Happy Labor Day! Peter Frase encourages us to celebrate workers, not work. Good Magazine has a list of 10 things the labor movement has brought you – weekends, 8-hour work days, etc. One thing I’d like to add to that list is that labor unions were key in restricting the freedom of contract to actually create what we take for granted as “free” labor in the 20th century. Consider this a #11 to the list: fighting against backwards, regressive, hierarchical, feudalistic forms of labor contracts.
Let’s take a typical worker who had a bad day at the office in 19th Century England (quotes, graph below and analysis from from Steinfeld’s excellent Coercion, Contract, and Free Labor in the Nineteenth Century; also see Steinfeld’s The Invention of Free Labor and Orren’s Belated Feudalism). What did his employer do to punish him?
George Heywood of West Bromwich was a bundler at the furnace of an iron works with both puddlers and millmen dependent upon him. Because he left his labour for a few hours, “the work was very much in arrears and other men were idle.” He was given the option of paying £5 damages or having two months in prison and remarked that “he would have to have the two months.”
And so he did. As a result of Master and Servant laws in England, a laborer breaking a labor contract could be sentenced to jail time for not performing satisfactorily on the job. He or she could also go to jail if they quit their job before the labor contract was completed. How’s that for “free” labor?
For fun, let’s get a a graph going. Let’s get a plot of the rate of prosecutions for a specific crime, “Offences Relating to Masters, Servants and Apprentices” for England and Wales against the unemployment rate in mid-to-late 19th century England:
The “prosec” line is the number of people jailed as a result of quitting their jobs before their contract expired or not doing their jobs as well as their bosses dictated. The other two lines are two estimates of unemployment at the time. As you can see, at full employment, when workers have the most power to demand higher wages or leave to find better, more fulfilling, opportunities, is when the most workers were jailed under Master and Servant laws. As one historian notes:
[t]here is . . . a correlation between the working of the trade cycle and the number of prosecutions in these Black Country towns…This would suggest that a worker would be less likely to challenge his employer in a period of slump and unemployment and cases of leaving work with- out notice and neglect of work would be much less frequent. However, in a period of trade boom and prosperity, the worker could use his economic power to better effect. Skilled workers especially wanted the right to sell their labour to the most generous employer and therefore were tempted to break their contracts. . . . When labour was scarce, employers were doubly determined to enforce con- tracts, and with a sympathetic magistracy behind them many more cases were brought to court.
America didn’t have this relationship quite the same way after indentured servitude died out in the 1820s in the North, though the post-Civil War South tried hard to keep these kinds of punishments going. But what the United States did have is a series of other legal coercions designed to get more out of workers at a cheaper cost through pecuniary remedies. Under 19th century common law rule in America, workers could lose all their back wages if their employers found they didn’t faithfully perform their labor duties. Since employers withheld wages, workers had to choose between a lack of mobility and losing a significant amount of earned pay. Here’s how that looked:
The entirety doctrine typically worked as follows. If an agricultural laborer agreed to work for a farmer for a year at $20 a month or $240 for the year, and the worker quit after working ten full months, the contract was construed to be entire, unless the employer had expressly agreed to pay the $20 a month to the worker at the end of each month. Full performance by the worker was considered a condition that had to be fulfilled before an employer was obligated to pay any wages under the contract. The worker was entitled to recover nothing under the contract for his ten months of service. No claim could be maintained that he was entitled to a divisible part of the contract price for ten months of labor. The employer was viewed as having bargained for twelve full months of service, and not for anything else, and it was for twelve full months of service that he had agreed to pay $240 at the conclusion of the term.
Given that workers are working paycheck to paycheck, this has massive consequences for the health and wellbeing of workers. Think about how abusive this looked in the 10th and 11th months.
This isn’t the “free” labor you think of when you think of “free” labor, and you don’t live in this world. Why? Here’s the important part. You may think that the sweeping away of feudal policies of detention, criminality and pecuniary punishments against workers were part of a 19th century movement of laissez-faire liberalism reworking the marketplace. But you’d be wrong – the rhetoric of free contracts actually reinforced these arrangements. For if a contract that has these punishment features are voluntarily entered into how can the state get in the way? Judges and intellectuals emphasizing laissez-faire markets and free contracts couldn’t see a problem with these arrangements, as long as they were entered into freely. Anything entered into freely and without coercion couldn’t be unfree.
