Free Markets, Free People

"Social Contract". You keep using that phrase. I do not think it means what you think it means.

This week seems to be the week for the more leftward-leaning members of the political elite to try to sneak past a unilateral revision to the "social contract". Bruce pointed out one example from Paul Krugman, and now I want to address another one, from Elizabeth Warren, formerly of the Obama Administration and now candidate for U.S. Senate in Massachusetts. Ms. Warren opined:

“I hear all this, you know, ‘Well, this is class warfare, this is whatever. No. There is nobody in this country who got rich on his own — nobody.

“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. You hired workers the rest of us paid to educate. 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.

“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.”

Let’s unpack this idiocy a little bit, shall we?

There is nobody in this country who got rich on his own — nobody.

This is a meme the Left has been pushing in recent years. The trouble is that it’s not just wrong, but it’s self-evidently wrong. It wasn’t "society" that gave Mark Zuckerberg the idea for Facebook, any more than it it gave Dale Carnegie the idea of teaching public speaking, or turned Bob Williamson from an alcoholic, drug-addicted homeless drifter to the Founder and CEO of WASCO and Horizon Software. Nor did society have to do much with Steve Jobs and Steve Wozniak selling homemade computers out of Woz’s garage. There are any number of lists of people who started with little or nothing, and who became extraordinarily wealthy due to their drive, entrepreneurship, and talent.

"Ah," say the Lefties, "but without society, none of this would have been possible!"

Now, this is perfectly true, I suppose, but not in any way helpful to their argument. Without society, half of children would die in infancy, life expectancy would be somewhere in the low 40s, a significant number of people would be eaten by wild animals. Pretty much everybody else would be carried away at a young age by disease, infection, injury, or roving bands of sadistic steppe horsemen. So, sure, society helps, in the sense that the Zuckerberg/Winklevoss dispute wasn’t ended when their craniums ended up a pile of skulls deposited by a detachment of Genghis Khan’s hordes after razing their small farming village, but in courts of law to which everyone has access.

But the Progressive argument about the usefulness of society is different, and silly.

You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. 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.

But, of course, those roads didn’t get built, and those workers didn’t get educated so that capitalists could oppress the proletariat. That stuff got built because they were universally seen as a positive good in and of themselves. Millionaires aren’t taking advantage of roads, everyone is. For instance, it’s how the millionaires get all that food delivered to our supermarkets, and iPods to our electronics stores. We benefit from the millionaire using the roads in delivering stuff we want to us. The only reason millionaire is using our roads because we want the stuff he makes and that’s how he delivers it to us.

Everyone uses the roads. Everyone benefits from education. Everyone benefits from fire and police protection.  We have those things not because they are a positive good—though they are—but because they comprise the minimal requirements for maintaining a civilization that we all derive benefits from.

So, not only do the millionaires not derive some additional benefit from their existence, we would still want them even if millionaires didn’t use them at all. And we’d still pay for them, because we all derive an equal benefit from having them. They provide no special advantage to the millionaire that the rest of us don’t enjoy.

What the millionaire does—the only reason he’s even a millionaire—is to provide us with goods and services we willingly purchase. If we didn’t buy his product, he wouldn’t be a millionaire. Whatever advantages he accrues comes not from some benefit he derives from our roads, or teachers or our police. He accrues them because of our desire to give him money for his product. We are the beneficiaries, because we put a higher value on his product than we do on our money, or on someone else’s products. We choose to make him a millionaire, because we value his product more highly than other things. He doesn’t send hulking thugs to our door demanding our money. We go out and buy his product intentionally.

And let’s dispense that the millionaires are using services "the rest of us" paid for. The millionaire is using services that he paid for along with us. And he probably paid more for them, in absolute terms, than most other people. He also indirectly pays for maintaining society through the salaries for all those "workers the rest of us paid to educate". The payments those workers provide to maintain society only exist because the millionaire’s business provided their jobs. Without those jobs, society’s overall wealth would be smaller, and our ability to maintain that society would be proportionally lessened.

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.

