Labor Day Is a Triumph of Capitalism

By Ben Connelly

Monday, September 07, 2026

 

Even in 2026, when only 10 percent of American workers are unionized, we tend to think of Labor Day as a celebration of organized labor. For that reason, union-skeptical conservatives and libertarians sometimes feel ambivalent toward the national holiday.

 

But there is good reason for free marketeers to celebrate Labor Day — even those of us who frown at organized labor’s ties to the Democratic Party. From the very beginning, free-market capitalism has been about free labor. Those of us who oppose unionization generally do so on the grounds that unions restrict the freedom of individual workers. It is the free market, rather than the closed shop, that best respects workers’ rights to make decisions about their careers.

 

Indeed, given that 90 percent of American workers don’t belong to unions, when we celebrate the freedom of American workers rather than labor activists, we can rightly say that we better represent the interests of American labor.

 

Free labor has a long and proud tradition in the Republican Party, going back to the very first presidential campaign of John C. Frémont in 1856. Founded in opposition to slavery, the Grand Old Party championed the right of workers to own their own labor. Southern slaveholders not only rejected this right in the case of their slaves, but they saw their society as fundamentally at odds with the capitalism of the Northern states. Perhaps shockingly to modern sensibilities, they did so on the grounds that the slave system was supposedly gentler and more humane than the dog-eat-dog labor markets of Northern states. Southern writer George Fitzhugh attacked the supposed exploitation of Northern free labor and argued that “slavery is a form, and the very best form, of socialism.” As Pierre Lemieux put it in an article for the Cato Institute, Fitzhugh believed that “competition reduces individuals to economic cannibals, making the weak no better off than slaves — and, in fact, worse off because they lack the protection of a master.”

 

Thus, the contest between North and South was a contest between the capitalist system of free labor and the Southern system of slave labor. The Confederacy even tried central planning. Northern victory in that struggle was a triumph for the idea that individuals should own their own labor.

 

This is a bedrock principle of free-market capitalism. It is what made capitalism a radical disruption to the feudalism of the Middle Ages. Thinkers such as Adam Smith rejected notions of serfdom and noblesse oblige, preferring “the system of natural liberty” in which human beings could change their circumstances through hard work and effort, rather than remaining stuck in the station to which they were born.

 

Free labor is inextricably linked to property rights and freedom of contract. If I own my own labor, the fruits of my labor belong to me. If I own my labor, I get to make my own decisions about what jobs I’m willing to take and what compensation I’m willing to accept. I can choose, for instance, to take a lower-paying job that allows me the freedom to write, or study, or make music. I can choose to move across the country and change careers. As Deirdre McCloskey points out in The Bourgeois Virtues, in precapitalist England, not only could workers often not change occupations, but they were often prevented from moving to other cities, because if too many blacksmiths moved from Manchester to Birmingham, they might compete with one another.

 

Socialists talk a big game about labor. Karl Marx argued that the free market pitted labor against capital in a vicious struggle that resulted in exploitation of the former by the latter. According to Marxists, socialism will finally usher in a workers’ paradise, in which people aren’t alienated from their labor and politics no longer serve the interests of capital.

 

But what many don’t realize is that it is capitalism, not socialism, that is premised on the principle of free labor. And it is socialism, not capitalism, in which people do not own their own labor. Indeed, in a socialist economy, people cannot own their own labor.

 

The sharpest anti-capitalist minds across history have recognized this. In order for any society premised on the notion of “from each according to his ability, to each according to his need” to function, there must be harsh penalties for slacking. Otherwise, human nature will encourage free riding.

 

Pierre-Joseph Proudhon wrote, “The slacker, the idler, who, without performing any social task, enjoys like others — and often more than others — the products of society, must be pursued as a thief and parasite. We owe it to ourselves to give him nothing; but since he must nevertheless live, to put him under surveillance, and compel him to work.”

 

A socialist society can’t leave it up to the individual to determine what his abilities and needs are. If men and women are free to own their own labor, they may choose to work less, or to go into some line of work which doesn’t directly contribute to the needs of society. Louis Blanc, who coined the phrase “from each according to his ability,” explained that “the more one can [contribute], the more one must.”

 

This sounds noble when we imagine self-sacrifice. But it sounds a great deal darker when we consider the reality that sacrifice will often not be voluntary. For a socialist society to meet all of the needs of its citizens, it cannot leave it up to the individual to determine what his or her needs and abilities are. It can only hope to survive if it compels sacrifice, rather than waiting for voluntary sacrifice in the name of the greater good. Suddenly, George Fitzhugh’s observation seems more accurate. In a socialist society, nobody can own their own labor. And if society owns your labor, any time you take off is stolen from your fellow man.

 

Edward Bellamy put it this way: “The one who evades or scamps his work robs every one of his fellows. A man had better hang himself nowadays, than get the reputation of a shirk.”

 

According to Bernard Shaw, under socialism, “The idler will be treated not only as a rogue and a vagabond, but as an embezzler of national funds, the meanest sort of thief. The police will not have much trouble in detecting such offenders.”

 

What all of these socialist thinkers (and many others) share is the view that human beings ought not to own their labor. If we own our labor, we might not use it for the benefit of humanity. Individuals, therefore, ought not to be trusted with free labor.

 

It is capitalism that rejects this. It is the capitalist society that allows individuals to make their own decisions about how and when and where to work, and for how much, and whether to work at all. It is capitalism in which ordinary people are not slaves to society but sovereigns unto themselves, in charge of their own time and talent.

 

We hear often that capitalism is cold and harsh, in need of unions and regulation to soften the rough edges of the market. The truth is that, more than any other system, free-market capitalism is premised on the dignity of individual workers and the freedom of people to make their own decisions about their labor and to be rewarded for their time and talent. That’s something worth celebrating this Labor Day.