Stephen L. Hall has graciously given us a very educational two part post this week! Thank you Stephen!
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Many seemingly unrelated issues often stem from a common origin seated in the distant past. Or, in the case of what I wish to discuss, a semi-modern corruption of an ancient concept central and pivotal to the very foundations of western civilization. However, it may not appear so in the beginning, but we’ll get there.
There is a fundamental legal distinction which comes into play in a number of different legal constructions which dramatically impact our social and political lives. It is that philosophical distinction between that which is a contract and that which is merely a relationship.
Most people do not view a relationship as being logically, much less intimately, connected to the idea of a contract. However, in legal conceptions they are essentially two sides of the same coin.
The differences between the contract and the relationship is perhaps easiest to see in the dissolution of the union. In order to end a contract, there are essentially two ways, either through completion or dissolution, or breaking of the contract. On the other hand, a relationship may be ended at any time by anyone in the relationship. The dissolution of the contract requires legal determination and oversight by the government, it is not simply decided by the parties involved.
This structure is not in law relegated to the areas that most people think when they hear the words relationship or contract, but the same principles are, in traditional and ancient common law, broader concepts of social organization. Modern jurists and politicians have corrupted the meaning and importance of these divisions, with many secondary consequences.
I shall leave it to the reader’s cynicism as to whether those consequences were intended or unintended, depending on the relative quality of your particular tinfoil chapeau.
One of the best illustrations of this dichotomy between the contract and the relationship is in the area of employment. Traditionally, the employer and employee relationship was known as the master and servant relationship. Key to this is not the name but that it is a relationship, not a contractual arrangement.
Legal types will refer to the traditional perspective upon employment as employment at will, meaning that a person was employed at the will of the employer. He could be fired for a good reason, a bad reason, or for no reason whatsoever. On the other side, an employee was likewise free to leave his employment at any time for whatever reason he may have.
Most people in the modern era are unfamiliar with the history of employment law in that the earliest employment laws were not for the protection of the employee but to ensure that the employee could not take advantage of his employer. In the middle ages, when the black death wiped out between half to three-quarters of the European population, labor became a rather scarce commodity. Landlords and employers would attempt to hire away laborers at higher wages and more benefits.
Labor laws were passed to prevent this nefarious practice from depriving people of their laborers by making it illegal to offer higher wages or for tenant farmers or apprentice craftsmen to leave their employment to seek greater remuneration. In this context the idea or employment at will was a great protection of the employee who would thus be free to seek his employment where it benefitted him the most.
But where employment was scarce and labor cheap, the bargaining power was with the purchaser not the seller, or the employer not the employee. People easily confuse the bargaining power of the actors with the legal principle because they fail to conceive and imagine a situation where the bargaining power might be reversed. Law looks to universal principle, not to the market forces of the day, as it must if the law is to be objective.
Along come the modern unions with their collective bargaining concepts and attack the very notion that an employee may be fired at will. They seek to impose upon the employer that notion of the employee having a right to their job; that if the employee has not done something wrong that they ought to continue in their employment. The employer’s feelings on the matter become irrelevant to many members of society. The job becomes an abstract object subject to ownership rather than a relationship between the employee and employer.
This idea resurfaces in the area of the so-called civil rights laws, where it becomes illegal for the employer to fire an employee for what the courts deem a bad or discriminatory reason.
It comes up again in the whistle-blower statutes which make it illegal to fire that employee who discloses that an employer has been engaging in illegal activities against the public interest.
In all three of these situations one is left to wonder precisely what kind of future relationship this employee will have with their employer who is forced by law to continue working with an obvious and open hostile relationship. That is precisely why employment was always legally viewed as a relationship rather than a contract.
Increasingly employment has been treated as a contract rather than a relationship, but only in a one-sided direction. Unlike the early employment laws, the modern treatment of employment as a contract rather than a relationship does not seem to bind the employee, only the employer.
The rules against discrimination only really cover three areas, customers, employees, and tenants.
However, a tenancy has always been viewed by the law as a contract not a relationship. The terms are set and determined, and generally governed by a length of time or term of the lease even in a month to month lease. Unlike employment, there is little or no direct interaction between the landlord and tenant on a daily, ongoing basis.
While there has been a recent increase in the interference of the courts in the landlord and tenant contractual agreement, particularly in making it more difficult for landlords to evict tenants and reclaim lawful possession of their premises, there has been no real push to change the nature of landlord and tenant law itself.
The same cannot be said for more social relationships and contracts rather than the business relationships and contract we have discussed. People familiar with business organizations recognize the basic differences between corporations and partnerships.
A partnership, regardless of the number of partners, is considered by law as a relationship, not a contract. At any time a partner may choose to leave the firm, thus dissolving the partnership. A new partnership may be formed by the remaining partners, but the partnership is never really considered a separate entity independent of the individual partners. Taxes pass through to the partners and the partners remain individually liable for the debts of the partnership.
This is contrasted to the corporation, which is considered a separate legal entity. It files and pays its own taxes and the owners of the corporation are not liable for the debts or actions of the corporation, not counting their individual actions as employees.
The corporation is in the legal nature of a contract, the partnership in the nature of a relationship. In recent times this legal distinction becomes increasingly blurred as the law creates limited liability partnerships and companies which grant inactive partners the limited liability of a corporation; as well as S-corporations which offer the shareholders the individual pass through tax advantages of partnerships. Then we add in the absurd concept of non-profit corporations so that certain people can make a tidy profit while pretending not to profit..
Unlike the employment relationships, the convolution of the business structures has had fewer unforeseen and problematic consequences.
By corrupting business relationships was the forerunner of what would become Social Justice Warriors, the left convinced people that jobs are actual things, possessions which become the property of the worker. They inverted the employment offered by employers to compel the employer to employ. The employee has a right to a job only if it is the state’s job to control the employer.
Putting this in more ancient terms, highlights the ridiculous nature of this idea: The servant has an entitlement to a job only if it is the state’s purpose to command the master.