That’s not the social contract. The social contract is "We maintain civilization because we all benefit from it. And we all have a responsibility to pay for it." Ms. Warren’s version of the social contract boils down to, "You have to pay more for maintaining our society because you can, and we outnumber you, and can force you to do so." That’s not a contract. That’s just extortion by majority. The millionaire’s responsibility is not to "pay forward" any more than any of the rest of us, because he doesn’t benefit any more than the rest of us.

To the extent that a "social contract" even exists, it is to provide the minimal necessary public infrastructure—physical and legal—for society to maintain itself. Ms. Warren’s concept of the social contract is that the millionaire derives some special benefit from society, so he should make special payments. But, since no special benefit actually exists, there is no excuse for extraordinary payment.

But, even so, the millionaire does make an extraordinary payment. As we’ve harped about endlessly here, the top 20% of income earners, with an average income of $264,700 per year, pay 69.3% of all federal income taxes. The "rich" are already covering 70% of the cost of "society"—loosely defined—at the federal level.

But Elizabeth Warren thinks they’re too stingy, and the "rest of us" deserve more.

~
Dale Franks
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40 Responses to "Social Contract". You keep using that phrase. I do not think it means what you think it means.

  • Let me recommend to all The Myth Of The Robber Barons, which was recommended to me by Sharpshooter (I think).  It is a very well researched, readable, short and compact little book that makes several arguments/statements of fact that speak directly to this Warren BS.
    For instance, the story of Scranton, PA and how it came to be.
    Also, the direct refutation of the organizational history notion that events are somehow dialed in, and players merely fungible factors.
    There is a “social contract” in the US, and it is generally codified in the Constitutional design; central government is empowered to do a very few things, states somewhat more, and people are left empowered to seek their own values across a broad, open field with very little impediment.
    It unhappily goes without saying that contract has been seriously breached, notably by people like Warren.
    The charter that gives our nation legitimacy does not authorize the central government to take my income and give it to others, and such an idea would have been anathema to the people who wrote it.
    Warren and others suggest an “adhesion contract” of infinite plasticity that was never set down, and to which we are not privy.  It is binding on us regardless of our acceptance, and it can be reformed at the whim of others.  This is in keeping with the reactionary idea to the Revolution that GOVERNMENT IS, and we are factors of government.  The Founders had that reversed; WE ARE, and government is our factor…our instrument to do a few things that history and human nature inform us need doing via such an instrument.
    Parties to a contract may, under a number of circumstances, withdraw from it with perfect equity.  People who are adhered to a putative contract owe no performance at all.  I suggest the latter applies at present.

  • I kind of want to show up at one of her town halls, ask how much she makes, and then inform her that since I’m unemployed – and she clearly doesn’t need as much as has – she should give me 2 or 3 thousand bucks.  When she says no, or dodges, or tries to say that no, I can’t have her money, I’ll politely* ask her why she gets to keep all of her money but other people can’t keep all of theirs.
     
    * – For certain values of “politely”

  • Using the left’s reasoning Stalin wasnt responsible for killing millions. After all if they werent there for him to kill than he wouldnt have killed htem. The Germans arent solely responsible for the holocaust. If the Jews didnt exist than obviously there couldnt be a holocaust.

  • It’s only fair. We have Ron Paul, they have Elizabeth Warren.
    There’s no business like show business!
     

  • Thanks Dale, for putting into words what my brain ran though when I first read her little bullshit story.
     
    Heavy emphasis on ‘they pay more’ for the same services we all use, and pretty much get exactly the same quality of service (except of course for those sweet loans some of them get from the DOE).  Meaning to me, they’re getting screwed, not getting some tremendous unearned benefit.
     
     

  • I thought that the Constitution was our social contract.

  • I think I know her definition of the social contract; “From each according to his ability, to each according to his needs”. As dertermined, of course, by our enlightened and compasionate vanguard of the proletariat.

    • Yes, and worse, the cowardly swine on the left refuse to acknowledge this obvious attachment to the underlying principles of socialism/collectivism.

      If I had more energy and time, I’d whine about their post-modern abasement of language. I’ll limit to my usual warning that you can’t possibly understand today’s left without understanding the post-modern basis of their thinking. If you can call it “thinking”.

      • Oh, it’s thinking all right, and if I was more like them than me, it’s the sort of thinking I’m sure I’d help stamp out by sending them to summer camps (and winter camps too…) for “re-education”.
         
