We lose talent in our society when we overlook those from poor backgrounds or minority families. For example, Lost Einsteins are children who harness above-average skills, but don’t have a chance to invent and create later in their lives because they lack access to opportunity. John Rawls' Veil of Ignorance provides the template for a just society where the luck of your birth need not be a factor in your life’s outcomes.
The Importance of ChildcareOur social contract has widely depended on women to provide free labor to care for children and the household. Because of the imbalance in structures like maternity leave, the gender pay gap can largely be attributed to children. By investing in affordable and accessible quality childcare, our society will benefit from the productivity and talents of all the women who are now subject to this child penalty.
The New Social Contract with BusinessGlobal corporate taxes have been lowering for decades as countries fight to attract major corporations. Using taxes to invest in our society is part of the social contract, and a minimum global corporate tax will ensure that large companies can no longer shirk this responsibility. In addition, the current economic model lacks any measurement of how we degrade our environment. If these costs were measured, a carbon tax can be designed to reflect them and incentivize sound choices about our environment.
FIND OUT MORE:Baroness Minouche Shafik is the Director of the London School of Economics and Political Science. She is a leading economist whose career has straddled public policy and academia. A graduate of the University of Massachusetts-Amherst, she received her MSc at the London School of Economics and her DPhil at the University of Oxford. By the age of 36, she had become the youngest ever Vice President of the World Bank. She’s taught at Georgetown University and the Wharton Business School. She later served as the Permanent Secretary of the Department for International Development from 2008 to 2011, Deputy Managing Director of the International Monetary Fund from 2011-2014, and as Deputy Governor of the Bank of England from 2014-2017.
Baroness Shafik has served on and chaired numerous boards and currently serves as a Trustee of the British Museum, the Supervisory Board of Siemens, the Council of the Institute for Fiscal Studies, and the Economy Honours Committee. She was made a Dame Commander of the British Empire in the Queen’s Birthday Honours list in 2015. In July 2020, she was made a crossbench peer in the House of Lords. Her new book is What We Owe Each Other: A New Social Contract.