The European Union’s invisible walls

byFabian Sauter This article was originally published on esfl.info When […]

Fabian Sauter

Image by © Dreamstime

This article was originally published on esfl.info

When in mid-April 2015 a ship filled with African refugees capsized and a large number of its passengers drowned, we experienced the latest terrible episode of a tragedy that has been going on for too long. The plight of refugees who drown en masse in the moats of Fortress Europe has stirred up an extreme controversy about individual rights that has created two positions.

The official EU stance is to ramp up security. Like a feudal lord who builds higher walls and digs deeper moats to reenforce his castle. More money for more controls, higher fences with more barbed wire and better technology to avert those who try to enter the EU. Even opening fire on refugees swimming in the sea appears to be an appropriate means to this end. The strategy is simple: Shock and awe to scare refugees back into their own home countries.

Another position on this issue is the complete opposite. It fights for open borders and insists on the essential right of freedom of movement for all people. The loudest of those who support this view are young, liberal students. Either via blogging or by spreading awareness of this issue on this years ESFLC, the demand is clear: Open borders now!

The idea is that every human being has the right of freedom of movement. This freedom creates the necessary flow of people and ideas to increase wealth by means of trade and economic exchange. The importance of free trade for a peaceful society has always been an essential part of classical liberal thinkers. Not just does free trade create better conditions for peace, but also it does increase the overall wealth. If people in African and European countries could benefit from the positive effects of free trade, the issue of refugees fleeing due to economic reasons could be effectively reduced.

Tearing down the walls of Fortress Europe is a good start in order to reach this goal. But there is another factor that inhibits growth and prosperity: the stale fume of mercantilism.

Modern-day Mercantilism at work

That is because the EU not only makes sure its physical walls are high and insurmountable, it also builds economic walls that block out others. These walls have only one goal: protecting domestic industries from foreign competition at the cost of others.

There are several tools in use in order to fulfill this goal and to control the EU market place. Various tariffs and quotas on goods that are being imported into the EU warp whole business sectors with the goal of protecting local interests. On the other hand EU subsidies generate additional income for certain industries, regardless of their actual performance. This is especially true with the EU agricultural sector. Not only do European farmers benefit from import tariffs, but they also receive direct payments in the size of several billion Euros. The strength of the agricultural lobby is widely known and in order to get their will they are not even scared of wasting foodstuffs, such as milk. Their interest lies solely in protecting their benefits, no matter the costs. Free trade and all its benefits is being sacrificed for the interests of a well-organized industry.

A world without walls

Removing these obstacles to free trade and prosperity would benefit everyone involved. The renewed competition would help reduce consumer prices in rich European states. Money formerly being spent on expensive local goods could either be saved or spent to purchase other goods. At the same time the European industry is being forced to find new ways of staying competitive, while farmers and companies importing freely into the EU will benefit from additional sales. Additional money would generate new capital for investment and thus growth in their home countries. While additional growth means new investment possibilities for European entrepreneurs.

But the strength of the agricultural lobby and its influence on EU politics is a sign of how a strong and well-organised minority can benefit at the cost of a majority. Archaic tools, such as import taxes or subsidies that are being publicly paid for show how the ghosts of Mercantilism still haunt us today.

The question of economic refugees also needs a „home-grown“ solution and that lies in the positive economic development of their own countries. Only growth and prosperity can lead poor countries out of their misery. The most effective way of achieving this is by destroying both physical and economic walls, so that people, goods and money can freely cross borders.


The views expressed on austriancenter.com are not necessarily those of the Austrian Economics Center.

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