        Fortunately for them I have this sick addiction to the idea they ought to be able to think what they want even if it is totally wrong.

  • There is a cololary to the Warren thinking.

    Syndrome: Oh, I’m real. Real enough to defeat you! And I did it without your precious gifts, your oh-so-special powers. I’ll give them heroics. I’ll give them the most spectacular heroics the world has ever seen! And when I’m old and I’ve had my fun, I’ll sell my inventions so that *everyone* can have powers. *Everyone* can be super! And when everyone’s super…
    [chuckles evilly]
    Syndrome: – no one will be.

    Take the ‘killing of Usama bin Laden” .. was President Obama responsible for bring him to justice ??
    Who built the helicopters that allowed the raid ?  Who manufactured the guns ? .. or the boots of the soldiers ? .. or the night vision etc. etc.
    QED

  • “Because people have lost confidence in the capacity of folks to look out for them …”

    .. and here I thought we (re)learned that in the aftermath of Katrina.
    I once worked with a guy who had previously worked at the prestigious Bell Labs (during what was known as the “Goldern Era” of AT&T). I asked him why he left what I thought must have been a “dream job.” He simply stated that his boss had told him that he had to look out for himself as far as career development, that nobody else was going to do it for him.

  • Via Legal Insurrection…From the occupiers of New York…
    They have taken our houses through an illegal foreclosure process, despite not having the original mortgage.
    They have taken bailouts from taxpayers with impunity, and continue to give Executives exorbitant bonuses.
    They have perpetuated inequality and discrimination in the workplace based on age, the color of one’s skin, sex, gender identity and sexual orientation.
    They have poisoned the food supply through negligence, and undermined the farming system through monopolization.
    They have profited off of the torture, confinement, and cruel treatment of countless animals, and actively hide these practices.
    They have continuously sought to strip employees of the right to negotiate for better pay and safer working conditions.
    They have held students hostage with tens of thousands of dollars of debt on education, which is itself a human right.
    They have consistently outsourced labor and used that outsourcing as leverage to cut workers’ healthcare and pay.
    They have influenced the courts to achieve the same rights as people, with none of the culpability or responsibility.
    They have spent millions of dollars on legal teams that look for ways to get them out of contracts in regards to health insurance.
    They have sold our privacy as a commodity.
    They have used the military and police force to prevent freedom of the press. They have deliberately declined to recall faulty products endangering lives in pursuit of profit.
    They determine economic policy, despite the catastrophic failures their policies have produced and continue to produce.
    They have donated large sums of money to politicians, who are responsible for regulating them.
    They continue to block alternate forms of energy to keep us dependent on oil.
    They continue to block generic forms of medicine that could save people’s lives or provide relief in order to protect investments that have already turned a substantial profit.
    They have purposely covered up oil spills, accidents, faulty bookkeeping, and inactive ingredients in pursuit of profit.
    They purposefully keep people misinformed and fearful through their control of the media.
    They have accepted private contracts to murder prisoners even when presented with serious doubts about their guilt.
    They have perpetuated colonialism at home and abroad. They have participated in the torture and murder of innocent civilians overseas.
    They continue to create weapons of mass destruction in order to receive government contracts. *
     
    The * means they have other stuff they might add…

    • “Through clearer thinking,” Mr. Sachs writes, “we can become more effective both as individuals, and as citizens, reclaiming power from corporations.” This reclamation will come primarily from punitive tax and regulatory measures. Mr. Sachs is undaunted by any thought that such a regime might worsen unemployment. The trained economist assures us: “Economic theory indeed supports the view that high tax rates can actually spur, rather than hinder, work effort.” He argues that financial incentives ought not to matter in a mindful society and is confident that well-intentioned social engineers can suspend the laws of economics.

      Stupid is as stupid does, but I’m not sure who is the more stupid.
      Ultimately, this seems to go back to …

      They have held students hostage with tens of thousands of dollars of debt on education, which is itself a human right.

      Many of these folks romping around Wall Street are the product of the current manefestation of a “liberal arts education.” They were robbed.  I have to wonder if Elizabeth Warren’s “Consumer Protection Agency” should be unleashed on the many “professor” who peddled such poor product to these unwitting rubes.

