FE144—If Only Men Were Angels

Institutional Wisdom for an Imperfect Species

Human beings are capable of extraordinary virtue and extraordinary failure, often within the same hour. Any society that ignores this duality—expecting pure altruism or assuming perfect self-restraint—builds its future on illusion. If Only Men Were Angels examines why enduring political and economic systems must be designed, not for imaginary perfection, but for the predictable patterns of a yet imperfect species.

This essay traces a line of insight stretching from Ulysses to Madison, from Mises to J. Reuben Clark, and ultimately to Martin Luther King Jr. Each, in different language and different eras, recognized the same truth: goodwill alone cannot preserve liberty or sustain prosperity. Human communities require structural wisdom—mechanisms that restrain power, reveal subjective value, and bend our collective efforts toward justice.

FE144 introduces the philosophical foundation for EconStitutionalism, a framework that embeds constitutional principles directly into economic life. Through whitepapers for Constitutional Business Alliances (CBAs) and Value-Linked Currencies (VLCs) , we show how decentralized governance, transparent valuation, and moral purpose can work together rather than in conflict.

This essay sets the stage. What follows in the series is built upon the recognition that human beings are not angels—and that wisely designed institutions can harness our strengths, mitigate our weaknesses, and guide society toward the long arc of justice.

Introduction

James Madison (1751–1836)

Often called the Father of the Constitution and the Father of the Bill of Rights, James Madison helped shape both the structure of the United States government and the constitutional protections of individual liberty. As the principal architect of the Constitution, the primary author of many of the Federalist Papers, and later the fourth President of the United States, he was uniquely positioned to explain why free societies require constitutional checks and balances. His enduring contribution was not simply advocating liberty, but explaining how constitutional structures could preserve liberty despite the imperfections of human nature.

James Madison observed that “If men were angels, no government would be necessary.” His insight reaches far beyond government. Human beings genuinely desire justice, prosperity, and peace, yet we remain susceptible to ambition, temptation, bias, incomplete knowledge, and error. The question is therefore not whether we should love one another, but how a society of imperfect people best puts that love into practice.

This essay argues that enduring institutions are acts of collective wisdom. Properly designed, they restrain power, reveal truth, encourage cooperation, and protect us—even from ourselves. In that sense, checks and balances are not evidence of distrust. They are among the highest expressions of responsible self-government.

The Ulysses Principle

Modern behavioral economists use the term Ulysses Contract to describe a voluntary commitment that limits one’s future freedom in order to avoid predictable mistakes.[1] The name comes from Homer’s Odyssey, in which Ulysses instructs his crew to bind him to the mast before sailing past the Sirens. He knows that when temptation arrives, his future judgment cannot be trusted. Rather than relying upon willpower alone, he relies upon structure.

The lesson is profound.

Ulysses does not bind himself because he despises his future self. He binds himself because he understands his future self. He willingly accepts a temporary restraint today to preserve something more valuable tomorrow.

Civilizations make similar choices. Constitutions, contracts, markets, accounting systems, courts, and countless other institutions are all forms of collective pre-commitment. They acknowledge that human beings are capable of extraordinary wisdom and extraordinary error. Rather than pretending those weaknesses do not exist, they seek to limit the harm those weaknesses can produce. This is not pessimism. It is institutional wisdom. In fact, if we truly care about others—if we love them—we must sometimes restrain our own ambitions, impulses, and desires. Binding ourselves can be an act of love.

Love Requires More Than Good Intentions

At first glance, there appears to be a tension between constitutional restraint and the commandment to “love thy neighbor as thyself.” One seems to begin with distrust. The other begins with love.

Yet they are not opposites.

Love does not eliminate human weakness. It recognizes it. Because we value one another, we willingly establish institutions that protect us from the predictable consequences of our own imperfections. We bind ourselves to the mast. We accept constitutional limits on our own future actions because we recognize that our neighbors deserve protection from our future mistakes just as we deserve protection from theirs.

Seen in this light, institutional design becomes an act of mutual care. Love provides the moral purpose. Wisdom determines the design.

Madison: Constitutional Restraint

James Madison approached the problem through politics. His concern was not whether people were good or bad, but whether liberty could survive the realities of human nature. He understood that ambition, conviction, generosity, pride, and self-interest coexist within every person. A constitutional system that ignored this complexity would eventually fail.

As he wrote in Federalist No. 51:

“If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.”

His solution was not to search for perfect leaders but to design institutions that remained stable even when leaders were imperfect.

“Ambition must be made to counteract ambition.[2]

Madison’s genius was recognizing that constitutional design should work with human nature rather than against it. Checks and balances are therefore not expressions of distrust. They are expressions of foresight. Rather than hoping human nature changes, Madison designed institutions that work with human nature.

Thomas Jefferson (1743–1826)

“In questions of power, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.”

While Madison explained why constitutional restraints are necessary, Jefferson reminded us that those restraints are acts of prudence rather than cynicism. Free people willingly accept constitutional limits because they understand the dangers of unconstrained power.

Thomas Jefferson expressed the practical consequence of Madison’s insight when he argued that those entrusted with power should be “bound down from mischief by the chains of the Constitution.” Constitutional restraints are therefore not signs of pessimism. They are expressions of wisdom exercised by a free people who understand both the possibilities and the limitations of human nature.[3]

Mises: Knowledge Requires Discovery

Ludwig von Mises encountered a different problem. Suppose political power is restrained. A society must still determine what to produce, how to allocate scarce resources, and how to recognize value.

Mises argued that no individual—not even one possessing extraordinary intelligence, integrity, and goodwill—could perform this task without the information conveyed through freely formed market prices. The limitation was not moral. It was informational.

