Social Contracts must be corrected urgently

Uncorrected Social Contract has the track-record (in twenty past mature capitalisms), of creating devastating wars reliably. No civilization has survived and today’s mature capitalism is the first to occur within a mature nuclear era. If history repeats as it did in 1914 and in 1939, another preventable World War – and nuclear winter – could bring human life on this planet to an end within just eight years; by to the timings of war’s commencement in World Wars I & II (see the chart below).

Social Contract, therefore, must be recognized as the most important social problem of our time – and of any era in human history too.

Climate industry activists report that we will lose a  small percent of our populations if we don’t run projects to clean-up and transfer heat-to-space by 2035. For this “crisis”, the students of the world took a protest day away from school in April, when these students should have instead adjourned to insist on the far more important solution to Social Contract.

A preventable nuclear war could result in the 100% extinction of the human race by 2030; erased from this planet – just like the dinosaurs.

The Problem has been solved before

FDR created the American Dream and the strongest economy in history. He did this during our last mature capitalism – in a time very like today, and he accomplished it with a handful of policies which included Empathy (a strong Social Contract – see his 1944 Second Bill of Rights), Nationalism, Full-employment, real Income & Wealth Distribution (20-years of 92% income tax and  80% estate tax for the rich), affordable cost-of-living, and accessible home-ownership.

Hitler turned around Germany’s economy more quickly than did FDR – through Fascism (Ultra-Nationalism), Social Contract, and Full-employment. Unfortunately, his regime’s consistent failings in empathy and its psychopathic behaviors toward Germany’s minorities and neighbors undid the benefit.

After her husband’s death in 1945, Eleanor Roosevelt went on to establish a global standard for Social Contract – the Universal Declaration of Human Rights at the newly created United Nations in 1948. The intent was for this solution – and lessons-learned during the Great Depression of 1930, was to add this as a second Bill of Rights to the Constitution of every nation. As economies started to boom after the war, the urgency of this change diminished. Countries that adopted laws to protect their Social Contracts, are among the strongest economies per-capital in the world still today.

King Hammurabi and our Bibles solved the same problem – with similar policies, two-thousand years ago.

See Transition Economics (TE) for more detail at http://transitioneconomics.info

How have our Social Contracts reached this critical level of importance?

Give any country’s citizens one-million dollars each and sixty years later you will have gross inequity. This is normal and it was how successful monetary systems were always designed to work.

Consider that today’s World GDP is fifty-nine-times its size back in 1960; a 1% inflation rate in 2019, amounts to a 60-times increase in cost-of-living and incomes by 1960’s measures. Exponential costs are created by the mathematical certainty of compounding annual inflations where 60-years of 1% to 14% interest compounding annually will repeat this result reliably.

Freedom, in a monetary system, is the difference between reliable incomes and cost-of-living. If this balance between reliable incomes and cost-of-living narrows over time, our freedoms will be lost.

Once freedoms are lost, the next tipping point comes when our incomes do not meet our costs-of-living, our Social Contracts (basics of food, shelter, healthcare, education, etc) are lost as well. Many tens of millions who are now “just surviving” cannot assist capitalistic productivity – until entire economies stall. Internationally today, strong Social Contracts build strong economies; and weak social contracts build weak economies – verifiably (see this below).

Monetary systems, are well documented to have a lifespan – as we see in the Mature Capitalism chart to the right.

Today’s record number of wars, international debt, populisms, economic recessions, hardship, and extremism – are normal. 68% of economies worldwide are collapse-trending; which means that they are not being properly balanced by their governments. This is to be expected; it’s normal.

In fact, this perfectly normal cycle has repeated dozens of times in historical record – one of the earliest recordings of monetary system resets was in 1763 BCE on the Code of Hammurabi.

Can Monetary System Cycles be managed?

Yes; monetary system cycles are manageable in two ways:

a) Governments can actively ensure salaries to costs-of-living ratios stay in-balance every year; similar to CPI corrections – but a little more sweeping …

b) Governments can allow open markets to unbalance themselves – and then, when social hardships become too great, reset the monetary system cycle to a new balance and new cycle again. The Code of Hammurabi and the Bible/Torah (Leviticus 25-26) suggested this second option at a time when monarchs had the authority to make these sweeping resets easily. A fiftieth-year Jubilee Year (a “Reset”) was suggested to pre-empt the hardships of a mature cycle. Resets here included: Universal Debt forgiveness, wealth redistributions, and basically a concerted effort to reset the American Dream conditions that we see at the beginning of any new cycle.

