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Thursday, May 2, 2019

There Is No Such Thing as a Social Contract, but so What?

There is much firmer ground upon which to build than an imaginary social contract to which no one was ever a signatory.

Image Credit: Photo by Perry Grone on Unsplash

Social contract theory is never too far removed from American political conversation. It shows up all the way back at our Founding when Thomas Jefferson presented the cause for American independence in decidedly contractual terms. The sole purpose of government, he wrote in the Declaration of Independence, is to secure individual rights, and government derives its “just powers from the consent of the governed.” Little could he imagine, as he borrowed his way through Locke’s Second Treatise, that this phrase would come to be used to justify a nearly limitless array of intrusions against the individual rights he sought to protect.

The evidence is clear enough, from calls for a “new social contract” to a “digital social contract” to even a “contract with Gaia,” whatever that means. All of this runs far afield from Locke (and by extension Jefferson), who stressed the simple need for every man to put “himself under an obligation, to every one of that society, to submit to the determination of the majority, and to be concluded by it.” Why would people do this? To protect their rights. It really is that simple.

Complicated Progressive Left Social Contract

The American progressive left, though, never found a simple thing that could not be complicated beyond all reason. So, too, the language of the social contract. The two modern progressive darlings, Elizabeth Warren and Barack Obama, prove the point.

Elizabeth Warren got the current episode of the social contract ball rolling in a September 2011 campaign speech for her Senate seat, when she said:

There is nobody in this country who got rich on his own—nobody. You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory—and hire someone to protect against this—because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea. God bless—keep a big hunk of it. But part of the underlying social contract is, you take a hunk of that and pay forward for the next kid who comes along.

In July of the following year, President Obama echoed the sentiment, saying:

If you’ve been successful, you didn’t get there on your own…If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business—you didn’t build that.

The implication, of course, is that people are expected to “give back” to society. But this call to give back is not framed as simply a good idea or even a moral requirement. The call to give back is framed as a contractual obligation. And not only that, it is a contractual obligation that needs to be consistently revisited and reformulated. President Obama explained as much in his Farewell Address in January 2017.

And so we must forge a new social compact—to guarantee all our kids the education they need; to give workers the power to unionize for better wages; to update the social safety net to reflect the way we live now and make more reforms to the tax code so corporations and individuals who reap the most from the new economy don’t avoid their obligations to the country that’s made their success possible.

It will come as no surprise to astute observers of American politics that Warren, Obama, and every other progressive proponent of this new kind of social contract owes a debt of gratitude to Franklin Roosevelt, who in his 1932 Commonwealth Club Address asserted that “Faith in America, faith in our tradition of personal responsibility…demand that we recognize the new terms of the old social contract. We shall fulfill them, as we fulfilled the obligation of the apparent Utopia which Jefferson imagined for us in 1776.”

Linking the progressive future with the Jeffersonian past, while intellectually impossible, was nonetheless politically necessary. And that was the sleight of hand that turned the social contract, a device to explain self-ownership, property rights, and the basis of society, into an engine that, in the right hands, might realize Roosevelt’s utopian vision. It scarcely mattered that the new and improved social contract violated property rights almost wholesale. As now, nothing short of utopia was on the line. Never mind that Jefferson had no such thing in mind. Besides, individual rights were an impediment to realizing the utopia. Jefferson’s individual rights existed within a constitutionally constrained regime of majority rule. And the majority will always seek to advance itself at the expense of minorities.

Does It Really Exist? 

But here’s the thing. Two things, actually. First, there never has been a social contract. A contract is an agreement between parties wherein the responsibilities of each to the other are clearly spelled out and overtly agreed to. The social contract envisioned by modern progressives is precisely not an agreement at all but is most often invoked in an attempt to force some people to do what other people would have them do against their will. And the terms are in no way clearly spelled out. What, exactly, are the responsibilities we have to each other? This sort of “social contract” is actually an attempt to write a totalitarian blank check.

The people perceived that they had obligations to each other and voluntarily took steps to fulfill those obligations.

Second, the regime that emerged from the Founding era was one based on majority rule in pursuit of the protection of individual rights. That regime has, surprisingly, accomplished quite a lot. For evidence, look to three minority groups: blacks, women, and homosexuals. In a majoritarian regime, minority groups like these should become ever more marginalized over time as the majority votes ever more power and largess to itself at the expense of the minority. Unless, that is, if people have an innate sense of community and responsibility to their neighbors that is completely independent of any sort of enforced social contract.

Evidence for this sense of community and responsibility is compelling. In 1967, the black household poverty rate was more than 1.6 times the white household poverty rate. Today, that number has fallen to 1.5. In 1967, black households showed up in the middle class at a rate two-thirds that for white households. Today, black and white households are equally likely to be in the middle class. In 1967, a white household was almost three times as likely as a black household to be in the upper class. Today, white households are less than twice as likely as black households to be in the upper class.

Social Obligation 

The data tell two stories. One is that we have further to go in eliminating racial income disparities, but the other is that those disparities have been steadily falling over the decades. This is not something we would expect from a majoritarian regime—unless the people perceived that they had obligations to each other and voluntarily took steps to fulfill those obligations. These improvements were not the result of an imposed social contract but of people making greater efforts to do the right thing.

We see a similar story in the case of women. Many economic studies have shown that the much-touted gender wage gap is more likely the result of gender differences in life choices than of gender discrimination in employment. Nonetheless, if we take the gap at face value, we see that it has declined significantly over time. In 1967, the average American woman working full-time and year-round earned 61 percent of what the average American man earned. Today, that number is 80 percent. Even if the gap were due to discrimination, it has nonetheless closed significantly.

Hate Crimes

We see a similar story in the case of homosexuals. In 1996 in the US, there were 4.8 (per one-million population) victims of hate crimes involving sexual orientation. By 2017, that number had fallen to 4.1. That 15 percent decline is even more profound given that these are reported hate crimes. Despite the fact that people are much more likely to report hate crimes today, the rate of reported hate crimes has nonetheless declined. Today, gay marriage is legal and common, and the great debate of our time is whether a business should be required to bake cakes for gay weddings. Have we resolved all of our differences? No, but we have clearly resolved many of the most weighty ones.

It turns out the American people are deeply concerned with the claims of their fellow citizens, justice, and fundamental fairness.

In a majoritarian regime, gains to minority populations like these should not have been possible. The majority should simply have leveraged the power of the state to its benefit and to the cost of minorities. But this didn’t happen. Yes, the law contains protections for minorities and always has, but those laws lag majority opinion. The law simply codifies something the majority has already demonstrated it is willing to accept.

So what’s really going on? It turns out the American people are deeply concerned with the claims of their fellow citizens, justice, and fundamental fairness. This is much firmer ground upon which to build than an imaginary social contract to which no one was ever a signatory. That’s not going to pack the same punch for the American left in the next election cycle, but it should.

  • Dr. Antony Davies is an Associate professor of Economics at Duquesne University, and co-host of the podcast, Words & Numbers.

  • James R. Harrigan is a Senior Editor at the American Institute for Economic Research. He is also co-host of the Words & Numbers podcast.