Is the source of law a moral component or social compact?
The old Lutheran idea of government-as-pedagogue is a Christian attempt at thinking about the government that I might have agreed to at the time, but in retrospect there are at least two problems.
1. Mixed faith societies (inc. nonbelievers) must admit a certain kind of humility and freedom of conscience. The reality of human existence is that people make choices about faith devotion. They will also make various decisions about morals, and the postlapsarian state must work in a postlapsarian world. The state itself must take its limitations. If the state is pedagogue, we are placing moral authority in it. Morals come out in governance, but the state itself does not have moral authority: the Church does.

The state does have a moral interest, of course, but this is only in a very vague sense. Most of the time, those ruling do not actually know what will be best for their country, or they are only defending what fear could be lost. This is not methodically pedagogical. 
2. the state as pedagogue cannot be clearly differentiated from the tutelle administrative. Perhaps the best distinction is that the pedagogue need only contain certain morals, and their enforcement displays them with the discipline of moral learning and the imprimatur of state authority. The morals can be seen as the "higher" thing because the state defends and enforces them. The administrative tutor is more actively guiding, even micromanaging.

A state forming its own society will become that society, though. When Henry Adams sees the force, or dynamics, or Russia or the US, he sees in those countries something that not even the state can contain.

Question: is this all or nothing? A step in that direction does not mean all the dominoes will fall, right?

If anything, a state's natural activity is to seek the stability that will ensure its perpetuity, for this is the purpose of the rulers. However, eventually in the West, people began to see the state's existence-unto-itself as absurd. They give up taxes and freedoms - why, so a prince might expand, squash, retaliate as his whim drew him? At least the men of letters saw this, and mocked it. The idea that a state should exist for its people is a natural flow of logic, dating back through Aquinas eventually to Plato's philosopher-king. Shear force established the state, but men came to assent to it naturally for the good it would produce. For this reason, a social contract is a plausible means for viewing government and society. However, this is not a contract between people but between any given person (or the whole community) and their rulers. Even the act of Constitution-making in a republic is merely a common social arrangement (undertaking) to determine the relationship that will exist between a man and his government. It does not determine the relationship between men. This became evident when parties (factions) formed in the American Republic, even against the Founders' wishes. The Founders could structure the state, but they could not structure the society. People would continue to form their relationships between each other, and the thing could not be stopped.

Now, the relationship to the state influences the relationships between each other - no doubt. And this indirect means is how our government has any claim to set direction or definition for our country. But in a country where the government does not presume to set social relations, they can only get so far.

So it does not make sense to outlaw homosexuality. It is permissible to disallow gay marriage, which has to do with a person's relationship to the state.

Now, the social contract affects the direct person-state relationship insofar as the person is concerned, but insofar as the state is concerned, the person-state is only one aspect. It is concerned with person-person, because it is charged with the government of persons, so that a person might live their life safely, sustainably, and possibly productively. A person has a right to life because the state does not make sense if people cannot expect even their own lives protected. Liberty, because this is this is how men fulfill their abilities (choosing) and social natures (choosing relationships). Property, because this is what people use to fulfill the previous.

The government is also charged with governing society, since society understands itself to be in relationship to the government. There is a collective understanding that the government's responsibilities should be similar toward the society as it is toward the person - we will defer to you, if you let us live our lives. This collective sense exists not because the society is collective, but because there is a satisfaction with the social system as a whole, an understanding that we are all within the rules of the game - even if it is cutthroat and we want to beat each other, we identify with the system because it enables us even in our competition. The player will fight for a proper relationship with government. This is why the society's relationship to the government must always play out as the relationship of specific groups (nobles, wealthy burghers, bourgeois industry-owners, interest groups, political parties) to the government. The hope is that there is a wide diffusion of money and power, so the compact between government and society is best comprehended as that of society as a whole. This can only take place in a complicated and inefficient government that gives many groups the right to speak at many different point in the system. "Congress is not designed to pass laws, but to keep bad laws from being passed."

As new power is created, and new groups emerge that can express themselves to the state, these groups are often not so powerful as to dominate the rest of the country, and so they themselves gain legitimacy by claiming to speak on behalf of the interests of the people. They must either fool the people, disguise their interests, or moderate their message closer to what would actually help or be in the interest of society as a whole. In modern America, all three take place; the hope of our system is that clear thought and better information would draw things closer to the 3rd. That is why there is a hope against interest groups, and that is also why interest groups play a very important role. Ultimately the legislator must assert his independence from them to best determine society, and to understand government's compact with them.

Since rights are understood in terms of a relationship, and especially a promise (that is, a contract), this is a good place to begin a discussion of rights. Not in what we give to each other, but in what we as individuals have in our relationship to the government, and what the government is able to assert against us, by its power, with the interests and feelings of our society being represented by various groups against the government's power. 

Some enlightened ruler might restrain himself for the good of society, but this is clearly not sustainable over generations. Absent this rule, we have only a commonly held belief in constitution, another self-restraint. Absent this, we have only dynamics.

The government accepts certain limits today, in what appears to be self-restraint. In some ways, it is actually restrained by commonly-held constitutional assumptions - such as rights to property. Some are long-term, but some are shorter. Society understands itself to be in compact with government, whereby it will not allow government to go past a certain point. That can be altered, and crises especially, but also persistent mass media and controlled language, provide the ability to change the compact. In example, the people and welfare; intrusions so the war on terror may be fought; the acceptability of war; the state's economic responsibilities. Practically speaking, these exist insofar as society understands itself to be in relationship to the government. So with their rights.

Their rights against each other have traditionally fallen more in the realm of torts, since it is hard to establish responsibilities that people have toward each other. However, we have begun to do this with banks, pharmaceutical companies, and medical units: they must exist for public good. The issue of corporate social responsibility can actually be apprehended because there ought to be a defined social relationship involving corporations, especially to the region of its operations.

The whole thing might be seen as an aspect of paradigms that we use to comprehend the world, to simplify groups of relationships. However, the lynchpin is the idea of understanding rights and responsibilities with regard to relationship. The rights are not abstract, at this point. The second key is that government is not understood as the product of our common action, necessarily and primarily (though this can exist), but necessarily and primarily as a person's relationship to the government, and the society's relationship to the government.

Now, there is a more abstract moral beneath this that exists. We claim certain rights against each other because we think they are necessary. This must rise from an abstract system, and eventually an absolute authority. As Christians, we assert certain universal human rights in natural law terminology only insofar as we hope others will not dig back to the absolute authority that it derives from. They agree because they act on assumptions and paradigms, and the Christian ones work with how they apprehend and live in the world. They accept on experience. Logic will kill this if they explicitly reject God, the authoritative source. Many reject God, but they don't use all the logic. Some do use it. Christians try to appeal to those who haven't and hope they won't. This is a natural law argument: finding common ground, but refusing to go deeper, when the Christian knows it runs deeper. To run all the way down would be to lose the argument (which is to say, not find resolution between the two) because the two are not connected at their source. However, many people run on Christian assumptions, and we lightly appeal to those. We also appeal to the fact that they work.

Some do not work so obviously, at least in one generation, such as religion itself. It is obvious then that the state must be non-religious with regard to religion. Some things it will find common agreement on, among its people.