Social contract, in all honesty, sounds like a highly philosophical term with limited practical application and if you google it, you will end up reading about “origin of government” and “state protection”. No one wants to read that, I get it. Instead, this is an attempt to link the concept of a social contract with another concept most of us here appreciate – decentralization. Decentralization of power, decision making and information.
The concept of a social contract initially became popular in the 16th and 17th century. Using a technology metaphor, social contract is a blockchain that underpins our society. Layer upon layer, certain parameters and conditions are built into smart contracts residing on our societal blockchain. Unfortunately, this blockchain is still running on technology from the 17th century where transactions can be executed even when one party does not fulfil their obligations.
Original philosophies around social contract centred on the interaction of government with its citizens. Simply put, individuals were elected with a promise to represent the collective will of the people and to govern for their benefit. In exchange, people agreed to be governed, pay taxes and abide by the laws. This exchange of intangible goods formed the basis of a social contract.
Taking this a bit further, we can apply the idea of a social contract to our interactions with the corporate world. When we buy Nike sneakers there’s a social contract. In my mind it reads something like this – “I’m giving you money for your product with the expectation that you will be a responsible corporate citizen. That means trying to solve global warming, exploring sustainable supply chains, fostering an inclusive work culture, not discriminating against anyone based on anything, etc. I’m certainly not giving you money to exploit children in Asia. I don’t want to see headlines about your suppliers harassing their workers and forcing them to work in unhuman conditions. I’m also not giving you money to line up your own pockets.” In my mind, every time we purchase a good or a service, there’s a contract. And if it was a smart contract on a modern day societal blockchain Nike would only get my money if they held up their end of the bargain.
Let us take a moment and recall some of the recent corporate scandals. There was the Wells Fargo fake accounts fiasco, Mylan’s 400% price hike on a drug to treat severe allergic reactions, multiple scandals at Uber, and the list goes on. Previously unnoticed, these social contract violations now matter and are magnified through social media. The ability of a corporation to act in the public interest, sometimes at the expense of shareholders but for the benefit of the broader community, is already becoming an integral part of social governance. This evolution of the corporate citizen must continue.
A desire for decentralization of power and information, among other things, comes out of the lack of trust we have in our institutions, governments and corporations. You can argue that companies like Uber, Airbnb and Bla Bla Car were early manifestations of this desire. Turned out that while only 18% of Americans trust their government, roughly 52% say they trust all or most of their neighbours. While still centralized, these companies made a bet that, reinforced by new technology we are likely to trust each other. Bitcoin, created in the midst of the financial crisis, was another pillar of a decentralized society, a vision of a monetary system free of banks and other institutions. Many other cryptocurrencies have since followed in its footsteps. While their price is purely a matter of speculation, their place in a decentralized society is beyond reasonable doubt.
Photo by Andy Kelly on Unsplash
blockchain technology is a game changer I believe in it completely.
amen to that