Time for a new social contract

It is vital for the world to come together and develop a new social contract. We may have reached a new ‘San Francisco’ moment that must be seized before it is too late.

— António Guterres,
UN secretary-general

In the midst of the global pandemic, which refuses to go away, the UN secretary-general has called for “a new social contract between people, governments, the private sector, civil society and more.” The call for a new social contract was also voiced by several public intellectuals, scholars, and businesses at the 2021 World Economic Forum.

The UN secretary-general has emphasised that a new social contract is “an opportunity to build back a more equal and sustainable world” from Covid-19. It could also help advance a more just post-Covid-19 recovery, while simultaneously addressing the deeper systemic inequities that are plaguing societies like racism, discrimination and gender inequality.

The secretary-general has suggested “a new generation of safety nets including Universal Health Coverage and the possibility of a Universal Basic Income extended to everyone.” The unprecedented wealth levels seen globally show that we have all the resources we need to invest in global public goods; what we need is to channel these resources appropriately.

The new social contract is a universal political project, a vision whereby the global community can reshape the relationship between the government and the governed. It lays down a new normative foundation for the progressive realisation of sustainable human development.

The social contract has a long history in political thought, dating back to Sophists (ancient Greek teachers) and Epicures’ contract theory, which tried to explain why individuals need to give up some of their natural freedom to enjoy the benefits of political order. Thomas Hobbes and John Locke argued that in order to ensure a stable and comfortable life, citizens would have to voluntarily transfer some of their rights to an absolute authority or to a representative government. Rousseau aimed to reconcile freedom and authority in his famous social contract theory by suggesting that the sovereign represents all citizens acting collectively (through the “general will”) to establish rules and set up systems of governance. During the twentieth century, the social contract was the basis of John Rawls’ Theory of Justice, where he argued that all citizens of society have basic rights, regardless of their racial, ethnic or other differences.

There is growing discontent among policymakers, civil society and academia with the present state of the social contract, with critics noting that it is outdated and incapable of meeting the needs and challenges of the twenty-first century.

Part of the problem is due to a flawed measure of human well-being and economic growth: The Gross Domestic Product. It ignores the negative effects of conventional economic growth on society such as income inequality, poverty and ecological costs among others. It is shocking that more than half of the world’s population lacks coverage from even one social protection benefit. Among the most affected are the two billion people employed in the informal sector, which is estimated at more than 60% of workers worldwide.

Over the past two decades, civil society has recognised an urgent need to upgrade the past century’s dominant social contract to one that can respond to this century’s challenges. They suggest that the human, social, and economic crisis triggered by the Covid-19 pandemic should bring the international community together to innovate a new social contract. Their arguments are as follows:

n A global political commitment to securing basic social security guarantees needs reinforcing. Social protections entail basic income security such as pensions, child benefits, income support, employment guarantees for those living in poverty and for the unemployed and universal access to health and other social services.

n Universal access to quality education should be at the core of any new social contract, giving particular attention to the world’s nearly 60 million children out of primary school. Students should be equipped with skills and competencies for succeeding in fast-changing labour markets and contribute to climate-friendly economies. Businesses must provide quality employment that offers diversity, equity and inclusion, social safety nets and generate low-carbon footprints.

n An equitable, resilient and sustainable social contract should rebuild people’s trust in governance institutions. Trust is a prerequisite that offers legitimacy to those governing and it permits the existence of a contract in the first place. Legitimacy stems not only from periodic elections but from the inclusion of marginalised and vulnerable groups in decision-making processes. Trust also builds social cohesion, which helps prevent socio-political polarisation and sustain peace.

As pointed out by Nobel laureate Joseph Stiglitz, at the core of a new approach to the social contract lies the quest for “a new balance between the market, the state and civil society, based on progressive capitalism. It channels the power of the market and creative entrepreneurship to enhance the well-being of society more generally.”

(The writer is Hon. professor, Karnataka State Rural Development and Panchayat Raj University, Gadag)