His insight extends Madison’s realism. Constitutions compensate for the imperfect exercise of power. Markets compensate for the imperfect distribution of knowledge. Good intentions cannot replace information any more than virtue can replace constitutional restraint.[4]

Ludwig von Mises (1881–1973)

One of the twentieth century’s leading economists, Mises demonstrated that market prices are not merely accounting numbers—they are indispensable signals that communicate dispersed knowledge throughout society. His work explained why even well-intentioned central planners cannot duplicate the informational role of competitive markets.

Human Prosperity Requires Justice

J. Reuben Clark approached the problem from yet another direction. He recognized that political liberty and economic knowledge are insufficient if economic relationships become exploitative. A prosperous society cannot endure when one group consistently benefits at the unjust expense of another.

Clark envisioned a relationship between capital and labor based not upon perpetual conflict but upon partnership. Such a partnership would require more than contracts or legislation. It would require a shared commitment to fairness.[5]

He found that guiding principle in one of civilization’s oldest moral teachings:

“Love thy neighbor as thyself.”[6]

This commandment is often understood as a personal virtue. It is also a principle of institutional design. Institutions should encourage people to prosper together rather than at one another’s expense.

J. Reuben Clark (1871–1961)

Clark was both a diplomat and legal scholar who argued that lasting prosperity depends upon moral relationships as well as economic efficiency. His writings emphasized cooperation between labor and capital rather than perpetual class conflict.

King: Justice Gives Institutions Their Direction

Martin Luther King Jr. reminded us why these efforts matter.

“The arc of the moral universe is long, but it bends toward justice.”[7]

King was not describing the mechanics of institutional design. He was describing its purpose. Justice does not emerge automatically. It advances because each generation chooses either to strengthen or to weaken the institutions that shape human behavior.

Hope gives society its destination. Institutional wisdom provides the means of traveling there.

Martin Luther King Jr. (1929–1968)

King consistently appealed not only to individual conscience but also to institutions. His vision of justice assumed that societies must continually reform their laws and institutions so that they more faithfully reflect enduring moral principles.

Institutional Wisdom

At first glance, these thinkers appear to be discussing unrelated subjects.

  • Madison writes about constitutions.
  • Mises writes about markets.
  • Clark writes about labor and capital.
  • King writes about justice.
  • Drucker writes about organizations.

Peter Drucker (1909–2005)

Often called the father of modern management, Drucker transformed the study of organizations by emphasizing that institutions should be designed around human strengths rather than merely controlling weaknesses. His work naturally extends Madison’s constitutional insights from government into business and other organizations.

Yet they are all wrestling with the same fundamental question:

How should human institutions be designed so that imperfect people can achieve extraordinary things together?

That question is the foundation of this essay. Each thinker contributes part of the answer.

  • Madison teaches that institutions must restrain power.
  • Mises teaches that institutions must reveal knowledge.
  • Clark teaches that institutions must discourage exploitation.
  • King reminds us that institutions should serve justice.
  • Drucker later observed that the purpose of organization is to make ordinary people capable of extraordinary performance , making human strengths productive while rendering weaknesses increasingly irrelevant.[8]

Taken together, these are not competing philosophies. They are complementary design principles.

Conclusion

“If men were angels, no government would be necessary.”

But governments are not inhabited by angels. Neither are businesses. Nor markets. Nor families. Nor communities. They are inhabited by people—real people, capable of remarkable generosity and remarkable failure.

Civilization advances not because human nature has fundamentally changed, but because we gradually learn how to build better institutions. The same principle extends beyond government. As Peter Drucker observed, well-designed organizations make human strengths productive while making human weaknesses increasingly irrelevant. The purpose of institutions is therefore not merely to restrain human weakness. It is equally to unleash human potential.

That is why we willingly bind ourselves with constitutions. That is why we establish clear contracts. That is why we create orderly markets with real prices. That is why we build organizations with checks and balances.  Not because we distrust one another. But because we love one another.

The remaining papers in this series explore one possible application of these enduring design principles. They propose that constitutional wisdom should not end at the boundary of government, but should extend into the economic and organizational institutions that increasingly shape modern civilization.

Notes

1. Ulysses Contract (Wikipedia): Modern explanation of the concept of voluntary pre-commitment in behavioral economics and decision theory.

2. James Madison, Federalist No. 51 (Library of Congress). See especially: “If men were angels, no government would be necessary”; “Ambition must be made to counteract ambition”; and the surrounding discussion of constitutional checks and balances.

3. Thomas Jefferson, Kentucky Resolutions of October 1798, 8th Resolution. Also, “it is jealousy and not confidence which prescribes limited constitutions, to bind down those whom we are obliged to trust with power: that our Constitution has accordingly fixed the limits to which, and no further, our confidence may go…”

4. Ludwig von Mises, Socialism: An Economic and Sociological Analysis, Chapter 6, Section 1: “We may assume that the director of the socialist economy will be a man of extraordinary capability and goodwill… But he will still be unable to cope with the problem because he will lack the guide which market prices alone can provide.”

5. J. Reuben Clark, J. Reuben Clark Selected Papers, edited by David H. Yarn Jr., p. 566. Clark argues that capital and labor should become “the social equivalent” of a partnership characterized by a just sharing of the proceeds.

6. J. Reuben Clark, J. Reuben Clark Selected Papers, pp. 572–573. Clark concludes that the guiding principle for labor-capital rapprochement is the Divine command, “Love thy neighbor as thyself,” leading to “an era of prosperity and goodwill that the world has never before witnessed.”

7. Martin Luther King Jr., “The arc of the moral universe is long, but it bends toward justice.” King popularized this expression, which traces back to Theodore Parker.

8. This principle is consistent with Peter F. Drucker’s observation that “The purpose of organization is to make the strengths of people effective and their weaknesses irrelevant.” See The Practice of Management (1954).