Against the Renting of PersonsDavid Ellerman in conversation with The Straddler
David Ellerman, New York City, 2016 Photo: James Wrona
David Ellerman, philosopher, mathematician, economist, and political theorist, is highly critical of the intellectual underpinnings of the current employment system, which he says institutionalize “the renting of persons” on dubious philosophical grounds. Describing his position as “neo-abolitionist,” he notes that modern liberal thought simplistically locates chattel’s slavery illegitimacy in its being a coercive institution. According to Ellerman, this wholly ignores a long and neglected tradition of liberal thought that viewed voluntary slavery as legitimate. This more sophisticated defense of slavery is itself illegitimate, but its tenets survive today and underlie the renting of persons in our own employment system. While working at Wal-Mart or Starbucks is a categorically different experience than chattel slavery, Ellerman’s efforts to recover the tradition of inalienable rights, which informed the rhetoric of the Declaration of Independence as well as the abolitionists of the nineteenth century, seek to provide an analysis of the institutions of modern employment, which he claims structurally maintain an essential denial of human agency.
The key distinction, Ellerman argues, is not between consent and coercion, but between delegation and alienation—between decisions made representatively on one’s behalf by delegates and decisions made by unaccountable agents to whom decision-making power has been wholly transferred. An adult person who consents to a contract of alienation essentially agrees to something that is not possible: to partially turn him or herself into a thing. As Ellerman puts it, “I can voluntarily transfer the services of my shovel to another person so that the other person can employ the shovel and be solely de facto responsible for the results. I cannot voluntarily transfer my own actions in like manner.” In short, “[a]n individual cannot in fact vacate and transfer that responsible agency which makes one a person.”
Ellerman notes that the law itself explicitly recognizes the “legal fiction” behind contracts of alienation in the case of hired criminals. An employee who commits a crime at the behest of an employer cannot escape responsibility simply because an act was done for hire. But, Ellerman notes, when an employee and employer engage in work that is not criminal, the employee reverts to the legal status of a rented instrument, even though “the facts about human responsibility are unchanged.”
“[T]he fiction takes over. The joint venture or partnership is transformed into the employer’s sole venture. The employee is legally transformed from being a co-responsible partner to being only an input supplier sharing no legal responsibility for either the input liabilities or the produced outputs of the employer’s business. And then the orthodox intellectual hirelings, whose profession is to ‘account for’ our economic civilization based on the renting of persons, can point out that the system is founded on a voluntary contract—unlike those coercive systems of the past.”Ellerman is the author of five books, including Helping People Help Themselves: From the World Bank to an Alternative Philosophy of Development Assistance (2006); Intellectual Trespassing as a Way of Life (1995); Property and Contract in Economics: The Case for Economic Democracy (1992); and The Democratic Worker-Owned Firm (1990). From 1992 to 2003, he worked at the World Bank, where he served as speechwriter and economic advisor to Chief Economist Joseph Stiglitz. He is currently a visiting scholar at the University of California at Riverside, and a Fellow of the Center on Global Justice at University of California at San Diego. His website is at ellerman.org.
Video by Patrik Witkowski
The standard liberal view states that the basic condition for an acceptable social order is consent. From this perspective, if you go back to slavery, the main point that gets highlighted is that slavery is involuntary. It’s not based on consent. However, if that’s all that’s wrong with it, then that would mean that voluntary slavery would be different—and perhaps acceptable. And indeed, Robert Nozick, a philosopher who taught at Harvard in the late twentieth century, and who was widely considered the preeminent modern libertarian philosopher, argued that a civilized contract for slavery based on consent should be acceptable.
There is actually a whole dark, hidden history of defenses of voluntary slavery. If you go back to the Roman law, out of which Western jurisprudence developed, there were three legal ways one could become a slave according to the Institutes of Justinian. One was an explicit contract. You could sell yourself into slavery. A second way was through the commutation of a sentence for the commission of a capital crime. You’ve committed a capital crime, and can be executed, but they’ll commute your sentence into a lifetime of slavery if you accept that. Generally fighting against Rome was considered a capital crime. So prisoners of war had the choice of being killed or being sold off into slavery.