Enter labor. These penalties, criminal and pecuniary, were slowly removed from the books by laws, courts that upheld the laws and the activism and planning of organized labor. For labor saw that this was essentially unfair – bosses aren’t penalized in the same way and that these kinds of contracts create fundamentally unfree citizens and workers wherever they show up. The pro-labor legislation and judicial decisions that gives us the notion of “free” labor – of freedom of mobility and to exit a labor contract without penal or pecuniary punishment – that you take for granted is a recent phenomenon, going from around 1875 to the New Deal. And this modern “free” wage labor is entirely a construction of state regulation that restricts certain labor arrangements.
So when you think about labor giving you the weekend and the eight hour day, also remember that labor gaves you the right to say “F*$% You I’m Quitting” to your boss without going to jail and the ability to get paid every other week instead of once a year under heavy threat of forfeited wages. So here’s to labor, which is less about about marginal products and surpluses and more about fighting feudalism in the workplace wherever it shows up.
Rortybomb 
Excellent post, Mike, and of course I agree with all of it. It’s worth mentioning — and this is a point that Orren and (I believe) Steinfeld make (you should also check out Forbath’s Law and the Shaping of the American Labor Movement, as well as Christopher Tomlins’ more recent work) — that the contracts workers entered into freely had these features you mention, regardless of whether workers/employers tried to stipulate otherwise. In other words, principles like entirety were considered to be structural features of the contract, which judges enforced, even in the face of express stipulations by the parties to the contrary. Even if legislatures tried to overturn these provisions. That’s the other piece of “feudalism” that often gets lost in these discussions. So the notion that there was a right to free contract — which is so common in conservative and liberal and left accounts of the period — actually overlooks the fact that neither party to the contract (but especially workers) had the juridical right (let alone practical ability) to determine all of the content of those contracts. That’s what the structure of common law and judicial power entailed, and it remained intact — despite the Constitution and an array of social movements to the contrary — well into the turn of the century. This, by the way, was also true of marriage contracts. Based on 17th century precedent doctrines from Britain, judges interpreted any marriage contract to mean that a wife had given sexual consent to her husband when she married him — sexual consent in perpetuity, that is, for the entire marriage. When she said yes to him at the altar, in other words, she gave up her right ever to say no to him (sexually) again, while they were married. So if he should rape her, it couldn’t be considered rape, under the law. And even if a husband or wife tried to write into their marriage contract something to the contrary, they couldn’t. You can find legal treatises in 1957 saying the exact same thing. It wasn’t until the 1980s that state legislatures actually overturned this doctrine, which was called the “marital rape exemption.”
Suresh Naidu and Noam Yuchtman wrote an economics paper where they model the use of criminal punishment under Master-Servant (MS) laws to show how wages moved relative to this punishment, in a relationship similar to the one you draw between unemployment and MS legal punishment. It’s a kind of efficiency wage/legal constraints labor market model. The most recent draft of the paper is here:
Click to access MS_paper_draft_may_7_2011_nber.pdf
(Also, Acemoglu and Wolitzky have a paper titled “The Economics of Labor Coercion” that is in part inspired by Steinfeld’s work. A very technical and difficult paper to read, however.)
A minor historical point: I would argue that the actual use of the entirety doctrine in the U.S. was much less prevalent than scholars such as Steinfeld might otherwise assert. There is a big difference between “law” and “practice”. (Peter Karsten has dug into the data and proved the lack of enforcement of entirety across most states in the antebellum era.) Of course, this does not refute your “feudalism in the workplace” claim, and in fact, later law and labor scholars such as Tomlins (whom the above commentator mentions) have done a much better job of crystallizing this thesis.
At any rate, you’re right on about the will theory of contract. It’s interesting to me , how the philosophical origins of contract law give a space for both “freely entered into” AND equity. (That’s the Aristotelian notion of a just contract, anyway.) However, it was, in part, the influence of utilitarianism and of course a budding capitalist philosophy which eventually made the will theory of contract the main emphasis. If you’re interested more in the “triumph of contract” (i.e. the will theory), you can also look at Morton Horwitz’s /Transformation of American Law/.
Great post! Thanks,
Pingback: Things to think about | The Small Position Trader
Daniel, do you have a cite for that Karsten paper? I’d like to see it. It’s been ages since I read Horwitz but my recollection is that his evidence for the triumph of at will contract is not primarily drawn from employment relations, is it? (Again, it’s been a long long time, so I could be totally wrong.) Orren’s argument is that while at will contract does triumph in almost every sphere of the economy, it takes an extraordinarily long time for that notion to finally make it into the sphere of labor/workplace relations. That, to her mind, is what the labor movement managed to achieve (as Mike suggests above, and other scholars suggest as well): it finally established a notion of at will employment. She looks at a bunch of legal doctrines, not just entirety but also vagrancy, another principle the name of which I can’t remember but it basically holds that whatever wages a worker gains from work s/he does on the side belongs to the employer to which s/he was first contracted, and the whole practice of requiring testimonial letters. From her telling the entire relationship of worker and employer is nested within this set of feudal regulations.
