Yearly Archives: 2013

Cosmopolitanism and open borders: a follow-up

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After I wrote my post on the apparent lack of interest in open borders among cosmopolitans, I received some comments offering some contrary evidence. While, as an advocate of open borders, I remain disappointed with the book I referenced in that post (though more generally as a student of cosmopolitanism I happily recommend The Cosmopolitanism Reader), I believe I was premature in claiming cosmopolitans have unduly ignored migration.

First, even if most of the mentions of migration and border controls in the book are cursory, some of the contributors have substantively commented on migration elsewhere. Brian Barry, one of the contributors to the part titled “Cosmopolitan Global Justice” that focused so much on global distributive justice, mostly ignored movement across borders in his essay. Yet he also edited a book in 1992 titled Free Movement: Ethical Issues in the Transnational Migration of People and of Money (which I have not read fully).

Simon Caney, another contributor, has also discussed migration separately. In a 2006 paper he admirably brought the sometimes abstract discussions of global justice into the practical realm of policy by comparing a dozen (ostensibly) cosmopolitan policies, one of which was open borders. He proceeds by defending the policy against the charge that open borders would not actually benefit the world’s poor:

Maybe the upshot will simply be that talented and able-bodied people will migrate, leaving the most vulnerable behind and unprotected. This is no doubt a risk but two points should be made in reply. First, recent evidence from the World Bank and elsewhere does indicate that migration aids the global poor. It is important to recognize here that migration generates two distinct kinds of beneficial effects. First, it improves the standard of living of the migrants and, second, migrants send remittances to their family members who remain in the home country and so the latter too can benefit from migration. So the beneficiaries include not simply those who leave (who are likely to be able bodied and skilled) but also those who are not able to leave to seek work. In its 2006 report entitled Global Economic Prospects: Economic Implications of Remittances and Migration, the World Bank found, for example, that the amount of money sent as remittances to developing countries was likely to be approximately $167 billion in 2005 and it has increased by 100% in five years […]. The report further adds that ‘remittances have been associated with declines in the poverty headcount ratio in several low-income countries—by 11 percentage points in Uganda, 6 in Bangladesh, and 5 in Ghana, for example. […]

Other cosmopolitan thinkers were also brought to my attention, including Phillip Cole, who has written two books on the ethics of immigration (or one and a half: the second was co-written with Christopher Heath Wellman, who argued for the right of states to restrict immigration. Phillip Cole has been discussed on this site previously here). I am not sure Cole considers himself a cosmopolitan, but he is certainly a fellow traveler, basing his arguments on the moral primacy of the individual and universalizing this primacy by applying it to every individual.

Likewise, Joseph Carens is an ethicist with whom I was already familiar (and who has been discussed on this blog previously), but I didn’t include him in the original post because I’ve never seen him adopt the cosmopolitan label. But focusing too much on labels can be unproductive. Carens has been writing about the ethics of migration for decades, with one classic essay, Migration and Morality: a Liberal Egalitarian Perspective, appearing in Barry’s book mentioned above. In this essay he stakes out the position, similar to that advanced by this site, that “Liberal egalitarianism entails a deep commitment to freedom of movement as both an important liberty in itself and a prerequisite for other freedoms. Thus the presumption is for free migration and anyone who would defend restrictions faces a heavy burden of proof.” Carens has continued his work in defending free migration to the present: Amazon tells us he has a book forthcoming on the subject in December.

Arash Abizadeh is a political philosopher at McGill University of a cosmopolitan bent who has defended open borders in a number of recent papers. In one especially novel paper (pdf), he defies the conventional wisdom that democratic principles and liberal egalitarian principles come to loggerheads on the issue of border control. He proposes that, because border control is coercive to individuals seeking to cross borders, democratic legitimacy requires that the migrants (those on the business end of coercion) must be given some democratic say in the matter.

According to the state sovereignty view–the dominant ideology of the contemporary interstate system–entry policy ought to be under the unilateral discretion of (the members of) the state itself, and whatever justification is required for a particular entry policy is simply owed to members: foreigners are owed no justification and so should have no control over a state’s entry policy. What I seek to demonstrate is that such a position is inconsistent with the democratic theory of political  legitimation domestically is thereby committed to rejecting the unilateral domestic right to control and close the state’s boundaries, whether boundaries in the civic sense (which regulate membership) or in the territorial sense (which regulate movement).

