Human society, always remember, is a product of human action, and human action is shaped and directed by ideas. Thus society and any concrete order of social affairs are the direct result and outcome of ideas.

Human societies would not exist without social cooperation.

Ultimately, there are only two possible types of social cooperation:

There is cooperation by means of voluntary choice and coordination — which precisely because it is voluntary may be accurately called contractual — and there is cooperation by means of coercion, command, and subjugation.

To the extent that societies are formed by means of voluntary agreement and cooperation, the logical relationship between individuals in this cooperative society remains symmetrical: they are all parties to interpersonal exchange contracts. Jane has the same relation to Jennifer as Jennifer has to Jane.

To the extent that societies are forged in coercion, compulsion, or subjugation, there is one who commands, and then there are those who obey these commands. The logical relations between these two classes is asymmetrical: there is the one in power, and there are the people under the subjugation of that power, and it is the powerful who choose and direct action, while the others — the wards — live and act as mere pawns under the will of any given leader’s fingers.

The power that calls into life and animates any social body is always ideological might, and the thing which makes an individual a part of any society is always her or his own conduct.

What differentiates the coercive bond from the voluntary-contractual bond is, to a precisely proportionate extent, the scope in which the choices of the individuals can legitimately shape and determine the course of events.

Whether the director is an individual or an organized group of individuals and whether the director is a manaical tyrant or a good-hearted paternal despot is of no fundamental relevance for the structure of the whole system. The whole point here is to specify that there are, in the final analysis, only two possible types of social cooperation: voluntary and coercive.

 

Wrote Friedrich August von Hayek.

The distinction between these two types has also been made by many other thinkers throughout history: for instance, Adam Ferguson, in his Essay on the History of Civil Society (1789), called it “a contrast between warlike nations and commercial nations.”

Saint Simon described it as “the contrast of pugnacious nations against peaceful or industrial nations.”

Herbert Spencer — a human being of utter (if inconsistent) genius, in my opinion —  in his voluminous Principle of Sociology (1914), described it as “a contrast of individual freedom and those of a militant structure.”

Werner Sombart depicted it as “heroes versus peddlers.”

And Ludwig von Mises:

“The state as an apparatus of compulsion and coercion is by necessity a hegemonic organization … [whereas] the characteristic feature of peaceful civilization is the voluntary-contractual structure proper to human cooperation.”

Voluntary human action, which includes the process of voluntary exchange and freedom of association, is not a “zero-sum game,” as you’ve been told, nor is it a “win-lose” arrangement, as you’ve also had hammered into your head. Neither does the introduction of money as a medium which facilitates the process of exchange alter this bedrock fact.

Peaceful societies and peaceful cooperation are only possible under voluntary-contractual organization, and “human civilization as it has been hitherto known to historical experience is preponderantly a product of contractual relations,” as von Mises also wrote. He then continued:

“Where there are violent conflicts and as far as there are such conflicts, there is neither cooperation nor societal bonds. Those political parties which in their eagerness to substitute the coercive system for the contractual system point at the rottenness of peace and of bourgeois security, extol the moral nobility of violence and bloodshed and praise war and revolution as eminently naturel methods of interhuman relations, but here they contradict themselves. For their own utopias are designed as realms of peace. The Reich of the Nazis and the commonwealth of the Marxians are planned as societies of undisturbed peace. They are to be created by pacification – i.e., the violent subjection of all those not ready to yield without resistance. In a contractual world, various states can quietly coexist. In a coercive, hegemonic world there is no possibility of this: there only can be one Reich or commonwealth and only one ruler. Socialism must choose between a renunciation of the advantages of division of labor encompassing the whole earth and all peoples and the establishment of a world-embracing coercive order. It is this fact that made Russian Bolshevism, German Nazism, and Italian Fascism “dynamic” – i.e. aggressive. Under voluntary, contractual conditions, empires are quietly dissolved into a loose league of autonomous member nations. The hegemonic system is bound to strive after the annexation and forceful usurping of all independent states.

“The contractual order of society is an order of right and law. It is a government under the rule of law as differentiated from the welfare state or paternal states. Right (as law) is the complex of rules which specify, sanction, and determine the orbit in which individuals are free to act. No such orbit is left to wards who live under a coercive regime of power. In such a state, there is no right or right law. There are only directives and regulations which the director may change daily and apply with what discrimination he or she pleases and which the wards must obey” (Ludwig von Mises, Human Action).

There is no type of freedom and liberty except the type which voluntary action and voluntary exchange brings about. In a totalitarian society, the only freedom that is left to the individual, because it cannot be denied to him or her, is the freedom to obey or not obey.