There is an idea, extremely common among social contract theorists, that the primary function of social institutions is to secure some form of cooperative benefit. If individuals simply seek to satisfy their own preferences in a narrowly instrumental fashion, they will find themselves embroiled in collective action problems – nteractions with an outcome that is worse for everyone involved than some other possible outcome. Thus they have reason to accept some form of constraint over their conduct, in order to achieve this superior, but out-of-equilibrium outcome. A social institution can be defined as a set of norms that codify these constraints. 1 Simplifying somewhat, one can then say that social institutions exist in order to secure gains in Pareto-efficiency. This theory is one that I take to be in large measure correct. 2 My concern, however, is that it tends to be formulated at too high a level of abstraction. By focusing on the structure of the interaction – a structure that is often specified simply in terms of the utility functions of participants – the theory tends to abstract away completely the mechanism through which social benefits are produced. Thus major philosophical writers working in the social contract tradition, such as David Gauthier and John Rawls, make no attempt at all to specify how cooperation improves the human condition. Rawls, for example, states simply that “social cooperation makes possible a better life for all than any would have if each were to live solely by his own efforts,” without saying how. 3 Gauthier focuses entirely upon the role of institutional constraints in resolving “prisoner’s dilemmas,” but with no systematic analysis of what people are typically trying to accomplish when they get into these dilemmas.

This theory is one that I take to be in large measure correct. 2 My concern, however, is that it tends to be formulated at too high a level of abstraction. By focusing on the structure of the interaction – a structure that is often specified simply in terms of the utility functions of participants – the theory tends to abstract away completely the mechanism through which social benefits are produced. Thus major philosophical writers working in the social contract tradition, such as David Gauthier and John Rawls, make no attempt at all to specify how cooperation improves the human condition. Rawls, for example, states simply that “social cooperation makes possible a better life for all than any would have if each were to live solely by his own efforts,” without saying how. 3 Gauthier focuses entirely upon the role of institutional constraints in resolving “prisoner’s dilemmas,” but with no systematic analysis of what people are typically trying to accomplish when they get into these dilemmas.