Obviously I cannot exhaustively cover all the cosmopolitan and cosmo-curious thinkers who have discussed the ethics of migration in this post. A brief dip in the literature has turned up more than I originally thought I would find based on my introductory text. I’d like to close with perhaps my most encouraging find. Gillian Brock, in her 2009 book Global Justice: a Cosmopolitan Account, devoted a whole chapter on immigration. An adapted excerpt of the chapter was published on openDemocracy. Brock is not opposed to increased migration per se, but she expresses skepticism that freer migration will advance global justice if unaccompanied by policies mitigating perceived adverse side effects of liberalized emigration from poor countries. Specifically, she contends brain drain effects on sending countries can outweigh the positive effects on host countries and the migrants themselves, especially in the case of health workers.

I plan to address Brock’s concern about the “brain drain” in another post, but for now I want to point to the attention her arguments received among other cosmopolitans. The journal Global Justice: Theory Practice Rhetoric (mercifully ungated) hosted a special issue in 2011 to discuss her book. Two of the response essays focused on Brock’s treatment of migration, criticizing her skepticism of freer migration policies. The journal editors, perhaps sensing the wide interest in the topic, then devoted their 2012 issue to migration and its relationship to global justice. Even when cosmopolitans oppose unrestricted movement or hedge their arguments against it, they offer a refreshing point of view. In a debate where so often advocates of open borders struggle to get our interlocutors to acknowledge that the rights and preferences of would-be migrants warrant our consideration at all, skeptical cosmopolitans on the contrary fear that we may have insufficiently considered the effects on all of the relevant affected people. The coverage of migration by cosmopolitan philosophers is more substantive than I thought, and it’s heartening to see that, if anything, interest in the subject has deepened in recent years.

Immigration-backed Bonds

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Nathan Smith has proposed a scheme for a keyhole solution: DRITI, that has as its main features return deposits, surtaxes, and savings accounts. While I found it interesting, it looked a little complicated to me. In a similar vein, Anu Bradford suggests that a bond be posted by companies for the immigrants they hire. I liked that idea, too, but I share David Henderson’s reservations regarding the exact scheme.

Now, allow me to offer my own proposal. I am for real open borders. So it is only meant as a compromise that could work with most people being skeptical or even hostile to open borders. For want of a better name, let me call it an “immigration-backed bond” (unfortunately, “immigration bond”, which would be a better term, already refers to bonds that immigrants have to post to get out of detention).

The main points that I would like to change are these:

  • The above proposals rely on individual and private contracts. It would be preferable to exploit economies of scale and create a market with public information.
  • A product that needs to attract a lot of capital has to be reasonably simple. Even better if it conforms to some standard template.
  • There is often a complaint that proponents of open borders want the benefits for themselves, but risks are socialized. It would be nice if you could instead put your money where your mouth is.
  • Self-interest has been a reliable motivation for ages. So those who supply the capital should reap a profit commensurate with risks taken.
  • To increase political feasibility, I would also like to create a material interest on the part of the government.

The basic structure of an “immigration-backed bond” may look complicated, but only relies on rather standard features that have been around for a long time, e. g. for corporate and mortgage-backed bonds. It is a bond that has a certain maturity, e. g. in ten years, and is then paid back. In the meantime it pays a regular coupon. The coupon depends on a pool of immigrants and how they behave. It might pay back before maturity (in part or whole), i. e. there is a “callable” provision. And in extreme cases what you receive at maturity could be less than 100%. Of course, the coupon would have to be high enough to compensate you for the risks you take.

How does this relate to the immigrants?

For every, let’s say, $20,000 in bonds issued, there is a visa for one immigrant. The visa is “shall issue” and not “may issue”, i. e. the government can only refuse to issue it if there are some predefined reasons (e. g. no clean criminal record, affiliation with a terrorist organization). “Shall issue” is in line with a prima facie right to immigrate, whereas the current “may issue” is not. The bond insures risks from the immigrant, and the $20,000 serve as collateral if there are any problems that result in expenses to the government or third parties (e. g. fines, damages, cost of repatriation).

