Suppose, a la Nozick, that we mix our labour with sources of resources and thereby acquire the products of our labour, which we can sell, give, or bequeath to someone else. (Nozick also thinks that people can acquire sources of resources despite the fact that their labour is entirely in what they take out and not what they leave behind, but we can ignore that error at present.)
Now, suppose that two people work together. Although it may be difficult, if not impossible, to determine the shares of the two in the product in practice, if people acquire property by mixing their labour with things, it must be the case that each owns a share proportional to the labour performed that actually went into the product. Otherwise, one is appropriating the property of the other.
If one of the two is the employee of the other, the problem is that the share that the employee receives will be determined not by the amount of labour he contributes but by competition with other potential employees, assuming that there is freedom of contract. Occasionally, he will receive proportionally more than he should but other times, he will receive proportionally less. The latter outcome will occur far more frequently than the former. Either way, the employee will almost never get what he deserves in light of the labour-mixing theory of property acquisition. It will be a fortunate accident if he does.
Libertarians who endorse the employment relationship and freedom of contract cannot use the labour-mixing theory to justify them. In fact, they need a justification that denies the labour-mixing theory.
When it comes to employment, freedom of contract is not a libertarian principle; freedom of contact for a just price is. A just price is determined by the actual contribution of the worker to the product, not by the market price for his labour.
The consistency exhibited by most contemporary individuals who call themselves “libertarians” is not logical consistency but consistency in serving the interests of the people who happen to gain the most under the presently applied rules.
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