The object of man's desire is not to enjoy once only and for one instant of time, but to assure forever the way of his future desires. And therefore the voluntary actions and inclinations of all men tend, not only to the procuring, but also to the assuring of a contented life. (Hobbes [1651] 1991: Part I, Ch. 11) I Introduction MOST RECENT WORK ON INSTITUTIONAL THEORY has focused on the cost savings (or expected gains) to be associated with various institutional arrangements. (1) But persons typically are concerned not just about cost savings and gains; they worry as well about how to protect against certain kinds of losses. Such a concern is appropriately characterized as a prudential concern. (2) In what is to follow, I want to explore the implications, for a theory of rationally defensible institutional arrangements between persons, of assuming that persons will be motivated by such a concern. (3) I shall argue that the implications are important and substantial--that prudential considerations provide a powerful argument not only for constitutional restrictions on governmental actions but for constitutionally mandated positive government programs as well, especially in the area of welfare. With this way of thinking, a wide spectrum of public programs can be best understood as an efficient way in which persons can insure themselves against the vicissitudes of social and commercial activities and natural events. (4) Within the context of a theory of prudential concerns, then, the view that that government is best that governs least is very questionable. More generally, prudential concerns provide a powerful argument for a much wider spectrum of basic rights than is recognized by many social and political theorists. II Characterizing Prudential Motivation TO BE PRUDENT IS CLEARLY SOMETHING DISTINCT FROM, say, simply having concern for long-term as opposed to short-term considerations. One who focuses on long-term investments but chooses among options solely by reference to expected monetary return is not being prudent. The plan that yields the greatest expected monetary return might expose one to substantial risk, including loss of all of one's capital. To choose in this manner, then, is not to choose prudently. Being prudent involves giving special consideration to the avoidance of at least certain kinds of loss, even if the loss in question is quite unlikely. Being concerned with avoiding loss, however, still does not capture precisely enough the idea of a prudential concern. If one had a steady and guaranteed source of income, more than sufficient for the promotion of one's projects, avoiding loss would hardly be dictated by prudence. Prudence is a more focused concern than just avoiding loss, even substantial loss. It is better characterized as a concern for avoiding losses that qualify as disastrous for the individual in question, losses that involve great harm of damage to that person. (5) On the usual account, these include loss of life, serious impairment of health, loss of income, and substantial loss of property. In very general terms, it is a loss that proves ruinous to substantial and important undertakings. (6) Since disasters typically arise from very specific undertakings, which can vary significantly from one person to the next, it might seem difficult to draw any general conclusions here about what prudence actually requires. But the references to loss of life and impairment of health make clear there are some important general conclusions that can be drawn. Thus, while undertakings will vary from one person to the next, each person will still be disposed to avoid substantial losses with regard to what have come to be known as primary goods. (7) These are goods that are typically useful regardless of one's plan of life or one's particular undertakings (8) and include one's physical, emotional, and intellectual capabilities or skills, financial and other (renewable or nonconsumable) resources, and opportunities, all of which play a critical role in the pursuit of one's projects. …