In the many discussions I’ve been in where I’ve argued against capital hiring labor and in favor of labor hiring capital, inevitably someone poses a question like the following:

“This contract [wherein labor hires capital] can say just about anything, stipulating how the capital is used down to any detail. How is this different from an employment contract?”

Well, if the details in question go as far as being functionally identical to employment, it wouldn’t be very different. In fact, it would be an employment contract. What makes a contract an employment contract isn’t that the words “Employment Contract” are written at the top. What a contract is or isn’t is going to be a matter of the reality of the situation it brings about. So if employment contracts are not seen as valid contracts in a given society, then they can’t “say just about anything, stipulating how the capital is used down to any detail.” It’s not about avoiding the “magic words” but about actually eliminating the renting of people, explicitly or through legal gamesmanship.

In the Mutualism group on Facebook, a user posted the following Proudhon quotation:

‎”Every possessor of lands, houses, furniture, machinery, tools, money, &c., who lends a thing for a price exceeding the cost of repairs (the repairs being charged to the lender, and representing products which he exchanges for other products), is guilty of swindling and extortion.” – Proudhon

The quotation was accompanied by a skeptical set of examples (following Proudhon’s list) meant to appeal to the reader’s intuition and, I presume, lead them to conclude that Proudhon was full of it and that there is nothing wrong with charging for the use of something you own. The upshot is that today’s mutualists, if they agree with Proudhon, are full of it too. Read the rest of this entry »


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