The problem of voluntary slavery for utilitarianism

Reciprocity is a norm, a rule embedded in financial mathematics, which permits high rates of interest to poorer, higher risk, borrowers. This means that phenomena such as debt-bondage can become prevalent (von Lilienfeld-Toal and Mookherjee, 2010). Voluntary slavery is a limiting expression of debt-bondage (Genicot, 2002) and by considering the case of voluntary slavery we can highlight limitations of, not just, basing lending decisions solely on the norm of reciprocity, but also, of weaknesses of the utilitarian argument upon which much neo-classical economic theory is founded.

Contemporary deontological ethics, rooted in Kant, argues that one should “Act in such a way that you always treat human beings as persons rather than as things” (Ellerman, 1988:1110) and on this basis slavery can never be justified and hence voluntary slavery cannot be permitted. There is a problem for consequentialist ethics originating in Mill’s foundational statement in On Liberty

the only purpose for which power can be rightfully exercised over any member of a civilized community, against his will, is to prevent harm to others. His own good, either physical or moral, is not a sufficient warrant. (Mill, 2015:I.9)

Some modern libertarians believe a free individual is free to sell themselves into slavery (Nozick, 1974:331). Mill, himself, did not, arguing in On Liberty that

by selling himself for a slave, he abdicates his liberty; he foregoes any future use of it beyond that single act. He therefore defeats, in his own case, the very purpose which is the justification of allowing him to dispose of himself.(Mill, 2015:V.11)

This presents a Russell-like paradox; you are free to do anything apart from forgo your freedom. This is the approach taken by Austrian economists who have a deontological injunction on alienating an individual from their will.

Fuchs (2001) recognises the inadequacy of this argument within a utilitarian framework. He notes that for Mill a person is only competent to judge what is in their best interest if (1) they have had knowledge of the alternatives in question; (2) the ability to enjoy the options; and (3) they must be able to foresee the probable consequences of their actions (Fuchs, 2001:236). On this basis, along with other consequentionalists (see Schwan (2013:759‒761) for a summary), Fuchs sees the central issue as the permanence of voluntary slavery. This argument points to one of the fundamental weaknesses with consequentialist ethics: the individual’s inability to foresee that far into the future and explains the absolute rejection of voluntary slavery by Austrian economics.

Schwan (2013) argues that the ‘permanence’ issue could not have explained Mill’s objection to voluntary slavery because Mill was also opposed to ‘coolie’ ‒ bonded ‒ labour, which is not permanent. Schwan (2013:764‒765) resorts to Mill’s paradox when he argues that “we know a priori that entering such a contract severs the connection between the individual’s actions and their conception of the good.”; ultimately society knows best.

Fuchs (2001:244‒247) offers a more interesting argument when he distinguishes two types of autonomy underpinning liberty: ‘autonomy₁’ and ‘autonomy₂’. ‘Autonomy₁’ is associated with “authentic representations of and are coherent with the agent’s own settled ideals” and Fuchs identifies seven factors “inimical to autonomy₁” including reversibility and a lack of ignorance, indoctrination, coercion, compulsion and duress. ‘Autonomy₂’ is “more limited” and relates to specific actions: “ one can do what one wants to do and can refrain from doing what one does not want to do.” Autonomy₁ would permit ‘Mormon marriage’ or entry into a convent where an individuals rights and freedoms are curtailed.

There are two comments on Fuchs’ argument. Firstly, it seems as much Kantian as consequentialist (White, 2011:11‒13). Secondly, Fuchs highlights the elitist nature of Mill’s philosophy. The autonomous agent must be educated (1), be able to appreciate (2) ‒ a very normative concept, Fuchs (2001:236) compares appreciating a nursery rhyme to Beethoven, coca-cola to Château Margaux ‒ their choices and an ability to foresee (3). Archard (1990:464) points out that Mill approves of paternalism so long as it enhances the individual’s rationality ‒ education is compulsory ‒ and so their ability to be free. Arguing that rationality is based on education implies it is cultural and one could conclude that Fuchs’ ‘autonomy₁’ would prohibit an Aztec willingly going to sacrifice because despite the act being “coherent with the agent’s own settled ideals” we could argue that the Aztec has been ‘indoctrinated’.

The relevance of the second comment is that for the utilitarian argument to hold the agent must be securely embedded in society. Hirschman (1997) identifies that Smith’s ‘hidden hand’, and hence the utilitarian argument, must have a stake in society and international relations are based on “a group of states, conscious of certain common interests and common values, form a society in the sense that they conceive themselves to be bound by a common set of rules in their relations with one another” (Bull, 1977:13). The libertarian admits voluntary slavery, and by implication debt-bondage, on the basis that the individual is atomised and can alienate themselves from society. On the other hand, we argue that the consequentialist, acting as a Kantian, rejects voluntary slavery because the individual is embedded in society. This realisation is driving the “re-introduction of ethics into economics” (van Staveren, 2008; White and van Staveren, 2013). The practical implication of these standpoints is the libertarian can accommodate inequality ‒ because this facilitates the separation of communities into those capable of rationally rejecting voluntary slavery and those incapable ‒ where as the ethical economist cannot.

References

   Archard, D. (1990). Freedom not to be free: The case of the slavery contract in J. S. Mill’s On Liberty. The Philosophical Quarterly (1950-), 40(161):453—465.

   Bull, H. (1977). The Anarchical Society: A Study of Order in World Politics. Columbia University Press.

   Ellerman, D. P. (1988). The Kantian Person/Thing principle in political economy. Journal of Economic Issues, 22(4):1109—1122.

   Fuchs, A. E. (2001). Autonomy, slavery, and mill’s critique of paternalism. Ethical Theory and Moral Practice, 4(3):231—251.

   Genicot, G. (2002). Bonded labor and serfdom: a paradox of voluntary choice. Journal of Development Economics, 67(1):101—127.

   Hirschman, A. (1997). The Passions and the Interests: Political Arguments for Capitalism before Its Triumph. Princeton University Press.

   Mill, J. (2015). On liberty. In Philp, M. and Rosen, F., editors, On Liberty, Utilitarianism and Other Essays. Oxford University Press.

   Nozick, R. (1974). Anarchy, state, and utopia. Basic Books.

   Schwan, D. (2013). J. S. Mill on coolie labour and voluntary slavery. British Journal for the History of Philosophy, 21(4):754—766.

   van Staveren, I. (2008). Introduction to the special issue on ethics and economics. Review of Political Economy, 20(2):159—161.

   von Lilienfeld-Toal, U. and Mookherjee, D. (2010). The political economy of debt bondage. American Economic Journal: Microeconomics, 2(3):44—84.

   White, M. (2011). Kantian Ethics and Economics: Autonomy, Dignity, and Character. Stanford University Press.

   White, M. and van Staveren, I. (2013). Ethics and Economics: New Perspectives. Taylor & Francis.