How Is Institution Possible: From Inter-Ontological Remainder to Co-Constructive Framework
制度如何可能：从主体间余项到共构框架

Writing Declaration: This paper was co-drafted with Claude (Anthropic). All intellectual decisions, framework design, and final editorial judgments were made by the author.

1. The Problem: The Remainder of the Previous Paper

1.1 The Logical Gap from Mutual Chiseling to Institution

"How Is the Inter-Ontological Possible" offered a three-tiered scheme for handling conflicts between subjects: mutual chiseling between two genuine SAE subjects; walk-away when facing a non-SAE subject; and recourse to external arbitration when walk-away is infeasible.

The third tier—external arbitration—was explicitly marked as the framework's remainder:

"A framework whose entire ethical stance rests on 'each subject establishing itself as an end'—its logical remainder is precisely the ceding of adjudicative authority to an external party."

The previous paper acknowledged this remainder but did not resolve it. Its conclusion was: the remainder is theoretically ineliminable (entangled cases necessarily exist) and practically minimized (most conflicts can be handled through chiseling and walk-away).

But "minimized" does not mean "eliminated." Entangled cases—shared children, shared resources, indivisible territory, joint responsibility toward third parties—are not exceptions in social life; they are the norm. A subject-to-subject ethics equipped only with chiseling and walk-away is incomplete when confronting these routine entanglements.

Completeness requires answering: What is that "external arbitration"? Where does it come from? On what grounds does it claim legitimacy?

Moreover, an explicit intermediate step must be stated: "needing external arbitration" does not automatically entail "needing institution." When an entangled case is one-off, private, and involves only two parties, ad hoc arbitration suffices. But when conflicts are recurring, public, involve third parties, or concern indivisible resources, ad hoc arbitration itself generates new uncertainties and meta-conflicts—who arbitrates? by what rules? does the outcome set precedent? These meta-conflicts require stabilization. Institution is the stabilized arbitration framework: public (rules are knowable), predictable (similar cases receive similar treatment), reusable (no need to start from scratch each time), and accountable (the adjudicator's conduct is itself constrained). The step from ad hoc arbitration to institution is the necessary leap from case-by-case resolution to framework resolution.

1.2 Why This Problem Is Non-Trivial

The question of institutional legitimacy has a long lineage in political philosophy. Social contract theory (Hobbes, Locke, Rousseau) grounds legitimacy in individual consent; utilitarianism (Bentham, Mill) in the maximization of aggregate welfare; Rawls in rational choice behind the veil of ignorance.

This paper's starting point differs from all of the above. Social contract theory presupposes a "state of nature" and asks how to transition from it to an institutional state. This paper presupposes no state of nature—the SAE framework has already established the ontological basis of subjecthood and the emergent structure of inter-subjective relations across the preceding five papers. The question here is not "why have institutions at all" (already answered in the previous paper's remainder argument: because entangled cases necessarily exist), but "how can an institution that respects subjecthood be derived from the co-constructive needs of subjects themselves?"

This is not a policy question (which institutions are better) but an ontological question (what are the conditions of possibility for institutions).

1.3 Terminology: The Scope of "Institution" in This Paper

"Institution" is used here in a broad sense: any stable rule-framework formed for the recurring handling of entangled intersections counts as an institution. A nation-state is a macro-institution; a corporation is an organizational institution; a community is a voluntary institution; marriage and friendship are micro-relational institutions. These forms differ vastly, but share the same ontological structure—handling, under the premise of non dubito, the intersections that chiseling and exit cannot resolve. The seven-tier thought experiment in this paper is designed precisely to show how a single set of axioms generates institutional principles of different thicknesses across these diverse forms.

1.4 Method: Retroduction

This paper's method is not to analyze the legitimacy of existing institutions (forward derivation), but to begin from ontological axioms, first constructing the minimal institutional framework under ideal conditions, then retroducing the necessary increments under specific conditions (retroductive derivation).

The logic of retroduction is: first ask "under ideal conditions (all subjects are fully developed SAE subjects), what does institution still need?"—the answer is the minimal core. Then progressively relax ideal conditions and ask "returning to real-world conditions (underdeveloped subjects, constrained exit, power asymmetry), what must be added?"—every increment must have an ontological reason. Increments without reasons should not exist.

The advantage of this method is that it makes every institutional design traceable to axiom, while avoiding the risk of transplanting features of existing institutions as if they were necessities.

