If I have given a true account of that freedom which forms the goal of social effort, we shall see that freedom of contract, freedom in all the forms of doing what one will with one's own, is valuable only as a means to an end. That end is . . . the liberation of the powers of all men equally for contributions to a comon good. No one has a right to do what he will with his own in such a way as to contravene this end. . . .Every one has an interest in securing to every one else the free use and enjoyment and disposal of his possessions, so long as that freedom on the part of one does not interfere with a like freedom on the part of others, because such freedom contributes to that equal development of the faculties of all which is the highest good for all. This is the true and the only justification of rights of property. Rights of property, however, have been and are claimed which cannot be thus justified. We are all now agreed that men cannot rightly be the property of men. The institution of property being justifiable as a means to the free exercise of the social capabilities of all, there can be no true right to property of a kind which debars one class of men from such free exercise altogether. . . .A contract by which an one agreed for a certain consideration to become the slave of another we should reckon a void contract. Here, then is a limitation upon freedom of contract which we all recognize as rightful. . . .
Are there no other contracts which, less obviously perhaps but really, are open to the same objection? In the first place, let us consider contracts affecting labour. Labour, the economist tells us, is a commodity exchangeable like other commodities. This is in a certain sense true, but it is a commodity which attaches in a peculiar manner to the person of man. Hence restrictions may need to be placed on the sale of this commodity which would be unnecessary in other cases, in order to prevent labour from being sold under conditions which make it impossible for the person selling it ever to become a free contributor to social good in any form. This is most plainly the case when a man bargains to work under conditions fatal to health, e.g. in an unventilated factory. Every injury to the health of the individual is, so far as it goes, a public injury. It is an impediment to the general freedom; so much deduction from our power, as members of society, to make the best of ourselves. Society is, therefore, plainly within its right when it limits freedom of contract for the sale of labour, so far as is done by our laws for the sanitary regulations of factories, workshops, and mines. . . .Its application to compulsory education may not be quite so obvious, but it will appear on a little reflection. Without a command of certain elementary arts and knowledge, the individual in modern society is as effectually crippled as by the loss of a limb or a broken constitution. He is not free to develop his faculties. With a view to securing such freedom among its members it is as certainly within the province of the state to prevent children fronm growing up in that kind of ignorance which practically excludes them from a free career in life, as it is within its province to require the sort of building and drainage necessary for public health.
Our modern legislation then with reference to labour, and education, and health, involving as it does manifold interference with freedom of contract, is justified on the ground that it is the business of the state, not indeed directly to promote moral goodness, for that, from the very nature of moral goodness, it cannot do, but to maintain the conditions without which a free exercise of the human faculties is impossible. . . .
Now we shall probably all agree that a society in which the public health was duly protected, and necessary education duly provided for, by the spontaneous action of individuals, was in a higher condition than one in which the compulsion of law was needed to secure these ends. But we must take men as we find them. Until such a condition of society is reached, it is the business of the state to take the best security it can for the young citizens growing up in such health and with so much knowledge as is necessary for their real freedom.