Many philosophers of law have affirmed the idea that the central function of law is to provide the conditions within which individuals can flourish in the sense of pursuing the aims and goods that each understands as constituting a good human life. They have concluded that the social framework of the law must be designed to make this possible. Yet the two global institutions that have come to dominate our planet -- global capitalism and the system of sovereign nation-states -- have functioned to progressively destroy everywhere the social conditions within which human beings can aspire to lead good human lives. The fragmentation of so-called "sovereign nation-states" -- of a multiplicity of weak nations dominated by a few powerful nations -- has allowed global banking and capital to colonize the world-system to the point where the democratic social contract within most nations is hopelessly broken. 
If the idea of a democratic social contract was developed from the 18th through the 20th centuries to mean that the laws and institutions of government should function to protect the equality, freedom, human rights, and life-possibilities of citizens, then it is clear that the 21st century has experienced the shattering of that social contract and its replacement with an economic Darwinism: a predatory society in which law and government operate to promote the callous exploitation of the majority by the super-wealthy few, and in which everything is commodified -- from human beings to natural resources to the environment -- everything is subject to merciless exploitation without regard to human welfare, the common good, or the future of our planet.
In the United States today, and in much of the world -- even in the countries of Western Europe -- the Neo-liberal ideology of greed, unrestrained power, and accumulation for the sake of accumulation (with reduction of government regulations to make way for private power and corporate domination) has become institutionalized within governments, educational institutions, multinational news institutions, and much popular culture. No longer are citizens considered responsible to the common good of their society and expected to participate in democratic politics with a view to creating a society premised on making possible flourishing for as many citizens as possible. Citizens are to be either passive, apolitical consumers manipulated by corporate propaganda or marginalized and criminalized poor people, repressively channeled into the school-to-prison pipeline. The past 40 years of corporate domination and government complicity has led to the conversion of government into the facilitator of wealth and power accumulation by the 1% at the expense of the rest of humankind, nature, and future generations.
This process of moral disintegration of both individuals and governments is not simply one option within a typology of possible modes of governance. It represents, rather, the triumph of criminal irrationality -- the domination of our planet by criminals and criminalized institutions -- in the place of the rationally and morally justified institutions that are at the heart of the democratic social contract. Philosophers have articulated the nature of legitimate institutions at length over the past three centuries. As British philosopher Thomas Hill Green wrote in the late 19th century: "If the ideal of true freedom is the maximum of power for all members of human society alike to make the best of themselves, we are right in refusing to ascribe the glory of freedom to a state in which the apparent elevation of the few is founded on the degradation of the many."  Similarly, contemporary philosopher of law John Finnis speaks of legitimate government as creating "a set of conditions which enables the members of a community to attain for themselves reasonable objectives, or to realize reasonably for themselves the value(s), for the sake of which they have reason to collaborate with each other (positively and/or negatively) in a community."  It is this "community," this democratic social contract, that is being replaced by what contemporary political commentator John Whitehead calls "a government of wolves." 
In the Introduction to his new book, Neoliberalism's War on Higher Education, U.S. social thinker Henry Giroux details the "war on democracy" within the U.S. during the past 40 years, a war which includes the open pandering to corporations and the rich by government officials, the dismantling of those functions of government that empowered ordinary people to "pursue for themselves reasonable objectives," such as public education, social security, unemployment benefits, and other social services, the expansion of police powers and prisons to incarcerate and dispose of those marginalized by this system, and the hiding of criminal activities by government officials through claiming "national security" secrecy for their illegitimate culture of corruption.  It is not simply that democracy, with its hope and promise for ordinary people, is being dismantled. Rather, any possible moral legitimacy for government authority is being jettisoned. It is no accident that the government has vastly increased pervasive surveillance of the citizens at the same time it has militarized police forces nationwide and initiated repressive policies toward protests and political dissent. When moral legitimacy is abandoned by government, the only option is naked repression -- the creation of a dictatorial police state.
Yet, as I said above, the phenomenon is global. U.S. economist David Korten, in his book When Corporations Rule the World, describes the devastating consequences of vast multinational corporations with unlimited power to do what they please, since they literally have more power than most governments on Earth.  Canadian social commentator Michel Chossudovsky, in his book The Globalization of Poverty, similarly describes the Neoliberal operations of the World Bank and the IMF in destroying democratic social contracts around the world in favor of exploitation and predation by the rich and powerful.  The fact is that globalized capitalism, which turns everything -- even human beings and the political process itself -- into commodities to be bought and sold for purposes of private profit, is necessarily destructive of the democratic social contract. It necessarily colonizes the governments of nation-states, and it necessarily uses the most powerful of nation-states (in this case the U.S.) as the means to establish a global empire of exploitation and domination enforced by the "full spectrum military dominance" of the imperial state.
The promise of the democratic social contract is, and always has been, inherently universal. When Thomas Jefferson wrote in the Declaration of Independence that "we hold these truths to be self-evident that all men are created equal, and endowed by their creator with certain inalienable rights," he was stating the universal truth behind the democratic social contract, in spite of the fact that he wanted to apply these rights only within 13 tiny former colonies, that he owned slaves, and that women of his day had almost no rights. By contrast in the late 20th century, U.S. philosopher Mortimer J. Adler wrote: "'all' -- when what is meant is all without exception was never seriously meant to include every individual member of the human race. That we are now for the first time in history beginning to mean all without exception when we say "all" is another indication of the newness of the emerging ideal of the best society, the institutions of which will benefit all men everywhere, by providing them with the conditions they need to lead good human lives." 
Indeed, as Adler understood, the system of "sovereign" nation-states institutionally blocks our ability to extend human rights and the democratic social contract to all persons everywhere. Each nation is supposed to be protecting the rights, security, and well-being of its citizens, but global forces make this inherently impossible, converting the governments of nations into mere security forces for protecting the "private property rights" of global corporations to exploit, bribe, corrupt, and dominate. Effective and morally legitimate democracy is no longer possible on the Earth given the colonization of nearly all nations by the criminalized interface of imperial military forces with global transnational corporations. As Finnis expresses this, "the claim of the national state to be a complete community is unwarranted and the postulate of a national legal order [is] a 'legal fiction'."  The only system of law today that could be legitimate and not a 'legal fiction' would be democratic world law legislated by a duly elected World Parliament.
In the late 20th century many progressive world citizens realized this fact and together wrote a definitive Constitution for the Federation of Earth, in which the fundamental democratic premise that we mean "all" when we say "all" is actualized for every person on the planet. The Constitution creates for the Earth a World Parliament with the authority and effective power to define and regulate transnational banking and corporations for the common good of the environment and all people. It takes money and banking out of these private corporate hands and places them with the Earth Federation Government in the service of people everywhere. It sets up special institutions designed to protect the human rights of every person on Earth and to represent the collective good of the planet and its citizens.