Work, Productivity & Pay
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Work, Productivity and Pay

Wanjiru Njoya, PhD (Cantab.) MA (Oxon.) LLM (Hull) LLB (Nairobi) PCAP (Exeter)
​Fellow of the UK Higher Education Academy

​​​

Economic liberty at work

5/1/2019

 

​The ultimate goal of one’s working life is to achieve individual prosperity and wellbeing. This is most effectively sustained through free markets constructed upon the ideals of economic liberty, with the role of law limited to ensuring free and fair competition, protecting property rights, and enforcing contractual obligations. 

​The idea of economic liberty highlights the role of private ordering (primarily freedom of contract) in enabling each person to pursue his individual goals. Economic liberty in this context encompasses the liberty of labour, ‘the liberty to employ one’s body and time in productive activity that one has chosen or accepted, and under arrangements that one has chosen or accepted’ (James Nickel, ‘Economic Liberties’ in Victoria Davion and Clark Wolf (eds) The Idea of a Political Liberalism: Essays on Rawls (Rowman & Littlefield, 2000) 155 et seq). Nickel describes economic liberty in relation to labour as ‘the liberty to employ one’s body and time in productive activity that one has chosen or accepted, and under arrangements that one has chosen or accepted’; what Tomasi describes as the ‘liberty of working’.  
 
This rich conceptualisation of economic liberty in relation to working life is at odds with the modern preoccupation with systems and standards, making sure that everyone comes out roughly the same so that it's 'fair'. Yet liberty matters more, not less, especially in this digital age: it creates a vision of human flourishing for income-dependent workers based on a notion of autonomy and choice which differs from one person to the next and defies standardisation. This perspective helps us to make sense of evolving forms of employment relationships that do not fit within the categories of long ago, when ‘job security’ was understood as a job for life with a guaranteed income. Crucially, this is a vision of liberty for all members of society, not just a privileged few, and specifically freedom for working people to shape their own lives and destinies.

​But economic liberty comes with risks! Markets can go up as well as down! Workers get exposed to harsh consequences that are often described as market failures (i.e. the market has failed to deliver the anticipated ROI)! Markets yield both ideal as well as exploitative conditions! It's all very surprising, and indeed shocking, but not impossible to manage once you get used to the nature of reality.

​Reality exhibits a wide range of outcomes. Market participants include a wide range of people, from the avaricious ‘fat cats’ who are said to dominate the financial sector through an entire range of people with varying social and economic goals and priorities. The functioning of markets exhibits both oppressive conditions, as well as mechanisms that boost the innovation, creativity and prosperity associated with the industrialized market economy (Lisa Herzog, Inventing the Market: Smith, Hegel and Political Theory (OUP, 2013). This creates the temptation to prefer a ‘free market’ when we like the outcome and ‘state regulation’ for when we don’t like the outcome. 
 
Welfare economics has long been concerned with asking whether, and when, the state can improve upon the free market and the institutions of private law in achieving ‘justice’ for workers. Justice is in turn often conceptualised in egalitarian terms - a world in which everyone has the same amount of stuff and nobody is richer than other people, for shame. Conversely, the ideals of economic liberty imply that state regulation, where necessary, must be limited to providing strong support for the institutions of private property and freedom of contract. This then is a debate not about the validity of distributive justice as a welfare priority, but rather about the most effective path to achieve social justice. 
 
An example of how this debate influences policy on current economic challenges relates to concerns about income inequality, including financial insecurity in the context of precarious work. Income inequality is widely viewed as a social problem that requires to be fixed through various regulatory interventions, undergirded by reform of taxation and social security welfare safeguards for the poorest in society. One of the predominant concerns in relation to economic inequality is income insecurity.

The prevailing regulatory approach aims to safeguard workers’ expectation of income during and after employment through wages, salaries and bonus payments, redundancy and unfair dismissal compensation, pensions and other work-related forms of social security. This legal framework is underpinned by notions of social justice theorised by ‘high liberal’ philosophers such as John Rawls. Rawlsian perspectives dictate a broad scope for legal intervention designed to mitigate socio-economic inequality, for instance through progressive taxation that enables wealth transfers from the ‘rich’ to the ‘poor’.
 
In contrast, the classical liberal tradition is characterised by ‘deep ambivalence toward state power’ with an appreciation of the need for government action in resolving specific functions, as well as the need to constrain powerful governments from encroaching upon individual liberties (Richard Epstein, The Classical Liberal Constitution: The Uncertain Quest for Limited Government (Harvard University Press, 2014). This is a debate, in that sense, about means as much as ends.

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    Wanjiru Njoya

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