Smith on In-Country Migration

Jeremy Rose (a resident of Barcelona, Spain) writes: ‘Globalisation’s Unsung Martyrs’ in Scoop (a New Zealand web site) 3 April:

“The free market cheerleaders who forcefully proclaim the need for developing countries to open their markets and liberalise their economies are strangely, if predictably, silent on the human cost of the rich world’s closed labour markets.

Their intellectual hero Adam Smith was in no doubt that there is no such thing as a free market for goods without an equally free labour market.

In his classic 1776 work The Wealth of Nations he wrote:

‘Whatever obstructs the free circulation of labour from one employment to another, obstructs that of stock likewise; the quantity of stock which can be employed in any branch of business depending very much upon that of the labour which can be employed in it. Corporation laws, however, give less obstruction to the free circulation of stock from one place to another than to that of labor. It is every-where much easier for a wealthy merchant to obtain the privilege of trading in a town corporate, than for a poor artificer to obtain that of working in it.’
The more things change, the more things stay the same….”

Comment

The quotation above is from: WN I.x.c.44: p 152 [GK: Minor punctuation errors corrected.]

While agreeing with Jeremy Rose’s general point of international restrictions on labour mobility (though such restrictions are absent on citizens of the European Union with its 25 member countries – also an outcome of ‘globalisation’?), I feel we must in all honesty to Adam Smith’s legacy be aware of the context in which the above quotation was made.

The UK at the time (particularly in England) had some rigid laws (Settlement Act; Apprenticeship Acts) and it was to these that Smith referred when he advocated their repeal because these obstructed economic development through the division of labour. He was not referring to the mass movement of people across international borders.

National restrictions of labour movement are international in their application and scope. This, in all cases I know of, are at root racist in motivation, albeit dressed as preventing social disruption. They apply today in all developing countries and have been the source of racial pograms in many places, including in Africa (expulsion of the Asians in East Africa is one such example; Rawindi and Burindi are also examples; as are tribal hostilities in Somalia).

High African barriers to trade between neighbouring African countries are an area where Africa could do much to invigorate their economies, independent of anything they might wish to do in relation with their trade with the developed world. Whether this would be accompanied by the free movement of labour among them, sadly, is unlikely, for much the same reasons that it is restricted with Europe. African governments, and the mood and tempers of their national residents, oppose such reforms.

The phenomenon of hostility to inward movement of people has nothing much to do with globalization, nor can it be blamed justly on the growth of international trade. That people are moving between Africa and Europe (if not within Africa), despite the appalling risks, is welcome news to me personally, as is the movement of people among the EU member countries as a result of its expansion. But I am but one vote among tens of millions.