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An old social contract to forget?

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(From left to right) Portraits of philosophers Jean Jacques Rousseau, John Locke and Thomas Hobbes. PUBLIC DOMAIN

An old social contract to forget?

In an attempt to explain the theoretical foundation of a contemporary constitution in less than 15 minutes, I referred to Magna Carta, used a sentence or two from Thomas Hobbes, John Locke and, finally, brought J-J Rousseau to the scene to bring the curtain down.

Who’d care about the so-called Social Contract anyway? But just then the rain started to fall down in torrents, so I looked out of the glass windows briefly wondering how these three giants would have updated their books if they had known that technological advancements and demographic mobility could create such a globalised interdependent society like nothing they had ever seen.

It is universally acknowledged that modern democracy – one direct application of Social Contract theories – is a good form of government precisely because the members of a given society (people) would have the power to choose and to check their government which, in turn, is expected to understand, advance and protect the interests, rights and freedoms of the people.

In some places where unwanted elements come into play, however, such expectation often sounds rather theoretical than real. Daily news is showing that more and more states are failing to meet this expectation.

To go into some concrete examples of those places will defeat the length of this short article. But if you are looking to challenge the established wisdom, keep reading. We must begin by recognising one truth that our mothers often tell us: nobody can prosper alone.

Those who say otherwise must have been dreaming. But to be fair, even for very focused persons it still takes a major crisis to prove the vital importance of interdependence. While the prevailing current cultures value individual success stories, Covid-19 has taught us so much about the need for collective actions. This virus has painfully revealed that social contract as the foundation of modern nation-states has long been broken in many market economies due to greed and manipulations.

Lack of basic supplies, in adequate number of healthcare workers, outdated hospitals, social inequalities to cite a few examples have all come to the fore even in the richest of places. Sad though this might sound, we humans sometimes require a sizeable pandemic to remind ourselves that we should have taken social contract more seriously, that we can make the best choices when we as a society agree to shoulder the risks more widely. Just like the price goes down where there is abundant supply, the cost of mitigating risks goes down if many people are willing to share it. When technology allows us to work globally and benefit from anywhere at our fingertips, the sense of responsibility can no longer reside within a country’s borders.

As much as we don’t like to admit mistakes, we can’t help noticing that there have been numerous attempts to build a broad social contract both at the global and regional levels. The existence of the UN, the EU and the likes is a living testimony of such attempts. Yet, every so often, these supranational institutions have not proven sufficiently effective. You need not be an expert in international relations to be able to articulate that Real politik has been their thorniest issue which will never go away. This means that we ought to look for hopes elsewhere, perhaps beginning by agreeing on a new theory of social contract that does not have too many politicised elements in it. But wait, what is social contract exactly? In its simplest form, social contract determines the types of services and goods to be provided to the members of a given society and by whom (mainly government). The ultimate goal of social contract is the satisfaction of collective needs and realisation of collective benefits. This is why it is often confused with the so-called Welfare State model which is one of the ways to help establish a just society. The Welfare State model is being practised almost everywhere to some extent but it is strongly visible in the UK, Canada, the US, many EU countries and the Nordic states which offer many public services at very low costs such as public schooling, housing and hospitals while also providing unemployment benefits, pensions, tax benefit scheme . . . etc.

But, like most concepts, social contract is not a constant. It evolves and means different things to different people especially where non-state actors (businesses, associations and NGOs) – eager to justify their existence – are increasingly demanding a say in enforcing social contract in one form or another.

Public Private Partnership (PPP)– an approach to having public services provided by private parties – is one example of a long-term contract between governments and companies. PPP as a policy tool created by proponents of the New Public Management (NPM) in the late 20th century makes a lot of sense for governments which do not (or cannot) wish to directly collect revenues from citizens. Under PPP, citizens become customers. Otherwise, fiscal policy and taxation methods are a good place to look into if you want to make sense of how governments try to redistribute wealth in order to provide for collective benefits. The menu for social balance interventions can be tiringly long.

I shall leave such an endless debate to economists and NPM specialists. Since in-country sensitivity is so diverse (politically, culturally, economically, historically, ethnically . . . etc.); however, there can never be such thing as best welfare state model or complete social contract checklist. Feel free to challenge anything under political or social categories but let us finally review the role that pure business should play because trade goes beyond sensitively charged matters. Like mathematics, trade should speak a neutral language.

If you agree to trade with someone, it is because you see a benefit in doing so and so does the other person regardless of her or his background. Indeed, one might say that this is where a good social contract theory should begin: sharing the same logic from the start. Since free trade can greatly flourish when there is true consent, trade-bound elements would resonate well with most contractual arrangements.

A few centuries have now passed since Hobbes, Locke and Rousseau first taught us the art of governing a society, each offering a version of social contract. While we shall remember their contributions, we are now stuck with a technological and mobile society that often obscures the importance of true consent (when was the last time you actively negotiated a deal with a real human at the other side?).

Instead of trying to get every answer from the government, we would do well to ponder over these questions in particular: what would a social contract mainly based on trade look like? What sorts of risks should we all agree to share and pay for? What sorts of risks are best left to each individual come what may? What aspects of life should be tradable? What sort of society would we see if both state and non-state actors each behaved as a true-consent trader?

Indeed, if everyone takes consent seriously, if a government takes its people’s choices very seriously, a good social contract does not necessarily lead to an overwhelming welfare state but to a society built on freely negotiated exchanges. The role of state should primarily be to keep greed in check, maintain a peaceful trading environment for such exchanges to flourish come rain or shine.

Virak Prum, LLB, LLM, PhD teaches Cambodian Business Law diploma at CamEd Business School. The opinions expressed are solely his own.M.

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