The Free Movement of Labour: What Will It Signify?
By Anthony de Jasay
Liberal discipline and its frontiers
In her first six months as Britain’s Prime Minister, Theresa May has earned herself the partly playful and partly reproachful nickname of “Theresa Maybe.” Ceaselessly questioned about her “strategy” for what to do about the country’s future in Europe, all she would say was that “Brexit is Brexit,” which may of course mean nothing or everything, and the ambiguity made the listener feel that Theresa May herself is of two minds about what it should mean. She complained more than once that she was not ready to reveal her “strategy,” and it was suspected that she did not have one. If the word is not misused, as it is so often misused in ordinary discourse, a strategy is not a long term desire or a plan, but a series of steps chosen with a view of the probabilities of the possible steps with which the adversary would react to them. When she finally made her strategy known, it became evident that her first step was accepting that the European Union was in all probability going to reply with a strong negative. In claiming absolute sovereignty over the admission of European citizens to Britain, Theresa May has deliberately invited the EU to reply that the free movement of labour is one of the cornerstones of the EU, and as even the moderate Angela Merkel warned, “it was not negotiable”. Theresa May has decided not to seek any compromise, but has seemed quite content that the adversary’s counter move in response to hers was as radical as it could possibly be. She immediately proceeded to her next move, the renunciation of British access to the customs union. Sovereignty over the access of citizens of EU countries to Britain was a price Theresa May judged worth having in exchange for customs-free access to the EU Common Market. While this is a bargain not everybody will consider a good one, for Mrs. May it was a bargain that she would never want to miss. Being master over the country’s borders was for her worth more than any number of trade concessions.
For more on these topics, see “Catching Up: Could We Have More Growth?”, by Anthony de Jasay, Library of Economics and Liberty, January 2, 2017; and “A Populist Referendum and the Price of Being Single”, by Anthony de Jasay, Library of Economics and Liberty, August 1, 2016.
By denying the free entry of EU labour, Britain will now pay the price of the privilege of free access to the Common Market for goods and services. It must make an offer for some substitute access to which the EU could be persuaded to agree. As Mr. Michel Barnier, the chief bargaining negotiator of the EU made it to understand, Britain is the demander and so cannot expect to receive terms that would be as good as the previous access that she has given up. Negotiations will officially open in April, but of course they have already begun discretely. They must be concluded by March 2019, then ratified by both the British Parliament and the twenty-seven governments of the EU member states. And if any of these conditions fail to be satisfied, everybody will have to start thinking again. The bargaining for access to the Common Market is unlikely to be too harsh, because both sides would gain if trade between them were preserved as far as possible. Any harsh conditions that the British side were likely to be confronted with would be concentrated on non-tariff obstacles to trade. Brussels may have a field day, insisting both on regulations that already exist and others that may be invented, for instance, making British financial services more difficult to export to the Continent.
The real difficulty arises with British trade with countries of all the world except the EU. British trade at present is conducted under agreements with the EU, and once Britain ceases being an EU member, new trade agreements would be needed. Moreover, all such agreements would have to conform to World Trade Organization rules. The task of successfully concluding trade agreements with every country in the world outside the EU would be like a nightmare that could well last ten years or more, if the recent agreement between the EU and Canada is any guide. The British negotiators who will seek an agreement with such notoriously hard bargainers as India or the United States will have to earn our sympathy.
An Empty Melting Pot
“Having workers move to the capital, or the capital move to the workers are both tolerable alternatives; like belts or braces you do have to choose one or the other, but you do not necessarily need to choose one rather than the other.”
The free movement of people into Britain must be a very precious privilege, if you consider the price that Britain was willing to pay and the EU was able to exact. However hard we may look at it, it is difficult to see why this privilege is so priceless. The distribution of industry inside the EU is no doubt influenced by the distribution of manpower, and it could be argued that it would be more efficient if manpower were freely distributed without any constraint that national boundaries might present. However, the EU is not only demanding the free movement of labour but also that of capital, and neither party is objecting to the latter. If Italian workers cannot migrate from the Mezzogiorno to the British Midlands to work in a new scooter factory, it would still remain possible to invest British capital in a factory in the Mezzogiorno and employ resident Italian workers in it. The efficiency between the factory in the Midlands and of the Mezzogiorno may be slightly different, but is likely to be of second-order magnitude. Having workers move to the capital, or the capital move to the workers are both tolerable alternatives; like belts or braces you do have to choose one or the other, but you do not necessarily need to choose one rather than the other.
