Capitalism and Further Thoughts on Social Contracts

"XKCD" by Randall Munroe

“Social contracts” has to be one of the most numbingly dull-sounding post tiles imaginable, but I still have a great deal to say on the topic and continue to find it interesting.  It reminds me of a book I was assigned in a high school ethics course, “The Necessity of Ethical Absolutes.”  (Think of how that sounds to a 10th grader.)

I established what I think are the basic laws of social interaction (ie, social contracts) here.  These laws are, I believe, unalienable.  You don’t have the option of agreeing with them or not; you agree with them by choosing to live with other human beings, rather than as a hermit in a cave.  Come to think of it, they could apply to hermits in caves, too.  These laws are fundamental to the smooth operation of society, so they can’t be disagreed with.  (Of course the fourth law becomes a matter of definition, but the principle is sound and necessary.)

It occurs to me, though, that there is a second kind of social contract: the kind that groups of people establish among themselves and, thus, can be accepted or rejected.  Essentially all “unwritten rules” fall into this category:  Writing thank-you notes, not staring, men paying for dinner on dates, and so on.  None of these rules are necessary, since they vary from culture to culture and between subgroups within a culture, but by being a part of a given demographic, you’re agreeing to that demographic’s specific contracts.  Your agreement doesn’t seem to be as binding as with the original four laws, but perhaps that’s just because our unwritten rules are pretty trivial and unlikely to result in anything worse than offending someone.  In a culture where unwritten rules could have truly serious effects, I imagine that adherence to these social contracts would be very important.

That, however, was not the interesting thing I was wondering about.  The interesting question was:  Is capitalism compatible with those fundamental social contracts?  This is an important question.  A social structure that encourages the breakage of the contracts will be plagued with difficulties.  Take communism.  The idea that you do your share of the work and get your share of the rewards is obviously in line with the contracts, but it’s too easy for someone to not do his share of the work and still get his share of the rewards, or to not do any work at all and attempt to take all of the rewards.  It doesn’t work.

I benefited, as I always do, by discussing this with Jordan.  He pointed out that capitalism is obviously compatible with the social contracts because America is a capitalist nation and the contracts are generally respected.

That’s true enough.  On the other hand, the freer capitalism gets, the less incentive one has to adhere to the contracts.  Whoever can get something for nothing comes out ahead.  In a completely unregulated free-market scenario, even the first rule would not need to be obeyed.  Caveat emptor: If someone sells you a bobcat instead of an office chair, you know not to buy from him again.

It seems, then, that the social contracts are best fulfilled when there is a balance of freedom and regulation, and consequently a balance of freedom and regulation is necessary for a society to function as smoothly as possible.  An obvious conclusion, perhaps, but in times of high polarization, not one that you’ll hear promoted very often.


1 Comment

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One response to “Capitalism and Further Thoughts on Social Contracts

  1. Mom S

    I will include something really interesting in my next box to you and Jordan… hmmm!

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