This will sound pretty intuitive and even obvious to most of us I think. To explain how we also confirm this empirically today, let us begin with the report on our left. The late Professor Richard Wilkenson’s students from Edinburgh University, composed this TED Talk slide in 2011. It compares thirteen social problem statistics in twenty countries.

As an aside, Scotland has seen a tremendous turnaround in both social contract and economic prosperity since 2005 – as has Ireland, despite a global recession that still has a strong hold on Britain’s Social Contract and economy. This turnaround can be directly attributed to the efforts of Dr. Wilkenson and like-minded academics and policy-makers in Scotland who modeled the importance of Social Contract policies that reset their economies. New Zealand, Germany, and Italy have watched these successes and are now positioning themselves to benefit similarly.

CSQ Research looked closely at the ten bottom-left countries on the TED Chart. The countries which had the lowest rates of social problems shared advancing economies 92% of the time, and 80% had some of the highest Export-per-Capita (ExCap) productivity measures in the world.

The empirical measures of these countries’ prosperity, greatly exceed international averages.

Strong Social Contract build Advancing Economies reliably

We next asked, do strong Social Contracts (food, shelter, incomes, security, healthcare, education, etc.) build advancing economies consistently? To answer this question, consider the following Transition Economics Proofs (TEP Charts) from the thesis End of War:

TEP Charts are frequency distributions, and these specific TEP charts survey 158-countries to confirm that strong social contract nations have advancing economies both reliably and progressively. The surveys above confirm that strong Social Contract nations do have advancing economies up to 100% of the time.

These TEP Charts show something else as well.

“Not only do strong social contracts increase the probability of an advancing economy, but weak social contract nations also have an increased probability of a collapse-trending stalling economy.”

The Social Contract measures the most economically beneficial social measures of an economy:


Social Contract

=


Education

+


Income Inequity

Longevity

Suicide

Poverty

The SCP Report (Social Contract Product), adds the most beneficial financial measures to Social Contract:


The SCP Report

=


Export per Capita

Trade Balance

Debt

+


Social Contract

Similar to Professor Wilkenson’s findings, these TEP Charts confirm empirically that countries with low social-problems/ high social contracts, typically have the highest export-per-capita rates and the most consistently advancing trade balances and economies too.

Finding the Ultimate Measure

Are these truly the best measures of successful economies? For 2019 we didn’t have the World at our Hands Report – a ranked library of all available TEP Chart Surveys, where now we do.  In 2020, we’ll know a little more and we will revise the SCP and Social Contract to include the best social and financial measures possible. As it is, 100% of The SCP’s top-20 countries have advancing economies. That’s a much better indicator of economic success than the GDP Report can offer.

Social Contract is not Socialism

Social Contracts are built by projects that produce food, shelter, healthcare, etc. and are made cost-effective by implementing a mix of both state-owned (20%) and privately-owned (80%) infrastructure producers. 20% public : 80% private – is a typical ownership-ratio in hundreds of countries worldwide. This ownership mixture can be adjusted during normal operational reviews or whenever operating efficiency requires it.

Socialism is fairly irrelevant, but Social Contract is essential. See the USE CASE for Monetary Systems to level-set terms here. A disambiguation of the term Socialism is here.

Public partnerships (20%+- public ownership), KPI monitoring, and industry quality and cost-of-living regulation are important to be managed by governments. So is CPI (Consumer Price Index) and housing-affordability regulations; cost-of-living must be kept in balance with incomes.

Early-on in a monetary system cycle, capitalism does a better job of monetizing opportunity than socialism; later-on, neither system supports social contract without active government management.

Capitalism and Socialism ownership is typically 80%/20% worldwide and ownership ratios are only important when their adjustment better supports a strong Social Contract. As our technology start to automate our basic needs entirely, the ownership formulas – and even the use of money, can be adjusted to keep populations supported and productive within strong social contracts.

For our reporting and monitoring needs, we have many measures to choose from. GDP Reports are insufficient in mature capitalisms so the “World at our Hands Report” from End of War manages problems in economies now. Transition Economics confirms that many other measures need reporting alongside GDP, to increase the reliable success of our policy resets.

Large democracies lose their social contracts most easily. This is because large populations build diverse economies, and harmful policy in any one industry could be ignored by the votes of the majority easily. The impacted minority will have to suffer these uncorrected unsustainable policies – or they will have to change industries, move to new careers, change homes, etc. After 20-years, all industries are affected by uncorrected, unsustainable policies that imbalance income to cost-of-living ratios until the entire country’s productivity is pulled down by broad starvation wages, homelessness, and numerous related social problems.

