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THE SOCIAL CONTRACT, VALUE CHAIN, & DEPENDENCY INFRASTRUCTURES
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DSSi
M E T A T E M P O : S U R V I V I N G G L O B A L I Z A T I O N
THE SOCIAL CONTRACT,
VALUE CHAIN, &
DEPENDENCY INFRASTRUCTURES
MICHAEL WILSON
DECISION SUPPORT SYSTEMS, INC.
INFO@METATEMPO.COM
HTTP://
WWW.METATEMPO.COM
COPYRIGHT 1996-2001. ALL RIGHTS RESERVED
DECISION SUPPORT SYSTEMS, inc.

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“I have come bearing an olive branch and a freedom fighter's gun. Do not let the olive branch fall from my
hand." — Yasser Arafat, addressing the United Nations 1974
INTRODUCTION
Politics is about the definitions and the state of ownership and control of a handful of basic
concepts comprising the 'political economy'—social contracts (written and unwritten); value chains (material
and informational); dependency infrastructures; and the power of progress, advancement, and the conflict it
causes.
Sometimes this conflict turns into armed struggle—wars, rebellion, terrorism, violence. Such struggles can in
fact be defined by details of the friction, competition, or attacks to/from the elements of the political
economy. Progress may change some of the details of why and how, but the underlying relationship between
the elements of the political economy and conflict remains constant. A review of these elements and a check
on their current state may in fact help lend an understanding of conflict, and why, from a global perspective,
it makes an odd sort of sense that there is seemingly more conflict around us than ever.
THE SOCIAL CONTRACT
We don't know precisely who or how societies started. Protagoras, the ancient Greek Sophist pointed out
in his work that nobody is absolutely self sufficient, and that men banded together for mutual cooperation.
He credits Zeus for the gift of society, which he considered a survival trait. Philosophers like Jean-Jacques
Rousseau and Thomas Hobbes had views that were extreme opposites (Rousseau's 'noble savage' against
Hobbes' 'state of nature' being a 'war of all against all') but came to similar conclusions. For peace, survival,
and to share resources, it became necessary for each person to give up some 'rights' and assume some
obligations on the conditions that others did so as well—this is the 'social contract.'
Leaving aside the issue of obligations for a moment, clearly the issues to be faced were those of Natural
Law—the unnatural act is impossible. Unfortunately, this means the 'rights' and natural acts included such
things as murder, rape, theft, and an assortment of other 'uncivilized,' yet historically popular, acts.
Products of their time, Rousseau and Hobbes believed it the role of a 'sovereign' to define terms of the social
contract and enforce them; the sovereign was not himself bound by the terms of the contract.
Speculation on this initial social contract is fruitful and interesting. Given the structures of primitive
societies, it is unlikely that the initial parties to the contract were equal in strength (force capacity)—for who,
after all, would willingly surrender personal authority to an unknown, untested, or weaker/equal party? No,
it is most probable that the terms of the social contract were set by the stronger party—after all, they had
something to bargain with; the stronger party had the capability and potential willingness to do harm, which
they were temporarily willing to forego. This power to harm or destroy gave the power to control, just as a
willingness to destroy the 'peace' means control of the peace. The strong dictate terms—the Allied demand in
World War II for 'unconditional surrender' from the Japanese and Germans is just one recent historical
example.
In the interest of protecting life and property, social contracts were agreed upon, and primitive social
structures formed. Many centuries forward, John Locke rethought social contracts and posited that people
joined society to preserve their property, and only submitted to authority of government (the formalization
of social contracts) and laws as a means of safeguarding what was theirs. Locke states the labor justifies
property, which he defined as the act of converting states (which we will return to as 'value add' and value
chains). Refuting Hobbes and his concept of 'sovereign,' Locke believed that governments, as the embodied
social contract of the people, left the power of the contract with the people; Locke also reserved for the
people the right to assume their original liberty and ability to establish new contracts (governments).

