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Social Contract Theory

Even though this is the political subforum, I intend this more as a philosophy discussion. But obviously, take it anywhere you want.

In the Healthcare Deform thread, social contract came up kinda, and I figured a discussion on the subject was long overdue. What are your thoughts? Does 'the social contract' exist? It's the theory that turns governmental violence in nonviolence, so if it's valid, we're good, but if not, then we live in an unnecessarily violent society, and it would seem we would be morally obligated to stop interacting in such a way.

I'll save my ramblings until an idea is thrown out there. What's your take? Valid? Invalid? Is it logically consistent?