John Locke’s view on how something becomes a person’s
property could fundamentally alter labor-management negotiations in companies.
Moreover, our assumption that management participates in the discussions may be
upended. The key, I contend, lies in how we classify labor. I submit that the paradigm
that has been handed down to us is deeply flawed in its fundamentals, and yet
strangely we do not even question its contours.
In describing his notion of property, Locke begins with the
state of nature, wherein “every Man has a Property
in his own Person. This no Body
has any Right to but himself.”[1]
Unlike Thomas Hobbes, Locke did not think that rights depend on the existence
of government. From a person’s body, Locke goes next to its labor, as properly
one’s own. It follows, Locke contends, that “(w)hatsoever then [a person]
removes out of the State that Nature hath provided, and left it in, he hath
mixed his Labour with, and joyned to
it something that is his own, and thereby makes it his Property. It being by him removed from the common state Nature
placed it in, it hath by this labour something
annexed to it, that excludes the common right of other Men. For this Labour being the unquestionable Property
of the Labourer, no Man but he can have a right to what that is once joyned to,
at least where there is enough, and as good left in common for others.”[2]
The caveat at the end means that as parcels from the commons are belaboured,
the resulting private property should not exhaust the commons itself, which
nature provides to all. Yet even when all land, for example, has been claimed
by individuals and government, surely Locke’s claim still holds that in mixing
with an object, the labor of one’s person, being his or her property already, extend
the property to the object too.
Yet what if another person already owns the object? Locke
assumes the laboring person snatches it out of the state of nature, where
anyone can appropriate the object with one’s own labor. If the basis of Locke’s
theory of property is not the state of nature itself, but, rather, that a
person’s own person and labor are one’s
property—whether in the state of nature or in an arranged society—then a right
of property is still in the mixing of a person’s labor in an object. In cases
in which the object is already owned by another and he or she consents to the
labor of another being mixed with said object, then either the laborer has an
ownership share or he or she contracts with the pre-existing owner to sell the
share.
Hence, companies, whether owned by private interests
(capitalism) or a government (socialism), contract with employees essentially
to purchase their property rights that naturally accrue as their respective
laboring mixes in with the means of production. I distance the labor from the
means of production because the latter do not gain a property right in working
on an object, for it makes no sense to say that a machine has its machine and
work as property. The implications of this distinction are nothing short of
huge with respect to the assumptions we make about business and capital.
In financial reporting, labor is classified as an expense to
be deducted from revenues to arrive at profit. The returns to a company’s
owners (e.g., stockholders) come off after
the profit, rather than being an expense of doing business. If Locke is
correct that labor also gives rise to a property right, then the sale of the
stake is also extra-business, rather
than a mere means of production. That is, the cost of labor should rightfully
be classified with dividends after profit.
By implication, rather than negotiating the sale of the
labored property as if it were an expense, the talks would be between owners. For one group of owners,
that of capital, to say, “We can pay more, but we’ll have to cut expenses”
would be a category mistake. So too, would the common (and convenient) assumption,
“If we pay you more, we’d have to raise prices and we’d lose business.” Within
the property classification, buying up the labor-property shares would come out
of dividends, rather than to be made up for by intra-business revenue or
expenses. This “third rail” is never brought up as even an alternative—the capital-owners’
dividends presumably being off the table. Such a narrowing of a debate goes a
long way in getting what you want in negotiations. John Locke might just say,
not so fast!
1. John Locke, The Second Treatise of
Government, section 27, in Locke, Two
Treatises of Government (Cambridge University Press: Cambridge, 2003), p.
287.
2. Ibid., p. 288.