Well this is not 19th Century England anymore, now labor unions are forced to compromise – allowing starting salaries to be cut in half so corporations can keep jobs within the USA – High School kids will only be paid $33,600 a year to sweep the floors instead of the $67,200.00 that the Union demands.
Corey,
When I say “Will theory of contract” I am actually referring to the legal doctrine which considers the employment contract as, in its essence, an “ascension of the minds of the two parties”, that is, the concept that the contract is freely entered into by both parties. That’s what I mean by what Horwitz talked about, and yes indeed he was referring to labor contracts in his book. I’m not talking about the at will doctrine. And yes, while you’re right about that “at will” doctrine, all I was arguing in my post is that, in practice in the 19th century, many more contracts were seen as “at will” than the formal law of contracts might suggest. (I usually hate doing this, but I actually wrote a blog post about the will theory on my own blog, you can see it here: http://imagininghistory.blogspot.com/2009/07/from-equity-to-will-update.html)
Now, in order for a contract to be just, Aristotle said that it must /not only/ be entered into freely, but must also represent an equal exchange. That is to say, the exchange must be of equal value according to some objective notion of “value”. Courts in the early 19th century, realizing that value is rife with subjective notions, chose instead to rely primarily on the part that says a contract must be freely entered into. In fact, they would assume such a position a priori to the facts of the case, in most instances. They did that so that they could move on to substantive claims about the obligations that parties might have /once they have entered (freely) into the contract/.
It is a very curious phenomenon in intellectual history, IMO, how the judges’ idea of subjective value created this need to talk about the will theory of contract, when later on in the 19th century neoclassical economists would support a theory of distribution in which equal values are exchanged for equal values. There is, I’m sure, a paper or dissertation in that, somewhere.
By the way, here is the link to the Karsten paper:
“‘Bottomed on Justice’: A Reappraisal of Critical Legal Studies Scholarship Concerning Breaches of Labor Contracts by Quitting or Firing in Britain and the United States, 1630-1880,” 41 American Journal of Legal History 213-261 (July 1990)
In my judgment, the evidence he presents is quite compelling. But, as Tomlins and some others have asserted, this is no reason to abandon the feudalism claim. Judges in the early 19th century were some of the most ardent federalists left over from the “purge” of privileged aristocracy, so to speak, of the American Revolution. They brought with them, to court, an understanding of hierarchical government that surely influenced some of their opinions. The extent of that influence is debatable, and I’m not sure the Democratic Republicans in court could have done much better (in some cases, including Andrew Jackson, they did about the same or worse), but it’s nevertheless an important aspect of American labor relations.
Thanks for this, Daniel. The mistake in terminology was entirely mine: I knew you were talking about a will theory of contract, but was thinking about that in the context of labor, hence the transposition of “at will contract.” Though that raises the question of how one can have a genuine will theory of contract without a notion of at will employment. Looking forward to reading all of this. Though Mike has some paper in his next post on this site claiming 10,000 prosecutions per year for violations of law of master/servant, though the dates are later in the century than the ones mentioned in the title of the Karsten paper. Anyway, thanks for all of this; really appreciate what you have to say here.
That’s what the structure of common law and judicial power entailed, and it remained intact — despite the Constitution and an array of social movements to the contrary — well into the turn of the century. Thanks
Pingback: In advance of ‘the speech’ « thecurrentmoment
Pingback: Sunday Reading « zunguzungu
Pingback: Neoliberalism and the Human Economy — The League of Ordinary Gentlemen
Pingback: Institutional and Legal Creation of Labor, Prison Edition | Rortybomb
This is a bit obvious, of course, but I’m sure you all realize that the judicial claim that contracts were entered into “without duress” was a mockery, even when the worker actually knew the terms of the contract. Unless someone has a guaranteed living, he or she is *always* under duress when trying to find work. Only people with guaranteed livings can freely enter contracts, because only they can freely refuse to enter contracts.
Pingback: Income Inequality, Loser Liberalism and the Progressive Assault on Laissez-Faire | Rortybomb
Pingback: Quora