INSTITUTIONAL TURN: PRECONDITIONS OF PRIVATE AUTONOMY

Private autonomy and freedom of contract, in particular, can be justif ed on moral grounds. The further conclusion typically drawn by lawyers was to identify individual freedom with the realm of private law. However, the moral justification of private autonomy faces a kind of ‘institutionalisation gap’, because it does not deal with the institutional preconditions of private autonomy. confines itself to making the rights of formally equal persons compatible with each other, because it presupposes amongst other things general access to property as a means for economic inclusion of persons – persons who are only then able to exercise the freedom secured through a right. However, the way moral reasoning in private law deals with the problem of the preconditions of rights and necessary inclusion of persons into social systems is simply to decline responsibility and move the issue to the forum of public law. Thus private law, thinking traditionally, resolves the institutional question through a kind of theoretical externalisation.

This externalisation is clear, for instance, in Savigny's concept of the obligation, which he sees as fully subjected to the realm of law, being a ‘pure mere legal relation’ that is mastered without any reference to normativities outside the law, let alone societal considerations. The result is a functional division between the rules governing private contracts and the public law rules dealing with the social preconditions – and effects – of contractual freedom. A similar understanding and externalisation can be traced in the work of Rawls who championed ‘the idea of a division of labor between two kinds of social rules’ and their different institutional realisation. According to Rawls, one kind of rule defines the social background and manages to continually adjust and compensate for the inevitable tendencies away from background fairness, while a second kind of rule governs the transactions and agreements between individuals and associations – so that ‘individuals and associations are … left free to advance their ends more effectively within the framework of the basic structure, secure in the knowledge that elsewhere in the social system the necessary corrections to preserve background justice are being made’.