Unlike with current visas, the immigrants keep their visas as long as they pay up. So losing a job or changing employers would not be a problem per se. Or someone else might pay for them, e. g. a charity, family members or a spouse. If the immigrant does not incur any such costs, or less than some limit, they become permanent residents at maturity. If they default on payments or cross the limit, they can be sent back to the country they came from.

It still may not be clear how this would work on an operational level. So let me elaborate. To make it very concrete I suggest a rather specific implementation. However, I don’t think that the specifics are in any way optimal. They are only meant to show that there is no inherent problem.

The main part would be to set up a special legal entity (usually called a “Special Purpose Vehicle”) that obtains a certain amount of money from investors, let’s say, 500 million dollars for ten years, which would correspond to a pool of 25,000 immigrants. Half a billion dollars would be more than enough for a liquid market in the bond. In principle, the Special Purpose Vehicle could directly handle everything and have a dedicated staff for that purpose. However, that is not particularly likely because it is inefficient to start all over again for each new bond. Instead most operations would probably be outsourced to external parties who receive a fee from the Special Purpose Vehicle for their services.

As for the external parties involved I could imagine the following:

  • Investment banks set up the Special Purpose Vehicle and take care of bringing the bond to market.
  • A bank takes over the financial side of operations.
  • Rating agencies might supply a rating for the risks involved.
  • An accountancy firm supervises the different operations.
  • Probably a law firm takes care of handling charges from the government and re-couping them from the immigrants.
  • One or more human resource consulting firms originate the pool, i. e. select the immigrants (and probably also match them with job offers).
  • Some other party (e. g. a telephone operator) collects payments from the immigrants.
  • Insurance companies might also be involved, e. g. insuring extreme risks.

What is perhaps unclear is how some party (probably a human resource consulting firm) would originate the pool. Here’s how this could work:

The Special Purpose Vehicle comes with a definition for the characteristics of the immigrants. That’s because investors probably want to have an idea of what the risks are. The human resource consulting firm would then try to find people with the relevant profile in the usual way via ads or going through their databases (and probably also match them with respective job offers). Or it could be the other way around: the human resource consulting firm has a larger pool of potential immigrants, they “repackage” part of their larger pool and offer it to someone who wants to set up a Special Purpose Vehicle. An accountancy firm certifies they follow a defined protocol. To make the originator interested in delivering a good result, they could be asked to take on some of the risk themselves, e. g. with payments staggered until maturity, dependent on whether there are unexpected losses.

How would the definition be set for the pool? The main point would be to target a certain level of risk, and select immigrants accordingly. So any set of attributes that has predictive power, such as age, gender, education, etc. might be interesting as well as indicators for commitment (acquisition of relevant language skills, knowledge about the target country). The originator could also ask the immigrants to post some collateral themselves, or that someone vouches for them (e. g. their prospective employers, domestic citizens in the receiving country, immigrants with a good track record in some other pool, etc.). So parameters like degree of self-collateralization or percentage vouched for by reliable parties could also play a role.

What happens with the money?

Obviously, it would be stupid to leave it in a bank account at money market rates, so it should be invested in something. And here is where I would rely on the interest of politicians and the government: the money is invested in newly issued government bonds. And to make this even more attractive for the government, you could give them better than market conditions, e. g. no coupons or even negative coupons that are paid and not received by the Special Purpose Vehicle. Technically, you would perhaps want to keep the two things separate, so you have standard government bonds that can be sold in the market, plus a regular or lump payment to the government.

Up to this point, this looks like a money-losing operation. Holders of “immigration-backed bonds” would only have government bonds with lower or even negative coupons minus additional costs. That’s why the Special Purpose Vehicle has a claim on the immigrants for regular payments that cover all costs so far (market interest rates as an opportunity cost, expenses for origination and operation, extra payment to the government, a risk premium for investors).