The Second Bill of Rights would protect people from these negative impacts of capitalism in Constitution – so that the dystopic conditions that led to war could never happen again.

When we compared the ExCaps of the highest Social Contract nations to large democracies – the economic losses to large economies are enormous. For example; if the U.S. ExCap had kept pace with high social contract nation the Netherlands, the American economy would earn another $37 billion dollars every day in exported trade. Canada would earn $4.2 billion new per day, and the U.K. and France would earn $7.5 billion – new dollars – every day.

Social Contract Product – The SCP

End of War – Managing Mature Capitalisms was the book that introduced the SCP to the world in 2018. A strong Social Contract is the common thread of countries that have the strongest and most productive economies today – despite our current global mature capitalism.

Democracies are “mob rule” without our Constitutions and Charters of Rights. Aristotle warned against pure democracy, oligarchy, and tyranny – forms of Governments – for this reason.

Freedom in a monetary economy is the difference between our incomes and our cost-of-living. When our democratic systems or constitutions fail to protect our Social Contract –  rights of food, shelter, income, and basics of life as monetary systems mature, we lose trillions of dollars in trade, economic productivity, freedoms, culture, and we can lose our humanity as well.

The Social Contract and GDP in History

British musician and anatomist turned-Economist Sir William Petty suggested the first working concept of a standardized national ledger GDP Report back in 1652; at the dawn of Britain’s Commonwealth. This was a time of great opportunity for Britain, right at the beginning of a strong 30-year economic boom.

This boom followed one of the world’s greatest Great Depressions and mature capitalisms, the General Crisis of 1640. Historians of that period record that at no previous time were so many major wars waged worldwide than during the General Crisis.

1.1.        Philosophy and Leadership

When Petty was briefly a member of British Parliament in 1659, he was attributed with establishing the philosophy of Laissez-faire in relation to government activity in the economy.

“Laissez-faire” or “Let it go”, is an economic system where private business parties are freed from government regulation, tariffs, and constraint.

I mention this as evidence that Petty, an anatomy instructor at Oxford and a music professor in London earlier in his career, took an easier hand in governance whenever he got the chance. Laissez-faire policies would be recognized today as “Open for Business”, “Relaxed Banking Regulations”, ”Low‑Tax”, and “Small Government” policies.

The Commonwealth; and Britain’s Government and Monarchy, would grow to rule over 25% of the world’s population by 1925 – propelled by the great boom in growth and opportunity that followed the world’s greatest Great Depression – ever – in 1640.

1.2.        The Social Contract

More interesting than this discussion of Petty, was his employer Thomas Hobbes’ contribution. Thomas Hobbes was an economist and political philosopher at the University of Edinborough – whose 1651 book “Leviathan” established the Social Contract Theory.

The Leviathan of his book cover was a global monarch who ensured minimum social contracts the world over.

In her 1945 Universal Rights document, Eleanor Roosevelt recreated that figurative Leviathan at the United Nations. Rights of Food, Shelter, Security, Healthcare, etc. – were mandated to every nation, but few countries amended their constitutions to include these rights – and to their detriment as it turns out.

Hobbes had lived through a terrible global Great Depression – The General Crisis of 1640, as had Mrs. Roosevelt in the Great Depression of the 1930s. From this experience, Hobbes came to see clearly that economics should describe the requirements of “peace and material plenty”.

Other authors, statesmen, and philosophers saw this as well; notables included Lord Byron and Jean-Jacques Rousseau. Charles Dickens books and characters eloquently corrected the failings of capitalist open markets; Mankind was my business.

One look at the difference between the GDPs of the first and second industrial revolutions (1750 and 1880) – clearly shows the difference that Henry Ford’s revolutionary high-wage, high social contract approach to capitalism positively impacted every nation’s prosperity.

The Social Contract Theory suggested that Government by the People wasn’t enough; and that Government for the People was essential.

Social Contract is not Socialism by the way – socialism is ownership of production by the state. Social Contract is different; Social Contract is our basic rights and freedoms. High Social Contract nations report very low social problems because people have the things they need to be productive, to contribute to the economy, and this permits them to contribute to the well-being of their communities as well.

Norway, for example, is not socialist. The state owns a small percent of its production – as does Germany and most other countries.  Norway is a small population of five‑million who established a strong social contract in law, in response to terrible suicide rates and hardship during recessions there in the 1980s.

Norway was interventionist with businesses that detracted from their social contract and today Norwegians, and business, live the American Dream in an economy that is as productive as was America’s in the 1950s and 1960s. 6% of nations internationally live the American Dream still today; look for these in the top-20 positions of the SCP Report.

