The Swiss experience is very instructive for the role of the free movement of persons in the upcoming Brexit negotiations. It is much easier to grasp the importance of migration in these negotiations if the control over somebody’s migration is understood as a valuable right. Brexit is the attempt to take back these rights from the European citizens without any compensation in turn. Most probably, that will not work out.
The free movement of persons within the EU/EFTA countries is under the heaviest pressure since its establishment. Two States voted in a popular referendum to pull out of it altogether; Switzerland (in 2014) and the UK (in 2016). Switzerland is not an EU Member State but bound by the Agreement on the Free Movement of Persons. After the referendum, it is constitutionally obliged to renegotiate this Agreement in order to regain the capacity to cap immigration from EU/EFTA countries. The UK is supposed to leave the Union. Although the two legal relationships to the EU are different, the situations are very comparable: Both countries are supposed to cap immigration from EU/EFTA countries while keeping the best possible access to the Common Market. While in Switzerland there is a broad consensus that partial access to the Common Market is essential for the economy, such a consensus in likely to come about in the UK once the costs of the withdrawal from the Common Market become apparent.
Since an earlier version of this blog post has been published half a year ago, Switzerland has had to give in to political realities and bury its plans to withdraw from the free movement of persons – although it remains constitutionally obliged to do so. Instead, it opted for a largely symbolic measure that tries to give the impression that it is taking back control over immigration while keeping its access to the Common Market. If in the UK a consensus prevails that some sort of access to the Common Market is needed, chances are high that it will embark on a similar road. The reason for this is the enormous value of a right over one’s own migration for those who own it.
You’re Much Better off, If You Control Your Own Migration
My research may be helpful to clarify this point. I analyze the right to decide whether the migration of a given individual to a given place can happen or not, as a valuable right – the right to dispose over a valuable good: that is access to (among other things) a labor market. I call the control over this good the property right over migration.
International negotiations about migration deal with the exchange of large amounts of these property rights. Think of it this way: By becoming an EU Member State, the UK issued labor market entry tickets to all European citizens (and its citizens received entry tickets to the huge European labor market in turn). Owning your individual entry ticket means to own the property right over your migration to this country. The property right was transferred from states to prospective migrants. For individual citizens, these entry tickets have considerable non-monetary value: they mean more options in life and more independence from circumstances back home – a value, which is hard to measure. However, in order to get a first impression of the proportions we can restrict ourselves to the purely monetary value these tickets have for individuals.
It Adds up to a Staggering Sum
The monetary value is the difference in salary back home and the salary in the destination country multiplied by the probability that a given individual actually opts for migration to the UK (or to Switzerland) and actually finds a job there (higher living costs have to be taken into account as well). For many European Citizens, this probability is much smaller than 1 (where 1 indicates certainty and 0 indicates impossibility), which decreases the individual value of the entry ticket. For example, if the probability is 10 percent (0.1), this means that the monetary value of the entry ticket to a labor market is equivalent to a tenth of the difference in salary between the two countries. However, even if individual values of the ticket are negligible in most cases, modest in other cases and substantial in the relatively few cases of citizens who seriously aspire to migrate, adding them up for all European citizens results in a staggering sum.
As previously Switzerland, the UK wants these entry tickets back by revoking the free movement of persons; it wants the above-mentioned staggering sum of potential income of European citizens back. Of course, once back in the hands of the receiving country, those property rights cannot generate income any longer. On the other hand, they would enable to control immigration again (to the extent that this is practically feasible), which has a significant value to a country and its inhabitants as well. What is unlikely, however, is that it has a value anywhere near the value of the potential income that is destroyed by transferring back these property rights from individuals to a state. Like Switzerland, the UK has essentially nothing to offer to the EU (and its citizens) in exchange.
Putting it this way helps to show two things: First, even for a country as prosperous and powerful as the UK, it is very unlikely that it has anything to offer (such as financial contributions or even a defense coalition with the EU) that is remotely as valuable as the access to its labor market. This is so, because its labor market is comparatively attractive and because the gains from liberalizing labor markets are vastly more substantial than the possible gains from the full liberalization of markets of goods, capital and services combined.
A Question of Power Relations
The second point is much more general: blocking migration – thereby blocking access to labor markets – is actively diminishing the expected lifetime income of would-be migrants. If taking back the entry tickets from EU/EFTA citizens harms them, the decision never to issue such a ticket to third country nationals in the first place, means to harm them just as well. Why is it easier to cause the damage in the case of third country nationals – and get away with it? It is because these countries do not have a comparable economic and political leverage to enforce the internalization of the damage (done by suppressing migration) as the EU has with its Common Market.
But the insight remains: If countries would have to compensate the locked-out for the damage caused to their expected lifetime income, they could hardly afford it. If the country of origin is powerful enough to enforce a partial internalization of that damage, it quickly becomes too costly to continue to cause the damage. This is why countries with attractive labor markets will have to open them ever more to third country nationals if they want something in exchange: Access to the growing markets of goods and services in those third countries for instance.
Postdoctoral Fellow at the Max Planck Institute for the Study of Multiethnic and Multireligious Societies in Göttingen.
Stefan Schlegel got is PhD with the nccr – on the move. He wrote a policy brief based on his recently published PhD book. An earlier version of this blog post appeared on the blog of the Max Planck Institute for the Study of Religious and Ethnic Diversity.