EU residents have had up to now free entry to Britain, but they have not made such use of it that would suggest that this was not a major factor in the development of the EU. The major countries of the EU have all had a long past in terms of immigrant labour, with Britain having major post-war immigration from the countries of the Indian subcontinent as well as from East Africa and Nigeria, France from the Arab countries of Africa, and Germany from Turkey. None of these countries of origin were in Europe, and entry from them was a matter of the sovereignty of the receiving countries. Immigration from one EU country to another, on the other hand, was subject to the EU cornerstone of free entry, but this intra-European immigration into Britain was smaller and of a more recent order. It was becoming relatively more important after 2014 with the admission of several “low-income” countries to the EU. In the year prior to September 30, 2016, net immigration from other EU countries was 189,000 people, with Romania, Poland, Italy, Spain, and Bulgaria as the countries of origin in that order. In any case, the number was not large and it is difficult to conceive why national sovereignty had to become of such vital importance and a decisive factor in Britain deciding to leave the EU. One might as well say that it was much ado about nothing, or at least for rather little.
For more on these topics, see also the EconTalk podcast episode,
George Borjas on We Wanted Workers.
It is tempting to suppose that the free movement of labour was installed as a cornerstone of the EU by the brain trust in accord with the European ideal- not because the Common Market needed it, but because the European ideal and its champions, whether consciously or not, had the United States in mind. There, with two or three great movements of people—from East to West, from South to North, and finally from the East to the Southeast in the last two centuries, the melting pot has produced a great people with many of the common characteristics of one nation. Europe was to prove to be the same kind of melting pot, producing a great nation with common characteristics. Unlike America, the nations of Europe have not fit to a melting pot; it was staying empty and did not ever produce even the beginning of a single common nation. America had the melting pot, while European nations had each a history of their own.
During a rather long history of writing about politics and economics, I always tried to respect good manners and deny bad taste by avoiding the temptation of citing my own texts. I am now breaking this rule by citing something that I once wrote to explain the rule of liberal discipline in the respect of the home and the public places, the hospitals and schools and the entire public order behind the frontier.
“A very different stand can, however, be defended on no less pure liberal grounds. For it is quite consistent with the dictates of liberty and the concept of property they imply, that the country is not a no man’s land at all, but the extension of a home. Privacy and the right to exclude strangers from it is only a little less obviously an attribute of it than it is of one’s house. Its infrastructure, its amenities, its public order have been built up by generations of its inhabitants. These things have value that belongs to their builders and the builders’ heirs, and the latter are arguably at liberty to share or not to share them with immigrants who, in their countries of origin, do not have as good infrastructure, amenities and public order. Those who claim that in the name of liberty they must let any and all would-be immigrants take a share are, then, not liberals but socialists professing share-and-share alike egalitarianism on an international scale.”1
National frontiers that provide us with privacy from others, except when we do not require it, are in fact also the frontiers of liberty.
Anthony de Jasay, “Immigration: What is the Liberal Stand?” Originally appeared online at: http://www.econlib.org/library/Columns/y2006/Jasayimmigration.html. Reprinted in 2009 in Anthony de Jasay, Political Economy, Concisely, Liberty Fund, Inc.
*Anthony de Jasay is an Anglo-Hungarian economist living in France. He is the author, a.o., of The State as well as other books, including Social Contract, Free Ride, Political Philosophy, Clearly, Political Economy, Concisely, Economic Sense and Nonsense, Helmut Kliemt, ed., and Justice and Its Surroundings. His books may be purchased through the Liberty Fund Book Catalog.
The State is also available online on this website.
For more articles by Anthony de Jasay, see the Archive.