Thursday, December 15, 2011

The Social Contract

Is there a 'social contract' in America?  If yes, could I see a copy?  

In many ways we live in a world of competing interests.  Always have, always will.  It's the nature of the universe.  Two bodies cannot occupy the same space at the same time.  In the animal world size matters.  And strength.  And desire and craftiness and persistence.  If two bears want the same spot they don't call for arbitration, they don't negotiate with each other (not verbally anyway) and they don't call the cops or their lawyers.  They fight.  One wins, one leaves.  Sometimes maybe both die.  Nature.

At some point, as homo sapiens evolved, something called society emerged.  Life could be better, people realized, if certain rules were put into place.  The rise of agriculture led to the need for property rights.  Nobody wanted to plant, grow and harvest a crop and then watch helplessly as marauders stormed through and stole the produce of a season of labor and diligence.  With rights came the need for laws, with laws the need for enforcement.  All of this depended upon cooperation, a sense of society. 

Early on 'might' still made 'right,' most of the time.  The need to protect the food supply is a beginning but there is more to a social contract than that.  So let's fast forward to the 17th Century.  By this time people had been living in societies for centuries.  But some people perceived that society could be improved upon.  Why should a handful of people live in luxury while millions did all the work and barely survived?  Locke and Rousseau exposited that all people were born free.  In the newly emerging United States of America Jefferson and Madison ran with this idea and with many allies created a new Nation, dedicated to the proposition that all men are created equal. 
The new Constitution set up a government of, for and by the people, taking us further away from the idea that might makes right.  America would be ruled by law, not by a Monarch, with a tripartite government charged with putting the will of the people into law and then enforcing those laws.  This is where a social contract comes in.  We all agree to give up any idea of having absolute liberty in order to create a workable society. 

Alexander Hamilton foresaw that America would eventually come up against an old European problem: not enough land to support a simple, and growing, agrarian society.  The solution would be an industrial, capitalist society, which he believed would best serve the needs of a free people.  But we would still have as our foundation that all are created equal.  So whether a man was a landowner or not he would be an equal partner in this experiment in democracy. 

As time went by 'might makes right' continually had to be contended with.  We saw an age of 'robber barons,' a 'roaring twenties' when might made right on Wall Street, followed by a Great Depression, in response to which a bold President led us into a new era, characterized by a New Deal between the people and their government.  This New Deal once again asserted that it's actually right that makes might and right is defined by what is good for the most (not the fewest). 

For nearly fifty years America prospered.  The rich got richer, but only by being innovative or by making smart investments.  Capital flowed to where it could best be utilized.  Workers prospered because in addition to progressive taxation labor unions flourished, enabling workers to get a healthy share of the fruits of their labor.  Beginning in 1981, however, and the Reagan Revolution, we began once again to see the 'rights' of the few being exalted at the expense of the common good.  Tax rates began to come down, especially on high incomes, very especially if the income derived from investments rather than from work.  The rights of labor began to be eroded.  Wall Street regulations were relaxed.  It's OK, we were told.  This will benefit everyone.  As 'impediments' on business were removed capital would be 'free.'  As tax rates on capital gains came down capital would become more liquid, flowing all around the economy at such a high rate that prosperity for everyone would ensue.

It is now thirty years later.  Prosperity for everyone has not followed.  Rather we are looking at income inequality approaching the highest levels ever seen in a modern industrialized nation.  More people now live in or near poverty than at any time in our history.  Might makes right is back with a vengeance.  We have a Congress completely in thrall to very well-heeled special interests.  (And that 'special interest' is keeping the 80% of the wealth in the hands of the top ten per cent right where it is.  And adding to it.)   NO!, we can't raise taxes on the super rich.  Not even the super duper rich.  The ones with so much money they don't even know what to do with it all; all they can do is hoard it.  No!, we can't revive unions and push membership back up to pre-Reagan levels.  No!, we can't strengthen Medicare or Social Security, perhaps by removing the caps on the income that gets taxed to fund it.  No!, we can't have single-payer health care, or even a 'public option.'  No, no, NO!  Might makes right, baby. 

Well if that's really the way it's going to be, if we're really going back to the old way, where there is no agreement, there is no social contract, then shouldn't we go all the way?  Is the One Per Cent really ready for that?  Ninety-nine against one?  They sure seem to be saying so.     


  1. Thanks anonymous. ; ) (How about a hint?)

  2. Kevin,
    Outstanding, Lad! That is the best peice I have read in some time.

    Carry On,

  3. Oh,
    If you haven't gurssed - that was the evil, old,


  4. I knew it, I knew if you went to school and applied yourself you could make it as a rebel. Very good.

    Reducing and eliminating the capital gains tax is in my opinion one of the main culprits to our disparity in income and loss of manufacturing. If you are a small time investor, a regular shmo, and you have a hundred shares of acme inc, or a small business and you can sell it now at a profit you look at the cap gains (if there is any) and it's pretty annoying but you do what you need to do. But lets say now your the owner of a manufacturer with 400 people and acres under roof full of million dollar machines, or a board member of a corp that has 15,000 workers. Selling these companies for 100 million, or 3 billion, or just wrapping up one of the "excess divisions" and selling it, this capital gains tax is monumental on this deal and plays a part in if it can be done. If we had a high cap gains tax, these companies are more likely to reinvest their efforts and cash, strive to make them profitable as this is the sensible avenue that has been followed for most of the US history, fix it, grow it. When we have little of no cap gains tax everything is like a stolen car, sell it whole or by pieces, burn it if that makes most sense, take the money and walk off, leave everyone and all the potential behind, you've got yours, you beat the government, you beat the workers, pack the money up and buy houses in Sedona and on Central Park. The elimination of capital gains tax encourages buy outs, mergers, closures all at a net job loss.

  5. Thanks, Future person.

    You too, Sarge.
    p.s. The Anonymous commenter last night was up past your bed time, I figured. Right?

  6. Darrell, I'm glad I was able to justify your faith in me. If you can believe it there are people who think I should have studied something 'useful' while I was there. ; )

    You and I agree on tax policy, right down the line, I suspect. It's the first thing we need to address. Well, the second thing; the first thing after we take our democracy back from the big money special interests.

    Tonight, after work, I begin shortening this piece down to 500 words so I can submit it to the Wisconsin State Journal as a 'guest column.' It's currently at about 980 words so it'll be a process. Might be good for me, though. ; )