The third way you could become a slave under Roman law to be born to a slave mother. As you grow to maturity, you’re given food, clothing, and shelter that you have to pay off when you are of age. It’s like debt peonage. When you finally pay it off, it’s manumission. When you were a minor, it was your mother who accepted all this, but the debt is still a contractual obligation until paid off. So all three legal grounds for slavery under Roman law were basically contractual.
That whole intellectual history is basically lost. You will not find it in any liberal intellectual history. All you’ll find is a simple-minded consent-versus-coercion framework: slavery is wrong because slaves are coerced. You have to rediscover that whole sophisticated defense of slavery based on voluntary contracts.
The three pillars of liberal thought in jurisprudence and political theory are Locke, Montesquieu, and Blackstone. All three accepted voluntary slavery contracts, so long as they were not so extreme that the slave owner had the right to kill a slave. In Roman times, you had examples of slaves being killed and cut up for goldfish food. So throughout the liberal literature, they’ll say that’s not allowed. But if a slave owner doesn’t have a right to kill a slave, then it is a contract that is bound on both sides by “constraint,” as they put it. As long as you have constraints on each side, then the contract is acceptable. And in each case, they rename the contract. Locke renamed it the contract of drudgery, which is in the Bible. Montesquieu called it the “mild” type of slavery. And Blackstone called it perpetual servitude.
So the liberal tradition accepted legalized slavery based on voluntary contract, as long as there was some limitation—at least on the books—that you couldn’t kill the slave and get away with it. Therefore, the whole intellectual history of consent versus coercion that we have been presented with is nonsense. There is a whole sophisticated defense of slavery based on contracts, but this is ignored.
As an example, there is not a lot of literature on the pro-slavery arguments in the United States during the nineteenth century, but there are three anthologies by editors who collect together what they consider to the best examples of people apologizing for slavery. One of them is by Drew Gilpin Faust, who is now the president of Harvard. Another is by Paul Finkelman, a prominent legal historian. The earliest one was by Eric McKitrick, who was a renowned historian. So between 1963 and 2003 you have three historians independently sampling this intellectual history, and not one includes a person who defends slavery on the basis of voluntary contract—which existed in the antebellum south. Not to mention the whole history of Montesquieu, Locke, Hobbes, Blackstone, Pufendorf, Grotius, all the way back. It’s just gone down the memory hole, and everything is reconfigured in terms of consent versus coercion.
Now, the political form of the sophisticated argument for slavery was that wherever monarchy or non-democratic government existed as a settled condition, an implicit contract meant that the people had accepted it. Of course, you have an army and you have a police force that keeps it settled. But the argument was that wherever that settled condition existed, the people had, as it were, given their consent to that set of arrangements. And that was sealed by the prescription of time.
Politically, that was an implicit contract of alienation. The king or the monarch or the sovereign wasn’t governing in your name. If you didn’t like it, you could leave. By choosing to stay, you had given your consent to the arrangement.
A counterargument to this was developed in democratic theory, and its basis was not that the contract was coercive. Instead, the democratic counterargument was based on reinterpretation of the contract as one of delegation. This happened in the late Middle Ages, and it came out of a reform movement within the Church. The key figure here is Marsilius of Padua. The question was, when the cardinals elect the Pope, is he elected as the supreme representative of the Church, to whom power is delegated, or are the cardinals alienating all of their power to him, so that he governs however he wants? This was the movement of Conciliarism. Its political argument against alienation was eventually carried over to the secular monarchy as well. And it was out of that reinterpretation of the social contract or constitution as a delegation—not an alienation—that democratic thought emerged.
So democratic thought is not just based on the consent of the governed. Democratic thought is based on consent to a constitution that is a delegation instead of an alienation. The traditional Latin name for a constitution that’s an alienation is pactum subjectionis, a pact of subjection to turn a citizen into a subject.
