On this page we feature resources exploring the drivers behind our failing social contract and policy options for building a new one equal to the challenges of governing a 21st century global economy in the interests of all. High Meadows Institute’s particular interest in this area is the changing role of private sector responsibility and leadership in our social contract. The resource list is designed to engage a diverse set of perspectives on the underlying drivers restructuring our social contract, the challenges and issues that result, and ideas on how these can best be addressed.
High Meadows Institute Insights and Working Papers
- Towards a 21st Century Social Contract – by High Meadows Institute Chair Carl Ferenbach and President Chris Pinney
This article from the Journal of Applied Corporate Finance explores the macro force of globalization and technological change challenging our current social contract. It makes the case for a new working relationship between the private and public sectors in a social contract that can ensure continued economic and social progress in a global economy and society.
- Economic Growth and Inequality: Why It Matters and What’s Coming Next – by High Meadows Institute President Chris Pinney
For most of the last half of the 20th century, income inequality has remained stable in Western economies. During the last two decades, however, labor’s share of total income has begun to decline steadily in favor of capital in most OECD countries, and as a result income inequality has increased to new levels. This paper explores the drivers behind this rise and the implications of this trend for our economic and governance systems.
1. Edelman Trust Barometer: Executive Summary – by Edelman (2014)
The 2014 Edelman Trust Barometer found the largest gap to date between trust in business and government since 2001. The study argues that because business has made strides in transparency, supply chain and product quality, now is the time for it to be more involved in formulating regulation and initiating change. This can be done via CEO leadership and thoughtfulness around the macro business case, and a more inclusive management model with input from diverse societal stakeholders.
2. Public Attitudes Toward the Next Social Contract – by Bruce Stokes (New America Foundation, January 2013)
The Pew Research Center found that Americans do have a social contract with each other and government, but it is currently under stress due to federal debt and Americans’ conflicting values on safety net programs. In other words, traditional social contract expenditures are at risk, reflecting Americans’ conflicted and contradictory views on fairness, inequality, and the role of government in society.
The Governance Challenge
1. Our Broken Social Contract – by Thomas B. Edsall (The New York Times, June 2013)
In this opinion post, many diverse perspectives are given by leading social and economic experts as to why inequality is on the rise. The common culprit is identified as being disintegrating moral norms.
2. The Past and Future of America’s Social Contract – by Josh Freedman & Michael Lind (The Atlantic, December 2013)
The social contract formally based on high wages and stable benefits (provided mainly through employers) has moved to a new contract where low wages are the norm and the government poorly provides a medley of assistance programs. This article argues for a “middle-income social contract” that raises wages closer to a living wage, and requires the government to provide currently unaffordable services like education, child care and health care.
3. Can Government Play Moneyball? – by John Bridgeland & Peter Orszag (The Atlantic, June 2013)
Obtaining the right information and then acting on it is essential to restoring society’s faith in our government’s core functions. Additionally, government funding of ineffective, if well-meaning, programs with little evidence of success need to be replaced with better analytics and evidence-based funding priorities.
Building a 21st Century Social Contract
1. Capitalism for the Long Term – by Dominic Barton (Harvard Business Review, March 2011)
This article argues that public companies need to restructure in order to transform the capitalist system to be more equitable and sustainable. The author believes companies should focus less on the short term and more on the long term, and that they should begin to serve all stakeholders, rather than solely shareholders, to create long-term corporate value. Finally, the author believes companies should create more effective and collaborative boards.
2. Private Capital for Public Works – by Felix Rohatyn & Rodney Slater (Wall Street Journal, February 2014)
In this article, the authors use the Bridge Act as an example of a project where the federal government, acting as a junior partner and contributing limited funds, encourages private investment in public infrastructure. This transportation proposal and others in Congress would create an improved climate for cooperation, they argue, because states, cities and counties looking to improve public works would have the federal government be a catalyst to help structure projects financed with private partners, benefiting all involved.
3. The Next Social Contract: An American Agenda for Reform – by Michael Lind (New America Foundation, 2012)
This report begins by demonstrating how the existing American social contract is in crisis and needs to be reformed to meet 21st century challenges such as economic inequality and declining health and other public benefits. The author makes the case for three solutions: providing living wages, expanding social insurance, and expanding public provisions. The goal of these solutions is to streamline the economic safety net into a few big, simple, efficient programs.
4. State of innovation: Busting the private-sector myth – by Mariana Mazzucato (New Scientist, August 2013)
This article argues that it is government investment, not the private sector, that has contributed to much of the latest technological innovation. Apple, GPS, breakthrough drugs, and military inventions are just a few examples of revolutionary technology successful in large part to government start-up funding. The conclusion of this piece is that society must dispel the myth that the public sector is or will be less innovative than the private sector.