It may be the business of the Special Purpose Vehicle to collect payments from the immigrants. However, it would probably outsource operations to some other party. Any company in the business of collecting money over a wide area would do. One idea would be to collect it via phone bills. Alternatively, contributions could be tacked onto tax payments as a surtax that is routed to the pool (minus some compensation to the government for supplying the infrastructure and costs for collecting the surtaxes). Since immigrants might die or leave the country before the ten years are over, there could also be a so-called “callable” provision, i. e. early payback of part of the principal, either by lot or pro rata. The government might also have to cede any extra payments after that point, so the underlying government bonds can be sold in the market. Or you could do without such a provision and investors would have to bear the risk of the respective defaults.

Could this work in the real world? Just a back-of-an-envelope derivation to see whether the dimensions are okay: If the pool were pretty risky, e. g. on a par with a junk bond with a rating of BB, you would want a premium of perhaps 5% per year to compensate for this. This is a truly risky pool, as over ten years you would expect charges and defaults of about $10,000 dollars per immigrant. You would also want a market rate for a riskless security over ten years. Now those are very low at the moment. A realistic long-term level would perhaps be something like 4%. Then there may be additional costs for origination and operation of 2% and a further 2% to get the government interested. This adds up to 13%. Now 13% of 20,000 dollars would translate to 2,600 dollars a year per immigrant or somewhat more than 200 dollars a month. My guess would be that this is more of an upper bound.

The government would get 10 million per year and half a billion in capital for ten years. The originator and operator (and their subcontractors) would obtain an annual $10 million together. Again this is only meant as a rough estimate and more of an upper bound to see whether something like this could work.

Would a typical government be interested? I think it would. For an extra 100.000 immigrants in one year, the government would have $40 million in extra money per year and an extra $2 billion in government bonds issued. For an extra 100,000 immigrants per year, you would have to do this for ten years in a row and then revolve. Now it is an extra $400 million per year and $20 billion in government bonds issued. Many governments in the Eurozone would have been glad to get their hands on such cheap refinancing. Of course, in that case the underlying government bonds would account for much of the risk premium.

With this rough calculation, my conclusion is that “immigrant-backed bonds” could be feasible and interesting for all parties involved. However, there are all kinds of loose ends and potential problems:

  • Unlike with mortgages that can be originated over an extended time frame and then repackaged, here many things have to happen within a short period of time, e. g. 25,000 applicants with a job offer right now. There could be some leakage with offers or applications being withdrawn at the last minute. However, one solution would be to have an excess of applicants and jobs, so there are always enough to fill the pool.
  • It could be tricky to define when and how much to pay to the government. As for fines and damages, this would be the same as what the immigrants have to pay directly. But how about expenses for court cases, police enforcement, etc.? What about if these charges materialize only after the bond has matured? And how about welfare payments? There could be some moral hazard problems here.
  • Is insurance limited to $20,000 per immigrant (or whatever it is, as the figure was purely arbitrary) or is there a real insurance via the pool where also extreme risks are insured (e. g. one of them perpetrating a major terrorist attack)? In the latter case: What if the Special Purpose Vehicle goes bankrupt? A typical solution would be to insure such extreme risks with a reinsurance company.
  • Asymmetric information and adverse selection: the immigrants who are selected could not immigrate in other ways, so there might be some hidden risks.
  • The originator could be corrupt. Supervision by an accountancy firm might not be sufficient to detect this. However, one remedy is to make them share in the risk via staggered payments that depend on results. The prospect of repeat business and protecting your reputation could be additional motivations for diligent origination.
  • “Asset-backed bonds”, after which this proposal is modelled, have fallen out of favor with investors and regulators in the wake of the financial crisis, but have made a modest comeback since then. So there might be a certain reluctance to participate in an offering, especially in the beginning.
  • It is easy to shoot down such a scheme with moralistic hyperbole: “You are treating immigrants like a commodity.” There is also a lot of potential for harrowing stories how immigrants are “exploited” or about “human trafficking.”
  • There might be perverse incentives for politicians to close down other venues because “immigration-backed bonds” are more lucrative. So there could be some crowding-out.
  • It might be hard to end such a scheme if you want to go for real open borders. On the upside, that would also apply if the government wanted to abolish it for more closed borders.