So what’s wrong with a contract of alienation? The critique of these contracts of alienation goes back to the Reformation doctrine of the inalienability of conscience—which was secularized as a theory of inalienable rights by Spinoza and Hutcheson among others. The rights you have to make decisions, and the responsibilities you have for your actions, are an inextricable part of being human. No matter what contract you sign, you’re still a human. You could sign a contract to be a horse or a donkey, but you’re still a human. If we say, well, you’ll obey your master, and we’ll count that as your part of fulfilling the contract, and the other part of your fulfilling the contract is that you only have the rights of a horse, or a slave, or whatever it is—that’s basically legalized fraud. The inalienability is not just moral, it’s factual. You cannot turn yourself into a part-time horse or non-person to actually fulfill such a contract. You can obey your master, but you can’t not be human.
And to demonstrate how obeying your employer doesn’t make you less of a person, take the example of a hired criminal. When a person commits a crime at the behest of their employer, the law says the contract is off. The whole fraud is off. You are both responsible people. You both worked together to do this crime, and you’re both liable. The servant in work becomes the partner in crime.
Now, when the employee obeys the employer in the workplace, and they’re not committing any crime, they’re just as co-responsible. But the law treats it totally differently. The law says, oh, you’re an employee now—you get your wage or rental fee and the employer appropriates the product and pays all of the costs even though the employer is not the sole responsible party. That’s the fraud. It was the same with slavery. The abolitionists highlighted the fact that whenever slaves committed crimes, they suddenly became responsible persons, and were treated as persons in law. But for civil law, when you don’t commit crimes, then you’re treated as a thing. So the fact that this is a fiction or a fraud has been consistent throughout the whole history of the institutions for owning or renting other people.
The employment contract is the rental version of the voluntary slavery contract. Or, if you want to look at it as a political phenomenon, it’s the workplace version of the pactum subjectionis. Your right of self-government has been alienated to the employer within the scope of the contract. And there’s no controversy that the employment contract is an alienation. No one who thinks the employer is a delegate of the employees, and no one thinks he’s a fiduciary or a trustee for the employees. It’s very clearly an alienation contract. And once you understand the history of the inalienable rights arguments against alienation contracts, then it applies directly to the employment contract. That’s why that whole history is lost. Everybody can see where that’s going and they don’t want to go there.
There are several converging lines of thought here. The critique of the employment contract, the critique of the slavery contract, the critique of the non-democratic constitution of pactum subjectionis, and, I should also mention, the old coverture marriage contract.
Under the coverture marriage contract, marriage was interpreted as a woman giving up her independent legal personality. Marriage meant operating only under the wing of her husband. Once married, she could own property and sign contracts in the name of her husband only. She took the family name of her husband to symbolize this. Prior to the marriage, she was under the coverture of the father. The transition occasioned by marriage was symbolized in the ceremony by the father giving away the bride.
So you have these three voluntary contracts—the voluntary slavery contract, the non-democratic constitution, and the coverture marriage contract—that are all outlawed in today's democratic countries. And then you have the employment contract, which is not outlawed, but which you can analyze using the same inalienable rights theory.
Another route to the same conclusion is through analysis of the property rights. After Smith and Ricardo, you had this thing called 'the labor theory.' It was sort of floating around in the air and economists wanted to develop a labor theory of value—at least in special cases. You know, there are no real developed means of production, and you’re running around the woods chasing deer. That sort of thing. How many hours does it take to catch a deer, or beaver, or whatever it was in the primitive state of nature? This was in Adam Smith.
Then there was a movement that sought to use “the labor theory” to critique capitalism. The question was, do you develop it as a theory of value—in which case you’re going to get an argument that says people are underpaid—or do you develop it as theory of property? If you develop it as a theory of property, you’re going to say it doesn’t matter what they’re paid, because it’s not a question of what the wage is. It’s a question of a relationship in which someone else appropriates the fruits of your labor.
The big decision around the early part of the nineteenth century was how should the labor theory—the then-amorphous idea that labor was somehow different and special—develop? That was the major conceptual fork in the road for the critique of the employment system. One school developed it as a labor theory of property. The big names there were Thomas Hodgskin, Pierre-Joseph Proudhon, and William Thompson. The other school developed it as a labor theory of value and exploitation. That was Karl Marx.
