The point is dear, that socialism starts with a social Contract. And we should be solving for capitalism's natural rate of inefficiency, by using socialism to bail out Capitalism, like usual.
Social Contract is a theory that dates back to the Age of Enlightenment and actually involves about a dozen various models depending on who's theory of Social Contract you are observing. Our model, for example, is mainly patterned from John Locke. Locke argued that government's legitimacy comes from the citizens' delegation to the government of their right of self-defense. The government thus acts as an impartial, objective agent of that self-defense, rather than each man acting as his own judge, jury, and executioner—the condition in the state of nature. In this view, government "derives its just powers from the consent of the governed."
The theory starts with Grotius postulations on individual natural rights and natural law. This evolved into the Social Contract theory, first espoused by Thomas Hobbes. According to Hobbes, the lives of individuals in the state of nature were "solitary, poor, nasty, brutish and short", a state in which self-interest and the absence of rights and contracts prevented the 'social', or society. Life was 'anarchic' (without leadership or the concept of sovereignty). Individuals in the state of nature were apolitical and asocial. This state of nature is followed by the social contract. The social contract was an 'occurrence' during which individuals came together and ceded some of their individual rights
so that others would cede theirs (e.g. person A gives up his/her right to kill person B if person B does the same). This resulted in the establishment of the state, a sovereign entity like the individuals now under its rule used to be, which would create laws to regulate social interactions. Human life was thus no longer "a war of all against all".
But the state system, which grew out of the social contract, was also anarchic (without leadership) with respect to each other. Just as the individuals in the state of nature had been sovereigns and thus guided by self-interest and the absence of rights, so states now acted in their self-interest in competition with each other. Just like the state of nature, states were thus bound to be in conflict because there was no sovereign over and above the state (i.e. more powerful) capable of imposing some system such as social-contract laws on everyone by force.
This brings us to Locke's
Second Treatise of Government (1689) who most agree is the fundamental basis for our form of government. Others had variations on the theory, Rousseau, Proudhon, Rawls, Gauthier.
A true Socialist government is probably more in line with Rousseau's version which calls for complete surrender of individual rights to governing authority and holds that the laws imposed by the state are designed to "build character" in the individual. However, according to Karl Marx, Socialism is merely the segue to Communism and under a Communist government there is no social contract.
Capitalism has no inefficiency and Socialism never bails it out. Socialism without Capitalism was attempted by Mao Zedong in China. More political prisoners (i.e.; citizens) died under his rule than any other dictator in history with the possible exception of Stalin. Mao's plan was essentially followed by Pol Pot in Cambodia with the same results on a smaller scale. Everywhere on the planet where Socialist government has been attempted with large populations, the results have been horrific... on an inhuman scale of horrific.
Anyone with an IQ over 50 who thinks Socialism is a system we should give a whirl, is totally insane. So we must surmise, you are either someone who is really not very smart or you are someone who is mentally not stable.