5219
football-and-labour-economics

Jose Mourinho’s Inter Milan side were crowned kings of European football on Saturday night, having won their domestic Italian league, the Italian cup competition and the Europe-wide Champion’s League in the space of a season. Remarkable stuff, but there is an economically interesting fact behind this.

Not one player in the Inter Milan starting team was Italian, let alone Milanese; the squad featured players from Brazil, Holland, Romania, Argentina, Macedonia, Ghana, Serbia and Cameroon, in addition to a Portuguese manager. This trend is repeated across Europe; English champions Chelsea regularly fielded just two English players in the starting team this year. Indeed, a relatively small amount of world-class footballers stay in their country of origin with even fewer remaining at their original club. The overwhelming majority of talented footballers are traded on what resembles an open labour market.

Free movement of labour is a controversial topic amongst liberal thinkers; some support open borders on grounds of freedom, while others invoke a private property argument relating to trespassing. Some also take a pragmatic view between the two.

The economic ideal is that individuals are free to seek employment across borders, and employers are thus free to employ the best person for the job, regardless of the candidate’s country of origin. The process is therefore more macro-efficient.

In this sense, the increasing internationalization of football’s workforce in recent decades provides an interesting natural experiment. I suspect that an examination of the data from all the top-flight clubs across Europe would reveal a very strong positive correlation between the number of foreign players at a club and the club’s position in the league. This correlation, in itself, would not imply that an international workforce causes more success at a club (although it fits very well with the theory). For example, it could be said that the correlation is due to the fact that high achieving teams are likely to be richer and so can afford to buy more players in from abroad, but even this explanation is still very compatible with the theory. The point can be tidied into a neat syllogism: Football clubs rationally pursue the course of action that is best for them; the clubs tend to employ more foreign players when they have the resources to do so; therefore clubs should be allowed employ players from abroad if they choose to.

As a control group, we can look at clubs from leagues with relatively low levels of foreign labour. French, Russian and Portuguese clubs employ proportionally less foreign players than their English, Spanish and Italian counterparts and have a correspondingly less-successful record in Europe-wide competitions. The success of ‘internationalized’ clubs such as Inter Milan, Chelsea, Manchester United and Barcelona in recent years has occurred despite a ridiculous contention from UEFA (the governing body of European Football) that mandatory numbers in any squad should be from the native country.

While the example of football clubs is a simplified model for the labour market as a whole, it is highly illustrative of the potential efficiency and booming growth that relatively free labour migration can have on an industry and of the wider effects of globalization in general. This point is particularly relevant at the moment with the political consensus that immigration must be tightly monitored and restricted.

The triumph of Inter Milan must serve as a reminder of the numerous benefits of foreign labour.