Yearly Archives: 2013

Response to A. M. Fantini

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The Freeman hosted a debate on immigration a few days ago (I’m not sure when exactly it was posted) between myself and A.M. Fantini, editor-in-chief of The European Conservative and secretary general of the Hayek Institute in Vienna, Austria. My arguments won’t be news to readers of this site, though this may be the most novel paragraph:

Open borders would undermine the legitimacy of the welfare state by taking away the border as blindfold. Such policies would make it obvious that the welfare state does nothing to help the world’s poorest, so why have it at all? Indeed, since open borders are far superior to foreign aid or the welfare state as means of helping the desperately poor, advocating open borders is by far the best way to seize the moral high ground against statists. And open borders would allow people to vote with their feet against predatory governments.

Let me focus instead on the arguments made by my interlocutor, Mr. Fantini. He starts by saying he sympathizes with many pro-open borders arguments and would “almost” like to advocate open borders…

But I can’t—not because I am heartless, but because of the fundamental importance I give to the classical liberal order and its prerequisites.

Fantini mentions that immigrants need to be denied access to “tax-funded goodies,” else “free migration only ends up growing the welfare state”– I more or less agree with him there– but his main argument is that “political communities have thrived so long as a majority of their members accepted certain principles—and the shared values that uphold them,” and “supporters of open borders fail to recognize the dangers of welcoming immigrants who are hostile to classical liberal principles and values.” Then he offers evidence:

The riots in Stockholm last month illustrate just such dangers. While some pointed to ethnic, racial, or religious reasons for the violence (others blamed bad schools, over-regulated labor markets, and the welfare state), few addressed the reality that most immigrants are simply not ready—or willing—to live and work in Swedish society. There is virtually no pressure nor incentive for immigrants to embrace Swedish values.

Over the past few years, there have been similar riots in other European capitals, with immigrants railing against their adopted countries. During September’s London riots, rioters cried out, “some of [you] were calling for freedom of speech and democracy—but isn’t it time we made an uprising?”

Such statements are reflective of a wider attitude among immigrant youths across Europe. In Austria, France, Denmark, Holland, and Germany, they blame society for their isolation, marginalization, and poverty. Never mind the civics courses, free language classes, welfare benefits, and subsidized housing; at their cores, these immigrant groups reject liberal democratic values.

How should libertarians respond if immigrants are aggressively opposed to their values? Should libertarians allow immigrants to move into a community even if they seek to undermine such values and formal institutions? Should the libertarian then become a refugee himself?

In Principles of a Free Society, I actually carved out of my pro-open borders position a possibly expansive exception for Muslim immigration, inasmuch as Muslims are arguably committed to a rights-violating ideology and therefore do not qualify as peaceful immigrants. Vipul challenged me on this point, and we debate whether the principles of freedom of speech and religion should extent to non-discrimination in immigration decisions on the basis of speech and religion. So I’m somewhat sympathetic to Fantini’s concerns.

That said, there’s something odd about a European libertarian complaining that immigrants “are agressively opposed to their values.” Isn’t the native European population aggressively opposed to libertarian values? Fantini complains that there is no pressure for immigrants to embrace Swedish values. Objection 1: If that’s the problem, the most direct solution is to create pressures for immigrants to embrace Swedish values, not to exclude them by force. But, Objection 2: Should libertarians really want immigrants to embrace Swedish values, that is, to embrace the values of a quite humane but also quite socialistic society? Fantini complains that immigrants are alienated despite “the civics courses, free language classes, welfare benefits, and subsidized housing,” but all those taxpayer-provided handouts are contrary to libertarian principles and teach immigrants anti-libertarian lessons.

If immigrants “seek to undermine… values and formal institutions,” I would ask two further questions. 1) Are the values and institutions they seek to undermine good or bad? 2) If they are good, are the immigrants likely to succeed in undermining them?