I am admittedly not an expert on structuring such products, so there might be even major improvements or else arguments why the whole concept would not work. That’s the reason I would like to offer this proposal for debate. However, if “immigration-backed bonds” came to pass as the best possible alternative under given circumstances, I would certainly be interested in investing my own money in them, just to show that I put my money where my mouth is – and to make a profit from a great opportunity to increase wealth.

[I would like to thank the Open Borders team for valuable input on a previous version of this post. I hope I now address most of the points they have raised. As always: all errors are mine. And for full disclosure, I would like to add that I work in the financial sector, but have no professional stake in what I suggest. And I am certainly not speaking on behalf of my employer.]

Weekly link roundup 7

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Here’s our weekly installment of links from around the web (see here for all link roundups). As usual, linking does not imply endorsement.

If Open Borders Are Instituted Gradually, What Should Be The Initial Number of Immigrants Admitted?

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In a recent post, Vipul wrote about the importance of better understanding the number of people who might migrate under policy changes in the direction of open borders.  One reason why he considers this important is to evaluate the legitimacy of concerns about “swamping:” “One of the main concerns of people ranging from hardcore restrictionists to moderate pro-immigrationers and even some who identify as being pro-open borders is that true open borders would lead to very large numbers of people moving over short time periods in a manner that would strain housing, electricity, water supplies, and other infrastructure in the countries receiving the immigrants.”

Whether receiving countries would be swamped if open borders were implemented, and what the swamping would actually be like, is pivotal to determining the morality of open borders.  That’s because, absent the possibility of a swamping that turns a receiving country into an economic and political basketcase similar to Haiti or Somalia, from a moral standpoint there are no obstacles to instituting open borders immediately.

In fact, two of the strongest moral arguments in favor of open borders include caveats in which extremely harmful swamping might override the arguments.  In “Aliens and Citizens: The Case for Open Borders” Joseph Carens uses John Rawls’ question about “what principles people would choose to govern society if they had to choose from behind a ‘veil of ignorance,’ knowing nothing about their own personal situations,” such as their class, race, sex, or natural talents, to address immigration policy. (p. 255)  Since people would be prevented “from knowing their place of birth or whether they were members of one particular society rather than another,” (p. 257) he concludes that they would choose an open borders regime: “In considering possible restrictions on freedom, one adopts the perspective of the one who would be most disadvantaged by the restrictions, in this case the perspective of the alien who wants to immigrate.  In the original position, then, one would insist that the right to migrate be included in the system of basic liberties for the same reasons that one would insist that the right to religious freedom be included: it might prove essential to one’s plan of life… So, the basic agreement among those in the original position would be to permit no restrictions on migration (whether emigration or immigration).” (p. 258)  (The original position means when people operate behind the “veil of ignorance” about their personal situation when choosing society’s laws.)

However, in “Migration and Morality: A Liberal Egalitarian Perspective,” Mr. Carens states that with open borders “… the number of those coming might overwhelm the capacity of the society to cope, leading to chaos and a breakdown of public order… A threat to public order could be used to justify restrictions on immigration… because the breakdown of public order makes everyone worse off in terms of both liberty and welfare.”  At the same time he writes that “the state is obliged to admit as many of those seeking entry as it can without jeopardizing national security, public order and the maintenance of liberal institutions.” (p. 30)

In “Is There a Right to Immigrate?” Michael Huemer argues that unless there are “extenuating circumstances,” people have a right “not to be subject to seriously harmful coercion.” (p. 432)  Therefore, unless special circumstances can be identified, physically barring immigrants from entering a country and expelling those already inside a country are violations of immigrants’ rights not to be harmfully coerced. (p. 434)  Mr. Huemer addresses a variety of justifications for this coercion against immigrants, including claims that immigration hurts native workers, that immigrants fiscally burden natives, that the government should prioritize the interests of disadvantaged natives, and that immigration threatens natives’ distinctive cultures.  Mr. Huemer effectively shows that these justifications do not override immigrants’ rights not to be harmfully coerced through immigration restrictions.

