Economists like to portray themselves as dispensers of eternal truths. In practice, not only the answers change over time – so too do the questions.

Unfortunately, rather like the generals who have a habit of being constantly ready to fight the last war, economists have a habit of being concerned with yesterday’s issues. Meanwhile, politicians, being, as John Maynard Keynes observed – “the slaves of some defunct economist or other” – are usually even further behind.

This applies, par excellence, to the EU.

The Treaty of Rome – the foundation document of the European Union, signed in 1957 – laid down three freedoms of movement: of goods, capital and labour.

For many economists at the time (and for some still), this made perfect economic sense. Economies are more productive when resources are allocated efficiently. And they are more likely to be allocated efficiently if they are free to move between competing places and types of employment.

At the time of the Treaty, and for a long period afterward, the freedom that seemed most important to both economists and their political masters was the freedom of movement for goods.

It is easy to understand why. The Great Depression of the 1930s had been characterised by the widespread imposition of trade barriers, including tariffs, which caused international trade to contract. This was one of the main forces behind the collapse of output.

But the world has changed. The manufacture and trading of goods has become a smaller part of our GDP, while tariff barriers have come down dramatically around the world. The free movement of labour is now the most important of the three freedoms – and it poses serious issues for the EU.

It has become so important because of two major factors: first, the huge expansion of the EU to the east, including countries with much lower standards of living, whose people, therefore, have a strong economic incentive to move; second, the mass of people outside the union who want to get in.

The onrush of people from outside is due to the breaking down of states in the Middle East and Africa, the increased allure of the life apparently on offer in the EU, and the inexorable rise in the populations of these regions.

But you ain’t seen nothing yet!

Over the next few decades, the population of Africa and the Middle East is set to soar.

As a result, today’s migration issue isn’t about the allocation of resources; it isn’t even primarily about economics at all. It is about the ability and willingness of people, cultures and institutions to absorb large numbers of people from the outside, often with very different values, beliefs and traditions.

What is the answer? The EU is seeking a common European migration policy.

Of course, it already has such a policy for people within the union, namely free movement; now it is looking to put in place the equivalent of the Common External Tariff for goods, that is to say an EU-wide policy on immigration into the EU.

David Fuller's view

Roger Bootle is brave enough to ask some very sensible questions in this column, concluding with this one:

Just what is the problem to which the EU is the solution?

Indeed, and I hope subscribers will read the rest of this column.