In Europe, immigrants are far from the only threat to democracy and free speech. A Swedish pastor was jailed for anti-gay remarks. Until recently, Mein Kampf couldn’t be sold in German bookstores. In Norway, Christian missionaries have been arrested for spreading the Gospel. Last year, a German court banned male circumcision, which of course is an absolutely fundamental violation of the religious freedom of Jews and Muslims. Meanwhile, the project of European unification has been progressively alienating power from national governments to a European Union regime with weak mechanisms of democratic accountability, in spite of repeated setbacks at the ballot box. I worry a bit that illiberal Europeans and illiberal Muslim immigrants will somehow collaborate in establishing a regime where an anti-Christian and socialistic bureaucracy concedes, first bits of turf, later vital principles, to rising Islamofascism. But the biggest problem for European libertarians is Europeans, not immigrants.

In a way, Fantini’s remarks were actually rather off-topic, since the topic was whether the US should open its immigration, and the problems Fantini cites in the European case hardly exist in America. In America, Muslim immigrants are patriotic.

I kind of like Fantini’s policy advice, precisely because I don’t think it would be effective. He suggests:

When considering immigration controls, it’s important to be guided by classical liberal principles—and avoid increasing federal involvement. There are alternatives to spending $4.5 billion on extended border fencing and “continuous surveillance” as proposed in current legislation.

For example, apply the principle of subsidiarity. In practice, this means addressing the issue in the most decentralized (local) way possible. As Hoppe has argued, this can be far more effective in controlling immigration than depending on the state, while also reinvigorating the “intermediate social institutions and hierarchies” in society—thus ensuring the survival of classical liberal principles.

I’ve responded to Hans-Herman Hoppe’s arguments before. It’s hard to understand what Fantini is envisioning here. The reason people want to control migration at the border, e.g., with expensive fencing and surveillance, is that once they’re in, immigrants automatically enjoy much of the freedom of movement that citizens enjoy. We don’t check the IDs of people who are walking around the streets, or riding public transportation, or as passengers in private cars. We sometimes check the IDs of drivers, and you need an ID to get on a plane, but still, localities just don’t really have the procedures to control migration. Should we establish them? Should towns, neighborhoods, state governments, or whatever be empowered to curtail people’s property rights by controlling whom owners can rent or sell real estate to? The notion reminds me of Cuba’s Committees for the Defense of the Revolution. That said, if there were a proposal to introduce state migration control while abolishing federal migration control, I’d support it as a lesser evil. Some states would liberalize, and state migration controls would be easier to evade. But it seems like a strange cause for a libertarian to support. I do favor gated communities. That is, I think it’s basically okay– though some questions remain to be asked on a case-by-case basis– to establish small territorially exclusive communities through private, consensual arrangements.

Lebanon and political externalities bleg

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A few weeks back, my co-blogger John Lee blogged about the worldwide success of the Lebanese diaspora and used this to argue against the hypothesis that people in a conflict-torn and economically unsuccessful region will necessarily be unsuccessful elsewhere in the world. Reading John’s post led me to ask the question: what about Lebanon’s immigration policy? Prima facie, Lebanon appears to be the poster child of the problems with a liberal immigration policy for refugees, ranging from political externalities (electing a new people) to culture clash. Here’s what Wikipedia’s page on the Lebanese Civil War states (footnotes and hyperlinks removed):

The Lebanese Civil War (Arabic: الحرب الأهلية اللبنانية‎) was a multifaceted civil war in Lebanon, lasting from 1975 to 1990 and resulting in an estimated 120,000 fatalities. Today approximately 76,000 people remain displaced within Lebanon. There was also a mass exodus of almost one million people from Lebanon.