Nevertheless, the possibility of swamping gives Mr. Huemer pause.  He writes, “No one knows what the full effects of a policy of open borders would be, since it has been a very long time since U.S. borders have been open.”  Referring to Brian Barry, who predicts a billion immigrants coming to the U.S. with open borders and disastrous consequences, Mr. Huemer states that “Perhaps Barry is correct that the result would be disastrous for American society.  If so, this is the sort of extremely negative consequence that, it might be argued, outweighs the rights of potential immigrants to freedom of movement.” (pp. 453-454)

So would receiving countries be swamped with open borders, and would that swamping essentially destroy the economic and political systems that made those countries desireable destinations in the first place, thus overriding the moral imperative for open borders?  That is what Vipul is apparently exploring, but it seems that a clear answer will be elusive.

In apparent response to concerns about swamping, some, including Mr. Huemer (p. 454), have advocated for a gradual transition towards open borders.  This would involve increasing immigration levels over a period of time.  If receiving countries are not being severely swamped after each increase, then immigration levels would again be increased.  Politically, and perhaps morally, this approach may be warranted, although the suffering associated with restrictionism would persist.

At least the initial increase in immigrant numbers under a gradual transition could be substantial, without severe swamping of receiving countries, based on Israel’s experience with high levels of immigration from the former Soviet Union in the 1990s.  Philippe Legrain has highlighted this experience in his book Immigrants: Your Country Needs Them.  This flow of people to Israel was, in Mr. Legrain’s words, “one of the most dramatic experiments in the history of immigration.” (p. 133)  Mr. Legrain notes that between 1990 and 1997 over seven hundred thousand immigrants from the former Soviet Union arrived in Israel, a country with a population of about 4.6 million in 1989, and almost half of the immigrants entered in a two year period. (p. 134)  Mr. Legrain puts these numbers in perspective for America:  “Imagine, then, what would happen if over 15 million foreigners were suddenly to arrive in the U.S. over the next two years, rising to 29 million over eight years.  Twenty-nine million people who don’t speak English, don’t have jobs to go to and don’t even have any experience of working in a capitalist economy… Mass unemployment?  Riots in the streets?  Perhaps even the collapse of society?” (p.134)

Citing an Israeli economic expert on this impact, Mr. Legrain states that at first native Israelis’ wages fell by about 5 percent for men, and there was a sharp rise in interest rates.  However, “Israel’s economy seems to have absorbed a vast number of new workers without a rise in unemployment.”  Unemployment among native Israelis dropped during this period, and by 1997 the ex-Soviet employment rate was similar to that of native Israelis.  (p. 135)  In addition, by 1997, “natives’ wages had recovered to where they would have been without the mass immigration, and interest rates had fallen to their pre-immigration levels.”  Mr. Legrain concludes that “flexible advanced economies can absorb large numbers of immigrants without any cost to native workers if the inflows are reasonably predictable, and with only a short-term cost to them if they are unexpected.” (p. 135)

Some might counter that the ex-Soviet immigrants had higher levels of education than those who might immigrate to western countries from developing countries under an open borders policy.  However, Sarit Cohen and Chang-Tai Hsieh found that “… the Russian immigrants suffered from substantial occupational downgrading in Israel and thus did not increase the relative supply of skilled workers in Israel.” (p. 27) Many female immigrants, and presumably many male immigrants, ended up doing menial service jobs. This fits with Mr. Legrain’s explanation of how differences between native and immigrant workers limit competition between the two groups:  “… critics of immigration would be the first to argue that  immigrants and native workers are not identical.  The newcomers will almost certainly speak the local language less well, have fewer contacts and less knowledge of local practices… At most, then, they are imperfect substitutes for local workers, which implies that they only indirectly compete with them in the labour market—thus limiting any short-term harm they might cause natives.” (p. 137) Thus, despite their high education levels, the immigrants from the former Soviet Union should not be viewed differently from those who would enter developed countries under open borders.

