Bleeding hearts and bleeding backs: Why we shouldn't be so quick to eliminate beatings from the labour market

A guest post by Addams Esquire. Addams Esquire is an esteemed economist working in the areas of law and economics, corporal economics, and critical Reganomics. His latest book “A Case for Restoring the Private Death Penalty” has just been published by the University of Chicago Press. We are delighted to print his important contribution to this vital issue- should it be legal for employers to beat their employees?

As the reader is doubtless aware, it is legal for employers to beat their employees so long as the employment contract specifies it. This is actually a considerable retreat from earlier ages when eminent authorities such as William Blackstone held that employers had the right to correct their servants unless the right was explicitly excluded by contract. Now a number of bleeding hearts- well-intentioned, but not necessarily well-effecting- wish to abolish this ancient right altogether.

Let’s be clear. No one but a few sadists (and perhaps a few masochists) rejoice when any soul is beaten- that much is obvious. As much as the voices for abolition would like you to think this is a debate over whether or not beating is good, it isn’t. It is better to think not in terms of the abstract desirability of the practice of beating, but instead in terms of Marshall’s twin scissor blades- supply and demand- except in this case supply stands for feasibility and demand stands for desirability[1]. We must always have limits on possibility- and its twin concept, unintended consequences- front and center in our mind when considering the realms of economic policy.

Much like raising the minimum wage, the employee most likely to be negatively affected by a ban on workplace beating is the marginal employee. That is to say, the employee who, as yet, has only a thin work background, perhaps because they are young or were until recently incarcerated- and need to do ‘something extra’ to show their commitment as prospective employees and break into the job market; for example signing a contract that specifies they will be savagely beaten if they underperform. Indeed, as many economists working in the area of corporal economics have observed, proposals to ban beatings are likely to lead to additional unemployment among the most vulnerable.

If these reforms are passed, there will be somewhere out there a boss who would have been happy to hire a particular worker- probably a worker at the margins of the job market- with the security a ‘beating contract’ provided, but who now isn’t. That worker would have been happy- or at least willing- to take up the contract. Yet for some reason the state has decided it knows better than either. If, somehow, the boss is nevertheless able to offer this marginal worker a job, that job will, in all likelihood- be worse paid, as a willingness to sign a beating contract with a boss is a powerful signal of commitment- and in the absence of a capacity for such inherently trustworthy signaling, wages will likely have to be lower, at least for many months as the employee laboriously builds up trust. Additionally, job security will be harmed, as the option of intermediate sanctions less drastic than sacking the worker is removed.

We all know of the studies from Kard and Crueger and many others purporting to show that there is no increased unemployment in jurisdictions that have banned ‘beating contracts’, but an equally large number of studies purport to show the opposite. The econometric methodology is complex and has many moving parts. In the face of such uncertainty, I’m inclined to rely instead on the simple theoretical argument- many bosses want the option of a beating contract- it is worth some amount of money to them. If they cannot get it an employment contract is worth less, hence they will either reduce the proposed remuneration or perhaps not make the offer at all. Such reasoning seems more reliable to me than the dueling quasi-experiments and meta-analyses of meta-analyses that characterize the empirical literature. Alternative theoretical models are much less elegant and require epicycles such as the assumption that bosses have market/monopsony power over workers.

Some bleeding hearts have appealed to ill-defined negative externalities to try to justify abolishing beating. Personally, I see no such externalities- what could be a more private transaction than the transaction between a boss, a worker, and a cane? But let us grant this for the sake of argument. This would not justify the abolition of beating, only the imposition of a Pigouvian tax, equal to the externalities imposed. If we are concerned about the welfare of the employees of beating bosses, the money so collected could be used for their benefit- for example, to defray medical costs.

Two groups of people already regulate “beating bosses”- consumers and workers, and I trust the good sense of both. Consumers can trade off the moral odiousness of excessive beatings against prices and quality. Workers, as we have already discussed, can weigh costs and benefits in a competitive employment market. I trust the swifter democracy of the dollars (consumer choices) and feet (exit rights) over the clumsy democracy of ballot boxes and outrage.

The bottom line is that no one is beaten without their consent under the current laws because no one is beaten without explicitly having agreed to it via contract. Some say that this is no consent at all and that because people take on jobs for “beating bosses” under desperate circumstances, they have not chosen freely. Such logic is absurd- it could just as easily be used to demonstrate that all work done for a private proprietor where there is no other means of subsistence available is coerced. if it is fair to say that people aren’t being beaten of their own free will- that the element of economic compulsion makes this assault- then one might just as easily say that the element of economic compulsion makes ordinary labor into slavery.

[1]- Alas, this metaphor is not my original creation, but I believe hails from Geoffrey Brennan, though I have not been able to track the source.