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Jun 17, 2020 | Politics | 0 comments

Towards a 21st Century Social Contract

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Written by Daithí Ó Sé

In the first part of a series on the topic of a new ‘social contract’, Daithí Ó Sé of Cork Social Democrats lays out the case for creating a more equal future via radical change.

6min Read

Written by Daithí Ó Sé

6min Read

In the first part of a series on the topic of a new ‘social contract’, Daithí Ó Sé of Cork Social Democrats lays out the case for creating a more equal future via radical change.

“The strong take what they want and the weak suffer what they must.”

This sobering statement was written by Thucydides in The History of the Peloponnesian War 2,400 years ago. In the age of Alexander, might made right and bigger army diplomacy prevailed. Such was life in ancient times.

Over time, society evolved from an agrarian society to industrial manufacturing to services and now the emerging data-based, digital economy. The level of social change is accelerating given the technological advances in the last 150 years. Telephone, radio, television, electronics and the internet have changed our world in that time and continue to do so into the future in ways we can’t predict. Humankind is experiencing the most peaceful, prosperous period in our history. There have never been as many people living longer, healthier lives. A child born today is likely to see the 22nd century.

If that is the case, why do we see such social and economic upheaval today?

The rapid advances in technology and introduction of automation in industries have changed society and everyday life. Two examples are disruptions to the jobs market and wage inequality.

First, disruptions to the jobs market. In 1850, 58% of workers living in the United States worked in agriculture. Today, that number is less than 5%. While the numbers working in agriculture fell, there was an explosion in productivity.

Manufacturing tells a similar story. The workforce in this sector has halved since 1980 and yet we are seeing a doubling of industrial output. Fewer workers are manufacturing goods but are doing so more efficiently than ever before. In 1980, 25 workers were needed to produce $1 million dollars in output; today only 5 workers are required.

The rise of automation and technology is projected to put 47% of current jobs are at risk in the next 20 years. Most of these jobs are in the service industry i.e. Translation services, fast food, travel agencies. 3 million transportation jobs are at risk in this period due to self-driving cars alone. If half of all jobs are on the chopping block within a generation, a new economy must be created for these displaced workers before they fall behind in the global marketplace.

This leads to the second point: wage stagnation and inequality.

From 1948 to 1973, wages and productivity increased together in the United States.. Workers became richer and more efficient in equal measure. However from 1973 onward, productivity continued to rise but wages flatlined and have barely increased since. Workers would be paid more than double what they are now being paid today had wages kept up with productivity. Research from Stanford University shows that a person born in 1980 has a 50/50 shot of being better off than their parents. The American Dream is dead.

Wage stagnation is coupled with the inequality of income going to the top 1%. The rich are getting richer and the poor are getting poorer. Prior to the Stock Market Crash of 1929, the top 1% in the United States shared half of all the wealth in the country. Radical economic policies of the New Deal and middle class expansion following the Second World War meant most of the population were able to prosper in the 1950s and 1960s creating a broad middle class of educated workers. This growth slowed in subsequenct years and began to reverse in the 1980s under the supply-side economics and deregulation of the Reagan presidency. Since then, the share of the 1% wealth are back at pre-1929 levels to such an extent that in 2015, the global 1% own more than the bottom 99%. This is simply unsustainable.

These ruptures have led to pessimism and a distrust in the institutions designed to protect us leading to the rise of the anti-liberal order i.e. Trump, Brexit, Le Pen. From this, a new economic class is emerging, one forged in the crucible of the 2008 financial crash, austerity and the COVID19 pandemic. These events have given rise to anti-trade, anti-global and anti-immigration forces across the globe urged on by oligarchs and dark corporate money.

Beyond Donald Trump, this shift in attitudes present an increasing support for authoritarianism. Struggling workers look to the local strongman to smash the establishment and solve their problems through swift action. The price is a surrender of civil liberties which is a dire place for democracy to be in. This loss of faith in our democratic model of governance is growing with more and more people on lower incomes becoming frustrated and anti-systemic.

What is needed now is a 21st century social contract; one I believe is ripe for renegotiation.

But what is a social contract? As members of society, we agree to a governing authority in exchange for services like safety, education, healthcare etc.

Rather than incremental improvements, we must strive for radical change in order to build something better for all people equally. The model of government designed in the 20th century was hindered by access to information and geography. Today, modern technology and the internet render boundaries meaningless while information is abundant, cheap and easy to utilise. An expansion of education and job training in the digital world. Universal healthcare provision. Empathetic administration and policy making for communities. An inclusive, thriving society where all peoples have an equal stake in society.

This is the clarion call for the 21st Century Social Contract. We must fight for a future of shared prosperity to stop the forces of division and civil strife from taking our freedoms away from us.

The views outlined in this article are solely that of the author and do not necessarily reflect those of or any other organisation.

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