Freedom, Servitude and Voluntary Contract
We present a framework to revisit and reframe some important debates over the nature of free versus unfree labor and the economic consequences of emancipation. We use a simple general equilibrium model in which labor can be either free or coerced and where land and labor will be exchanged on markets that can be competitive or manipulated or via other non-market collusive arrangements. Tied labor-service contracts and other forms of 'servility' clauses are 'necessary' only as a strategy to help landlords sustain a collusive arrangement to pay workers wages below their marginal product. We discuss two purported paradoxed that have been stressed in the literature: the paradox of immiserizing emancipation (that explains why total output fell in so many post-emancipation societies) and the paradox of bans (that claims that interference with workers freedom to enter into voluntary contracts can only be Pareto-decreasing. We argue that while these paradoxes are generally valid when examined in the context of simpler bilateral contracting situations, they fail to consider important general equilibrium considerations.
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