The government of Lebanon had been dominated by Maronite Christians since the state was created as a safe haven for them by the French colonial powers. However, the country had a large Muslim population and many pan-Arabist and Left Wing groups which opposed the pro-western government. The establishment of the state of Israel and the displacement of a hundred thousand Palestinian refugees to Lebanon (around 10% of the total population of the country) changed the demographic balance in favour of the Muslim population. The Cold War had a powerful disintegrative effect on Lebanon, which was closely linked to the polarization that preceded the 1958 political crisis, since Maronites sided with the West while Left Wing and pan-Arab groups sided with Soviet aligned Arab countries.

The militarization of the Palestinian refugee population, with the arrival of the PLO forces after their expulsion from Jordan during Black September, sparked an arms race amongst the different Lebanese political factions and provided a foundation for the long-term involvement of Lebanon in regional conflicts. Fighting between Maronite and Palestinian forces began in 1975, and Left Wing, pan-Arabist and Muslim Lebanese groups later allied with the Palestinians. During the course of the fighting, alliances shifted rapidly and unpredictably: by the end of the war, nearly every party had allied with and subsequently betrayed every other party at least once. Furthermore, foreign powers meddled in the war, such as Israel and Syria which supported and fought alongside different factions. Peace keeping forces, such as the Multinational Force in Lebanon and UNIFIL, were also stationed in Lebanon.

So, Lebanon first let in lots of Maronite Christian refugees (under French colonial rule), leading to a Christian-dominated government. Then, they let in lots of Palestinian (mostly Muslim) refugees (in the wake of the creation of Israel and subsequent hostilities) leading to the tipping of the population scales in favor of Muslim domination. Net result: 15 years of civil war.

Bleg for anybody interested:

  1. What lessons, if any, does the story of Lebanon hold for migration policy worldwide?
  2. What other parts of the world, current or historical, resemble the pre-civil war situation in Lebanon?
  3. What parts of the world might resemble Lebanon if they moved to considerably more liberal immigration policies, particularly policies that approximate “open borders” as discussed on this site?

UPDATE 1: I discovered a lengthy article by Steve Sailer titled Diversity Is Strength! It’s Also … Lebanonization. Choice excerpts (hyperlinks removed):

Although many in our ahistorical punditariat had declared that Iraq was going to be “the first Arab democracy”, Lebanon was a successful democracy beginning in 1943, when it gained independence from France. It enjoyed a free press, women’s suffrage (from 1953), and a booming economy centered on banks, trade, and tourism.

And then it all came tumbling down. A hellish civil war erupted in 1975 and flared on and off into the early 1990s, with 100 different militias pounding each other with artillery duels inside Beirut.

Although it’s hard now to remember, during its three decades of stability and prosperity, Beirut was known as the “Paris of the Arab World”.

The more serious problem: Lebanon’s demographics shifted. The constitution was based on the 1932 census, when Christians comprised 54 percent of the population. Regrettably, but predictably, the best educated ethnicity, the Christians, had the lowest birthrate and were most likely to emigrate. In contrast, the poor and backward Shi’ites proliferated—and stayed put.

As the demographics changed, the original distribution of power among the groups became increasingly contentious. The Shi’ites demanded a new census. The Christians, who predominated in the cushiest government jobs and were guaranteed half the seats in the legislature, resisted.

Then, immigration became the straw that broke the fragile Lebanese camel’s back. David Lamb, the Los Angeles Times correspondent in the Middle East, wrote in his 1988 book The Arabs:

“Lebanon worked, however artificially, then because one group, the Christians, were clearly in control, lesser minorities were given freedom to maneuver as long as they didn’t get too uppity and everyone who mattered was making money. Tensions and hostilities festered only beneath the surface. But in 1970 Lebanon’s delicate balance was upset.”

Palestinian refugees had started arriving in 1948 and sped up after the 1967 Six Day War. Then, in the “Black September” of 1970, King Hussein of Jordan turned on Yassir Arafat’s Palestinian Liberation Organization and booted them out of his country. They relocated to Lebanon.

By 1973, Palestinians made up one tenth of Lebanon’s population, and were radicalizing. They forged alliances with the other outsiders, the Druze. And PLO attacks on Israel brought retribution raining down on Lebanon as a whole, outraging the ruling Maronites.