Low Social Contracts cost large economies trillions of dollars in productivity and trade annually. The United States loses $37 billion dollars a day to its Social Contract failings. Who are the biggest losers – is explained in this chart.

Governments for the people create strong Social Contracts. A strong social contract builds a prosperous economy – verifiably (just look at the top-20 SCP country ExCaps to see this). Social Contract works because citizens can only be productive when they have the things they need – like shelter, food, education, access to incomes, and costs-of-living that afford freedom to live comfortably.

Americans achieved a strong social contract in the 1950s and then lost it; they voted it away to one empty promise after another. Today’s economic leaders are Norway, Ireland, the Netherlands, Czech Republic, Norway, Denmark, Slovakia, Switzerland, Slovenia, Austria, Sweden, Belgium, Finland, Germany, and Hungary – just to name a few of the SCP leaders below.

1.3       The Golden Rule

The Bible, the Torah, and the Code of Hammurabi each described this monetary system phenomenon – and also explain pre-emptive fifty-year resets for the problem. See Leviticus 25-26…

“25:10 Consecrate the fiftieth Jubilee Year and proclaim liberty throughout the land… 35. If any of your fellows become poor and are unable to support themselves among you, help them as you would a foreigner and stranger, so they can continue to live among you. 36 Do not take interest or any profit from them … so that they may continue to live among you. 37 You must not lend them money at interest or sell them food at a profit.”

Abridged, Leviticus 25 – 26

Bibles are books that explain a sustainable society; as an author of research and books that define sustainable societies, I can relate to the challenges that the authors of these great texts faced. The Muslim Quran does the same, as does the Hindu Vedas, Buddhist Tripitaka, and so on. Every religion in history, even Pagan religions that are no longer practiced, explained the Golden Rule and Ten Commandments; these are sustainability models for any society.

Why haven’t these books created a sustainable society yet? I talk about this in “End of War – Managing Mature Capitalisms“.

When we secularized our schools because we didn’t understand a contemporary context for 2000-year-old tutorials, we stopped teaching basic rules of leadership and philosophy to our young. It’s not surprising that we cannot understand why we stand again at the precipice of yet a fourth unnecessary World War (the Seven-Year War of 1754 was the first World War in truth).

The Bible repeats 20-times that God is Good; because “Good” is absolutely essential to a sustainable society. Good is not a “nice to have”;  we cannot decide to take a day off and kill, covet or disrespect today. This explains the importance of a single, wrathful God figure who showed his “teeth” whenever we found it inconvenient to not be good.

In 1820, the global literacy rate was still just 12%, so we humans needed incredibly simple, literal lessons when these books were written. Even today most educated people find the unemotional practiced art of academic discussion and Socratic questioning both difficult and frustrating.

The Bible repeats the Golden Rule 8-times.

Conservatives in the U.S. often say “helping people” equates to socialism – and explains it as a “bad” thing, but this amounts to one of the greatest lies of any time in human civilization actually.  Evil – is the systemic failure of empathy in society (The Nuremberg Diaries, 1946). Helping people – and good – is critical to any country’s economy and it is critical to sustaining any civilization.

Remember that every other civilization in history has fallen, and Social Contract is as American as its Mayflower Compact and FDR’s Second Bill of Rights as well.

Also, see End of War for my explanation of the phases leading up to war within these cycles; the currency wars, which are followed by trade wars, and so on…

Education – unites us. In Wikipedia’s list of socialist states, only four of 225 countries in the world aspire to socialism:

  • i) China – ranks 40th in Social Contract – by comparison Canada is #37, U.K. is #24, and the U.S. is #57
  • ii) Laos is #129
  • iii) Vietnam is #32
  • iv) Cuba – is #20 in Social Contract, a U.N. High Development nation, and #4 of 104 in developing Latin nations – despite fifty-years of American blockade.

The eight countries in the world that reference the word Socialism in their Constitution, use it in a context which excludes exploitation, injustice, and to ensure a strong Social Contract.

Mature Capitalisms (Great Depressions) are cyclic in successful capitalisms and occur when imbalance impacts our social contracts.

Social Contract imbalance can only occur when a democracy’s citizens permit it; the government policies that damage a social contract are endorsed by your vote.

Oligarchies, a government not for the people and another of Aristotle’s evil forms of government, can deny this vote to citizens by “training” them to vote for unsustainable policies. As an example, do you remember “Low-Tax”? It created today’s inequity, stalled growth, and high-debt. How about “Death Tax”? This was a message crafted by Republican Think-tanks in the 1980s to help abolish the unsustainable policy of eliminating inheritance taxes for the rich.

