When was the last time you heard someone use the phrase “social contract?” It used to be the go-to justification for all the things the big government types demanded government do and we accede to. It seems to have been replaced by euphemisms like “that’s what taxes are for” and “that’s what advanced societies do.” Thanks to the permanency of the Internet, though, we can still find chestnuts from usual suspects like Elizabeth Warren:

There is nobody in this country who got rich on their own. Nobody. You built a factory out there – good for you. But I want to be clear. You moved your goods to market on 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… Now look. You built a factory and it turned into something terrific or a great idea – God bless! Keep a 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.

The reality is that the phrase “social contract” has grown stale even among those who think, as Ms. Warren does, that being born into a society automatically burdens you with certain obligations. Consider it the liberal version of “original sin,” that can only be absolved through perpetual penance and atonement (and, perhaps not coincidentally, through the equivalent of purchasing of indulgences i.e. “donating” (under the threat of violence) some of what you earn to the Church/State).

The snark in me might suspect that the word “contract” has itself become an unpleasantry for leftists, since it reeks of capitalism. We can’t have capitalism spun in any sort of positivity, can we?

Snark aside, consider what the social contract actually is, especially when it is invoked as an argument for taxation and other burdens placed on citizens by government. It is, in essence, others telling you that they’re entitled to take some of what belongs to you, either to fund something they believe in or something that benefits themselves at your expense. Make no mistake – that’s exactly what the “social contract” is at its core.

Warren’s missive is a lie. When we buy gasoline, we pay taxes. When we register a vehicle, we pay fees. When we cross a bridge, we pay tolls. Thus, when we use roads, we pay for that use. That is the transaction, and it is just that: a transaction, not an open-ended obligation. The products we buy that travel over those roads have those same taxes and fees built into them, paid by the people who sell us those products. The same holds true for government services – as we generate income, we pay taxes that fund those services. We do not, however, enter into a contract in perpetuity to “pay forward.” We are not contractually bound to society or the state.

Right about now, I can hear conservatives cheering “Damn right!,” but here’s where I lose some of them. One of the biggest assertions of “social contract” burden involves children. Go down that path, challenge the preferential treatment that those who choose to have kids receive, and a common response centers on how society benefits from incentivizing people to have children, how it’s good that society “invests” in children, and the like.

The social contract is implemented with regard to children and child-raising in America in both the public sector and in private (i.e. not-government) life.

On the public side, public education is funded by taxation. In some places, property taxes pay for schools, and in others, schools are funded by the overall tax base. Either way, those without children are paying for the education of others’ kids. In addition, having dependents gains tax credits, reducing the tax burden of those with kids, even though people with kids avail themselves of a larger share of the core services of government than the childless do. On top of taxation, those with children have greater access to governmental largesse, and benefit from all sorts of other programs and initiatives.

On the private side, employers commonly offer benefits to those with children, including paid maternity and leave, health care that includes maternity coverage, onsite child care, educational assistance, and schedule flexibility. Those are the “formal” forms of benefit. “Informal” ones include subtle (and sometimes not-so-subtle) preferences for employees with children over employees without, including scheduling accommodations, overtime demands, travel demands, productivity expectations, layoff decisions and the like. While the demands and benefits of employment should ultimately be between employers and employees, societal pressure, i.e. “the social contract,” works against any childless person who objects to this disparate treatment. Furthermore, some of these benefits are mandated by law, and the trend has been for more to be mandated.

We see and hear this aspect of the social contract in declarations like Clinton’s “it takes a village to raise a child.” We are informed that other nations are more “advanced” than ours because their governments mandate or provide special treatment for mothers/parents. We hear that government has a vested interest in promoting birth, child-rearing and education, because today’s children are tomorrow’s producers/taxpayers. This makes them developable assets. But, at the same time, we hear that children are a negative externality, i.e. a cost borne by third parties. Can both be true? Sure, but only because government has made it so. Why has government done this?

