A Tale of Two Social Contracts

This summer, my trip back to Berkeley was a blend of both the familiar and the foreign. After living in Sweden for nearly three years, I found myself experiencing a deeper sense of reflection and perspective. I felt immense joy reconnecting with friends and family, taking daily walks through beloved neighborhoods, and enjoying the amazing fresh produce. However, I was also struck by the visible social disparity across neighborhoods— from dilapidated houses to individuals struggling on the streets. While these issues existed during my time living there, my return visit brought them into sharper focus, especially in contrast to my life in Sweden. Though Sweden has its own social challenges, the stark differences prompted me to consider the core structural factors at play. At first glance, it seems obvious that progressive social policies and higher taxes are reasons for these differences. But after living here for a couple of years, I’ve realized that the differences between Sweden’s and California’s ‘social contracts’ are far more nuanced than just high taxes and redistribution. It’s about how social responsibility is balanced with individual freedom, in ways that aren’t always obvious at first glance.

(Sweden’s flag colors on a public transit escalator in Stockholm)

What is a Social Contract?

At its core, a social contract is an implicit agreement between individuals and their government—who’s responsible for what, and how much power each side holds. In the U.S., philosophers like John Locke shaped the foundation of the country’s governance, with individual freedom and limited state power as key pillars. But as with most things in life, the reality is more complex. After living in both Sweden and California, I’ve come to reflect on three key differences between these places’ social contracts that shape the lived experience.

Individualism in Different Forms

Americans take pride in individualism—personal freedoms are embedded in the national ethos. What’s interesting is that Sweden also emphasizes individualism, but in a different way. Swedish individualism is built on a paradox: personal autonomy is crucial, but it’s reinforced by a strong welfare state that ensures everyone’s basic needs are met. As Swedish professor Lars Trägårdh points out, this allows people to be independent, knowing that if things go wrong, there’s a safety net that is not dictated by family or luck.

(Research by Lars Trägårdh highlights the different points of emphasis between Sweden and the U.S. when it comes to individual versus family versus state)

In California (and the U.S. in general), individualism looks different. It’s more of a "rugged individualism," where success is often a reflection of one’s ability to overcome challenges alone. But that perspective can overlook how much someone’s starting point matters. If you come from a marginalized background, success isn’t just about personal grit—it’s also about the resources and opportunities you have access to. In California, despite its wealth and progressiveness, homelessness and uneven access to basic services persist. The focus on personal responsibility over collective support means the safety net is thinner, and social problems like housing insecurity and income inequality are harder to address.

Where the money goes: Institutional support

Sweden and California also differ in how their resources are invested. In Sweden, there is strong public investment in healthcare, housing, and social welfare. This means that everyone, regardless of their income, has access to healthcare and affordable housing is prioritized to prevent homelessness. There are complaints about the system, sure—like long wait times for healthcare—but basic needs seem to be met for all. If you want specialist services, that’s where things can get tricky. In the U.S., though, if you have the money, you can get those specialist services quickly.

California has also made important reforms over the years, but the system is more fragmented. Take public education, for example (more on education from a previous post). Sweden guarantees high-quality education from preschool through university. In contrast, California’s public schools vary widely depending on where you live. Wealthier areas have well-funded schools, while low-income neighborhoods often struggle with under-funded ones. This disparity forces many families to consider private school if they can afford it, a conversation I’ve had with many friends when kids entered our lives.

The Lived Experience: Social Equity vs. Inequality

These institutional differences shape everyday life. In Sweden, equality is at the center of the social contract. Taxes fund universal healthcare, education, and welfare programs that aim to level the playing field for everyone. The result? Sweden consistently ranks as one of the most equitable countries in the world. The gap between rich and poor is smaller, and everyone has access to the same public services, regardless of income.

California, on the other hand, is a place of contrasts. It’s home to some of the wealthiest people in the world, but also has some of the highest levels of poverty and homelessness in the U.S. Despite progressive policies, the wealth gap is glaring. Taxes fund basic needs for low-income residents, like Medi-Cal and Cal-Fresh, but even these programs are criticized for not providing sufficient support in high cost of living areas, and the funding levels can change with shifting politicians, leaving the programs less effective and reliable over time. Those who are fortunate to have higher incomes rely on their company or union to provide services like health care and structured saving for retirement. 

California, in many ways, represents the American Dream—but that dream is becoming harder to achieve for the majority. While wealthy enclaves thrive, working-class families struggle to make ends meet.

A Different Kind of Responsibility

The key difference between Sweden and California isn’t just in policy—it’s in the underlying philosophies of responsibility. In Sweden, the state takes on a larger role in ensuring the well-being of its citizens, while individuals trust that their tax contributions will benefit society as a whole. This sense of collective responsibility reduces risks associated with poverty, homelessness, and crime. In California, the emphasis is more on individual responsibility—people are expected to navigate life’s challenges largely on their own (or through the support of family and charitable support). While this can foster innovation and personal achievement, it also leads to greater inequality and a thinner social safety net.

Both approaches reflect a different understanding of what it means to live in a community, and both have their strengths and weaknesses. But the question remains: can a balance be created that works for everyone?