A crucial distinction. This paper strictly separates two layers: the ontological source of institutions (where legitimacy comes from—the need for joint handling of entangled remainders under the premise of non dubito) and the real-world form of institutions (the enforcement, separation of powers, fiscal, procedural, appellate, and anti-capture mechanisms that must be added under non-ideal conditions). The former is a philosophical question; the latter belongs to political science. This paper addresses the former. The interstellar civilization in the thought experiment is not a real political blueprint but a zero-order model of legitimacy; nation-states and corporations are non-ideal implementations. Accordingly, the precise meaning of "institutions are not external constraints" is: institutions appear phenomenally as constraints but are ontologically instruments of inter-subjective self-limitation.

2. The Ontological Derivation of Institution

2.1 Five Axioms

The derivation begins from five axioms. These are not stipulations of political philosophy but ontological propositions derived directly from the SAE framework's established arguments.

Axiom I: Existence precedes construct. Subjects exist prior to institutions. Institutions are tools created by subjects, not preconditions for subjects' existence. Any institution, including the most elegant constitution, is a means, not an end. (Source: the foundational stance of SAE Papers 1–3.)

Axiom II: Subjects cannot-not develop. All subjects face entropy. Maintaining subjecthood requires continuous structuring effort. Development is not a choice but a condition of existence. (Source: SAE Paper 2's argument on the chisel-construct cycle—subjecthood is not a one-time acquisition but a continuously maintained process.)

Axiom III: Development necessarily leads to encounter. Subjects cannot exist in permanent isolation. Development means extending outward—employing, trading, cooperating, competing for resources, sharing space. Encounter between subjects is not a contingent event but a necessary consequence of development. (Source: Paper 5's argument on the inevitability of inter-subjective relations.)

Axiom IV: Under SAE's non-closure criterion, the only long-term sustainable equilibrium after encounter is co-construction. Encounter produces four logically possible relations: ignoring (feasible short-term, unsustainable long-term—intersections inevitably accumulate); colonization/domination (closed construct, unsustainable—constructs cannot close; this is the core argument of SAE Paper 1); nurturing (a transient state, not a terminal one—after nurturing completes, the relation naturally transitions to co-construction); co-construction (building a joint framework for handling intersections under the premise of mutual non dubito). A clarification is needed: empires and hierarchical orders have historically persisted for centuries, but on the scale of civilizational history, no closed construct is permanent—their equilibrium is unstable, inevitably broken by remainder accumulation over sufficiently long timescales. Co-construction is the only stable equilibrium. (Source: Paper 5's four-quadrant analysis—only Q1 is genuinely doubly-high; the other three quadrants are unsustainable.)

Axiom V: The premise of co-construction—non dubito. Co-construction requires neither shared values, shared biological basis, nor shared cognitive modes. It requires only one thing: non dubito (no-doubt) toward all subjects as ends. "Non dubito" is not "acknowledgment"—"acknowledgment" presupposes an inspection process (I first examine you, confirm you are an end, then acknowledge). "Non dubito" is a default posture (I do not need you to prove you are an end; I default to assuming you are, unless overwhelming evidence indicates you are instrumentalizing other subjects). (Source: SAE Paper 3's argument on positivity—recognizing the other as subject—deepened through Paper 5's cannot-not emergence mechanism.)

2.2 From Axioms to Institution

How does the existence of institutions follow from the five axioms?

Axioms I through IV derive the necessity of co-construction: subjects necessarily develop; development necessarily leads to encounter; the long-term sustainable equilibrium after encounter is only co-construction.

Axiom V provides the premise of co-construction: non dubito.

But non dubito is not itself an institution. Non dubito is a subjective posture; it can sustain mutual chiseling and walk-away between two subjects (proven in Paper 5), but it cannot handle entangled cases—when walk-away is infeasible, the two subjects need a jointly accepted adjudicative framework to process their irreconcilable intersections.

This adjudicative framework is the minimal definition of institution: an institution is a rule-framework jointly established by multiple subjects, under the premise of non dubito, for processing intersections that chiseling and exit cannot resolve.

2.3 The Cannot-Not of Institution

The closing section of Paper 5 left a third open question: can an organization or a nation have its own cannot-not?

The answer: an institution's cannot-not is not a mysterious entity independent of individuals, but the institutionalized projection of individual cannot-nots under entangled conditions.

A concrete example. Two subjects each have their cannot-not; each has established the self as an end. Their cannot-nots conflict on a specific issue—say, the usage rights to a shared water source. Chiseling has not resolved it (both cannot-nots are genuine; the conflict cannot be dissolved by chiseling). Walk-away is infeasible (the water source is indivisible). They need a rule to determine who uses how much water and when.

