Tackle the root causes of slavery and human trafficking

On the BBC’s Today programme last Thursday, it was reported that vulnerable individuals from the UK are being trafficked within the EU to work as forced labour. The predictable response was to ask an EU official what the government response to such a problem should be which was outlined as information-sharing, enforcement, inter-governmental co-operation via the European Convention on Action Against Trafficking and so on.

A similar position can be found in this report from the Joseph Rowntree Foundation from 2007, looking at trafficking and slavery into the UK. This report suggests that appropriate policy recommendations should be based around governmental solutions; public awareness campaigns, tougher regulation of gangmasters, a more rigorous enforcement of the 2004 Immigration and Asylum Act provisions against trafficking and so forth.

Unfortunately, most of these proposed actions focus upon symptomatic treatment and do not tackle the underlying causes of human trafficking and slavery. The JRF report recognises that many of the problems are integral to the issue of migration. In terms of the countries of origin, there is little that can reasonably be said without entering into a discussion of development economics (barriers to trade and migration and the stultifying effects of aid are for a different discussion).  It is clear, however, that UK immigration policy – by tying visas to specific jobs – enhances the ability of unscrupulous employers to coerce the victims. Tougher enforcement is unlikely to be very effective given its failures thus far; as the JRF observes, there have been very few prosecutions for trafficking. Comparison with the drugs trade would suggest that tougher enforcement merely drives up prices and further enriches the traffickers without having any noticeable impact on supply, amongst other harmful effects.

Eliminating the causes of human trafficking would be far more effective in these circumstances. The JRF report argues that the UK’s labour markets are the most flexible in Europe and it is the demand for cheap seasonal and temporary labour that creates demand for forced labour. Supermarket monopsony forces suppliers to drive down costs and employ the cheapest possible labour. Whilst the UK’s labour market may be more flexible than some, it is still highly inflexible in absolute terms.  Temporary labour is favoured because of the bureaucratic costs of employing permanent labourers. Attempts to impose the same costs on temporary labourers will also further encourage a resort to illegal labour unencumbered by regulation. Similarly, the minimum wage creates an incentive to employ bonded labour either to avoid paying such wage rates or because of the reduction in supply of labour that minimum wages and bureaucracy imposes. Further, while it is a complex issue, the supermarket monopsony can hardly be explained in terms of a free market as the supermarkets receive various state-imposed economies of scale and barriers to competition which they would not receive in a free market.

One major aspect of the problem is the sex trade. Unlike the grey area of seasonal labour the sex trade is illegal. This creates the ideal incentives for trafficking and exploitation, and it is one of the strongest arguments for legalisation of prostitution. Instead, in an absurd piece of wrong-headedness, politicians like Harriet Harman advocate exactly the opposite. Sex workers themselves recognise the folly of this argument. It must also be pointed out that a slave is someone denied control over their body – which is what, in effect, prohibition of prostitution is doing. Criminalisation also makes it easier to engage minors in the sex trade as customers have fewer means of ensuring the legitimate nature of the business they are dealing with.

Of course, trafficking is not a simple phenomenon. In the case of forced marriage there is a case for state intervention because the slavery is an end in itself and is not a market-related phenomenon as such. These cases are rather more limited in number, however. It is also typical of interventionism in that it seeks to remedy one unintended consequence of interventionism with another, rather than removing the initial intervention. In other words, the government is enabling and incentivising a negative behaviour that it then seeks to remedy with further investment of resources, but it is amazing when everyone is surprised that such an approach fails. Thus it is liberalisation of labour markets and migration, not further state interventionism, which would mitigate against human trafficking.