The Israeli experience suggests an initial immigrant admissions level for the U.S., as part of a gradual move towards open borders, could be established that is much higher than current American admissions levels.  I don’t know how Mr. Legrain calculated the U.S. equivalent of 29 million people over eight years based on the Israeli experience, but my calculation is significantly higher.  First, there were over 820 thousand immigrants over the eight years, including immigration from other source countries in addition to that from the former Soviet Union.  Using the 1989 Israeli population of about 4.6 million and using a rounded down figure of eight hundred thousand immigrants between 1990 and 1997, there was about a 2.1% annual addition to the 1989 population over eight years.  A 2.1% addition to the current U.S. population of about 316 million yields more than 6.5 million new immigrants a year (52 million over eight years).  Therefore, a conservative recommendation would be to establish an initial immigration level to the U.S. of 6.5 million a year.  (By comparison, there have been about one million immigrants who have gained permanent legal status in the U.S. each of the last three years.  The undocumented population has been falling in recent years.)  The level would be raised regularly thereafter, assuming no devastating effects on the U.S. from previous levels.  Other receiving countries including Canada, Australia, New Zealand, and those in Europe and East Asia could also set their initial immigration levels at 2.1 percent of their current populations.

Again, this gradual approach to open borders means that much of the suffering associated with immigration restrictions would continue for years to come.  I share Bryan Caplan’s concern that fears of swamping, which are unsubstantiated, stand in the way of open borders: “We’re trapping millions in Third World misery because we know that free migration has very bad consequences” arguably overcomes the presumption in favor of open borders. “We’re trapping millions in Third World misery because there’s a small chance that free migration has very bad consequences” does not.”   While I am very uncomfortable with the gradualist approach to open borders, at least we have evidence showing a relatively high level at which receiving countries should begin their gradual implementation of open borders.

 

A reply to “Direct Economic Democracy”

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Direct Economic Democracy has measured the open borders movement and found it wanting. I couldn’t find any biographical information on the blog other than that the author lives in the UK, so for now the author is just DED to me. Judging by the two posts, DED and I (and probably most advocates of open borders) have substantively different worldviews, but I think there is potentially some common ground. So in addressing our differences I’d like to keep an eye toward our shared aims as well. After all, DED’s tagline is “Everybody matters”, a statement probably every free migrationist would heartily endorse. We advocate open borders in most cases because we think it’s a good way to empower people in poor countries to escape poverty. Likewise, DED is not a committed adversary of open borders, but instead seems to think the world is not yet ready for open borders and demanding free migration too early may evade or worsen the fundamental causes of world poverty:

In principle I share the libertarian ideal of everyone being able to live wherever in the world they fancy. I think the way to go about realising that aim is to first address the issues that create the disparities between rich and poor countries. Once that is (even if only partially) achieved, then the vast bulk of people would no longer have any desire to migrate. A few people would because of personal reasons and for exchange of specialist expertise. However opening borders would then not be opening the floodgates to a torrent of people driven by macroeconomic forces. It is only the prospect of such a torrent that keeps the borders closed now. My total disagreement with the Open Borders campaign is that they advocate opening the borders to a torrent of migration as a first-line response to the disparities between rich and poor countries.

DED begins the (second) post by criticizing free migrationists for describing labor in the rich world as “more productive” than identical labor in the poor world.

To my mind it is grossly insulting to describe that as “less productive” than working in yet another New York restaurant where insufficient custom means the food largely ends up down the sluice. Yet, in terms of how much the workers earn, it is “less productive”. It is all down to the fact that diners in New York have massively more money to spend than diners in Dhaka.

I agree that “productivity” is an unfortunate phrase, especially among non-specialists. It’s important to note that productivity is value-neutral as a technical term. Discussions of productivity differences between rich and poor countries, or similarly between rural and urban environments, have nothing to do with moral character. Because of the potential for connotative misunderstanding though, I prefer not to discuss “worker productivity” but simply wages instead. The pertinent fact is that wages for similar labor and skill sets are higher, sometimes vastly so, in the rich world than in the poor world, and liberalizing migration is the quickest and most straightforward way to eliminate this form of wage discrimination, to the immediate benefit the global poor.

DED suggests this approach is misguided because it fails to address the root causes of global poverty and assumes that such poverty is the result of bad governance in poor countries.

