A Social Policy Trilemma

A Social Policy Trilemma

There is a trilemma in economics that states that a nation can only have two of the following three things:

– Free movement of capital

– A fixed monetary exchange rate

– An independent monetary policy.

All three of these are things that a country would sometimes quite like to have; however, the trilemma states that if a country has two of them, the third must in consequence be given up – it is not possible to maintain all three at once. The choices are not purely binary: one can have some capital controls for example, and there are levels of independence in monetary policy, but at any point, increasing one necessitates a decrease in one of the others.

A Social Policy Trilemma​

There is a similar, less-recognised, trilemma in social policy, that means a nation can only have two of the following things:

– Free movement of people (no immigration controls)

– Non-contributory universal social welfare (for example, free health care, non-contributory out-of-work benefits, free university tuition)

– An independent sovereign social welfare policy.

Again, these are all three things that some people might consider to be beneficial.

To demonstrate this, imagine that a country has all three of these and chooses to set its social welfare at a level that are significantly higher than at least some of its neighbours. With free movement of people, movement of people from countries with less generous schemes will quickly render these unaffordable and/or creates other social pressures, for example on schools and hospitals. There are three potential solutions:

1. Impose immigration controls, by restricting the number of people who can enter; OR

2. Abandon the universal social welfare, or at least reduce it to the level that is no longer a significant draw for those outside the country; OR

3. Abandon an independent social welfare policy, for example by agreeing welfare policies collectively (by either democratic or technocratic means) on either a regional or global basis, so that there are no longer national disparities to create population flows.

Even more so than with the economics trilemma, these are not binary choices. People’s country of residence, even in the modern world, is ‘sticky’: it takes effort and resources to move, and people will not immediately do so for a minor disparity in benefits. It is possible to pool some but not all decision-making; immigration policy may be set at a wide range of levels between ‘complete free movement’ and ‘completely closed borders’. The important point to recognise, however, is that the three are fundamentally in tension and that advancing one means retreating on another.

Possible solutions

The modern liberal globalist solution is, either implicitly or explicitly, to place least weight on the third, the independent social welfare policy. This approach would see an increasing amount of national policy agreed via multilateral organisations. Sometimes this has an explicitly technocratic agenda, seeking to remove democratic accountability from the decision-making process, on the grounds that decisions are better made by ‘experts’; at other times, support for democracy is (at least outwardly) maintained, but the democratic institutions are moved from a nation to a regional level.  This is seen most obviously, of course, in the EU project, in which decision-making is progressively removed from nation states and where one of the principal benefits, to its supporters, is the free movement of people within that region.

A more neoliberal solution might be to compromise on the second, the universal non-contributory social welfare. This approach would maintain a high degree of free movement, to provide workers for businesses, and maintain a sovereign social welfare policy, but resolve the trilemma by reducing or abolishing universal social welfare, either by simply reducing their level, or by transforming them into contributory benefits, such as insurance-type schemes.

A traditionalist approach would choose to compromise this on the first, and we see this in both the more traditional parts of the right and left. This approach sees national sovereignty as important and would usually support a significant degree of universal social welfare (pensions, the NHS), but is happy to compromise on free movement, placing stricter limits on immigration and prioritising social welfare for citizens or long-term residents.

 

This post is not arguing for which approach is best. It is simply saying that there must be a choice: just as in economics, we cannot have all three at once. In cases like this, it is better to make such choices explicitly, in recognition of the trade-offs, and to understand that those who choose a  different position on the trilemma may not think that one of the three is actively negative, simply that it is less important than the other two.

