Why didn't Caesar hire free men to do slave work?

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Most important: nobody was interested in reducing or abolishing slavery. Roman society, and all Mediterranean societies, were slave-based. Caesar would not gain any popularity by reducing the number of slaves. More the opposite. Reducing the number of slaves was never an issue in Rome. For the Romans only the poverty of Roman citizens mattered. Roman citizens, rich and poor, had votes. Everybody else - slaves included - had not.

First reason was what @B Lorenz said: a citizen was a free man, and a poor urban citizen would definitely not be happy having to do what he saw as far below his status. Even resettling urban citizens into colonies was not something they looked forward to. Most preferred to be poor in Rome rather then to be less poor elsewhere. Many civilian colonies were forced civilian resettlements. A lot of military colonies were often also forced or very close to being forced, but that was part of the package.

Being a poor citizen in Rome had many benefits. (Panem et circenses) He would loose many of those benefits for at least dubious gains by voluntarily moving out of the city.

Second reason are Caesar's peers. Every Roman had a slave. The line of poverty was not being able to afford one single slave. But the rich had thousands of slaves. He would alienate many of his allies by replacing their slaves with free men.

Third reason, not the most important (yet), was loyalty. Slaves and freedmen as well were loyal to their owners. Not by free will, but by law. Caesar owned himself a lot of slaves. They owned their allegiance to him, personally, and nobody else. Even as freedman they still owned their allegiance to him. Many worked as his secretaries and in his staff. Theoretically they couldn't be bribed. They were considered to be more reliable than free man because of their (compulsory) allegiance. As they were slaves and freedman, they were socially inferior to senators and equites, thus less likely to strike political deals with them. That's why Caesar had a lot of slaves and freedman doing work that otherwise could have been done by free men.

Later, under the empire, these slaves/freedman owned by the emperor became very important. Many of those imperial slaves and freedman became very rich and powerful.

Don't forget owning land was very important and very muddled in Rome. The Gracchi brothers tried to do as you suggested, and both were murdered.

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Being a paid field worker and a settled farmer are quite not the same. Owning land means independence and place in the community (And the ability to be conscripted as pre-Marian legionary. Although by the time of Caesar proletarii were often taken into the army)

I doubt that the "mobs" of the Urbs would have had happily left Rome to do slave's work in some latifundium in rural Italy. Being a citizien and living in Rome had many advantages even if one were penniless: regular grain and oil subsides from the state, triumphs, festivals, games and public banquets, and the possibility to sell ones political rights on the next election.

Caesar died before he could realize the majority of his reform-designs. He might have tried something of such effect later, but would surely not risk such a controversial and tumult-inducing move while the Civil War was underway and his enemies extant in may provinces.

And Caesar probably did not have enough landed interest to make all these freemen into his own employees, so they would become to depend on other roman aristocrats, while by giving them land of their own, he made the colonists into his clients.

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