It could be argued that those in the rich world have little capacity to eliminate poverty in foreign countries and so have a greater chance of benefiting the lives of poor people by opening borders to immigration. That argument hinges on the idea that poverty is due to bad governance abroad and that the only answer is for the population to vote with their feet and emigrate. Firstly, I don’t think it is actually true that the rich world is a mere passive observer of poverty abroad. From what I can see, much of the blame for that poverty lies with active policies conducted by the developed world.

[…]

Much of the Open Borders logic seems to stem from the idea that market finance already has an inbuilt characteristic that would always lead towards an optimal solution for the world’s problems if only meddling governments were to stand aside.

I agree that the rich world is not merely a passive observer, but actively enforces policies that inhibit effective development in much of the world. Such policies include the arbitrary borders imposed by Western colonialism, agricultural subsidies cosseting rich farmers and tariffs inflicted on poor farmers, and, I must include, the coercive restrictions on movement known as border controls. I do think that another culprit behind persistent poverty in the world is bad governance. It seems hard to deny that governance has at least some impact in a world that has supplied such natural experiments as the Korean peninsula and East/West Germany. Although too often even the fault of bad governance can be laid at Western feet: the governments of the rich world have exhibited a nasty habit of propping up authoritarian dictators who are friendly to Western interests, or at least the interests of insiders. Then again, it’s important to remember that the “natural state” of humanity is grim poverty and early graves.

My point is not to enumerate the causes of world poverty but only to demonstrate that advocating open borders is consistent with any number of causes of world poverty, including causes DED likely favors. DED rather unfairly implies that advocates of open borders believe that our favored policy is the one true Way to cure what ails the world. But nothing about our advocacy suggests that other complementary policies should not be pursued as well. “Complementary” here is, to some extent, to taste. DED and I will likely disagree on the most effective and most just package of policies to subdue world poverty, but I see no reason in principle why DED, who has no fundamental problem with the freedom to migrate, should not include the opening of borders among their favored policies. Simon Caney’s slate of proposals might be of interest to readers of DED’s ideological persuasion (unfortunately gated). If DED fears the effects of a “torrent” of immigrants, (see here and links therein for a discussion of how likely this is) then the appropriate response is to advocate a gradual opening of borders, rather than defending the status quo.

Even by DED’s own standards of wanting to “address the issues that create the disparities between rich and poor countries” and getting the money to go to where the people are, liberalizing migration is effective. Remittances sent by immigrants to their countries of origin move resources directly into the hands of the poor by magnitudes greater than current official aid from the rich world. Diasporas facilitate investment in the poor world by increasing information flows between agents in rich and poor countries and, importantly, providing economic links augmented by trust and long-term commitment that is absent from far-removed investors.

I have tried to be constructive and non-confrontational in this post because at the end of the day, someone with DED’s concerns and commitments is exactly whom I want to reach (I speak personally here, and not necessarily for my fellow bloggers). But I do want to address some distracting and unnecessary provocations in DED’s posts. Linking to a study relating migration to schizophrenia in a throwaway comment (first post) is insulting to migrants. Hopefully we can all agree that restricting the freedom of movement of people around the world is not an effective way to prevent schizophrenia. And the mention of the Highland Clearances was jarringly irrelevant. No advocate of open borders is proposing a forced relocation of anyone anywhere. It shouldn’t come as a shock that we would decry the Trail of Tears as a blight on American history as well. These were brutally coercive policies that have nothing to do with a liberal migration regime.

It’s reasonable to highlight the abuses that can occur when people migrate to places with minimal standards for human rights protections, as in DED’s link to the story of indentured labourers in Dubai. But I see this as an argument for nations more committed to human rights to open their borders to provide more and better options for the world’s inevitable migrants. This story “underlines a wider phenomenon of migrant workers being in a less assertive position to ensure that they receive a fair level of pay”, something advocates of open borders seek to correct by bringing migration into the formal, regulated economies of democratic societies.

I’ll just close by urging Direct Economic Democracy and their readers to reconsider open borders, or at least reform in that direction, as a policy that could bring substantial benefit to millions of people, even as other systemic maladies of our imperfect world continue to demand solutions.