The Social Contract

Embedding the economic individual

Chris Harris
10 min readMay 10, 2021


(Chapter 11 of The Utopia Thieves)

“As long as the music’s loud enough, we won’t hear the world falling apart.” —Borgia Ginz [Jack Birkett], in Derek Jarman’s Jubilee (1978)

THE Revolution that Never Was is not confined to finance, or to the issue of failing to get to grips with the issue of falling costs and industrial transformation, and the maintenance of an anachronistic and distorted emphasis on diminishing returns instead.

The Revolution that Never Was also extends to a failure to institutionalise the idea that is often referred to in political theory as the social contract, as opposed to contracts that are entered into between individuals and legal individuals such as firms.

The social contract binds society together, thus adding the missing terms of equality and solidarity to conventional economics’ pre-existing emphasis on liberty.

Within the terms of the social contract, we moderate our potential opportunism in return for spontaneous and freely-given help from others: the principle that social anarchists call ‘mutual aid’ and others, politeness and civility.

Politeness and civility come from classical roots referring to town life. Such words imply that this is the way we must be if we are not to live in solitude, the original meaning of the word ‘idiocy’.

Town Life: The Cargill Monument, Dunedin, New Zealand at the beginning of the early twentieth century. Digitised postcard dated 1900 to 1909 (no 7352, in the ‘Oilette’ series), from the Leonard A. Lauder Collection of Raphael Tuck & sons postcards of the Newberry Library, Chicago, via Wikimedia Commons. Public domain image, mid-tones lightened.

Sociologists also their own term for the thing for which we exchange our rough edges. They call it ‘social support’, and argue that it comes in four varieties:

  • emotional support (self-explanatory),
  • instrumental support (direct hands on help with anything that’s at least a ‘two-person job’),
  • informational support in the form of freely-given tips and tailored advice, and,
  • appraisal support (‘you’re doing it wrong, this is how you should do it’).

The ultimate expression of social support is the process of being raised from babyhood to adulthood, and introduced to all the right people along the way while being kept away from bad influences. Without the support of a wider community than the nuclear family this is, of course, a fairly hit-and-miss affair.

Whence, also, the well-known ‘postcode lottery’ which extends to entire nations: the fact that one’s chances in life are overwhelmingly determined by geography and one’s choice of parents.

In contrast to such realism — which acknowledges, further, that individuals themselves are shaped by circumstances and upbringing— the kind of economics described by Veblen not only has no place for the economic value of social support (including all forms of unpaid household labour) but also treats the economic actor as someone who has simply dropped in fully-formed.

Its under-socialised economic actor is a bit like the British comedian Rowan Atkinson’s comic character of Mr Bean, an invader from outer space who has a bit of difficulty blending in with the humans.

Except, of course, that Bean is fairly harmless most of the time, apart from the episode in which he accidentally kills one of the humans through clumsiness.

In contrast, many forms of under-socialisation are more overtly malignant.

Such as, for example, the chronic narcissist whose modus operandi is to be nice to people not yet committed to a relationship, and then cruelly exploit and mistreat them after they have made a commitment such as buying a house together with the narcissist, and can therefore no longer so easily escape.

Such a malignant narcissist is, of course, only doing what the economics of opportunism dictates. Which is to say, driving the hardest possible bargain in the circumstances. A soft bargain while the market is still competitive, and a harder bargain once you have the other party over a barrel.

And that’s precisely why we have to somehow temper the economics of opportunism in every social situation involving commitment. Social situations involving commitment are not exclusive to the realm of personal relationships. They are also pervasive in the context of employment and organisations, or in other words, in the ‘core’ of the economy.

An economics of pure opportunism thus legitimates the exploitation and abuse of workers and colleagues in ways that almost anyone, save perhaps a toxic bully, would at once recognise as being, indeed, toxic and bullying.

The economics of pure opportunism also leads to a completely erroneous theory of worker motivation and performance management. Erroneous, at any rate, outside of a slave plantation where abused workers are being ‘driven’.

The correct theory of worker motivation holds that most people, provided that they are not being abused at work to the point of ‘switching off’, have pride in their work and want to do a good job because they identify with their place in society.

