Enforcement of Putative Contract

In the productive state that provides and finances public goods and services, costs of agreement dictate that decisions binding on all members of the community be made by some subset of the putative parties in contract. Once made, however, these decisions must be enforced just as those reached by negotiations among persons in genuinely voluntary interactions. To enforce its decisions, the productive state must call on its complement, the protective state.

To the individual citizen who may oppose a particular outcome, enforcement here is not one whit different from exogenous destruction in his rights. He is forced to abide by choices made for him by others, which may involve a net reduction in his own command over material goods. Taxes are levied on him, without his consent, to finance goods and services that he may value less highly than the foregone private-goods alternatives. The activity of the enforcing agent becomes quite different here than it is with reference to ordinary contractual agreements among separate parties. In the latter, rights are presumably well defined in advance, and the contractual terms are explicitly known and acknowledged. The task of enforcer is ''scientific''; it must determine whether an explicit contractual agreement has been violated. This setting may now be compared with that involved in the enforcement of the putative fiscal contract that is reflected in a decision on providing and financing a public good. Suppose that a spending-taxing decision has been made by an appropriately required majority in a legislative assembly. The outcome is opposed strongly by a significant minority of citizens. Here the enforcing agent must assume a wholly different role. Problems arise in determining just what rights individuals possess prior to contract, and in determining the limits to which these rights, if they existed, may be coercively destroyed without consent in the putative fiscal contract that the decision reflects.

The enforcement agency's task may remain ''scientific'' at the purely conceptual level, but the discretionary limits are significantly wider here. The range over which the agent may make his determination is not narrowly confined, and, within this range, his own judgments may enter, judgments of ''value,'' not of ''truth.'' Consider a simple comparison with ordinary two-person contract. If A tells B that he will repay a loan of $10, the enforcer must decide only whether A has carried out the terms. But what if A and B join forces in a three-person collective group and, by majority vote, impose a tax of $10 on C to finance a joint-consumption project? Suppose that C objects and refuses to pay the $10. He has violated no agreement, no explicit contractual arrangement made with his peers. The enforcing agent or adjudicator here must do more than determine whether C fails to comply. The agent must also decide whether the putative contract is, in itself, ''constitutional.'' As noted, this, too, is a factual or scientific question at the conceptual level of inquiry. But constitutions are unlikely to be at all specific with respect to the rights of collectively controlling coalitions to impose binding decisions on all members of the community. Historically, the United States courts have held only that overtly discriminatory treatment is prohibited. If taxes are plau sibly ''general,'' there is normally no ''constitutional'' basis for minority objection, regardless of the distribution of benefits or of the nonvoluntariness of the decision.10

The point of emphasis here is that the necessary intrusion of the external enforcing arm of the state into the putative social contract reflected in collective decisions concerning the financing and provision of collective-consumption goods places this arm or agency in a conceptually superior position. By necessity, the protective state must ride herd on the possible excesses of the productive state that is its complement. Majorities might, if left unchecked, impose discriminatory costs on minorities. Gross departures from anything that could plausibly be legitimate social contracting might be observed under majority rule without constitutional constraints. Nonetheless, the granting of review authority to the enforcing arm of the state carries with it a fundamental contradiction. Under the majoritarian governmental process that finances and provides public goods, the individual citizen who holds the franchise retains some indirect controls through the possible formation of rotating majority coalitions. Even if he remains dissatisfied and disappointed with particular results, there is a participatory element that is present which has some value save in those cases where the constituency is permanently divided. With respect to the enforcing agent, however, the individual does not have even this recourse open to him. The transfer of final authority to this part of the state must, therefore, reduce rather than enhance the individual's influence.

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