A new societal contract

  • This paper argues that the traditional social contract that underlies the free market economy has run its course and needs to be replaced by a new contract, based on a new conception of the “empowering economy.” Whereas different social contracts are relevant to different societies, all these contracts have some features in common, addressing some basic human needs that are common to all. These are needs that every thriving society must satisfy. In the presence of current global problems – such as climate change and financial crises – satisfying these needs can also generate the popular approval for multilateral agreements to tackle these problems. The paper identifies three inconvenient truths for the existing social contract: (i) economic performance involves more than material prosperity, (ii) free markets naturally generate inequality, and (iii) human progress rests primarily on cooperation. In response, the paper proposes a new social contract that can be promoted through three policy approaches: (1) policy that focuses not just on material prosperity, but also on personal empowerment and social solidarity, (2) automatic stabilizers that reduce inequalities of economic power and (3) policy that develops the human capabilities of cooperation.

Export metadata

Additional Services

Share in Twitter Search Google Scholar
Metadaten
Document Type:Article
Language:English
Author(s):Dennis Snower
Parent Title (English):Economics: The Open-Access, Open-Assessment E-Journal
Publication year:2019
Publishing Institution:Hertie School
Number pages:14
First Page:1
Last Page:13
DOI:https://doi.org/10.5018/economics-ejournal.ja.2019-37
Release Date:2019/09/11
Volume:2019-37
Issue:13
Licence of document (German):Metadaten / metadata
Verstanden ✔
Diese Webseite verwendet technisch erforderliche Session-Cookies. Durch die weitere Nutzung der Webseite stimmen Sie diesem zu. Unsere Datenschutzerklärung finden Sie hier.