Monthly Archives: October 2012

Charter city constitutions: filling in the blank

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This post may seem off-topic, but from my point of view it’s relevant because I think of charter cities as part of the “master plan” for open borders. My master plan has four parts:

  1. Advocacy and moral suasion
  2. International migration deals, which would what the WTO has done for trade
  3. Undocumented immigration and civil disobedience
  4. Passport-free, or at least much less restrictionist, charter cities

See here, here, and here for more.

Anyway. The falling out between Paul Romer and Michael Strong/MGK Group seems to have been over a constitutional issue. What should the constitution of the new charter cities be like? Just what the two sides of the constitutional disagreement were is hard to discern and describe. It’s partly the lack of transparency by all parties, but more than that I think we’re hobbled by a lack of good theory. Theory gives us the vocabulary, the mental categories and the words to express them, with which to perceive what’s going on.

Let me start from the Concept page at the Charter Cities website:

The concept is very flexible, but all charter cities should share these four elements:

  1. A vacant piece of land, large enough for an entire city.
  2. A charter that specifies in advance the broad rules that will apply there.
  3. A commitment to choice, backed by voluntary entry and free exit for all residents.
  4. A commitment to the equal application of all rules to all residents.

The broad commitment to choice means that no person, employer, investor, or country can be coerced into participating. Only a country that wants to create a new charter city will contribute the land to build one. Only people who make an affirmative decision to move to the new city will live under its rules. They will stay only if its rules are as good as those offered by competing cities.

A charter should describe the process whereby the detailed rules and regulations will be established and enforced in a city. It should provide a foundation for a legal system that will let the city grow and prosper. This legal system, possibly backed by the credibility of a partner country, will be particularly important in the early years of the cityʼs development, when private investors finance most of the required urban infrastructure.

There are three distinct roles for participating nations: host, source, and guarantor. The host country provides the land. A source country supplies the people who move to the new city. A guarantor country ensures that the charter will be respected and enforced for decades into the future.

Because these roles can be played by a single nation or by several countries working together as partners, there are many potential arrangements.

This is admirably lucid as far as it goes, but I am struck by (1) the way it leaves the constitution of the charter city as fill-in-the-blank, and (2) the assumption that the crucial guarantor role must be played by a country.

Why would a country want to play the guarantor role? Presumably not for territorial aggrandizement. Possibly out of altruism, the presumptive (not always the real) motive for foreign aid. Wise constitutions don’t rely too much on altruism, however. Could a country profit by serving as the guarantor of a charter city? In one sense, that could make sense, because if better rules raise productivity, the guarantor could cream off some of the surplus value created while leaving everyone involved better off. But a crucial feature of the rules in developed countries is the distinction between private sector actors such as businessmen, who can sell their services to the highest bidder but cannot use force, and public sector actors such as judges, who cannot sell their services to the highest bidder but can use force.

The problem with relying on altruism is not just that altruism is rare, but that it doesn’t give specific instructions. Live for others? How? A stylized characterization of the constitutions of the wealthy West is that the #1 rule is that the rulers don’t make the rules, the ruled do. Suppose you tell Western bureaucrats to set up shop in a vacant plot of land in a developing country. They ask, “What are we supposed to do there?” We answer, the same thing you do at home. You guys run things well in the West, do the same thing here. But in the West, they are accustomed to serving the people. So the first thing the bureaucrats might want to do is hold an election, so they’ll have political bosses to obey and mandates from the people to carry out. But if the city’s just been founded, there’s no one to vote. So you have a chicken-and-egg problem. Later, when people move in, they’ll likely vote for different rules than the West has. And that seems to be the end of your experiment with exporting good rules to poor places.

Alternatively, the Western bureaucrats could obey their home governments. But those governments are democracies and obey their home electors, who will not have the interests of the charter city at heart. That the policies of a charter city should depend on the domestic politics, as distinct from the technocratic expertise, of another country, seems to be an unwelcome feature of a charter city whose staff are the servants of a foreign country. Is it possible to give Western bureaucrats, likely to have knowledge and integrity but not accustomed to taking initiative or setting policy, specific instructions to carry out, without letting good rules be overridden by local democratic politics or tied to irrelevant democratic politics abroad?

The following constitution is my attempt to resolve the question.

Continue reading Charter city constitutions: filling in the blank →

Chilecon Valley

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Post by Nathan Smith (regular blogger for the site, joined April 2012). See:

From The Economist:

THE world’s most valuable resource is talent. No country grows enough of it. Some, however, enjoy the colossal advantage of being able to import it. Rich, peaceful countries can attract clever immigrants. Unlike other useful imports, they cost the recipient country nothing. They come, they study, they work, they set up businesses, they create jobs: 40% of the founders of Fortune 500 companies are immigrants and their children. Yet they are only 23% of Americans.

Yet for more than a decade America has been choking off its supply of foreign talent, like a scuba diver squeezing his own breathing tube…

Canada, Australia and Singapore make it quick and painless for brainy foreigners to obtain visas to work or set up companies. Even Chile is luring some of the talent that America rejects. A remote emerging market with little tradition of innovation might seem an unlikely place to try to build a technology hub. But Start-Up Chile, a local programme to encourage entrepreneurs, is doing rather well, as our Silicon Valley correspondent reports from Santiago (see article). An entrepreneur with a good idea can get a visa in a couple of weeks. Since 2010, when Start-Up Chile began, it has attracted some 500 companies run by whizz-kids from 37 countries. Many of those who flock to Chilecon Valley, as it has been dubbed, would rather have gone to America, but couldn’t face a decade of immigration humiliation.

Chile or California?

