Putty Capital's Shadow of the Invisible Hand on Clay Labor: On the Emergent Risk of Differing Speeds of European Union Capital and Labor Freedom

Abstract

Globalization led to unprecedented risks stemming from global interconnectedness. Economic trade may distribute benefits of international exchange unevenly due to fundamental barriers of distance, national borders and implicit market segmentation. In order to equalize trade prosperity, the European Union (EU) 4 freedoms of goods, services, capital and labor are established by a neoliberal policy framework and the Eurozone featuring a common currency. While there is a vital central monetary union and since the 2008/09 World Financial Crisis a common European fiscal pact, EU free trade is limited regarding labor mobility. Explicit labor transfer constraints comprise of work permission requirements and sector specific restrictions while implicit drawbacks arise due to specific language, cultural and skill requirements. The paper addresses risks emerging from labor immobility in combination with more vital capital and goods movements. Within the European compound, full capital flows and export opportunities may gravitate trade benefits towards original EU core countries, while periphery countries that became later part of the EU are shunned from full employment productivity. A less mobile workforce in the EU periphery is described as a reserve army of labor with social problems invisible to the core union as for remaining out of focus due to national borders and geographic distance. Trade movements within the EU are analyzed with attention to export, unemployment as well as migration patterns in order to advocate for attention to full labor freedom within the EU following the greater goal of Ricardian fair and mutually-beneficial trade enabled through a harmonious interplay of national government and European governance polity.