When we don’t know what to stand for, we can fall for anything – and fallen we certainly have.

Giving people what they need to be productive, makes every citizen a profit‑center. Leaving them to just “get by”, means that they only have the opportunity to be a cost center for an economy.

Hobbes realized this, and more – he saw that Government had to play a role in maintaining a balance between capitalistic prosperity and the well‑being of citizens; one that ensured protection in policy and law for a civil and productive society and body politic.

So what is wrong with the GDP?

The GDP hides big problems. It reports none of the trade revenues lost to unproductive economies, none of the poverty created by housing bubbles, and it always reports a gain – even if that gain is just inflation. GDP is boosted by social problems in fact – because housing and energy bubbles (mortgage, rental, and energy poverty) artificially increase a country’s GDP. Squandered pensions? There’s another GDP report benefit.

The SCP Report captures the losses caused by Social Contract, where in the past 60 years the World GDP has reported only one -1% year. 2008 was as severe a financial year as we have seen since 1929 – and yet GDP recorded -1%.

The first step in solving a problem is recognizing that you have a problem. But, the GDP insists that you never have a problem.

Record-high debt loads, record inequity, record homelessness, record world wars, conflicts and extremism, yellow jackets in Paris. These are not normal times – but what does the GDP say?

The GDP says we are just fine.

The GDP says your government is doing a great job.

The GDP explains that big businesses are not pushing billions of dollars daily out of your economy through their externalizing of social costs.

The GDP says your politicians are competent and managing your best interests. As an incompetent politician, I would want to report with GDP as well.

Things are not normal; your economy is losing trillions of dollars in revenue to GDP reports, misinformed leadership, and your grossly misled votes.

When we don’t know what to stand for, we’ll fall for anything…

Economies are large remember; Canada’s export is $510 billion dollars a year which means that they lose a staggering $4.2 billion dollars a day – every day that they ignore the problem of their crumbling social contract. The U.S. loses $37 billion daily; the U.K. $7.6 billion daily, and France losses $7.5 billion. See Social Contract Loss in billions per year in the SCP Report below.

There is a very large problem, one that needs your vote to change it – and millions are suffering in your community every day because of it. That is the reality of a failed social contract and it is a compelling reason for large democracies to reinforce their constitutions to safeguard rights of food, housing, healthcare, security, incomes, and freedoms.

This is why ACT Parties and CSQ Certifications are important now as well.

Do you think $13 trillion would afford the cost of a social contract in the U.S.? Studies show we earn $4 for every $1 invested in Social Contract; and this also means we lose $4 for every $1 that we don’t invest.

The Gross National Product “does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials… It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile”

Robert F. Kennedy, 1968

The SCP Report for 2019

Social Contract Product is the most economically beneficial report on the planet today. This can be verified by viewing Transition Economics Proofs (TEP Charts) for the U.N.’s HDI, IHDI, Happiness Report, and other surveys including OECD and Happy Planet Indexes.

Click here for a full-page view of the SCP Report

Scroll down to view the legend …

Legend

“A/C” – A = Advancing Economies: are nations with positive trade balances; C = Collapse Trending nations with trade deficits

“SCP” – Social Contract Product is the weighted scoring of each nation’s economic and social rankings to the right

“Social Contract” – is the unweighted scoring of social measures only

“Social Contract (SC) Loss”  – these are the dollars that this economy loses annually to its present Social Contract; compared to a strong SC nation like the Netherland’s ExCap.

“SC Loss” – is a simple calculation:  ExCap / ExCap (preferred) x Export

“SC Loss per Day” is SC Loss / 365

HDI – is the United Nations parallel score and ranking

Citations explaining all data sources are explained in End of War. Click here to get your copy.

ACT Social Contract rallies are a peaceful, coordinated, and productive movement of voters. They get the message out and they tell democratic governments clearly that your vote will change your communities for the better going forward.

The ACT Party is a concept that builds sustainable political parties in your country and ensures that every democratic voter can elect to build sustainable societies consistently in future as well.

What do Social Contract Rallies ask for?

  1. A strong Social Contract – in national Constitutions (especially important in large democracies)
  2. Responsible management of economies to ensure long-term strategic planning (Right Plans), prosperity, increasing productivity, recognition of merit (and not wealth), and training as needed by citizens to turn their opportunity into new revenues for your nation
  3. The right to vote for a strong Social Contract at ballot boxes
  4. Sustainable World Peace and Prosperity – the Golden Rule



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