Santiago is hardly a paradise for entrepreneurs. Chile’s domestic market is small, its bankruptcy law punitive. Private venture capital is still rare and credit costly. In a sad irony, Chilean bureaucrats are trying to shut down a low-interest lending market set up by the founder of Start-Up Chile. And although the programme to attract foreign entrepreneurs is promising, other government initiatives in that area—such as offering $40,000 grants to start-ups—are less sensible.

Still, the main lesson from Chilecon Valley is that clever people have choices.

Here’s hoping the idea spreads.

Wage discrimination’s elephant in the room

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Besides illuminating the horror of both candidates’ immigration policies, the 2nd US presidential debate this year was noteworthy for other reasons, such as Mitt Romney’s by-now infamous “binders full of women” remark. Romney was responding to a question about what he would do to erase the wage gap between men and women. The questioner specifically asserted that women make “only 72 percent of what their male counterparts earn.”

The Atlantic has an interesting interview with labour economist Francine Blau on this; it seems clear from the data that some statistically-inexplicable wage gap exists between male and female workers, although the difference is closer to 9% than the 28% suggested at the debate. What didn’t come up in the debate, and what Blau failed to highlight, is that these wage gaps, appalling as they are, are the tip of the iceberg. I refer, of course, to the horrifying place premium. Continue reading Wage discrimination’s elephant in the room →

“The Christian Perspective on Immigration”

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I was struck by the beginning of this article published at the website of the anti-immigration group, Center for Immigration Studies:

What are They Thinking: A Look at the Roman Catholic “Doctrine” on Immigration

It takes little effort to notice and to conclude that the Roman Catholic Church has, in the past few years, intensified its lobbying on behalf of immigrants and thus has intensified its lobbying on behalf of “comprehensive immigration reform”.1 Indeed, it can be argued that “comprehensive immigration reform”, as envisioned by the Church and by those who stand in agreement with her, is designed primarily to benefit immigrants, especially illegal immigrants, more than it is designed to benefit the current national population.2

The Church’s lobbying stems from, dare I say, an erroneous application, in the political sphere, of the Christian perspective on immigration. The Christian perspective on immigration makes no distinction between legal and illegal. Actually, allow me to be more precise: the Christian perspective on immigrants makes no distinction between legal and illegal. The Christian perspective on immigrants makes no distinction between legal and illegal because the Christian perspective per se does not see “immigrant” but sees “child of God”.

St. Paul, in a letter to the Christian community in Galatia, dated somewhere between 50 and 58 AD, articulates well this deeper perspective: “There is neither Jew nor Gentile, neither slave nor free, nor is there male and female, for you are all one in Christ Jesus.” One could easily add: “neither legal immigrant nor illegal immigrant”.3 This is a properly Christian perspective, a faith perspective that considers each individual in the light of the One considered to be the God-man, Jesus Christ, beyond human categories. Edwin O’Brien, then-Archbishop of Baltimore, articulated this perspective in a letter4 about illegal immigrants dated July 16, 2008: “Dare we look at these human beings as made in the image and likeness of God, brothers and sisters of Jesus Christ? Dare we look at them, in other words, with and through the eyes of Christ for whom no one is illegal, no one alien, no one a criminal who labors honestly to feed his family?”

Yet in spite of this, and of a lot of quotes illustrating the Church hierarchy’s fervor on the subject of immigration, the author of the article opposes the Catholic Church’s position. The author’s argument is difficult for me to follow, because some of it seems to rely on the reader to just dismiss the Roman Catholic view as absurd. I might do well to quote this paragraph, so that I don’t overstate the extent to which the Catholic Church agrees with me: Continue reading “The Christian Perspective on Immigration” →

Closed borders kill people

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Open borders advocates have long seized philosophical hypotheticals to argue that open borders would, quite literally, save lives. Restrictionists tend to jump through all kinds of hoops to argue that preventing someone from earning an honest living isn’t economically equivalent to robbing that person of some of their income — which, in extreme cases, can obviously cause death. But it isn’t hard, at all, to find cases where closing the borders quite literally kills people.

Historically, developed countries have welcomed political refugees, knowing that to turn someone away would likely lead to their death. We regret and condemn cases where the civilised world has failed to do this, such as when the 1940s US denied visas to European Jews (perhaps the most famous victim of American oppression here being Anne Frank). West Germany welcoming East German escapees or the US welcoming Vietnamese refugees come to mind; even today, the US near-automatically grants residency to Cuban refugees.

While reading an article in the New York Times today about the corner of the world where the borders of Pakistan, Afghanistan, and Iran meet, all I could think about was the power of open borders to transform people’s lives. I don’t know many people who would find it appealing to live in Iran, yet there are literally people willing to run the risk of death just to get into Iran (over 2 million of them, by one estimate from the article). That’s the immense power of the place premium.

I don’t have extremely strong views on Iran, but after reading the article, I don’t think I had a very positive impression of the country — to put it mildly. The way it treats undocumented Afghan workers, literally murdering people for crossing a line someone drew on a map, is unconscionable. Yet almost everything about Iranian immigration policy, short of murdering immigrants, resembles immigration policy in almost every country of the world. What makes Iranian immigration policy barbaric, but US or European immigration policy civilised?

Something else to chew on: Australia’s policy of jailing immigrants has backfired, because Indonesians are willing to risk death on the open seas to immigrate to Australian jails. The place premium’s existence and power are undeniable: people risk life and limb to get into Iran. They risk life and limb to get into an Australian jail, because that’s still a better life than what they had before. If closing the borders isn’t equivalent to taking food away from a starving man, it’s pretty damn close — especially when you need to literally kill some people to keep the borders closed.