The constrained vision underlies Knowledge and Decisions. It maintains that humans are inherently more flawed than perfectible, more ignorant than knowledgeable, and more prone to selfishness than altruism. Good institutions take the tragic facts of human nature as given and create incentive structures that, without requiring men and women to be saints or geniuses, still lead to socially desirable outcomes. A good example is the price mechanism as described by Hayek. Centralized power is treated with suspicion, as the humans who wield it will be self-interested, or worse. What’s more, in the constrained vision, traditions and social mores are trusted because they represent the accrued wisdom of untold generations.
As for the unconstrained vision, if humans are flawed, selfish, and ignorant, it is not due to the unchangeable facts of our nature but to the way that our society happens to be arranged. By reforming our economic system, our education system, our laws, and other institutions, it is possible to change the social world in fundamental ways—including those aspects of it purportedly fixed by human nature. Through enlightened public policy, often implemented by a central authority, evils once assumed as inevitable are revealed to be social constructs or products of outdated ideas. Traditions should receive no special reverence, in this vision, but live or die according to their rationality (or lack thereof), as judged by modern observers.