Marx took the wrong road, and it has been a total dead end theoretically. The Marxian labor theory of exploitation argues that workers are underpaid, which is not a critique of wage labor per se. The problem with Marxism is not just that the labor theory of value fails as a theory of price, but that even if it were true, it would be superficial. It would only be a theory of wages-are-too-damn-low. It’s only saying that more labor time is extracted from workers during work hours than is implicit in their wages.
The other fork in the road is the labor theory of property, the property version of the general juridical principle that people should be held legally responsible for the results of the actions—the fruits of their labor. Far from being a critique of “private property,” getting the fruits of your labor is the only real legitimate basis for private property. And far from being “the” private property system, the current system of renting human beings allows some (who we call "employers") to misappropriate as their private property the joint fruits of the labor, both positive and negative, of all those who work in a productive enterprise (employees and working employers). There should be a real private property system based on getting the fruits of your labor instead of the current system of private misappropriation of the fruits of other people's labor based on renting those persons.
The corporate system we have now is based on an idea that we have organizations that are owned. If you thought of a city or a town as being owned, it would be bizarre. You don’t have owners of a democratic polity. But we have corporations, which are communities of workers, that are owned. And even that is a farce, because in a public stock market, people don’t buy shares in publicly traded companies to exercise the vote. They buy shares as an investment.
So you have a system now in the commanding heights of the economy where even the legitimization principle is basically a farce. Shareholders are not really owners in any real sense. If you took away the voting rights from General Motors shareholders, how long would it take for anybody to notice? Nobody buys General Motors shares to vote them. It’s just an investment to get return on capital.
Suppose we reconstitute the corporation in a way that acknowledges that people who buy shares are not owners in any real sense? What if we turn their shares into something like variable income bonds, with no vote attached, and then reassign the vote to the people who work within the corporation? Right now, shareholders can’t monitor management—the people who work in the firm have a better idea of what’s going on. By reconstituting the way the firm runs, people who work in the firm can monitor management, and management can be the real representatives of the people they’re governing.
We see examples of this in worker co-ops like Mondragon. They’re big companies, but they’re run democratically. Making the legal transition isn’t the problem. We’re not talking about a bloody revolution. You can just turn the fiction that absentee shareholders are owners into the reality that they’re actually absentee suppliers of capital. They’ll still get a return on their capital. But the people who work in the firms, the real people who are the ones governed, will then be endowed with the right to select people who govern them and to appropriate the joint fruits of their labor.
And if it’s done in the traditional democratic way, it will mean one person, one vote. So the person who has worked for the company for ten years will not have a greater say than the person who has only been there for a year. I mean, there might be some short probationary period, but beyond that, it will be one person, one vote.
But that doesn’t mean horizontal organization. That’s a superficial idea of a democratic organization. The difference between a democratic organization and a non-democratic organization is not horizontal versus vertical. It’s alienation versus delegation. In a democratic, delegating organization, you have representatives. It’s not that everyone has equal power. But the authority of the delegates is given to them by the people they’re governing. So the principle of one person, one vote is at that level. It’s not at the level of day-to-day decisions. It’s at the level where you’re electing the board of directors. Then the board of directors selects the management, and so on. It doesn’t mean everybody has equal authority in day-to-day decisions. There’s a whole hierarchy there—but the hierarchy is democratic.
But liberals avoid these questions. They say, well, in any company you need hierarchy. Therefore you need to give up and alienate your governance rights. They don’t ask if the hierarchy is a hierarchy of delegation or one of alienation. So they try to push that question—if they even understand it—into the background.
Never has a society that inherently violates basic inalienable rights had a better false consciousness than ours. It’s incredible. Maybe if you go back to ancient Greece, where you had slavery, but didn’t really have ancient philosophers talking about it as a problem. In Athens, you had privately owned slaves. In Sparta, there were publicly owned slaves. And you could have a debate about whether privately owned slaves were better than publicly owned slaves. And that’s kind of akin to what we had in the Cold War. Should everyone be an employee of the state under communism, or should employees be private under capitalism? You got these critiques of private versus public employment which is complete false consciousness on both sides, just as it would have been in a debate in ancient Greece between the merits of privately owned slaves versus publicly owned slaves. Those aren’t the real alternatives.