The correct theory of performance management holds that if people appear to screw up, it is usually either because (a) they haven’t been shown how to do the job properly, or (b) because their ability to do the work is being affected by problems elsewhere in the system. Problems such as shortages, contamination or vibration, to mention just three of the most obvious issues that often affect the quality of work.

In the place of such sophisticated arguments, the economics of pure opportunism proposes the carrot and the stick, focused on individuals.

In the context of a plane crash caused by some combination of (a) and (b) issues, the carrot and the stick would be the equivalent of heaping all the blame on the pilot every single time and proposing that future crashes would be prevented by harsher penalties in the event that the pilot survives, instead of conducting a proper investigation into the many systemic or mechanical issues that a proper investigation will usually disclose.

There’s a good video on this issue, as applied to the similarly complex context of nuclear safety, by Nick Means.

The social contract is so-named because in effect we agree to moderate our potential narcissism and ego, in return for social support. Which won’t be forthcoming if we behave with total opportunism, taking advantage of other people’s vulnerability and so on.

Here’s another important fact to bear in mind. The social contract is not a conscious contract so much as something evolutionary in character, like the ‘contract’ between the flower and the bee. It’s an aspect of human nature, of the behaviour of the human being as a social animal.

This is not to say that people can’t behave opportunistically. Obviously, people do. The point is that both that kind of behaviour, and more pro-social forms of behaviour, are wired in to the human psyche, and which mindset prevails then depends on circumstance.

If you are regularly betrayed, then obviously you are not going to be so trusting any more. If you’ve been on the receiving end of any kind of abuse or exploitation of vulnerability, you’re going to be wary of commitments.

And this is where the economics of pure opportunism becomes so radically damaging to society, including the world of work. In the first place, it facilitates abusive exploitation of the vulnerable and committed.

Which is no doubt why it persists, given that American textbook economics really does in fact seem to be a sustained apologetic for ruthless, plutocratic and slave-driving behaviour, in the sense of the title of Jonathan Aldred’s new book Licence to be Bad: How Economics Corrupted Us, or the following 1963 quote about the “modern conservative” by the immortal John Kenneth Galbraith:

The modern conservative is not even especially modern. He is engaged, on the contrary, in one of man’s oldest, best financed, most applauded, and, on the whole, least successful exercises in moral philosophy. That is the search for a superior moral justification for selfishness. It is an exercise which always involves a certain number of internal contradictions and even a few absurdities. The conspicuously wealthy turn up urging the character-building value of privation for the poor. The man who has struck it rich in minerals, oil, or other bounties of nature is found explaining the debilitating effect of unearned income from the state. The corporate executive who is a superlative success as an organization man weighs in on the evils of bureaucracy. Federal aid to education is feared by those who live in suburbs that could easily forgo this danger, and by people whose children are in public schools. Socialized medicine is condemned by men emerging from Walter Reed Hospital. Social Security is viewed with alarm by those who have the comfortable cushion of an inherited income. Those who are immediately threatened by public efforts to meet their needs — whether widows, small farmers, hospitalized veterans, or the unemployed — are almost always oblivious to the danger.

But the corruption of society by mainstream American economics’ refusal to embrace the social contract is actually worse than that. For the economics of pure opportunism is a recipe not merely for exploitation, but for disintegration.

Take a look at any complex technical system; any cooperative jigsaw in which the revenue is created jointly once each person volunteers their piece of the puzzle. And then ask yourself, could this really be run on the basis of what used to be known as ‘every man for himself’?

As the earlier example of the jigsaw puzzle and the recalcitrant holdout suggests, a ruthless form of bargaining that leads, at first, to the exploitation of the cooperators by the non-cooperators, may go on to produce a generalised withdrawal from cooperative commitments if the habit spreads. To the sort of situation where nobody wants to play the game any more.

Nearly fifty years ago, a couple of economists named Jeffrey Pressman and Aaron Wildavsky co-wrote a book called Implementation: How Great Expectations in Washington are dashed in Oakland. Their point was that anything really complicated places extraordinary high expectations of reliability on each component.