 

8 thoughts on “A Social Policy Trilemma

  1. Could it not be argued that the EU solution is more like the second solution, or at least somewhere between 1 and 2.

    “for EU citizens who are not workers or self-employed, the right of residence depends on their having sufficient resources not to become a burden on the host Member State’s social assistance system, and having sickness insurance.” [1]

    So you get universal healthcare, but only if you’re a worker (or have sufficient financial support to pay for medical insurance). Without that, you can’t stay for more than 3 months

    Of course, different countries’ internal systems are different. In the UK, everyone gets NHS care, but EEA nationals can’t access most other benefits that UK nationals have access to. [2,3]

    As with the post, not attempting to judge this either way, just stating what I understand the facts to be. I don’t think I’ve mis-represented them, though I have paraphrased/simplified.

    [1] http://www.europarl.europa.eu/factsheets/en/sheet/41/free-movement-of-workers
    [2] https://www.gov.uk/government/publications/guidance-on-overseas-visitors-hospital-charging-regulations
    [3] https://www.nhs.uk/NHSEngland/AboutNHSservices/uk-visitors/moving-to-england/Pages/moving-to-england-from-the-eea.aspx

    1. That’s a fair point – you’re right that the EU is a mixture of (1) and (2).

      There are obviously some things (e.g. higher education finance) where we offer the same across the EU and accordingly face financial pressures, but clearly in other areas, such as the ones you cite above, we’ve chosen to abandon universal healthcare for all UK citizens instead, which is (2).

      1. I think you mean abandon universal healthcare for UK *residents*, rather than *citizens*, right? As far as I’m aware, all UK citizens have access to the NHS, and everyone in the UK (regardless of residency status) gets A&E.

        I’d note that in Scotland, EU students do have all three of the benefits you list (no cap on numbers, free tuition, sovereign HE financial policy) – the other regions of the UK have abandoned the free tuition to varying degrees.

        Thinking more about it, aren’t students the only group in the EU who have full freedom of movement? For everyone else, there’s a limitation on actually being able to support yourself (and any dependents), typically through employment (and therefore tax & NI contributions). Which means that the EU is almost entirely in solution 2, for pretty much everything. There aren’t really any situations in social welfare that I can think of which are mandated by the EU – in general EU citizens get whatever access local citizens get, but their home country of citizenship may be asked to pay for it. I guess it depends whether you count worker’s’rights etc. (which are mandated across the EU) as social welfare. Doesn’t that make it more “neoliberal” than “globalist”?

        I agree that in terms of things like food standards, agricultural policy, environmental protection etc. the EU is, globalist (which definitely has both pros and cons), but I’m not sure I’d agree that it is on social welfare.

        1. No, I did mean citizens – UK citizens aren’t entitled to NHS care if they don’t mean certain residency requirements. The same is true for maintenance loans for university. My understanding (though speculation about motivations always has limitations) is that one reason for this is that the EU doesn’t permit these things to be restricted by citizenship, so if we didn’t want to offer them up to the whole EU we had to go down the residency route which had the side effect of excluding some UK citizens.

          Though this still reinforces your argument that the EU has resulted in ‘neoliberal’ responses as much or more than ‘globalist’ ones in this area.

          Regarding the ‘need to support yourself’ and ‘not being a burden on the social welfare system’, I’ve read the links you sent but am sceptical that this actually works in practice. There are no checks on entry and given that the High Court has ruled that actually being homeless (and having committed minor criminal offences) doesn’t qualify you as being eligible for deportation, it’s hard to see how this is genuinely a limitation in any way. (Not arguing that we should necessarily be able to deport people in such circumstances, just that the fact we can’t suggests the clauses you referenced don’t really have teeth). I’m not an expert here though, so would welcome correction if you can point to ways in which it is a genuine restriction.
          https://www.independent.co.uk/news/uk/home-news/homeless-eu-citizens-deporting-illegal-policy-home-office-high-court-ruling-brexit-stop-a8110001.html

          1. I think the issue of the practicalities of how the UK monitors its borders are valid, though I think age a UK-specific issue. One of the challenges with EU citizens after Brexit is that there is no “list” of EU residents. I believe that in some other countries EU migrants are required to register within a short period of living there (after the 3 month period) – see, e.g. Austria https://www.virtualvienna.net/moving-to-vienna/entry-and-residence-in-austria/

            In terms of deporting homeless people, I think that judgement you mentioned was that homelessness in itself should not be a reason for deportation.