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This returns us to primitive cultures—social contracts aren't altruistic mechanisms. They are a
manifestation of Adam Smith's 'invisible hand'—acting in self interest, you promote a beneficial end not part
of your original intention. Giving up certain 'rights'—murder, theft—mutually led to grounds for beneficial
competition and cooperation. (Note the game theory position of occasional 'defection' from the social
contract being rewarding explains brigands, pirates, warlords, etc.)
Regions of peace, those with an operable social contract, prospered and increased in size, probably from
a combination of birthrate increases (safety, better odds of mating) and attracting new parties. Scale
complicates—as Herbert Spencer pointed out, social bodies increase in structure as they increase in size. This
also meant increased differentiation in structure and function, increased specialization to cope with rising
levels of complexity, and division of labor—which, Adam Smith points out, leads to a dramatic increase in
production. Increased production leads to further increases in size (the benefits of success) and eventually
passes thresholds to gaining economies of scale. These factors embody the next elements of a political
economy: value chains.
THE VALUE CHAIN
There are two sorts of value chain—material and informational. The function of the material value chain
was actually well defined by Locke's definition of property—the act of laboring to convert something from
one state to another. An individual may pick up a piece of flint, making it theirs by taking it from nature
(see the interesting 'property as theft' argument of Locke's period) and chipping it into an arrowhead; this
can be traded to another who makes arrows; and again to another who hunts; the animal brought down by
the arrow enters the value chain—as meat, hide (then finished products); and so on. Each step changes the
'state' of the property, and increases its value or utility in some meaningful way. The 'primitive' social
structures are full of easily discernible value chains—farming, metalworking, woodworking,
hunting/gathering, etc.
Interlaced throughout the material value chain is a second value chain—the informational. Blind labor
may change states, but only directed behavior and labor can provide 'value add' (something Karl Marx
missed conceptually). Where did the ability to make an arrowhead, arrow, plant crops, work wood or metal,
select non-poisonous food come from?
The informational value chain is transformational as well, only it converts data into information into
knowledge into wisdom. But first, the debate on data—how do we know what we know? Literally millennia of
thought has been dedicated to this very question, it being the fundamental issue of philosophy. Data, it
seems, comes from our experiential perception of our perceptions (senses), or from the communication of
such perceptions. At least, that was the definition which has been the most recently accepted one; the
foundations are shaking again as we've discovered the thresholds of our abilities to perceive (and the effect of
perception on the observed), and as we've begun to alter or fabricate perceptions or perceptual proxies
('digital' perceptions such as video, audio, photos, etc. can no longer be relied upon as having any validity,
and personal perceptions can easily be called into doubt).
Data becomes information through a filtering process, one of exclusion. A phone book is a set of data,
the selection you want is information; you get information from data by removing any data that doesn't
match your filtering. Gregory Bateson defined information as any difference that makes a difference; the
quality that makes one thing distinct from another is what allows you to differentiate. Information becomes
knowledge through a process of analysis, extrapolation, and utilization. Much of what becomes knowledge
did so through scientific method—experiential/experimental data tested and filtered through various
hypothesis until generalizations or abstractions, a predictability, is discerned. How knowledge becomes
wisdom is unknown; wise men have come from religious, philosophical, scientific, and 'common'
backgrounds. Wisdom implies a 'deeper' understanding of concepts, systems, relationships and interactions,
an integrated perspective.

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It is these two value chains—the material and informational—and the interaction between them, that have
advanced society. By accident or design, 'progress' is made; differentiation occurs that passes a variety of
Charles Darwin's natural selection—the survival and continuation of advantageous variants. From our distant
historical perspective, we define progress and the level of civilization by the depth of structure,
differentiation, complexity, and specialization in the value chains. 'Primitive' cultures have relatively simple
value chains, while modern cultures have such complex webs that they resist conceptual mapping. Certain
advances have a 'threshold' quality to them, where a seeming boundary minimum is passed that redesigns
society and triggers a new burst of progress—from 'anarchy' to Agrarian society, to Industrial, to
Technological. The Marquis de Condorcet believed, after looking at the application of probability theory to
natural and social sciences, that society can be continually progressed and improved. This human drive
toward greater complexity, creativity, and adaptability is like Henri Bergson's elan vital—a vital impulse for
progress, novelty, making things better, faster, cheaper. And this leads to the next piece of the political
economy: dependency infrastructures.