Two reasons:

One – government is a bunch of politicians. Politicians have a primary goal, to get elected. Thus, they are incentivized to do stuff for people and to give stuff to people, and will take the path of least resistance in doing so. When society imposes a “contract” on everyone that includes third-party burdening for the costs of children, it’s easy for politicians to institutionalize those externalities with things like public education, tax benefits, employment mandates and the like.

Two – government likes money. Today’s minors are tomorrow’s taxpayers. Given that government has dug itself a GIGANTIC hole with our $21T national debt, that this is dwarfed by the underfunding of Social Security and Medicaid, and that no one we’ve elected has had the guts to fix either, future taxpayers (i.e. fresh contributors to the giant Ponzi scheme) are the path of least resistance. So, they try to buy with today’s tax dollars what they figure they need for the future (although there’s a whole lot of dissonance in this).

Then there are all the benefits accrued by being married.

The marriage contract is unusual (unique?) in that the State is a mandatory third party, and thus the rules of the marriage contract are dictated not by the people getting married, but by society via its enforcer, the government. This has become more and more necessary over time, because countless government rules and benefits (over 1000 at the federal level alone) are meted out based on marital status. Being married is, in general, an enormous benefit as far as taxation is concerned. Ditto for estate purposes. Ditto for the benefits offered by employers, both formal and informal (as discussed above).

These forms of preferential treatment are routinely defended as a recognition of the benefit and importance of families. I agree with the premise – empirical evidence clearly shows that stable families produce better results. Where I disagree is with the idea that this justifies government distortions. There are plenty of good ideas that, nevertheless, do not justify government intervention.

They’re also defended by asserting that, absent such incentives, it’s likely that the State will be burdened by greater numbers of children on welfare or in public care. This is bootstrapping. The State created the public safety net, and uses its creation to justify other forms of social engineering. Liberals will offer a similar defense, with perhaps a minor adjustment in tone. Liberals want government to supplant or supersede the family. Conservatives want government to encourage and support the family. The former comes with significant unintended consequences, including counterweighting instinctual and evolutionary human behaviors developed over many thousands of years. The latter justifies unequal treatment under the law, and creates moral hazard.

Libertarians, on the other hand, want government to stay out of the family business. Government should be neutral on the subject, neither encouraging (via the tax code) marriage and childbearing, nor undermining (via the welfare state) the nuclear family unit. Choosing to remain unmarried and/or childless (or having such thrust upon you by the vagaries of fate) should not warrant a transfer of wealth, time, resources, and opportunity from you to others. Choosing to marry and/or have a family should not justify forcible taking from others.

This is the essence of liberty: my choices should not infringe upon your choices.

It applies to countless other things the government does, from corporate tax credits to the deductibility of charitable donations to tax exemption for religious organizations. Most people will take issue with some of these forms of social engineering, actively defend others as beneficial to society, and miss the irony.

And, as noted earlier, the “social contract” currently goes well beyond government-mandated inequalities and dicta. It manifests in the workplace, where expectations and allowances vary based on marital and parental status (not always in one direction, either), and in private businesses open to the public, such as restaurants. While private companies should be free to do as they wish, they are as subject to the push and pull of society as any individual is, and if we grant legitimacy to the idea of the social contract, we pressure those companies. We can find examples of unequal treatment, both under the law and by convention, all over the place, and by that I don’t mean basic human courtesy and/or decency.

I probably sound like a curmudgeon here, but embracing a philosophy of principle, i.e. libertarianism, demands that the principle be equally applied. Government today imposes many inequalities, and a societal narrative that espouses unequal treatment many more, and we should be honest about all of them. A free society, where all are equal under the law and in the eyes of each other, should not systematize or institutionalize preferential treatment, no matter how “noble” or beneficial-in-the-aggregate the goal. We should each be free to act and treat each other as we feel is proper, without being coerced to do so.

Peter Venetoklis

About Peter Venetoklis

I am twice-retired, a former rocket engineer and a former small business owner. At the very least, it makes for interesting party conversation. I'm also a life-long libertarian, I engage in an expanse of entertainments, and I squabble for sport.

Nowadays, I spend a good bit of my time arguing politics and editing this website.


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