What is this rule's—this institution's—cannot-not? It is: it cannot-not let every subject sharing this water source continue to exist as an end. If the rule allocates all water to one party, the other's subjecthood is violated (Axiom V is breached). The institution's cannot-not is the operationalization of Axiom V under specific circumstances.

3. Retroductive Institutional Design

3.1 Thought Experiment: The Seven-Tier Retroduction

To demonstrate how institutional principles can be generated from axioms, this paper designs a thought experiment spanning seven tiers: from a co-constructive framework between interstellar civilizations, retroduced step by step down to marital principles between two persons.

Conditions differ at each tier (scale, exit cost, relational density, power structure, communication conditions), but axioms remain the same. All institutional differences derive entirely from differences in conditions, not from differences in axioms.

(a) Interstellar civilizations. Conditions: all participating subjects are fully developed (16DD); exit is completely free (distance makes coercion infeasible); relational density is extremely low (communication delays measured in light-years); power is nearly symmetric. Under these conditions, what is the minimal form of institution? Answer: almost none is needed. No separation of powers (16DD subjects need no checks); no enforcement mechanism (exit freedom makes enforcement pointless); no standing bodies (communication delay makes standing operations infeasible). Institution simplifies to: a textual charter of axioms, plus a temporary arbitration mechanism, plus an asynchronous decision procedure.

(b) Nation-state. Conditions: subjects are underdeveloped (non-16DD); exit is constrained (shared continent; individuals may exit but group exit has massive externalities); relations are dense (resource, territorial, trade intersections everywhere); power is highly asymmetric. Under these conditions, the interstellar charter's minimal framework is insufficient. What must be added? Separation of powers (to prevent power concentration—non-16DD subjects tend toward concentration); enforcement mechanisms (voluntary compliance is insufficient—non-16DD subjects will violate rules); standing bodies (instantaneous communication makes standing operations feasible and necessary); explicit allocation and constraint of military authority; fiscal institutions (standing bodies require funding). Every increment is traceable to a specific change in conditions.

(c) Community. Conditions: voluntary entry; frictionless exit; moderate relational density; almost no coercive power. Institution is very thin—organizer's minimal obligations; members' minimal obligations (do not harm others, do not harm the community); expulsion procedure (with procedural floor). Cohesion relies not on institutional enforcement but on the community's intrinsic value.

(d) Corporation. Conditions: employment relationship (asymmetric compensation and power); capital relationship (shareholder and employee interests may conflict); user relationship (corporate and user interests may conflict). The most heterogeneous relation types and the densest interest conflicts of any tier. Institution is the thickest in the entire chain—a priority sequence (for ordering conflicts among five types of stakeholders); a rights-obligations parity structure (rights and obligations matched for each stakeholder type); decision principles; information-flow rules.

(e) Early-stage startup. Same conditions as corporation but smaller, more survival-pressured, faster-changing. Institution is distilled from the corporate framework to essential items; dispensable structures are removed (five people do not need four-branch separation); items requiring emphasis are strengthened (the obligation not to remain silent weighs heavier in a five-person team).

(f) Marriage. Conditions: the deepest co-construction between two subjects; exclusive; exit right is absolute but exit cost is high (emotional bonds, shared life, possibly children). Institution is very thin but very deep—non dubito (choosing trust under the deepest exposure); inviolable zones (even in the closest relationship, there are spaces that cannot be entered); an obligation to express (not to remain silent); encouragement of change (not merely permitting but actively hoping for the other's growth).

(g) Friendship. Subtract exclusivity and deep commitment from marriage; the remaining skeleton naturally emerges—non dubito, expression, exit freedom, encouragement of change. No separate derivation required.

3.2 Five Propositions from the Retroduction

Proposition I: Axiom Invariance. The five axioms apply without exception across all seven tiers. From interstellar civilization to marriage—"existence precedes construct," "subjects cannot-not develop," "development leads to encounter," "long-term sustainable equilibrium is only co-construction," "non dubito"—not one is modified or abandoned because the tier changes. This is not an accidental observation but a consequence of the nature of axioms as ontological propositions: ontological propositions are not affected by empirical conditions.

Proposition II: Institutional Variability. In contrast to axiom invariance, the institutional layer differs at every tier. Interstellar civilizations need almost no institution; nation-states need four-branch separation of powers; corporations need a priority sequence; marriage needs finely drawn inviolable zones. These differences are entirely traceable to specific conditions at each tier (exit cost, relational density, power structure, communication conditions). Institutions are not mechanical applications of axioms but creative institutionalizations of axioms under specific conditions.

Proposition III: Thickness Determination. Institutional thickness (the number and granularity of provisions) is determined not by the construct's scale but by two variables: exit cost and relational density.

