For obvious reasons, the most economically powerful class in a society dominates its politics. Even so, the interests of other classes must be satisfactorily addressed, or social rebellion ensues. This “balancing” of class interests is the social contract. The last social contract in the West was Social Democracy (the New Deal in the U.S.); in the East, the last social contract was Socialism. Both are in tatters.
The economic and social conditions that are the backdrop to any social contract continue to evolve during its tenure, and these changes play a major role in gradually undermining its key covenants. Moreover, as decades roll on and the generations who “signed off” on the old deal pass away, new generations, taking their cue from society’s emergent necessities, first question and later abandon allegiance to the old arrangement. Every 80 years or so, these new generations struggle over a new social contract.
We, now, are at such a moment in world history.
The key issue of the last social contract was the relationship, in industrial societies, between the dominant economic class – monopoly capitalists (organized, for the most part, as corporations) – and the people who worked in their factories. Obviously, capital and labor are interdependent, but leading up to the 1930s, extreme economic polarization undermined their relationship, threatening social stability. Workers demanded accountability to their needs and, through fierce struggle, won the right to strike and bargain collectively. Subsequently, after working men and women bore the brunt of World War II, post-war Western governments established old age security, national health care (except in the U.S.), other safety nets, bank regulations, and additional protections to promote class peace, justice and security in the post-war era.
But that social contract ran its course after a few decades, undermined (in the West) by the rising reliance on service production and the export of manufacturing jobs overseas and (in the East) by the bureaucracy and rigidity of state planning. With fewer and fewer factories, the foundation of the union movement in the U.S. and Europe crumbled, and its power was lost. In 1970, Western banks abandoned the Bretton Woods Agreement (the international corollary of the post-war social contract), and in 1981 Reagan and Thatcher broke the back of their nations’ weakened unions. Meanwhile, in 1989, Soviet reformers attempted a revolutionary remaking of Socialism but lost control to opportunist oligarchs while, in China, the government embraced market forces but not the rule of law or human rights. Since the 80s, politicians around the world have turned on government itself, embracing austerity, curtailing social investment, and turning to more coercive means of ensuring control, both domestically and worldwide.
Today, after the demise of Socialism in the East and Social Democracy in the West, civilization has no social contract. By default and de facto, corporate capital now runs governments and global markets by itself and in its interests alone. After two decades of increasingly disastrous speculation that brought on the 2008 financial crisis, corporate capital is now committed to austerity in the public and private sectors, alike. Meanwhile, to the detriment of human potential everywhere, violence is engulfing our world.
Thus, whatever the particulars of our local troubles and struggles, our fight is for a new social contract, a global restructuring of power between corporate capital and the world’s people. We demand a permanent revenue stream from corporate commerce so that a Global Problem-Solving Authority (GPSA) can establish a worldwide program of full-employment through social and ecological problem-solving at the global grassroots.