Sovereignty as exchange of political property rights

Boettke (2012) categorizes the conjunction of methodological individualism, rational choice, and “invisible hand” explanations, which I employ here, as the foundation of mainline political economy, going back to Adam Smith.

Interestingly, the theory of legitimacy most congruent to my theory of sovereignty may be the ‘Mandate of Heaven’ (Tianming, see e.g., Mote 1999, pp. 8–10), rather than any Western theory. However, for the purposes of this paper, I will not hereafter consider non-Western conceptions of sovereignty, or any theory of legitimacy, hereafter. Since I am using past theories as steppingstones to constructing my own, rather than considering them in their own right, the omission will not pollute my analysis.

I thank an anonymous referee for helping me to develop this point.

Unlike Congleton (2011), de Jouvenel ([1945] 1993, esp. pp. 26–28) does explicitly discuss sovereignty. de Jouvenel roots sovereignty in authority: the ability of a ruler to gain power not through domination, but through winning the assent of those a ruler seeks to govern. In other words, sovereignty relies on political bargains. It is not, however, democratic. Ultimately to de Jouvenel sovereignty means the right to command in a specific socio-political context. A normative treatment of sovereignty would have to wait until the next work in his political trilogy (de Jouvenel [1957] 1997).

See also Mises (1944) and Niskanen ([1971] 2007).

This theory of de facto organizational autonomy is commensurate with classical elite theory (Michels [1911] 1915; Mosca 1939; Pareto [1901] 1991).

The discussion of the Prisoners’ Dilemma, and later on the discussion of the Ultimatum Game, will proceed rather informally. Since these games are used merely for illustrative purposes, this should not be a problem. The use of these games to model interpolity behavior is obviously not new; what I focus on is how the form of the game in question sheds light on the underlying structure of political property rights, and hence sovereignty.

The labels ‘England’ and ‘France’ are used for historical familiarity only. Having just presented, in Sects. 2 and 3, arguments for the de facto existence of divided sovereignty, I do not mean to claim here that England and France are necessarily unitary sovereigns. But given the history of post-Westphalian international relations, I believe these labels may, in certain circumstances, have some truth. First, separate sovereigns within a polity can obviously find it in their interest to cooperate in the face of an existential threat. Second, the costliness to define and enforce political property rights necessarily entails some ‘lumpiness’ in those rights. Imagine a sovereign organization, in possession of a military, wished to conquer merely one organization in another polity to acquire its rights-claims, but not the whole polity. How could the first organization do this without threatening the opposing polity as a whole? The idea of targeted predation among modern nation-states appears incredible, but in medieval times, sovereign transfers of this kind took place regularly. This highlights the importance of the larger political-economic context for understanding which political bargains are self-enforcing, and which are not.

Again, whether this is desirable or even possible, and what the distribution looks like, depends on the ordinality of payoffs at each stage. Assume that the payoffs are such that this is possible and rational for both parties. Since I am using these games only for exposition, I will not sacrifice analytical power in making use of these tautologies.

That is, a body with separate personhood, de facto, from the personhood of the members that make up this body. In other words, the offices of governance are inhabited by, but not reducible to, individuals, a point in some tension with de Jouvenel’s ([1957] 1997) and North et al.’s (2009) theories. In the limit, the corporate body may comprise a single individual occupying a single office, such as Louis XIV in his capacity of King of France. But with the possible exception of Congleton’s (2011) political formateurs, the individual is conceptually distinct from the social role of sovereign.

My theory of sovereignty suggests that a truly sovereign nation-state is the exception, rather than the rule. One criterion that can be used to ascertain whether a nation-state’s government is sovereign is whether the government can reasonably be modeled as having a single preference scale. As argued about the United States in Sect. 3, and in another context by Wagner (2010, 2012), modern states usually are orders, not organizations, and thus fail the ‘test.’ If a state is also to be sovereign, it is probably both small and authoritarian, which would render unitary control more feasible. For example, the government of Singapore may reasonably be classified as sovereign, due to its unified internal hierarchy, and the market-based incentive alignment mechanisms used to prevent power-diffusing political bargains; likewise, the governments of the individual principalities that comprise the United Arab Emirates, a true confederation, are probably sovereign, in virtue of the royal family’s ownership of governance technology (Salter and Hall 2015; Salter 2015b). But these are highly peculiar cases; the default assumption within modern polities should be not a single sovereign, but competing and coexisting sovereigns.

‘Anarchy’ in this sense should be thought of as governance by means other than nation-states (Leeson 2012).

Admittedly the boundary between sovereign hierarchies and the rights-claims themselves can be fuzzy (e.g., Aligica and Tarko 2013), because political property rights, like all property rights, are costly to define and enforce. But as before, this does not prevent us from analyzing them. The chief point of this paper is that, even in governance situations where familiar nation-states are absent, there is always a sovereign—or more properly, a group of interacting sovereigns—because at some level, social arrangements must rest on self-enforced claims. The phenomenon the Romans lamented as imperium in imperio—“a state within a state,” remembering that the Roman definition of statehood was quite different from ours—is properly analyzable as multiple sovereigns interacting in a given territory. Whether this interaction is largely peaceful or conflict-prone depends on the criteria I discussed in Sects. 3 and 4 in this paper.