Shaky Social Contracts

Elites everywhere have always lived by the injunction to enrich themsleves, and ordinary people have not minded very much, provided that the elites protect the country against its enemies and improve living conditions. It is this implied social contract that is now endangered by economic collapse, particularly in autocratic countries.

LONDON – “Enrich yourselves,” China’s Deng Xiaoping told his fellow countrymen when he started dismantling Mao Zedong’s failed socialist model. In fact, elites everywhere have always lived by this injunction, and ordinary people have not minded very much, provided that the elites fulfill their part of the bargain: protect the country against its enemies and improve living conditions. It is this implied social contract that is now endangered by economic collapse.

Of course, the terms of the contract vary with place and time. In nineteenth-century Europe, the rich were expected to be frugal. Conspicuous consumption was eschewed. The rich were supposed to save much of their income, as saving was both a fund for investment and a moral virtue. And, in the days before the welfare state, the rich were also expected to be philanthropists.

In the opportunity culture of the United States, by contrast, conspicuous consumption was more tolerated. High spending was a mark of success: what Americans demanded of their rich was conspicuous enterprise.

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