I shall venture to affirm, That both these systems [divine right of the sovereign and the social contract] are just; though not in the sense, intended by the parties: And, That both the schemes of practical consequences are prudent; though not in the extremes, to which each party, in opposition to the other, has commonly endeavoured to carry them.Emphasis in original.
It's quite an essay. Here's a nice little passage: "[Philosophers] affirm, that all men are still born equal, and owe allegiance to no prince or government, unless bound by the obligation and sanction of a promise." Again, emphasis in original. Just prior to this he forwarded a particularly lovely style of historicism, both presaging Strauss and writing with prudent Straussian elision. So here, the social contractarians are right, but only so long as the terms of the contract are met. Unwritten is men owe no allegiance to a prince who upturns the terms of trade, so to speak. A sovereign who breaks the agreement no longer retains legitimate authority.
Likewise, "a sovereign cannot, properly speaking, be called [the Deity's] vice-regent, in any other sense than every power or force, being derived from him, may be said to act by his commission." Again, a Straussian call to revolt when the sovereign ceases to act in accordance with the Will of the Divine. You can almost hear him snickering into his sleeve here.
A little later on though, we find the following (keep in mind this was written in 1748, fifty years before M. Guillotine began his bloody rampage): "In reality, there is not a more terrible event, than a total dissolution of government, which gives liberty to the multitude, and makes the determination or choice of a new establishment depend upon a number, which nearly approaches to that of the body of the people: For it never comes entirely to the whole body of them." If you're reading Buchanan into that, you're not alone. Heck, if you're reading Caplan into that, you're not alone. Hume was mightily skeptical of the ability of regular folk to re-design from whole cloth either the terms of a social contract or to re-interpret the Word of God.
Of course, in practice, the post-Enlightenment revolutions tended to be based on the principles of "reason" or "science" or some such nonsense. They also tended to be rather bloody and messy. Being proven right in this case seems little cause for joy.
At any rate, the whole essay is great fun, and if you'll indulge me, there's one more passage in there that answers the question Hayek asks by way of Munger's post below:
Can we seriously say, that a poor peasant or artizan has a free choice to leave his country, when he knows no foreign language or manners, and lives from day to day, by the small wages which he acquires? We may well assert, that a man, by remaining in a vessel, freely consents to the dominion of the master; though he was carried on board while asleep, and must leap into the ocean, and perish, the moment he leaves her.Hard coercion by untenable alternatives. QED. Take it from a guy who's lived in a place where he knows no foreign language or manners, and lived from day to day, by the small wages which he acquired.