(本文翻譯自 陳冲 當盧梭遇到巴布狄倫—談新社會契約 2020-03-12)
For three hundred years, Rousseau's Social Contract has long been the basis of democratic politics and even the operation of modern states. In 2016, Bob Dylan unexpectedly won the Nobel laureates in Literature. I was confused at the first time but after seeing the title of his song winning the 73rd Academy Award Best Original Song, Things Have Changed, I understood that thinking pattern in the Stone Age must change a bit in the digital age and so that literary awards are of course no longer limited to traditional text form. Similarly, the ever-changing social contract should have new different contents after the rapidly changing social environment in the past two decades.
Minouche Shafik, President of the LSE, has put forward many suggestions on the new social contract based on her experience in the IMF, the World Bank and the Bank of England during past two years. On January 1 this year, she published an opening column in Irish Examiner, a newspaper of nearly two hundred years in Ireland, titled Solving Global Problems Will Require a New Social Contract. Perhaps because she has talked about the issue too many times, in the column she only used simple words to interpret her thoughts. The whole article was still meaningful but the brief words made it difficult for domestic media to convey the original meaning when translating it.
Shafik mentioned in the article that it is imperative for the new social contract to provide a minimum income for all, which is generally translated as minimum wage. But in fact, what she said was “minimum income for all”, the same meaning as the recent hot topic “universal basic income”(UBI), which has nothing to do with the minimum wage law that was set as the top priority work in our Legislative Yuan. Andrew Yang, who recently dropped out of the US presidential primary race, was best known for the universal basic income policy. Many people have long worried about the financial resources of UBI. In fact, if we merge various personal subsidies, remove the censorship costs, reduce the expenses to please certain people, and include new taxes like the robot tax in digital times, it might still be feasible as well.
Universal basic income might be just one possible connotation of the new social contract. The rapid technology developments caused by globalization for the past two decades creates a new environment for a new social contract. The recent Covid-19 pandemic has swept the world, raising the possibility of the disconnect and reorganization of supply chain or value chain. Global economic order and the new social contract all face a new scene. Dealing with the pandemic, we must also look to the future and think about social structural changes.
The content of the new social contract must reflect the problems needing solving in the current society. To enumerate all in detail takes too many efforts so I just list some of them, like the wealth gap, the knowledge gap, the identity conflict, the generation conflict and the economic and social stagnation.
The wealth gap has long been a conundrum in human’s history and has exacerbated in recent years. In 2014, French economist Thomas Piketty took the problem to the extreme in his book Capital in the Twenty First Century, arguing that when the rate of capital return(r) is greater than the rate of economic growth(g), the wealth inequality will increase even worse. The quintile method or the Gini coefficient, generally used to measure wealth inequality, both show not too bad result of Taiwan but are still at historically high level. According to the data released by the Directorate-General of Budget, Accounting and Statistics, the Gini coefficient, although dropped from 0.345 during the financial tsunami in 2009 to 0.338 in 2018, is still higher than that in the past 20 years (only 0.32 in 1997). The first quantile (the highest 20%) of households has a disposable income of 2.099 million per household, while the fifth quantile (the lowest 20%) only 345,000, a gap of 6.09 times. According to the World Inequality Report released by the World Wealth and Income Database founded by Piketty in 2017, it can be seen that in the past few decades, income gap between the rich and the poor has been expanding almost everywhere in the world, the top 10% income shares increase and the income of the top 1% has grown twice that of the bottom 50%. The problem is getting worse now. Piketty calls for a wealth tax on those rich people. Many agree with him. But, how to define those “rich” people? In Taiwan, we can’t find those rich people simply by the taxation data. Were there a wealth tax, it would just be another redistribution among the existing taxpayers. The better solution still lies in the tax policy reform. Keep the source of tax from tracing the flow of funds, and thus be able to strengthen the taxation of capital gains from the tax system. How can we say it fair to exclude gains from stocks, foreign exchange and real estate but pay more attention to income from hard work, supplementary premiums of national health insurance and even property without cash flow?
Knowledge gap is another problem existing for a long time and now there are even more things like digital divide. Education reform is of course to be made and education in the digital age should be brought forward or delayed. For example, children are getting more precocious so we should consider relaxing the entry age threshold and incorporate the early childhood care into formal education. Also, to get with the times, up-skilling and reskilling should become part of lifelong and even compulsory education. These will help to improve the wealth gap problem and enhance the competitiveness of the society.
The phenomenon of identity conflict can be seen in many countries, such as the protection of Bumiputera in Malaysia, or the disagreement between old and new residents that only lead to internal friction though. In Taiwan, based on historical or political considerations, there are also many subsidies to different identities such as pensions, old farmer allowances, oil subsidies, and interest subsidies, etc., among which are some disputes over whether to be abolished or not. Some other identities like housewife or caregivers taking care of the old and young also make contributions to the society, raising questions of whether to be given subsidies or even implementing universal basic income which could reduce the administrative cost of reviewing qualified lists instead. Whether housewives should be paid by their spouses or the government, or whether their work should be included in GDP, remains an old question. Economics Paul Samuelson once joked that GDP falls when a man "marries his maid" because he needs not to pay her anymore. It is worthwhile to review these identity subsidies problems one by one now.
Generation conflict is certainly not unique in Taiwan. Take a look at Shafik’s word “Older people regard the young as ungrateful for past sacrifices, and the young increasingly resent the elderly for straining social-security programs and leaving a legacy of environmental destruction.” It touches your heart, right? I remembered that when I answered interpellation in the Legislative Yuan in 2012, I called for inclusion between generations, but there seemed only few responses. Inclusion means mutual endurance so a two-sided approach is required. Pity is that for the past two years, we only see politicians chasing ballots by exaggerating related issues without really intending to solve them.
There are at least two issues when it comes to the economic and social stagnation. One is the social mobility and the other is the slow growth of income. The former has long lacked dynamic analysis but is a quite common situation in the society. The latter also lacks proper analysis while it also needs to deal with the problem of economic dualism. For the solution, perhaps the above factors should be considered at the same time.
Forward-looking Infrastructure, in the digital age, is by no means just laying tracks, building roads and bridges, and spending money but considering a new social contract. I sincerely urge the government and the opposition parties sit down together, brainstorm to find solutions to above issues and make consensus on foresight or at least common expectation for future society. Make agreement on the new social contract and implement it so that Rousseau's thought could carve out a niche in Bob Dylan’s song “Things Have Changed” and produce sparkling sparks.
(Released on Appacus Foundation website, Mar. 12th, 2020)