Elizabeth Warren and The Non-Existent Social Contract

There's a video that has been doing the rounds recently to much adulation from my statist friends. It is of Elizabeth Warren, a would-be Senator campaigning for that bloated old fool Ted Kennedy's seat, talking about "the underlying social contract". Take a look, and then we'll start to dissect what Warren has to say:



I'm not particularly interested in her analysis of the economic woes of the US - yes, Bush Junior was a profligate wastrel when he was in power, but his replacement has done little to reduce the size of the deficit facing the US. In fact, he's made things worse. Rather, I want to look at this sort of underlying social contract argument that Warren uses.

First things first, on an initial listen/read, it is actually quite persuasive. On a surface level, she appears to be talking some sense. Yes, we are fundamentally and crucially individuals. But I know my life would be unpleasant and really rather short were I not part of a community. I'm not fantastically wealthy, and I never will be, but I do know the fact that I can live in relative comfort is not solely down to my own abilities. I need the interactions with others and the infrastructure of wider society in order to be able to attain and maintain my lifestyle. The super-rich are no different. But this acknowledgement of the essential inter-connectivity of modern life does not do the heavy lifting that Warren seems to think it does within her argument. Because it is all largely smoke and mirrors; drill down, and you start to see a lot of holes. So let's drill down.

Well, this is class warfare, this is whatever. No. There is nobody in this country who got rich on his own. Nobody.

Perhaps nobody did get rich on their own. But a lot of rich people have done so because of talents and skills that, while not unique, are very much the exception rather than the rule. There are three main ways in which people get rich: having a great, marketable idea; being willing to take risks; and/or being willing to work really hard. Yes, they need other people, but it is also something within them that allows them to differentiate themselves from other people and create something that makes them very wealthy. As such, their relationship with those who assisted them in making them very wealthy is symbiotic. This is a crucial point: no-one got rich on their own, but equally no-one got rich purely because of the benefits of the wider society around them.

It is telling that Warren never actually demonstrates that we're not dealing with class warfare here. Sure, she goes on to argue for a social contract, but since she does not convincingly demonstrate the existence of that social contract, her case that it isn't class warfare is not even implicitly made.

You built a factory out there? Good for you. But I want to be clear: you moved your goods to market on the roads the rest of us paid for;

And, of course, the factory-owner himself almost certainly paid for, and owing to the fact that they earn more money, probably paid more for than the average worker in the US and maybe even a greater percentage of his/her income.

Furthermore, there is something a little naive (at best) in this idea that goods get out to market through a publicly funded infrastructure. This may well be true, but what choice does the entrepreneur have? They are expected, under threat of imprisonment, to pay tax to the state, which then goes out and builds roads etc. Now, it could well be that an entrepreneur may want to fund his/her own infrastructure, private to his business, that could work more efficiently for him/her. But they have no choice but to hand over the funds that could be used for such a project to the government. Thus, they have no choice but to use the publicly funded infrastructure. As such, Warren's argument becomes essentially circular - you give money to the state, therefore you can only afford to use the public infrastructure, therefore you should pay for that infrastructure. And that argument is predicated on the far too seldom challenged notion that there should be no opt-outs from the tax system for those who do not wish to avail themselves of certain public services. Even if our entrepreneur could still afford to fund his/her own transport network, they would still expected to pay for the public one. Their hand is almost forced; they may as well use the publicly funded roads as otherwise they're going to end up paying twice for the roads they use.

you hired workers the rest of us paid to educate;

A spurious assertion that assumes our rich person doesn't hire privately educated people and that public education is of a high enough standard to truly benefit our entrepreneur friend. And, once again, our entrepreneur is also paying for that system to educate his/her workforce through taxation.

you were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did.

Hmmm. Because, since the advent of publicly funded police and fire services, there has never been a burglary or a building burning to the ground, right? Of course not; that's yet more nonsense. But Warren here seems to be falling into the naive trap of thinking that if the state funds and runs something, it is going to make us safe. That is, of course, nonsense on stilts. As factories investing in security guards and fire prevention systems shows. And, again, that entrepreneur ends up paying twice - once for a public system that is often bloated, inefficient and unable to do what it is supposed to be doing. The second time for a private back-up system designed to compensate for the inefficiencies of the public system they are forced to contribute to.

Now look, you built a factory and it turned into something terrific, or a great idea? God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.

I love the "God bless". Wonderfully patronising. Wouldn't worry too much about approaching those wealthy, big-money donors any more, Elizabeth. On the flipside, hate the phrase "pay forward". Just doesn't work at all..

But at the heart of all this is a sweeping, intellectual and ideological power grab. Warren is arguing that there is a social contract that underpins all we do, and that we need to adhere to it because we are part of society. But she is trying to do something even more bold - she is trying to claim that not only is there an underlying social contract, but she is the one who understands it. Therefore, we all need to fall in line with her statist policies about the redistribution of wealth through tax. So we've gone from an apparently innocuous argument about fairness in society to a much broader, and more dangerous, argument that is predicated on the idea that Elizabeth Warren has found the real truth about our society.

The big problem is that social contracts - underlying or otherwise - actually don't exist in any practical way. They are theoretical constructs of political philosophers designed to either offer an alternative to the status quo or to explain the transition from some sort of state of nature to the status quo. They are illustrations rather than actually part of the reality of modern politics. Therefore, to claim one exists and should actually be the guide for how much the state intervenes financially in the lives of its citizens is problematic to say the least. In part because we never signed up to any such social contract. Nor did our parents, or their parents, and so on. In fact, the person who signs us up - whether we like it or not - is someone like Warren. And she decides how we should interact with each other within society through nothing other than her own spurious and contestable argument and her own arrogance.

Which is the big problem I have with Warren, or at least the way in which she depicts herself in this video. Once you get beyond the folksy presentation of the case for redistributive taxation to the actual meat of what she is saying, you get a level of arrogance that I find very troubling. She's found the underlying contract. She knows best; about what is good for society, her supporters and for you. It is only a small step from finding that social contract to what Rousseau termed being forced to be free. On the basis of a contract you never signed up to because it has just been created as a rhetorical device for a campaigning politician, the state can demand more from you. And I know I can't be alone in finding that deeply concerning.