Perhaps you’ve heard the story about how the astronaut Alan Shephard, in response to a journalist’s question about what he was thinking about in the last minutes before he became the first American to be blasted off into space, said that he was thinking about how his rocket was made up of a million parts, each suppled by the lowest bidder on a government contract!

Actually, the procurement process was a bit more sensible than that: but it’s a good story all the same. And it does illustrate the peculiar vulnerability of complex systems to parts that — well — refuse to play their part.

In Implementation, Pressman and Wildavsky point out that even if the probability of cooperation is very high by most people’s standards — say, 90 per cent — that’s still not enough.

If a project depends on the cooperation of ten actors or agencies which can each be counted upon to a 90% level of confidence — if the project requires all ten to contribute their piece of the puzzle, or to hang together like links in a chain — it turns out, rather incredibly, that there is only about one chance in three that the project will go ahead.

There are two chances in three that at least one of the ten cooperators, each with a 10% chance of pulling out, will in fact pull out and thus — figuratively speaking — break the chain or leave the puzzle incapable of being completed.

This is why so many people have stressed the importance of ‘confidence’ or something very much like it in the history of complex undertakings and large-scale civilisations. It’s not just confidence in the ability to solve technical problems as they arise, important as that is. Even more crucially, perhaps, the issue is one of confidence in the idea that other people are going to continue to cooperate in the grand social enterprise.

When, like the troops of a demoralised army, other people also have it in their power to say goodbye, to mutiny, to melt away and go home for fear that everyone else is doing the same and that, if you do not, you will be left holding the fort on your own — if only in a figurative sense.

Torschlusspanik is what the Germans call this sort of contagious unravelling of the usual social contract to look out for one another: the temptation to bunk off and run instead. Tor means gate. Literally, the longer word means the ‘panic’ to run through a closing gate before it closes altogether.

(The German language has lots of perceptive words to describe weird feelings; words sometimes assembled into humorous lists. Torschlusspanik is but one.)

Seated before a Roman aqueduct still standing after nearly two thousand years in France and, indeed, carrying modern traffic, Kenneth Clark notes that the capacity to accomplish great things is “actually quite fragile: it can be destroyed.”

And one of the chief enemies of a complex, capable civilisation is the undermining of confidence in the idea that the social contract will be honoured by others.

That we are perhaps at risk of such a decline and fall ourselves (or, revolution) is suggested by stories of extraordinary political dysfunction and decay in countries such as Britain, such as this one from the Guardian of late:

Over the past fortnight, the news from Westminster has rather resembled a weird play about pre-revolutionary France, or Tsarist Russia circa 1916.

Preoccupation with royalty and the flag, both symbols of unity, seem to increase in inverse proportion to the way that the society is decaying on the plane of substance. Thus, in another article, we read about how the proprietor of a fortified gymnasium is seeking an armoured personnel carrier to transport his customers across a suburb of London torn apart by gang warfare.

That’s a scene straight out of Derek Jarman’s Jubilee: a vision of a flag-waving, royalty-worshipping and, otherwise, completely dystopian Britain dreamed up by a bunch of punk rockers in the 1970s. Which, of course, nobody took all that seriously at the time. But life has since come to imitate art.

In the words of one of the film’s more memorable characters, Borgia Ginz [Jack Birkett], “As long as the music’s loud enough, we won’t hear the world falling apart.”

But then again, not just the punks but also more scholarly types like Tom Nairn, author of The Break-up of Britain (1977), were warning loud and clear, back in the day, that if the Anglophone societies were to go down the road of greed and social atomisation that was just then being proposed by a few cranks (or so we thought), they would, indeed, break up.

To round off, here are a couple of classic quotes about embeddedness and the solidarity it demands. The first is from Pericles, the ancient Athenian:

Just because you do not take an interest in politics doesn’t mean politics won’t take an interest in you.

The second from José Ortega y Gasset:

I am I and my circumstances, and if I do not save it, I do not save myself.

And one more, from the trade union movement:

An injury to one is an injury to all.

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Chris Harris

I am an urban historian from Aotearoa New Zealand. With an engineering background, I also have up a PhD on planning and economics.