DEPENDENCY INFRASTRUCTURES
Progress is all well and good, but individuals still have basic needs to take care of. A.H. Maslow observed
that behavior is purposeful and directed—there is a reason why humans have acted the way they have. Maslow
mapped out a hierarchy of needs that direct/motivate behavior and require fulfillment: physiological needs
(survival, food, drink, health); safety needs (clothing, shelter, protection); affection needs (family, belonging,
companionship); esteem needs (self respect, achievement, appreciation); and self fulfillment needs (realization
and utilization of one's potential). As society progressed, grew, and became more complex and specialized,
individuals no longer had the time or ability to handle their needs personally—but they still had needs.
Progress took care of this as well—while society went off and advanced in every different direction,
certain parts always remained specialized in providing for those needs to be met. These supporting
infrastructural segments of the political economy are a continual link down the value chain; no matter how
scientific or automated, their nature is essentially the same as established millennia ago.
Supporting infrastructures quickly gained an economy of scale—a favorable ratio of cost of materials to
market demand. By providing the necessities or services essential to allow society to function, individuals can
devote more attention to their own specialization; the freed energy can capital can be used to fuel further
progress.
A delicate balance has been struck, however, in the social contract—by specializing and becoming
mutually reliant, numerous internal dependencies have been created in the system. It is like a river that local
wildlife depends on, but goes dry by accident or design; soon there is a diseconomy of scale, with a scarcity
of materials, too much competition, and a population too large to adapt to the change. What occurs next is a
'die back' to settle with the law of the minimum—the resource most needed and in least supply limits the
system.
Dependency infrastructures provide the needs and services that keep a political economy functioning, let
alone progressing. Primitive cultures, with primitive value chains, have dependency infrastructures that are
near identical to Maslow's hierarchy. More differentiated cultures, however, have complex webs for their
value chains, so it is difficult to establish a clear 'degree of separation' for the dependencies. Progress has its
price.
PROGRESS AND SUBVERSION
Progress in a society is a continual challenge—literally. The boundary condition for progress is first a
willingness to challenge the existing system, and a willingness/ability to make changes.

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Max Weber opined that humans were imprisoning themselves in an 'iron cage' with our success and
progress; between 'empty advances' and unintended consequences (intending to do one thing only to discover
something quite different emerged), stagnation was almost inevitable. Mancur Olson, with much more
detailed economic analysis to back him up, drew similar conclusions: stable societies with unchanged borders
accumulate collusions and organizations for collective action; 'small' (tightly focused) groups have
disproportionate organizational power for collective action; such organizations reduce efficiency and
aggregate income in societies with they operate; these organizations make political life more divisive, and
slow down a society's capacity to adopt new technology and reallocate resources to respond to changing
conditions. It is no wonder that Giambattista Vico observed that nations evolve in cycles from primitive to
rational, and are punctuated with violent transformations.
Observing history, it is difficult not to notice that most 'progress' comes from subversive individuals (or
outright rogues and scoundrels)—they had to be willing to challenge and change the accepted order, flying in
the face of God, sovereign, and popular opinion. This is sometimes the sort of individual whom Friedrich
Nietzsche described as a "...man who breaks their tables of values, the breaker, the lawbreaker; yet he is the
creator." It is a difficult thing to judge—just look at the American Revolution (paid for with money laundered
from France). A number of the 'Founding Fathers' were considered by the British to be rebels, terrorists, or
even by today's standards, criminals: Hancock, smuggler; Washington, hemp grower, drug user; Franklin,
sexual harassment; Paine, desertion of family, accepted bribes while a tax collector; Jefferson, adulterer.
History considers them Great Men; history is written by the winners.
