Why do Western nations want free markets of goods, but not of labour?

Question

Most powerful nations are trying to liberalize worldwide trade in goods and services, since the theory goes that free markets create more wealth than unfree markets.

But isn't this inconsistent and hypocritical, since they are doing nothing to liberalize the labour market? How can you morally justify free movement of goods if you don't allow free movement of people?

Shouldn't we try to make a decision one way or the other, ie. goods+labour restricted, OR goods+labour free?

Answer 1

The two have nothing to do with each other.

We don't want our schools ruined by being swamped with too many people whose taxes wont be enough to cover education costs.

Why should they have anything to do with eachother. There is absolutely no logic in that.

However, I'm happy to go to protectionist trade. It would be best for the US people (as opposed to elite) in my opinion. Mind you, it would really be hard on developing countries that depend on our consumption.

Answer 2

It's really not that simple. In the world there are wealthy economies, and then there is the developing world. Allowing totally free movement of labor would likely aggravate the loss of skilled labor from developing economies, which spend valuable resources to educate individuals, only to then loose them. This is even a problem in a top economy like Germany.

More important would be to promote fair trade and foreign investment into the developing world. Facilitating human capital flight would do nothing to solve an individual country's problems.

And it goes without saying that wealthier countries will always face political pressure to protect the labor market. Realistically, moral constraints are only present in the free-market to the extent that fair business practices are promoted for investor and consumer confidence. Anything that's far beyond that is really not capitalism.

Answer 3

They like to make more profits.