Putty Capital and Clay Labor

Differing European Union Capital and Labor Freedom Speeds in Times of European migration


  • Julia Puaschunder




Globalization has 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 more equitable trade prosperity, the European Union (EU) 4 freedoms of goods, services, capital and labor were 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 movement is limited regarding labor mobility. This paper is based on the idea that the asymmetry of the mobility of labor and capital leads to the risk of an uneven distribution of gains within the European Union towards some core states against the periphery. In the light of the
current European migration, the following paper offers a forward-thinking perspective on potential emergent risks arising within the European Union due to an asymmetry between the mobility of labor on the one hand and
capital and goods on the other in times of mass migration. The reasons for this asymmetry of the mobility of labor and capital are found in explicit labor mobility constraints that comprise of work permission requirements and
sector specific restrictions while implicit drawbacks arise due to specific language, cultural and skill requirements.
Within the EU 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. 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 and labor
movements within the EU are analyzed with attention to export, unemployment as well as migration patterns in order to advocate for attention to labor freedom within the EU following the greater goal of Ricardian mutuallybeneficial
free trade in combination with societal stability enabled through a harmonious interplay of national government and European governance polity in time of European mass migration.




How to Cite

Puaschunder, J. (2016). Putty Capital and Clay Labor: Differing European Union Capital and Labor Freedom Speeds in Times of European migration. The New School Economic Review, 8(1), 147–168. Retrieved from https://nsereview.org/index.php/NSER/article/view/72