BREACHING THE SOCIAL CONTRACT
The modern social contract is weaker than ever, witness the common breaches and violations by
mentally ill persons who don't understand the 'rules of society'; criminals risking for profit; those with
nothing left to lose; those for whom the contract has failed; those who think the boundaries established by
the contract don't apply to them. There are also men of will, driven to change, acting as guerrillas or
terrorists. Most striking of all is the level of negation of the social contract by 'ordinary' people; this is not
just a feeling of being disenfranchised from the political process, upset with 'private law' or privilege
supplanting equal treatment, but outright hostility with a distinct Lockean 'dissolve the contract' flavor.
Because of the massive upheavals caused by technological advance, social pressure, regional/ethnic conflicts,
etc. the social contract is in flux, on the verge of being renegotiated.
Violence, of course, is how you jockey for position. Strong parties get to dictate terms to weak parties;
negotiations only occur between equals; peace and stability only happen when the terms are agreeable to all
parties of the contract, otherwise the violence continues. The 'defining down' of the capacity for violence has
put the capacity to demonstrate dissatisfaction with the social contract available as never before.
On a larger scale, society has hit one of those threshold points again. The rules established and reasonable
under the previous phase of development are constricting or no longer satisfactory to many: the consolidated
ownership or control of assets in the world economy leaves many feeling the playing field wasn't level;
property and criminal laws are being shaken up by the information age, with digital copying, electronic
distribution, industrial espionage, information warfare; overburdened legal systems are incapable of keeping
pace. Capacity for destruction has dramatically outpaced moral development; conventional weapons are
available or can be manufactured at home with instructions from a variety of sources; weapons of mass
destruction, including nuclear, chemical, biological, and informational are devolving down into the hands of
organized forces or individuals; the willingness to commit atrocities even now remains only slightly below
the skin of the human animal, witness Bosnia or Somalia, as well as victims such as the Kurds or the
Palestinians. Dependencies are more vulnerable, interdependent, and already stressed by the needs of society.
It is at this point that reconsidering the interplay of the elements of political economy and conflict become
critical—whether to hold the fabric of the social contract together, or negotiate a new one.

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CONFLICT AND POLITICAL ECONOMY
Politics is formally defined as the art or science of governing; political systems are defined by who is
responsible for/to the selection and operation of the governing process. Hobbes and Rousseau would have
defined oligarchies, monarchies, and fascism as their social contract—a sovereign deciding for the subjects,
but not subject to the contract restrictions. Locke laid the foundations for democracy—government by, for,
and of the people, with equal opportunity to be individually responsible for your own free actions for all
parties. Locke reserved the right for members of any social contract to renegotiate terms or opt out, and this
is the root of the conflict.
Disagreement or competition between alternative social contracts has often led to violence and warfare
across the scale, from small tribal conflicts to the global Cold War. Conventional warfare is conflict through
brute conquest, attrition or overwhelming and forcing the failure of the opposition's political economy (to
be replaced with the winner's). We view this as a 'primitive' form of war because it is often a struggle for
possession of territory or to gain some holding. Manoeuvre warfare is more refined, seeking control of key
elements and thus effecting control of what is dependent on those elements; if command and control
elements of the political economy are taken, it allows assumption of control and thus unimpaired utilization
of the opponent's political economy for the winner's benefit. Guerrilla warfare comprises opportunistic
attacks on the military (and sometime political) infrastructure and dependencies of the opposition. The aim
of guerrilla warfare is to impair the functioning of the opponent's forces and to make the costs of operating
them too great to maintain. This leads to either a withdrawal/cessation of hostilities, or collapse of a force
projection will/capability, with guerrillas assuming political control (the strong dictate terms).
Terrorism is attacks on leverages points of the social contract and dependency infrastructure with
propaganda efforts to focus media attention as directed by the terrorists. As most of these targeted elements
are 'civilian,' terrorism is considered particularly heinous, but is definable as a form of warfare. In particular,
there is what might appear to be an oxymoron and termed 'defensive terrorism.' In a situation where it is
perceived that a strong party is dictating terms to what they consider a weak or defenseless party, the
defenseless party will act, commonly with terror attacks, to establish an equal capacity for violence (while not
having parity in the force projection capability), and establish themselves as an equal party in negotiations. It
is in fact this very sort of defensive violence and terrorism behind conflicts in Northern Ireland and the
Middle East. Parties such as the British, Israel, and the United States are viewed as using their military
capacity to influence, manipulate, or control the political economies of other players—Irish Catholics,
Palestinians, Arabs and Persians (all of whom are not without credible arguments to support their position).