  • “You built a factory, good for you” That attitude showcases the left’s disdain for anyone who produces, who achieves.  In this Obama economy where real unemployment approches something like 15%?  It should be “You built a factory, THANK GOD for you” But I love her logic, because she makes more than me and everyone that makes less than her needs to demand she pony up her share. Because she went to the schools we all paid for right?  She traveled the roads we all paid for right?  The cops we all paid for made sure she wasn’t murdered or raped (ok, maybe her general fuglyness took care of that last one) right?

  • Who paid for the roads, again?  The government or private taxpayers?
     
    Claiming generosity based on spending other people’s money.

    • Correct me if I’m wrong but all the roads built in this country for almost the first hundred years all private. I know the first Toll Roads were built by private entrepreneurs.
      Anyone name any great lefty builders? Other than mass graves.

      • There were state and Federal roads (post roads under the Constitution) almost from the founding.
        The U.S. Routes very often were laid down early in our history.

        • Heh, read about the National road – they left the stumps in the ‘road’, cut low enough to allow the wagon axel to pass over them.

  • well said.
    great read.
    thanks

  • But you’re bullsh*tting because you don’t believe in a “minimal”.  Any taxes at all are always too high.  Taxery is theftery by the leftery and everyone who got rich was and is entitled to it, every last cent.
    Everyone who got rich and famous did it all on his/her/its own, never did it on the backs of anyone else around him/her/it.  Never lied cheated nor stealed, nor stepped on any necks.  (Well they were exposed, weren’t they?  They were just begging to get stepped really!)
    Warren’s simply counterbalancing the sh*t y’all always peddle, and countering the logical extension of your pretension.  Why act all shocked and appalled and suddenly pretend you have standards other than mine-mine-mine-f*ck-everyone-else?  Your position logically leads to more robber-barony and feudalism.  It’s only the thin veneers of socialism that barely keep things from travelling quite that far.  But… we’re on our way back, for sure.  Thanks, guys!
    It’s just the same old stuff.  The rich are entitled to everything they have and more.  The poor are not quite even entitled to continue existing… except insofaras they can be made to usefully operate machinery for the rich.
    By the way:  Go f*ck yourself, friendo!  :-D

    • Your name says it all.

    • It’s always amusing to see someone transmute my position to a complete strawman that doesn’t represent my position at all.
      Your comment is is merely ignorance and arrogance combined into a neat little package.

    • “By the way:  Go f*ck yourself, friendo!”
       
      Hi! I’m a socialist leaning over-educated boob, (countering the logical extension of your pretension. ) I’m here to present an alternative point of view and by appeal to reason and discussion, persuade you you are misguided.
       
      You have your internet, your PC, pay your monthly access fees, and probably are proud owner of some fancy pieces of paper handed to you by a college, bet you aren’t on the poor side of the equation here.  And, I’ll bet when it comes tax time, you aren’t assuaging your guilty feelings of being better off by writing out any additional checks to the Treasury Department to pay for the social programs you and people like Warren so dearly love.
       
      It gives me pleasure to think that in a little over a year, you’ll be sitting with your wine glass gripped firmly in white knuckled hand, foaming at the mouth as the Republican candidate for President gives his or her victory speech.

  • THANK YOU for posting this!  I’m glad I found your blog!

    Steve
    Common Cents
    http://www.commoncts.blogspot.com

  • I pledge allegiance to the social contract and the bureaucracy for which it stands…
    Now that’s a pledge our friends on the left can stand up and salute.
    The Social Contract thing, when it first came up, I wondered why someone like Warren would be holding up on high the unwritten laws on how an American Man conducted himself. (OK, women to) I don’t claim to know or remember them all, but I hope I remember the important ones.
    When needed you come forward to defend your country, maybe you won’t qualify for the front lines, but you do what you can.
    Defend  woman and children, end of the day their lives matter, yours is expendable.
    Respect the property of others. Don’t take what doesn’t belong to you.
    If you make a contract, fulfill it. If you give your word, keep it.
    If your right, hold your ground. If your rights are being stolen, fight.
    May God allow me the strength to always follow this compact.