The Walmart Test: Payroll Taxes and the Social Contract. By George Packer. The New Yorker, February 20, 2013.
Packer:
If you were
to write a social history of America through the story of business, what would
be the most significant companies in the years since the Second World War? I’d
divide the period into two: from 1945 to the mid-seventies, I might name
General Motors and Woolworth’s. They set the standard for corporate success and
behavior during a period that could be called the Roosevelt Republic, when a
social contract underwrote American life. It included an expanding middle
class, a strong safety net, high marginal tax rates, a white male establishment
that grudgingly made way for other groups, a bipartisan approach to legislation
in Washington, and a business culture that was cautious, loyal, hierarchical,
and unimaginative.
In the
decades since the mid-seventies—you could call it the Reagan Republic, but I
prefer the “Unwinding”—the social contract has frayed to the point of
disintegration. The middle class has shrunk; tax rates (especially on upper
brackets) have plunged; inequality has exploded; the safety net (especially for
the poor) has weakened; the old power structure has given way to a more diverse
and broad-based upper class based on education; bipartisanship—well, you know;
and business culture has become entrepreneurial, fast, risk-taking, and harsh.
The trade-off: more freedom, less security.
The Broken Contract: Inequality and American Decline. By George Packer. Foreign Affairs, November/December 2011.
