twenty-first century, will it necessarily be a contract society, built upon reciprocal trade and agreement, as many people think?  Or could it be constructed upon other principles, for instance the left’s dream of universal nonviolence, peace, and justice, or the Isalmists’ dream of the world converted to Islam by the will of God and His holy warriors?  Or will it be a global bureaucracy, a United Nations writ large, the centralized rule of the international experts?   

When Sir Henry Maine wrote his famous dictum in Ancient Law that the movement of progressive societies was from “status to contract,” he was merely stating what seemed, to the Victorians, to be obvious.  A stagnant and traditional society may base itself on status and hierarchy, but a dynamic and changing society must move to contract.

Why must it?  Contract is so ubiquitous in the United States that we forget how advanced and radical it is.  In the past men have rarely thought that they could make up the rules for their interactions themselves.  Most communities have instead lived The Way, the unreflective way handed down from the ancestors, and they have believed that to violate that sacred Way would bring disaster.  In the pre-industrial age, it usually did. 

But the day comes when some young men begin to ask: “What’s in it for me?”  The self-conscious ego is born and initially experiences life as a contest of power between the Big Me and the rest of the world.  Although the conquering ego brought change and dynamism to a sleeping world, he became something of a problem too, as the Chinese were to discover in their Warring States period.  It was the genius of Confucius, according to Huston Smith in The World’s Religions, to tame the Warring States’ conquering egos by transforming the unreflective Way of the ancestors into the rules of the self-conscious Five Relationships.  This radical idea of explicit fixed rules transformed the citified world in the years between 500 BCE and 700 CE in several apparently separate outbursts: the Eightfold Way of the Buddha, the Ten Commandments of Judaism, and the Five Pillars of Islam.

Today most people in the world believe in fixed rules, like the billion Muslims who believe in the divine Word of God revealed to His prophet Mohammed in the Koran, or like the half billion Pentecostals (0.8 billion by 2025 according to missions expert David Barrett) who believe in the divine Word of God revealed in the Scriptures, or like the 300 million Europeans who believe in the rational rule of the experts. 

Among the great mass that believes in fixed rules there emerge from time to time some who believe that the rules are not necessarily fixed.  These creative egos—merchants, businessmen, scientists, and artists—think that they can change the rules and the world will not come to an end. 

But what is the difference between a creative ego and a conquering ego?  To most people, not much.  To them, men like Rockefeller and Carnegie were robber barons trying to take over the world, not creative geniuses that had found a way to slash the price of oil and steel.  To prove their good faith, these great business innovators submitted their vast empires to the rule of the political class, agreeing to be governed by contract and law.  Just to be sure, the political class put Rockefeller to the test by breaking up Standard Oil in pieces.

Yet contract and law are not enough, as Frederick Turner demonstrated in Shakespeare’s Twenty-first Century Economics.  The best contract in the world cannot anticipate all the possible scenarios that may occur in a business relationship.  Therefore something more than the dry words of a contract is needed.  It was the amateur lawyer Portia in The Merchant of Venice who taught us what this something more must be.  It is mercy, that falleth like the gentle rain from heaven.

Can this be true?  Can hard-nosed businessmen be angels of mercy?  Not exactly.  When things go wrong, it’s just cheaper to say “Joe, you owe me one” than to go for a lawyer.  That is why, when he journeyed to Capitol Hill to kiss the ring of Congress in 1913,  J. Pierpont Morgan testified to an incredulous Pujo committee that the most important personal quality in a financier was “character.”  Morgan would not do a deal with a man he could not trust.

We can now come to a startling understanding.  Contract and law are the pledge by which the creative ego renounces conquest and submits its creative destruction to the rule of society.  Trust is the lubricant that unseats the gears of commerce and frees them from the costly friction of suits at law and government regulation.

Those who yearn to supplant the emerging global contract society with something higher and nobler need to come up with something that’s higher and nobler than this great covenant offered to the world by the creative egos of business.  What am I bid?

Christopher Chantrill blogs at americanmanifestobook.blogspot.com.

Buy his Road to the Middle Class.

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Faith & Purpose

“When we began first to preach these things, the people appeared as awakened from the sleep of ages—they seemed to see for the first time that they were responsible beings...”
Finke, Stark, The Churching of America, 1776-1990

Mutual Aid

In 1911... at least nine million of the 12 million covered by national insurance were already members of voluntary sick pay schemes. A similar proportion were also eligible for medical care.
Green, Reinventing Civil Society

Education

“We have met with families in which for weeks together, not an article of sustenance but potatoes had been used; yet for every child the hard-earned sum was provided to send them to school.”
E. G. West, Education and the State

Living Under Law

Law being too tenuous to rely upon in [Ulster and the Scottish borderlands], people developed patterns of settling differences by personal fighting and family feuds.
Thomas Sowell, Conquests and Cultures

German Philosophy

The primary thing to keep in mind about German and Russian thought since 1800 is that it takes for granted that the Cartesian, Lockean or Humean scientific and philosophical conception of man and nature... has been shown by indisputable evidence to be inadequate. 
F.S.C. Northrop, The Meeting of East and West

Knowledge

Inquiry does not start unless there is a problem... It is the problem and its characteristics revealed by analysis which guides one first to the relevant facts and then, once the relevant facts are known, to the relevant hypotheses.
F.S.C. Northrop, The Logic of the Sciences and the Humanities

Chappies

“But I saw a man yesterday who knows a fellow who had it from a chappie that said that Urquhart had been dipping himself a bit recklessly off the deep end.”  —Freddy Arbuthnot
Dorothy L. Sayers, Strong Poison

Democratic Capitalism

I mean three systems in one: a predominantly market economy; a polity respectful of the rights of the individual to life, liberty, and the pursuit of happiness; and a system of cultural institutions moved by ideals of liberty and justice for all. In short, three dynamic and converging systems functioning as one: a democratic polity, an economy based on markets and incentives, and a moral-cultural system which is plural and, in the largest sense, liberal.
Michael Novak, The Spirit of Democratic Capitalism

Action

The incentive that impels a man to act is always some uneasiness... But to make a man act [he must have] the expectation that purposeful behavior has the power to remove or at least to alleviate the felt uneasiness.
Ludwig von Mises, Human Action

Churches

[In the] higher Christian churches... they saunter through the liturgy like Mohawks along a string of scaffolding who have long since forgotten their danger. If God were to blast such a service to bits, the congregation would be, I believe, genuinely shocked. But in the low churches you expect it every minute.
Annie Dillard, Holy the Firm

Conversion

“When we received Christ,” Phil added, “all of a sudden we now had a rule book to go by, and when we had problems the preacher was right there to give us the answers.”
James M. Ault, Jr., Spirit and Flesh

Living Law

The recognition and integration of extralegal property rights [in the Homestead Act] was a key element in the United States becoming the most important market economy and producer of capital in the world.
Hernando de Soto, The Mystery of Capital

presented by Christopher Chantrill

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