            Two relevant quotes from
            https://www.independent.co.uk/news/uk/home-news/brexit-home-office-deport-eu-citizens-homeless-rough-sleeping-european-commission-a8023896.html
            (which is linked from the article you cited).

            “Many of those detained and removed for misusing their free movement rights were actually in work and some even had permanent right of residency, but – in breach of their own policy – the Home Office didn’t care to check.” [human rights lawyer]

            “Under EU law, people have to be given procedural protections and there must be case-by-case consideration. They should also be given a month’s notice to leave. I suspect what the UK Government is doing is just rounding up people and getting rid of them.” [academic EU expert]

            So the way I read it
            1) a homeless person can’t come to the UK and continue to be homeless, as they can’t support themselves
            2) If they start working here, then become homeless, then they can be given a month’s notice to be deported to their home country.
            3) Unless they’ve been here for long enough to have permanent residency, in which case they can’t be deported.

            In case 2), there’s the issue of what to do if the person is in work but homeless -that would seem to imply that they can’t support themselves – though proving they’re a burden on the state is presumably harder (they are ineligible for benefits, of curse). But having an address seemingly isn’t a requirement in EU law – I guess such a requirement would be difficult for travelling communities. Having a registration system (such as Austria’s) would presumably solve that problem (though may well create others) – I haven’t thought about that in sufficient detail.

            Given that being deported is such a huge issue for the deportee (particularly if, as a result of deportation, they lose their job) it seems only right that it’s done with careful legal attention.

          2. I certainly agree we should follow due process. However, I think a system with no checks on entry and where it’s difficult to prove that even someone who’s homeless is a burden on the state is not what most laypeople would consider ‘people can only move if they can support themselves and their families’.

            If we’re honest, that’s why pretty well everyone – supporters or opponents – usually call it ‘free movement of people’ rather than ‘free movement of workers’. And I’d rather discuss whether the de facto policy is a good one or not than debate the theoretic case which doesn’t really represent what happens (I think this sort of thing – citing technicalities which don’t reflect what really happens, instead of actually defending the real policy – is one cause of the loss of trust in the establishment).

          3. Granted that specific cases probably detract from the main argument, though do the edge cases not define useful boundaries for the policy?

            If there an issue with what checks we do at the border, and who is allowed to stay in the country, then the people to lobby are not just in Brussels, but also in Westminster. Much of this is set by national policy, though obviously constrained by EU policy. My suspicion is that there’s more flexibility around the implementation than we’re generally led to believe.

            Other countries in the EU have stricter controls and tighter monitoring (in the form of registration forms and ID cards). See, for example, Austria https://www.migration.gv.at/en/types-of-immigration/mobility-within-the-eu/ -Granted that specific cases probably detract from the argument. But if there an issue with what checks we do at the border, and who is allowed to stay in the country, then the people to lobby are not just in Brussels, but also in Westminster.

            Other countries in the EU have stricter controls for residency beyond 3 months and tighter monitoring (in the form of registration forms and ID cards. See, for example, Austria:
            https://www.migration.gv.at/en/types-of-immigration/mobility-within-the-eu/
            And http://blogs.lse.ac.uk/europpblog/2017/02/21/eu-free-movement-curse-or-blessing-austria/)

            (not necessarily supporting the Austrian position, just using it as an example of another implementation).

            The catch is that such a solution requires ID cards, which comes with quite a lot of political baggage, certainly here in the UK.

          4. You make some good points! Ok, I’ll accept that the EU in principle allows a variety of possible compromises between the three options (whilst still constraining the option space to an extent, as anything on that scale would), and that it’s the UK’s particular response that falls into the mix of ‘globalism’ and ‘neoliberalism’ as above.

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