Human freedom and market freedom A capability analysis of labor market policies and the neoclassical case for free labor markets

This thesis develops a freedom-based approach to policy and policy evaluation and applies it to the analysis and evaluation of labor market policies. The first part develops the core concepts and framework of an agency-oriented freedom approach. I argue in line with Amartya Sen’s Capability Approach that freedom – what a person is actually able to do and to be, her real ability to live the kind of live she has reason to value – is the proper informational basis on which to evaluate economic and social policies. In addition, the approach developed here emphasizes the social nature and determination of individuals’ freedom. The second part of the thesis applies the agency-oriented freedom approach to the analysis and evaluation of labor market policies and employment relations. I develop the concept of the commodification of labor as a political economic framework and entry point into welfare analysis. It is shown that poorly regulated ‘free’ labor markets, labor market flexibilization policies and absence of social regulations give full scope to and facilitate the making into and treatment of human beings as commodities. This facilitates the degradation of the freedom, well-being and human dignity of individuals and of the communities and societies they are part of. It is shown that properly designed labor market policies and social laws and regulations that protect individuals from the commodity status of their labor are necessary if a society is to attach intrinsic value to persons as sentient and agentic beings.