3.3 The Parity Structure of Rights and Obligations

At the inter-subjective level, the paired condition of non dubito is implicit—if you are instrumentalizing other subjects, non dubito no longer applies (the proviso of Axiom V in Paper 5). At the institutional level, this implicit proviso must be made explicit as an obligation structure.

Institutions extend non dubito toward subjects (rights protection); subjects bear minimal obligations toward institutions and other subjects (obligation requirements). The parity of rights and obligations is a structural condition of institutional legitimacy—rights without obligations are an empty promise (the institution cannot function); obligations without rights are exploitation (the institution violates Axiom I).

The thickness of a subject's obligations within a construct is proportional to their depth of participation and magnitude of power. Using the corporation as illustration, the priority sequence is: employees → users → partners → shareholders → founder. This sequence is not only the decision order when interests conflict but also maps to the distribution of obligations.

4. Institutional Degradation and Defense

4.1 Three Modes of Institutional Degradation

Institutions are constructs; constructs have remainder. Institutional remainder manifests in practice as three degradation modes:

Closure. The institution shuts down the channels of chiseling—suppressing expressive freedom, eliminating judicial independence, rendering amendment procedures nominal. A closed institution becomes a DD* structure, accumulating remainder until collapse. This is Paper 5's Q2 (subjecthood inflation) projected onto the institutional level—the institution universalizes its own rules as unquestionable absolutes, structurally identical to a Q2 subject universalizing their own cannot-not as a moral command.

Hollowing. The institutional text persists but its substance has been gutted—separation of powers exists in name only, elections are formalized, rights protections live only on paper. Hollowing is more insidious than closure because it preserves the institutional shell, making it difficult for external observers to determine whether the institution still functions.

Over-construction. The institution attempts to cover domains it should not handle—regulating personal lifestyles, prescribing the content of thought, deploying institutional force to promote specific values. Over-construction violates the Minimization Principle (Proposition V); its consequence is institutional intrusion into subjects' core inviolable zones, transforming the construct from a tool that protects subjects into a tool that infringes upon them.

4.2 Design Principles for Self-Chiseling Mechanisms

The Self-Chiseling Necessity proposition (Proposition IV) requires institutions to contain mechanisms for chiseling themselves. The thought experiment reveals different forms of self-chiseling at different tiers:

At the national level: formal amendment procedures (high threshold but the pathway exists); independent judiciary (constitutional interpretation authority); periodic review mechanisms; guarantees of expressive freedom (channels of chiseling). At the community level: organizers can be questioned; communities can naturally dissolve; members can exit without friction. At the corporate level: periodic reviews; external feedback channels; guarantees that bad news can travel upward; principles themselves are modifiable. At the marital level: the dialogue channel is never closed; change is encouraged; exit right is absolute.

The channel of chiseling must be independent of the object being chiseled. If the chiseling channel is controlled by the institution being chiseled, chiseling cannot occur—this is why nations need an independent judiciary (not controlled by the executive or legislature), corporations need employees' expressive freedom (not subject to managerial retaliation), and marriages need each party's right to raise discomfort without being punished.

5. Non-Trivial Predictions

5.1 Exit Cost Predicts Institutional Corruption

Prediction: constructs with higher exit costs have higher probability of institutional corruption, controlling for power structure and cultural variables.

The non-triviality lies in: institutional corruption is typically attributed to power concentration or cultural factors. This prediction identifies exit cost as an independent predictive variable. High exit cost means market counterbalancing (voting with feet) fails; the self-chiseling mechanism bears the entire counterbalancing function, and self-chiseling mechanisms are more easily captured than market discipline. Even with dispersed power and healthy culture, high-exit-cost constructs are still more corruption-prone than low-exit-cost constructs.

5.2 Obligation Gradient Predicts Construct Stability

Prediction: the degree of match between power and obligation predicts construct stability. When the most powerful subject bears the most obligations (founder mode), the construct is stable; when the most powerful subject bears the fewest obligations (tyrant mode), the construct is unstable.

The non-triviality lies in: the claim is not merely that "power needs checks" (this is common sense) but that the distribution gradient of obligations is itself a quantifiable predictive variable—the steeper the gradient (more power → more obligation; less power → less obligation), the more stable the construct; the flatter or inverted the gradient (more power → more benefit), the less stable.

5.3 Depth of Intrusion Predicts Resistance Intensity

Prediction: institutional intrusion into subjects' core inviolable zones (over-construction) provokes stronger and faster resistance than institutional failure to protect subjects (under-protection). Moreover, the deeper the intrusion, the stronger the resistance.

