The myth of the Social Contract

IT is a common observation, though no less powerful for being so, that we live in an atomized society where the individual rules supreme and the collective is dead. As Margaret Thatcher once said there is no such thing as society, or words to that effect. The key philosophical definition is provided by methodological individualism in which, as Steven Lukes writes in Debates in Contemporary Political Philosophy, asserts that ‘all attempts to explain social (or individual) phenomena are to be rejected…unless they are couched wholly in terms of facts about individuals’. It was this fundamental principle that was seized on by the likes of Hayek and the philosopher Robert Nozick and eventually entered the political arena with what is commonly called neoliberalism. But as Lukes points out it is an ‘exclusivist, prescriptive doctrine about what explanations are to look like’ and ‘excludes explanations which appeal to social forces, structural features of society’ and ‘institutional features’.

The MI position is anathema to communitarian (which is not the same as communism of course) philosophers like Michael Sandel for whom it expressly excludes people for whom a sense of belonging to a community is constitutive of who they take themselves to be. And in the German Ideology Marx wrote: “The production of ideas, of conceptions, of consciousness, is at first directly interwoven with the material activity and the material intercourse of men – the language of real life.” But note those words ‘at first’ because Marx continues to make the claim that autonomous individuals cannot happen ‘as long as they are unable to obtain food and drink, housing and clothing in adequate quality and quantity’. It should also be noted that in her magnum opus The Origins of Totalitarianism Hannah Arendt argued that atomized societies in which communal networks are shattered are prime breeding grounds for dictators like Hitler and Stalin.

It is relatively easy to see how the Big State versus Small State fits into this philosophical dialogue and it is into this explosive arena that the economist Minouche Shafik dips her toe into what, is has to be said, are very shallow waters indeed with her book What We Owe Each Other.

For her the fundamental aspect is what she calls the ‘social contract’, apparently unaware that this device is in itself an expression of political liberalism ranging from the thoughts of Thomas Hobbes through John Locke and Jean Jacque Rousseau to John Rawls in the 20th century with his Original Position. The social contract is a device for more socially minded liberals to bridge the gap between the fundamental political unit of the individual on the one hand and society on the other. But, as Sandel has pointed out many times, this expressly excludes a communitarian approach to society so constantly fails to build the bridge.

So, Shafik’s discourse is riddled with her underlying and unacknowledged liberalism. As an example she rejects the concept of Universal Basic Income mainly because the recent experiment in Finland failed to ‘help people find work by giving them support to learn new skills or start a new business’. After two years, she notes, the ‘evidence showed no impact on employment – participants were neither more of less likely to find a job than someone on unemployment benefit’.

She seems to be blissfully unaware, as indeed did the Finnish government, that UBIs are not designed to be job creation devices but to create stability in people’s lives and help to address inequality. What it did show, as the more socially minded Ed Miliband points out Go Big, that it does not necessarily result in people dropping out of the jobs market, thus countering a common concern about about UBIs.

Instead Shafik argues that targeted benefits are a better option without apparently understanding that it is precisely this system that has become so unwieldy and punitive in today’s splintered workforce. She argues that the ’empowerment of workers can be achieved through better minimum wages, benefits, unions and retraining programmes, without, again, understanding that unions struggle to survive and recruit in an atomized society. She also seems to be unaware that the work ethic is itself a problem in a society where so much is likely to taken over by artificial intelligence leaving humans to do pointless jobs or, as David Graeber put it, bullshit jobs just to maintain the culture of work for work’s sake

Compare all this with the much more profound problem posed by Sandel in The Moral Limits of Markets when he argues that we have drifted from a market economy to a market society and asks ‘how can we protect the moral and civic goods that markets do not honour and money cannot buy?’ And: “Not only has the gap between rich and poor widened, the commodification of everything has sharpened the sting of inequality by making money matter more.”

Ultimately Shafik is unable to extricate herself from her establishment positions and high-ranking roles in the World Bank, International Monetary Fund and the Bank of England and bases her entire argument on the myth of the social contract that exists only in the minds of political philosophers. She seem to be unaware, also, of the work of Wilkinson and Picket in The Spirit Level and the Inner Level in which they identify inequality, rather than poverty as such, as the main cause of various social ills for everyone – rich and poor. (It should be noted here that both these books have come under severe criticism of late, which will be the subject of a future blog). There is no mention of inequality in the index of her book and, as such, this means that there is a black hole at the heart of the book in addition to her failure to acknowledge her own political and philosophical foundations and undue reliance on the myth of the social contract.