In honor of Labor Day, I want to talk about how a genuinely free market could eliminate wage slavery and other more general forms of exploitation. The market forces I will talk about are in play now but are obviously hampered by government aggression.

Taking it as a given that wage slavery existed, it easy to see how the free market could do away with wage slavery over the course of several years. If a wealthy land owner had a group of laborers whom he exploited, we could imagine that the laborers made some contract with the owner that bound them to his land for a fixed number of years. Under natural law principles, a promise to work is not an enforceable contract. It only requires that a worker pay back any wages advanced for services not performed and pay cost for any performance bond lost by the owner. Nevertheless, we can add the burden and assume for the sake of argument that enforceable labor contract were in place in this scenario.

First off, it would make sense that workers would not have much of an incentive to become more productive and would tend to decrease productivity relative to non-wage slaves. Since wage slaves do not derive much of any benefit, if any at all, from increased productivity, it would appear reasonable that their level of work would tend to be closer toward the minimum production required to fulfil their contract and remain employed. Each worker might have a different production quota, but no one would have an incentive to go much beyond that.

So comes along another wealthy owner looking for labor to exploit. After all, labor is the most desired form of capital. Since without it, tools and other forms of capital are useless. The second land owner makes an offer to the first. He offers to rent the workers from the first owner but request that the workers to choose among themselves who will take his offer. For meeting a certain production schedule, the second owner will pay a bonus above their normal rate of pay. Some of the workers might even reluctantly agree to give a portion of the bonus to the first owner. In any case, both owners expect to benefit, and workers are receiving higher pay, possibly even a greater percentage of their market value. Over time, workers could save enough money to buy out their labor contracts.

You could then argue that the first land owner would just increase his production quota for all his wage slaves. The problem is that future wage slaves would decide to work somewhere with a lower quota, better working conditions, or whatever it is they value (maybe not being bound to arbitrary labor contracts). As the competition for laborer was bid up, land owners would continue to offer better conditions until the point where they paid the market rate of labor. Without the government intervention I mention below, land and rent costs of capital and credit would fall drastically, enabling newly liberated wage slaves to begin their own enterprises. It would definitely decentralize production and further increase competition for labor.

Someone could also raise the point that exploitation of labor exists today, so the free market either cannot eliminate wage slavery or perpetuates it. The problem is that there is no free market that exists, but to the extent that free market principles have been practiced, working conditions have improved. Some of the ways in which governments have stymied a genuine free market are by giving privileges of immunity from liability, raising the regulatory barrier to entry and exit to the benefit of large corporations, and by subsidizing the transportation of goods.

Under state capitalism, intellectual property laws increase the cost of living, central banking discourages savings and gives an advantage to banks with early access to newly created fiat currency, anti-labor laws discourage collective bargaining, government control of vast tracks of natural resources, and the boom-bust cycle of centralized government planning cause additional insecurities to give some people an upper-hand at the negotiating table. Restrictions on mutual banking, legal tender laws, credit monopoly laws, government deficit financing, and cause banks to be able to charge higher premiums for loaning credit.

All this leads me to believe we do not live in a free market.

Another objection to this process might be that justice delayed is justice denied. We should demand an immediate end to exploitation. I completely agree. Where there are communities supportive of ending injustice, I support people seizing property they have a moral right to. Like I said, even in a stateless society with widespread despicable authoritarian tendencies, one which basically enforced slaver labor, the free exchange of ownership rights can make egalitarian solutions more palatable. A cultural shift would be needed, and a free market system could play a part in that solution. We would still have to educate and agitate others into taking actions to correct injustice. This can be sped along by upholding market economics so that more come to recognize the dignity of each individual’s life.

These subsidies and privileges I described above come at the expense of other people’s labor. It is slavery in a very real sense. The way to abolish this slavery is not to give power to the same group of people who orchestrated its enforcement.

• “How I Bamboozled Thousands of Conservatives into Thinking Like Anarchists” by Robert P. Murphy
• “Property Rights and the Theory of Contract,” The Ethics of Liberty by Murray Rothbard
• “Wage Slavery is a Symptom of Unfree Markets“
• “Wage slavery” on Wikipedia
• “Austrian Economics and Wage Slavery” by Brad Spangler
• “Economic Development Without the State” by Kevin Carson

The impression that only government can solve large public challenges, called “public goods” in economics lingo, is one of the reasons people will continue to believe an intrusive government is necessary, until libertarians break down people’s reflexive attitude of yielding to authority, that is. The assumption behind this support is that only government can provide these so-called public goods, which some people believe could not otherwise be provided, and thus society would be worse off if government didn’t forcefully compel financial support.