So we have this remarkable consciousness that the whole system based on the renting of human beings is normal. The option of abolishing the employment relationship per se and having people jointly working for themselves in enterprises isn’t even on the table. Cooperative groups are totally marginal in our society. Just to get people to say that it’s the renting of human beings is difficult. They say, no, it’s the hiring of human beings. We rent cars, we rent apartments, but we hire human beings. But it’s exactly the same thing. In the UK, a rental car is called a “hire car.” Google it. An economist will tell you that you buy an entity or you buy its services. So you buy a car or you rent—or hire—a car. Renting or hiring a car means you’re buying so many car days or car months. When you rent an apartment, you’re not buying the apartment, you’re buying the services of the apartment for a month or three days or whatever it is. It’s the same with human beings. You can’t buy human beings anymore, but you can rent them. And that means you buy their person hours. But just that understanding is difficult for people. They’re so trained to see a difference between these words hire and rent.
Economists don’t dispute this. The standard economic textbook for our whole generation is the one by Paul Samuelson, and he explains that this is a rental contract. You can’t sell all of your labor at once, you have to sell it piecemeal by renting yourself. The people who are defending the current system, economists, admit that part. But the average person does not.
Now, the way in which the labor movement has progressed over its history has realized some gains, and the way these gains have been packaged is by attaching them to what is legally called the employee role. What we’re talking about is not taking away those benefits, but turning that employee role into an owner/member role. The gains that have been made by the labor movement would then be put into the new framework.
What’s happening now, however, is that employers have so much control and the labor movement is so weak that they’re repackaging jobs and calling people independent contractors. Now you’re paying your own costs, but you still have a sort of de facto employee-employer relationship.
And this is what happened after slavery. When slavery was abolished, what happened next? It was recreated, but with a different legal package. You’re an independent farmer, but you don’t happen to have any land. So you can rent my land, and pay me part of your crop, and it’s called sharecropping. And you don’t have seeds, and I will give you some seeds, and you’ll owe me. And you don’t have fertilizer, and I will give you some fertilizer, and you’ll owe me. So you end up with a situation where you’re legally packaged as an independent farmer, but it’s actually debt peonage. Sharecropping with debt peonage on top of it. Slavery was essentially recreated by another name.
And that what is happening now with Uber and a lot of this gig economy stuff. Because the few advances that the labor movement has made are attached to the employee role, employers say, look, we’re going to allow you to come in as an independent contractor, not an employee. And this pushes back these gains. You have people who are really employees, but who have been repackaged as if they’re independent contractors, just as sharecroppers were repackaged as if they were independent farmers. The sharing economy is modern sharecropping by another name.
 Ibid. 13.
 Ibid. 10.
 “Incidentally, that argument carried over into a sophisticated argument for American slavery. The idea was that there were wars between tribes in Africa, and the fighters who were taken prisoner and not killed were then taken to the coast and sold to the slavers. The argument was that the slavers were just buying people who were already slaves as a result of being taken prisoners of war and voluntarily agreeing to having their lives spared in return for a lifetime of slavery—as in Roman law. And thereafter it was just commercial transactions.”
 Faust, Drew Gilpin, (ed.) 1981. The Ideology of Slavery: Proslavery Thought in the Antebellum South, 1830-1860. Baton Rouge: Louisiana State University Press; Finkelman, Paul (ed.). 2003. Defending Slavery: Proslavery Thought in the Old South: A Brief History with Documents. Boston: Bedford/St. Martin’s; McKitrick, Eric, (ed.) 1963. Slavery Defended: the views of the Old South. Englewood Cliffs NJ: Prentice-Hall.
 The Mondragon Cooperative Movement is a system of about a hundred mostly hi-tech industrial cooperatives in the Basque region of northern Spain headquartered in the townof Mondragon. For their story in their own words, see http://www.mondragon-corporation.com/eng/.
 Samuelson, Paul. 1948. Economics. New York: McGraw Hill.