Last week, various organizations, politicians, and well-meaning busybodies concerned with the “social rights” of workers emerged as a united front against the adoption of the new Labor Code. They described in detail the horrors that this code portends for working people, and of course called on these people to resist the coming horrors by every available means. Among the epithets the code received in the heat of debate, the word “slavery” appeared most often. Interestingly, I fully agree with this definition.
Judge for yourself. When a person “goes to work,” what actually occurs is a contract between the worker and the employer. The worker undertakes to provide certain services of a certain qualification in exchange for a certain sum of money. When I say “reality,” I mean the economic essence of what is happening—that is, what fits certain universal patterns that can then be analyzed. Such contracts constitute a significant part of our lives; they can be explicit or implicit—for example, when buying apples at a market, you enter into an implicit agreement with the seller: “apples in exchange for money.” And this contract, even though it is recorded nowhere, is not so simple. Its content depends, at minimum, on the traditions and habits of people in a given locality. If, for example, after buying apples, you immediately discover a rotten one among them, in most cases the seller will exchange it for a good one. But if you make this complaint an hour after the purchase, you will most likely be sent to a well-known address. One could recall many other circumstances that exist in the form of tradition, but from an economic point of view are part of the purchase-sale contract. For instance, the “right to taste”—theoretically, at a large market one may taste to one’s heart’s content, well and deliciously—the tradition of “heaping the measure,” and so on.
Wage work is a much more complicated matter than buying apples, but at its core lies the same explicit or implicit contract. The transaction exists because the employer values what the worker produces more than the sum of money he pays him, and the worker himself values this sum more than his free time or another job.
Now it would be useful to look at the “big picture.” When an entrepreneur starts a business, he studies the prices existing in the market and calculates whether he will be able to generate profit with his future product within the existing price landscape—that is, whether he can set a price at which his revenue will exceed his costs. Payment for workers’ services is a significant part of these costs. If everything goes well, a new good (or an old one, but in greater quantity) appears on the market, for which buyers vote with their money; all participants in the process, including workers, become richer.
When the state or someone else (for example, guilds in the Middle Ages) interferes in “labor relations,” this is equivalent to price regulation. If someone prescribes, for instance, that a worker must be paid no less than a certain sum, this simply increases the employer’s costs. As a result, either nothing will be produced that could have been produced without such intervention (meaning all participants will forgo the wealth that was quite attainable given the economy’s current state), or—if the business already exists—those whose services, as workers, are worth less than the prescribed price will suffer. Worse yet, people with such skills will not find work at all while the prohibition remains in effect (see unemployment in EU countries, especially Spain).
This is where our code and “labor legislation” as such come into play. Instead of removing prohibitions that hinder voluntary cooperation between people, the state begins to “regulate” these relations even further. Since there are many more people working for hire than those who hire workers themselves, the state, for purely electoral reasons (labor relations began to be seriously “regulated” simultaneously with the expansion of the franchise), builds an entire system of “protection” for the former from the latter. It is not surprising, therefore, that in this system the wage worker sees himself as an oppressed creature who, by the will of evil forces, is forced to labor for the benefit of the employer, while the latter appears as some kind of parasite. All “labor legislation” is based on the assumption that the employer exists exclusively at the expense of the worker, and therefore the state, out of humanitarian and justice considerations, is compelled to make the scoundrel provide the worker with certain additional benefits besides wages (which are also regulated). The fact that the employer with his business exists only because he enriches the consumers of his products (including, of course, the workers themselves) is completely ignored.
That is, the system of “labor legislation” is from the outset structured as a system of regulating slavery. The voluntary nature of employment relations and the very essence of the process, as a process of wealth creation, are in no way reflected. Any labor code by definition consists of the duties of a slaveholder with respect to a slave. And the difference between “good” and “bad” codes is the difference in how “humane” these duties appear to various do-gooders.
Therefore, the best labor code is the absence of a code. The choice is simple—either a contract of free people, or existence within conditions that presuppose slavery.