This is also why calls by the strong players for disarmament as a precondition for peace negotiations have
and will continue to fail.
Political warfare is waged by establishing an altered or totally alternative social contract and then using
proselytization, propaganda, and coercion to attract adherents. Polwar may or may not encompass the use of
force as a tactic; changes in social contracts through force establishes a certain tenor and preconditions to the
new contract that are going to perpetuate violence (recognition of this was part of Gandhi's brilliance).
Political warfare may seem less dramatic than it once did because it has been partially adopted into existing
political systems, notably democracy; this does not fully take into account the concept of political warfare,
which remains a potent mechanism of low-intensity conflict. That polwar is still a viable mechanism of
conflict was proven out in Viet Nam (where the United States not only lost to the Viet Cong, but were
probably the V.C.'s best recruiting agent), as well as in places where the electoral process is either a fiction, or
the first step to consolidation of a new social contract (which appears to be the strategy in much of the
Middle East and elsewhere).

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CONCLUSIONS
History and the advance of human society is defined by conflict; subversion is necessary for progress.
You have to be willing to question preconceptions, assumptions, conditions, and to challenge and change the
way things are.
Modern society has, in its centralized points, the cities, three days of inertia (available food, water, fuel,
etc.) between civilization and collapse. The social contract is at least in flux and may not last. Elements of the
dependency infrastructure are unstable and more tentative than ever (although there are means and methods
available to support them). 'Natural' acts—murder, rape, theft—add to the climate of chaos, terror, and
violence.
Thomas Kuhn coined the term 'paradigm' to mean the way an individual perceives the world, and noted
that adherents of the old ways seldom, if ever, were capable of fundamental changes in this view; they had to
die or be killed off before the dominant paradigm for a society changed. But beware of the quick and easy
solution—using force or violence for change comes back to haunt the user.
A historical context is important to establish and be aware of, if not study. No man can pass through
his life without there being two or three societal transformations, usually with conflict accompanying. That's
the thing about history, the patterns; you could almost say it's the same damned thing, over and over. It is,
and we call it 'progress.'
The social contract has changed before and society has come through, transformed, but intact; we'll
make it through again, until one time we won't. But the rate of change is itself changing—progress is
occurring more and more rapidly. There is both light and darkness on the horizon—we may become more
than we are now, or destroy ourselves utterly. How will we do? We'll know when we get there. I know I'm
looking forward to it.
ABOUT THE AUTHOR
With 20 years experience defense, intelligence, information operations, corporate finance, and
technology development, Mr. Wilson consults on matters of organizational safety and security, critical
infrastructure protection, information security and assurance, intelligence, finance, and technology for
multinationals and governments in Europe, Asia, North and South America, and the Middle East. As a
pioneer and acknowledged leader in the fields of infrastructural defense, information operations, open-source
and next-generation intelligence, Mr. Wilson is the winner of numerous awards, including the US National
Defense University’s Sun Tzu Award in 1997, and the G2I Intelligence Professional Award for both 1997 and
1998. In corporate finance, he structured multi-billion dollar merger and acquisition transactions for
multinational clients. As a technology inventor, his inventions and development of various technologies
include: computer security systems, anti-viral computer hardware, cryptographic methods, agent-based
modeling, three-dimensional visualization and interfaces, and massively-parallel, massively-distributed
processing systems. Mr. Wilson’s educational background is in system theory, cybernetics, and general
semantics, PERL (political science, economics, rhetoric, law), and physics. He can be contacted via email at
info@metatempo.com.
NOTE: This is a re-release of a paper which was published in 1996 by 7Pillars Partners.
Permission was granted by 7Pillars Partners for this re-release. 7Pillars and Michael Wilson retain all
copyright and intellectual property related to this paper.