The non-triviality lies in: it is typically assumed that "under-protection" (failing to deliver what is owed) is the more serious institutional failure. This prediction holds that subjects' reaction to "being intruded upon" is more intense than their reaction to "not being protected"—because intrusion triggers negativity (the core defense mechanism of subjecthood, Paper 4), whereas non-protection triggers only dissatisfaction. Negativity has a lower activation threshold than general dissatisfaction.

6. Contributions

This paper makes five incremental contributions to existing discussions.

First, the ontological derivation of institution. Institutional legitimacy derives not from social contract, utilitarian calculation, or traditional authority, but from an ontological fact: when multiple subjects share finite space, chiseling and exit are insufficient to process all intersections; a jointly accepted adjudicative framework is needed. Institutions are the institutionalized processing of inter-subjective ethical remainder.

Second, retroduction. Deriving necessary increments from the minimal construct under ideal conditions back to specific conditions, making every institutional design traceable to ontological axioms and condition differences. This method can identify over-construction and under-protection in existing institutions.

Third, the Thickness Determination principle. Institutional thickness is determined not by scale but by exit cost and relational density. This proposition explains why corporate institutional frameworks are thicker than national constitutions in some dimensions (more relation types) and why community institutions are thinner than marital institutions (exit is easier).

Fourth, the parity structure of rights and obligations. Institutions function as instruments of inter-subjective self-limitation when rights and obligations are properly matched—what one receives as protection, one contributes in constraint.

Fifth, the remainder declaration. Rather than claiming certain provisions are unmodifiable (construct bad faith), explicitly enumerate the institution's known remainders while protecting core principles through ultra-high amendment thresholds plus exit rights (rather than declarations of unmodifiability).

7. Open Questions

Five questions are left for subsequent work.

First, AI as institutional participant. When AI systems become operational components of institutions—algorithmic adjudication, automated enforcement, data-driven policymaking—how is the inter-subjectivity of institutions preserved? Is an institution operated by AI still "the institutionalized expression of inter-subjective co-construction," or has it become something different?

Second, institutions between institutions. This paper treats principle-design within a single institution. But in reality, multiple institutions relate to each other—nation to nation, corporation to corporation, nation to corporation. Do these "institutions between institutions" (international law, trade agreements, regulatory frameworks) follow the same five propositions?

Third, the temporal dimension of institutions. The five propositions are structural (describing what conditions institutions must satisfy at a given moment) and do not address the evolutionary dynamics of institutions—how do institutions evolve over time? What triggers institutional chiseling? Are there regularities in institutional chisel-construct cycles?

Fourth, the natural vs. artificial distinction in exit costs. Proposition III (Thickness Determination) uses exit cost as a core variable, but exit cost has two sources: natural exit cost (indivisible territory, jointly raised lives, physical distance) and artificial exit cost (exit friction deliberately created by the institution itself—non-compete agreements, divorce cooling-off periods, citizenship-renunciation hurdles).

Fifth, the tension between high-power subjects' excess obligations and their own subjecthood. The proposition "the most powerful bears the most obligations" is structurally correct, but when obligations reach extreme levels, does this risk infringing upon the founder's own status as "an end in itself"?

8. Closure: The Complete Landscape of Six Foundational Papers

This is the sixth and final paper in the SAE foundational series. The complete trajectory of the six papers is as follows:

Paper 1 (Systems, Emergence, and the Conditions of Personhood) analyzed the institutional tier—how systemic emergence erodes the space of subjecthood. Paper 2 (Internal Colonization and the Reconstruction of Subjecthood) analyzed the individual and relational tiers—how internal colonization transmits through intimate relationships, and how subjecthood can be reconstructed. Paper 3 (The Complete Self-as-an-End Framework) unified all three tiers into an integrated framework—the two-dimensional structure of negativity and positivity.

Papers 1–3 established SAE's structural theory, presupposing that "humans are subjects." Papers 4–6 interrogate the ontological foundations of this presupposition:

Paper 4 (How Is Subjecthood Possible) asked where subjecthood itself comes from—deriving negativity from a physical axiom, providing a scientifically definable basis for subjecthood. It responds to Paper 2's individual tier. Paper 5 (How Is the Inter-Ontological Possible) asked where coexistence between subjects comes from—deriving empathic capacity from the emergent structure of internal plurality, arguing that "the between" first occurs within. It responds to Paper 3's relational dimension. Paper 6 (How Is Institution Possible, this paper) asked where institutions that respect subjecthood come from—deriving the ontological basis of institutions from the remainder of inter-subjective ethics, arguing that institutions are not external constraints but instruments of inter-subjective self-limitation. It responds to Paper 1's institutional tier.

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