The problem is that people in government don’t really come up with workable, affordable solutions to things like transportation and security. How could they? To quote Frederic Bastiat, “Do not the legislators and their appointed agents also belong to the human race? Or do they believe that they themselves are made of a finer clay than the rest of mankind?” They have no incentive to solve any problems. Empirically, they have quite the opposite personal incentives, in fact. The government can’t provide lasting solutions because it has no solutions, only force. Force cannot inspire or innovate; it stagnates. When the government steps in to solve a problem, when it applies force, any progress halts and new problems arise. In the late 1800s, the advent of mass government education, teachers wrote with chalk on blackboards in front of classrooms of students who sat in neat little lines. Sound familiar today, one hundred years later? Force is a distraction from real solutions. If the government can’t provide answers to these legitimate questions, then the true purpose in forwarding statism is simply to obscure the question.

By trying to solve the question of public goods with government, greater public goods are created, including the public goods of a well-informed electorate and just laws. Taking the time to become informed on the issues, studying the economic and social impact for each of the differing policies, and investigating candidates’ records, just to know which candidates to support can be very consuming. Yet an individual’s vote makes an insignificant difference in the outcome of the overwhelming majority of races. Cost-benefit wise, it just doesn’t make sense to put that much effort into it. Many times, votes are cast based on some superficial trait or because the candidate confirms a voter’s bias. Even then, voters are inclined to support only someone with a good chance of winning. The second public good of government is the creation of just laws. For argument’s sake, let’s imagine that trustworthy candidates who have the best interest of all their constituents at heart, not just their supporters, are elected. Those lawmakers are beholden to the narrow interest of their distinct constituents. Lobbyists have a much greater incentive to push for special interests that are at the expense of everyone else or future taxpayers. Together, these public goods create a third public good of limiting the power and abuses of government. Of course it would be in everyone’s best interest for government to be restrained to certain powers, but meanwhile private interests are at work to see that government is not limited for long. It becomes socially acceptable to use coercion of government, which subsidizes the use of violence (via legislation and regulation) against competitors.

Maybe business could be convinced that special interests legislation is actually bad for them in the long run. You never know. Maybe voters could be made aware of the benefits of lower taxes and free trade. But the people who have no interest in seeing the government shrink are the government bureaucrats, their families and friends. Including benefits, the average federal worker makes more than twice the compensation as a private-sector employee. They have a big stake in expanding government, all 2.7 million of them.

Some Alternatives

I also think there is a case that so-called public goods would be significantly less important in an stateless society, where I believe workers would have much greater influence over their working conditions and wages than in limited-liability corporations. Different enterprises would have different aims, not only the maximization of its monetary wealth. It would also be true that in a stateless society individuals would become much more wealthy than they are today and would be more inclined to support environmental preservation. Private property rights would also become better defined because government regulation has often been used by well-connected special interests to lobby for protection from liability where common law tort cases were used to recoup damages. In other cases, governments have simply granted license to polluters.

Most everybody likes to hang their hats on national security. To be considered a credible candidate, even “Internet Constitution Jesus” Ron Paul had to say he supported a strong defense. The fact is that the only security people in government provide is for themselves. They’ve got all the big guns, mind you. There was a case just a few weeks ago of a Northwest Airlines crew that lost contact with ground control for over an hour. No military jets were scrabbled to intercept the plane. We’re talking post-9/11. Nothing. They were luck they were not headed toward Washington, D.C., or New York—else they might have been shot out of the air. To some degree, I understand why people in government would react that way. To conquer a nation, you have to control its capitol. That is the seat of the government, where the main bureaucrats operate, and you can bet the tax records are going to be pretty nearby. Because when nations are at war, they are fighting over who controls the tax livestock in the country. That is one of the advantages of a stateless society; there is no central headquarter on which to lay siege, no infrastructure in place to seize property and taxes.

Besides, if we are to believe that we could cultivate this total activist population, which valued liberty vigorously and made personal sacrifices to secure that liberty for its posterity against an entrenched government, then why would they roll over when an organization a fraction of the size of government with no perceived legitimacy tried to usurp those liberties? It seems to me that if there were such an organization that tried to aggress against others, it takes a lot less effort to prevent. You literally wouldn’t have to lift a finger. You just stop doing business with them.

A Faded Hope

What limited-government activists offer is an uninspiring vision for society, a limited slavery, one in which the best they can hope for is a constant struggle to halt the expansion of the state. It should be self-evident why the “eternal vigilance” struggle is a losing battle. A radical limited-government mindset is neither consistent philosophically nor convenient politically. It does not distinguish itself in principle, as it sanctions the use of violence to solve social problems, and is outside the mainstream of political reality. What are its chances of sustaining a groundswell of support if it is fundamentally no different than other political beliefs yet it hampers the political viability of its supporters? I don’t believe the chances are positive.

Bless those in the battle for limited government. I’ll be cheering for them, no doubt. I’ll be with them 90 out of 100 times. But if I got bribed well enough, I might even starting pitching socialized healthcare when in office. Until then, I don’t feel like idolizing a theoretical government that never existed in practice.