Toward a New Social Contract

February 9, 2011

Andy He: Washington D.C., DC, USA (Unsplash)

by Peter Corning

The term “social contract” has a deep history in political theory. Today it generally refers to the implicit bargain that exists in any stable society over social rights and duties, and the division of economic benefits and costs.

In the U.S., the social contract has become badly frayed over the past 30 years, as the gap between the rich and the poor has widened to Biblical proportions and an estimated one quarter of our population has sunk into more or less extreme poverty.

Now, as we launch a national debate about how to deal with our ballooning national debt and our widening state budget deficits, we confront hard choices that could very likely exacerbate the already deep political divisions in our society and shred the social contract, unless we use the principle of fairness as the compass for resolving these challenges.

Some cynics view fairness as nothing more than a mask for self-interest. As the playwright George Bernard Shaw put it, “The golden rule is that there is no golden rule.”

But the cynics are wrong. The emerging science of human nature has established that we do, in fact, have an innate sense of fairness, though it can easily be subverted by cultural, economic and political influences, not to mention the lure of our self-interests. And, of course, there are always the “outliers” – Bernie Madoffs – who seem to be “fairness challenged.”

Fairness means, quite simply, taking into account the interests and needs of all parties, all the stakeholders, and trying to strike a balance between them. And, whenever there are conflicting interests, “compromise” is the indispensable solvent for achieving a fair outcome.

The term “fairness” is often used with reference to procedural matters – fair dealing – but it has a vitally important substantive side as well; it refers to a “fair share” of the benefits, or the costs, or both. As I show in my new book, The Fair Society, there are three distinct categories of substantive fairness (equality, equity, and reciprocity) that must be combined and balanced in order to achieve a truly fair society.

Our basic, biological survival and reproductive needs are inescapable imperatives. In this respect we are all approximately equal, and our highest priority as a society is to ensure that the basic needs of all of our people are satisfied. Numerous public opinion surveys and formal research studies have shown that the overwhelming majority of Americans are inclined toward generosity. There is no justification for the fact that some 50 million Americans (including 17 million children) went hungry at various times during the past year.

Beyond providing for our common needs, the principle of equity (or merit) is also crucial to fairness, and our capitalist economic system and our democratic government have had a very uneven record in this regard. At times our economy and our politics seem to have become a rigged game, with little regard for merit. There is a saying on Wall Street that “whoever has the gold makes the rules.” Over the past 30 years, the income and wealth in our society have become overwhelmingly concentrated among the top 1 percent of the population. We hold the dubious distinction of having the greatest income disparity between the rich and the poor of any advanced industrial society.

The final fairness category, one where we also fall far short, is reciprocity, assuring that there is what Aristotle called “proportionate equality” in the burdens and costs that are necessary to sustain our society, especially the tax burden but also in relation to public service. We should exact more from all of us, in accordance with our ability to contribute in various ways. I am fond of the Muslim scholar Ibn Khaldun’s much-quoted saying “He who takes from society without giving back is a thief.”

A social contract based on these three fairness principles would entail some major policy changes in our society, including a full employment program (so that everyone who is willing and able to work would have a meaningful job at a living wage), along with an expansion rather than a contraction of our social safety net, a shift in our tax code toward greater fairness, and a universal public service obligation. This is the price we must be willing to pay to live in a fair, humane and stable society.

Is this an impossible dream? Actually, it would enable us to catch up with (and hopefully surpass) those European “welfare capitalist” societies – like Norway, the Netherlands, Denmark, Sweden and Germany – that have become models for what a fair society can look like.

In the meantime, we can move toward a fair society by applying the principle of fairness to dealing with our serious federal and state fiscal deficit problems. It requires us to share the costs and sacrifices in an equitable way. This will mean both budget cuts and tax increases. But we should not impose budget cuts in areas that affect our basic needs (like Medicaid, food stamps, and the like) and we should impose relatively greater tax increases on those who can most afford to pay and are least likely to be harmed.

Plato, in his great dialogue on social justice The Republic, observed that most states seem to be divided in two, one composed of the very rich and the other of the poor, and that these two states are forever “at war with each other.”

It doesn’t need to be this way. It’s a matter of choice.

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