Within the framework of private law, where individuals are largely self-governing subject to the basic principles of the law of obligations (contract, property, and tort) the law has nothing to say about whether everyone should have the same amount of stuff or even the same amount of social standing or economic power.
Self-employed workers are arguably the hardest working folks out there. The UK House of Commons Select Committee Report on self-employment and the gig economy, published in April 2017 and chaired by Frank Field MP, begins by observing that ‘the self-employed are a large and growing part of the UK labour force’ constituting some 5 million workers amounting to 15% of the total labour force.
The aim of Employment law is to regulate the voluntary exchange made between employer and employee. Voluntary? Why should a voluntary exchange require any form of regulation? There are two main reasons.
The modern market economy depends upon voluntary exchange between people selling what they have to offer and buying what they need. Workers sell their problem-solving skills and ability to get things done, and employers pay them a wage in return. That’s the beauty of the market. Alas, markets are not very effective in ensuring that everybody ends up with the same amount of stuff.
Income inequality is widely considered to be one of the most pressing social problems of our time. There is an intuitive sense that the economic pie ought to be carved up in a fairer way, coupled with the assumption that less for some will result in more for others. This post introduces my conference paper on the tension between such distributive concerns on the one hand, and the productivity goals of corporate law on the other.
It may well be the case that Victorian England exhibited the worst excesses of unregulated and exploitative industrialization, or that modern CEOs portray the unacceptable face of capitalism in one corporate scandal after the other when they profit at the expense of the corporation, its workers and the wider society. But it is to twenty-first century Africa that we should look in order fully to appreciate the economic realities in jurisdictions where capitalism has yet to put down secure and independent roots. In The Truth About Markets John Kay offers an illustration from Tanzania in the time of Julius Nyerere, the illustrious president who sought to bring economic progress to his beautiful but impoverished pre-industrial country by prioritizing social welfare and attempting to avoid the unpleasantness of the dark side of capitalism. He abhorred private property rights and encouraged community living based on joint effort for the common good. The experiment did not end well and Tanzania’s economy is still strongly dependent on agriculture and the artificial buttresses of foreign aid. The causes of economic failure are many and complex, but Tanzania’s experience nevertheless offers a poignant illustration of Kay’s point about the embeddedness of capitalist markets within the broader institutional framework: the legal, cultural, historical and political context within which markets function is just as important as, and perhaps even more important than, the processes of technological innovation and productive exchange. The lesson for those concerned with economic development is that a comprehensive account of the role played by law in supporting and facilitating capitalist markets is a vital element in evaluating the integrity and sustainability of the economic model. It is clear that amongst the various institutional factors, the approach taken by the legal framework is a crucial aspect of the portrait of modern capitalism.
 John Kay, The Truth about Markets: Why Some Nations are Rich but Most Remain Poor (London, Penguin Books, 2003): ‘Julius Nyerere stands out among the corrupt and vainglorious politicians of modern Africa for his decency and integrity. A socialist who believed in planned development, he devoted himself to the welfare of his people in twenty-one years as president’ at 271. Nyerere was a graduate of the University of Edinburgh, where he read Economics and History, and subsequently leader of Tanzania between 1961 and 1985.
 The issue, as Nyerere saw it, was how to take the benefits of capitalism without taking on the costs: ‘Our problem is just this: How to get the benefits of European society – the benefits which have been brought about by an organization of society based on an exaggerated idea of the rights of the individual – and yet retain the African’s own structure of society in which the individual is a member of a kind of fellowship?’ quoted in Thomas Moloney, Nyerere: The Early Years (Somerset: Boydell and Brewer, 2104) 154.
 According to World Bank data in 2016 the GDP of Tanzania in millions of US dollars was 47,340. By contrast, that of the US was 18,624,475 and 2,647,899 for the UK.
 ‘It would be wonderful – and very profitable – if the technology, capital and equipment used productively in rich states could be transferred to poor countries which have not simultaneously evolved a matching set of social, cultural and political institutions’ The Truth About Markets, 271.
The story begins with a paper prepared for the Labour Law Research Network conference to be held at the University of Toronto in June, provisionally titled 'Production, Pay and Profit'. It's all about why some people are paid 'too much' and whether that is 'fair', whatever that means.
June update: here's how that turned out, under the title 'Large firms, wages and productivity'.