Mass Immigration and its Discontents

Is there an economic case against open borders, and not just a cultural one? Certainly, warnings about labor shortages from open-borders advocates like Paul Ryan strike me as rather hollow at a time of increasingly advanced automation and robotics. The collision course that is the welfare state and affirmative action on one hand, and mass immigration on the other, has been explored quite extensively.

But there is plenty of room for reservation about open borders if you just believe in something called supply and demand.

That’s what the always interesting Ron Unz argued recently in a debate against libertarian economist and pundit Brian Caplan. I was surprised to hear a few days ago that an Intelligence Squared audience, predictably very much in favor of mass immigration according to polls taken at the beginning of the debate, subsequently swung massively to Unz’s restrictionist side.

Now, my view is that the wants and needs of western countries, even with their aging populations, are vastly outnumbered by the wants and needs of the pools of potential migrants in poor countries. Eight out of the ten most fertile countries in the world are in the dysfunctional region that is sub-Saharan Africa. Conceivably, we may need some of their labor, even if the unemployment rate in Spain and Greece remains in the mid to high twenties. But the fact that 44% of Somalians are under the age of 15, for instance, should be giving us pause for thought before we even consider throwing the borders open. The supply and demand situation here is incredibly skewed. Greece, certainly an economic basket-case at present, still looks tempting enough from the perspective of a young person from Eritrea, where per capita GDP stands at $600.  My money would be on major economic and social upheaval if unfettered movement of people were actually adopted as it stands.

Back to Ron Unz, who calmly advanced a common-sense argument against a typically smarmy Brian Caplan. Unz simply states that allowing an unlimited number of additional workers from everywhere in the world to come to America, as Caplan advocates, would massively increase the supply of labor. This would tremendously disadvantage labor, to the tremendous advantage of capital. Ordinary workers would not benefit at all. True, there would be a huge increase in economic production, productivity, and GNP on paper. All of it, however, would be captured by capital. America’s minimum wage would quickly become the maximum wage.

This would exacerbate the bifurcation of American that has taken place over the past 40 years. While technology has increased living standards, real earnings for most have been stagnant during this time. Yet the wealthy have gotten much wealthier. The top 1 percent of American society has reached the point where it has as much wealth as the bottom 95 percent. Mass immigration and mismanagement of the currency have been the main culprits here. Female entry to the workforce has payed its part, though the wage sectors that have experienced the sharpest declines are not the ones that have seen massive influxes of women.

A recent cover piece at The Spectator described the American and British middle classes as “shrinking and sinking”. This may constitute the single most disturbing social trend of our age, and a true tragedy for the adults of tomorrow, who will not be able to enjoy the trappings of life their parents and grandparents did. Not to mention it is potentially destabilizing politically.

If libertarians like Caplan and mainstream conservatives (or more accurately, perhaps, Wall Street conservatives) are not helping to stop and reverse this trend, they are on the wrong side of history. Recent talk of a ‘libertarian populism‘ or ‘labor Republicanism‘ may indicate a growing awareness that conservatives and libertarians must speak the language of exurban Ohio rather than midtown Manhattan.

The policies of previous decades, focusing on tax cuts and privatization, will no longer cut it. We now have huge numbers of working poor and people earning under £1500 a month in Britain. They may pay no direct tax apart  from an £85 National Insurance contribution. They gain significantly more from government services than what they pay in. They have no incentive to vote for the Mitt Romneys of this world.

So we are going to have to find ways to genuinely improve the average man’s standard of living, economic mobility, and purchasing power. My first step would be an end to all immigration unless of a highly skilled, specific variety. Its not the only step that could be taken, but I am willing to say it is the most important one.

I have said to a colleague on Facebook that open-borders libertarians, and the editorial writers at outlets like the Wall Street Journal and the FT, are because of their adherence to this idea now as dangerous to the middle class and prosperity as any Bolshevik. I stand by it.