CLASSICAL LIBERALISM AND THE ABOLITION OF CERTAIN VOLUNTARY CONTRACTS

Classical liberalism tends to respond to the criticism of any voluntary market contract by promoting a wider choice of options and increased information and bargaining power so that no one would seem to be ‘forced’ or ‘tricked’ into an ‘unconscionable’ contract. Hence, at first glance, the strict logic of the classical liberal freedom-of-contract philosophy would seem to argue against ever abolishing any mutually voluntary contract between knowledgeable and consenting adults. Yet the modern liberal democratic societies have abolished (i.e., treated as invalid) at least three types of historical contracts: the voluntary slavery or perpetual servitude contract, the coverture marriage contract, and an undemocratic constitution to establish an autocratic government. Thus, the rights associated with those contracts are considered as inalienable. This paper analyzes these three contracts and shows that there is indeed a deeper democratic or Enlightenment classical liberal tradition of jurisprudence that rules out those contracts. The ‘problem’ is that the same principles imply the abolition of the employment contract, the contract for renting human beings, which is the foundation for the economic system that is often (but superficially) identified with classical liberalism itself. Frank Knight is taken throughout as the exemplary advocate of the economics of conventional classical liberalism.