Progress pill
Philosophy of liberalism

Freedom of contract and employment

Freedom as a Social Project

Freedom of contract and employment

  • Why we want freedom of contract
  • Why we want freedom of work
  • Why we want monetary and banking freedom

Why we want freedom of contract

What is the fundamental element of free societies? It is the contract: the concrete, daily expression of the free disposition of oneself and of the goods that legitimately belong to us. Because each individual is the owner of himself, he mobilises this self-ownership in his contractual commitments, binding his will to that of others in order to accomplish certain actions together. Properties derived from previous work and exchanges can likewise be engaged in these contractual relationships, which must be understood not as zero-sum struggles but as positive-sum games in which each party finds a clear advantage in participating.
Charles Dunoyer (1786–1862), the great liberal economist and one of the founders of the Revue encyclopédique, understood this with particular depth. A close friend of Charles Comte and a tireless champion of industrial society against the remnants of feudal privilege, he wrote in his De la liberté du travail (1845):
"Contract is not merely a legal formality. It is the living tissue of civilised society. Where contract governs, men deal with one another as equals; where command governs, one party is the instrument of another's will. The entire history of progress is the history of contract's advance over command."
Indeed, the voluntary contract is also the cement of society itself. Society can be defined as the multiplicity of exchanges between individuals: without exchange or contract, it exists only in fact, as a raw aggregation of bodies in proximity. It takes real shape, genuine form, only through contract and voluntary association. This contractual functioning is the foundation of social harmony and peace, since it rests on mutually advantageous and freely negotiated relationships. When a person chooses to enter into a contract, it is precisely because he finds it advantageous to carry out the transaction rather than to abstain. In other words, every voluntary exchange is already proof that both parties have gained: the very act of contracting refutes the idea of exploitation.
Frédéric Bastiat (1801–1850), the economist from Mugron whose Harmonies économiques remain among the most powerful defences of the free market ever written, put it with his characteristic elegance:
"Exchange is society itself. It is the bond of sympathy that ties men to one another, the great motor of civilisation, since by it each person places himself in service to all, and all to each. To restrict exchange is to restrict society; to abolish exchange would be to return humanity to barbarism."
In other words, property and liberty, far from being opposed to solidarity, are its very precondition. The contract is not the cold instrument of calculation that its critics imagine; it is the form that voluntary human cooperation takes when it respects the equal dignity of both parties.

Why we want freedom of work

Work is one of the most fundamental human acts, and its freedom encompasses a remarkably wide field of application. What exactly does freedom of work cover? Far more than is commonly supposed. Many activities can be considered as work: freedom of expression, for example, is also a form of freedom of work, since journalism, the press, and printing are professions. Religious tolerance itself touches on this freedom, since the celebration of mass is work. Guaranteeing freedom of work is therefore tantamount to guaranteeing an extremely comprehensive freedom, one that reaches into every corner of human life.
Charles Dunoyer, whose three-volume De la liberté du travail constitutes the most systematic treatment of this question in the entire French liberal tradition, wrote:
"There is perhaps no question of political economy more important, or less understood, than that of the freedom of work. Men speak readily of freedom in the abstract; they are far less ready to recognize it in the concrete domain of industry, trade, and labour. And yet it is precisely here that freedom is most necessary, most beneficial, and most consistently violated by legislators who believe themselves its friends."
This freedom is justified by inescapable facts. Human needs vary from one individual to another, as do the means of satisfying them, and work is precisely the means of creating satisfactions and products for exchange. There is a fundamental diversity between the strengths and aptitudes of different individuals, who evolve in a changing environment that demands different skills at different stages of their lives. In other words, the case for freedom of work rests not on an abstract principle alone but on the empirical reality of human diversity: no two workers are the same, no two situations are identical, and no central authority can know in advance what each person is best fitted to do.
Indeed, freedom of work has a propulsive character that makes progress possible. Human perfectibility is achieved through this freedom, because centralised management merely reproduces patterns of production that are already known. The freedom to work enables us to break from well-trodden paths and advance toward new creations. A coherent programme of freedom of work therefore implies combating regulated professions, the "customs of examinations," and public monopolies, recognising the superiority of the repressive system, which punishes real violations of the rights of others, over the preventive system, which hinders everyone's activity a priori.
Dunoyer drew the conclusion with precision:
"The preventive system always begins with an assumption of incapacity or bad faith on the part of the citizen. The repressive system begins with an assumption of competence and good will. The one places liberty under tutelage; the other places it under responsibility. Between these two systems, there is the entire distance that separates servitude from dignity."
In other words, to regulate in advance is to assume guilt before the fact; to punish after injury is to respect the presumption of innocence. The liberal choice is always the latter.

Why we want monetary and banking freedom

Banking and monetary freedom is a particular application of the freedom of work, since money simply represents a service rendered and a product exchanged on the market. Jean-Gustave Courcelle-Seneuil (1813–1892), economist, professor at the University of Santiago in Chile, and one of the most rigorous theorists of free banking in the French liberal tradition, together with Charles Coquelin (1802–1852) and others, helped revitalise the economic theory behind this freedom in the nineteenth century. These thinkers offered a comprehensive critique of the long history of state monetary manipulation, devaluation, and inflation.
Courcelle-Seneuil, in his La Banque libre (1867), stated the fundamental principle with characteristic directness:
"Money is not an instrument of sovereignty; it is an instrument of exchange. The state no more created money than it created language or the weights and measures that commerce spontaneously adopted long before kings thought to regulate them. To grant a monopoly of money-creation to the state is therefore to confiscate from society a tool that belongs to it, and to place at the service of power what nature designed for the service of all."
Indeed, Courcelle-Seneuil asserted the French Revolution's ideas on freedom of work and property, explaining that there was no reason to justify a public monopoly of money. Free banking would make banking and monetary services available to more people, including the farmers who were excluded from the system at the time. As in Scotland and in certain American states of the period, freedom of banking and money encourages innovation and progress, driven by the self-interest that motivates market participants to develop new solutions to satisfy consumers.
Charles Coquelin, in his Du crédit et des banques (1848), reinforced the argument from a historical angle:
"Every historical examination of money leads to the same conclusion: monetary crises are the children of monopoly. Where banks compete freely, each is constrained by the need to maintain confidence; where a single bank holds the privilege of issue, it is constrained by nothing except the occasional and belated intervention of governments who find themselves, in the end, the victims of the very monster they created."
In other words, monetary freedom is not an eccentric theoretical position; it is the conclusion that any honest reading of monetary history forces upon us. The potential for monetary innovation, of which today we perceive only the first signs, is vast.
Quiz
Quiz1/5
Why does the text argue that a repressive system is superior to a preventive system when implementing freedom of work?