On April 13, 1975, four Christians were killed in a drive-by shooting of a church. Later that day, a Maronite Phalangist militia massacred 27 Palestinians on a bus. The country descended into civil war, polarizing along Christian-Muslim lines, but with many strange alliances and rapid betrayals.

UPDATE 2: Here’s an EconLog comment by Ali about Lebanon (emphasis mine):

Mr. Econotarian, what race/ethnicity is ILLEGAL? And why on earth should Americans embrace people of any race/ethnicity who do not respect us or our laws? Yeah, you’re libertarian, but government does provide services other than welfare and THAT depends on the cooperation of the members of society. If someone makes their first act here breaking the law, and they’re rewarded for it, why on earth would they think they have to follow ANY laws? Moreover, as for “diversity” doing away with welfare, it may well do that–and with the nation itself. My grandparents, Arab Christians, left Lebanon because that country became so diverse it fell apart.

UPDATE 3: Bryan Caplan’s post Does Conflict Immigrate? is tangentially related.

UPDATE 4: A lengthy response article (in German) to Steve Sailer’s claims about Lebanon.

A Biblical Frame for Immigration Liberalization

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This is a repost from Paul’s blog Quitting Providence. The original post is here.

I was reading this Atlantic write-up of the excellent website Open Borders: The Case and I was surprised when the article concluded that what was really needed was Mark Zuckerberg to ride in to the rescue. Zuckerberg has started deploying resources to make it easier for skilled workers to immigrate to America, but this is small potatoes compared to what he could be doing:

Lobbying his unparalleled audience, the largest online community the world has ever known, to create an army of open borders supporters–that is the kind of connect-the-world change that Zuckerberg has already created with Facebook. Perhaps not this year, or even five years down the line, but Zuckerberg might eventually use his clout to start a global debate about the borders that keep Marvin from the marketplace. The lure of trillions of dollars for all, the potential elimination of world poverty, and a solid moral footing preached by Naik and Clemens probably won’t convince a majority without backing from major business leaders.

Don’t get me wrong. I am in favor of fabulously rich individuals devoting their wealth to advance worthy causes, but my awake-at-4AM mind jumped to “Why doesn’t the Catholic Church devote (a lot) more energy to pushing for liberal migration policies around the world?”
The Catholic Church, as a large, well-funded, and international institution with a vested interest in removing barriers to movement seems particularly well placed to press for open borders in an effective way. Unlike most things I would like the Catholic Church to do (like accept women’s reproductive rights, contraception, and some facts of human sexual diversity), this would not require the Church to radically rethink any theology or rewrite any catechisms. The Church already acknowledges the human right of migration and has some powerful rhetoric it can deploy in its favor. The following was taken from the website of the US Conference of Catholic Bishops (it was one of the first pages to come up when I asked the Internet what Catholics think of immigration):

Both the Old and New Testaments tell compelling stories of refugees forced to flee because of oppression. Exodus tells the story of the Chosen People, Israel, who were victims of bitter slavery in Egypt. They were utterly helpless by themselves, but with God’s powerful intervention they were able to escape and take refuge in the desert. For forty years they lived as wanderers with no homeland of their own. Finally, God fulfilled his ancient promise and settled them on the land that they could finally call home.

The Israelites’ experience of living as homeless aliens was so painful and frightening that God ordered his people for all time to have special care for the alien: “You shall treat the alien who resides with you no differently than the natives born among you; have the same love for him as for yourself; for you too were once aliens in the land of Egypt” (Lv 19:33-34).

The New Testament begins with Matthew’s story of Joseph and Mary’s escape to Egypt with their newborn son, Jesus, because the paranoid and jealous King Herod wanted to kill the infant. Our Savior himself lived as a refugee because his own land was not safe.

Jesus reiterates the Old Testament command to love and care for the stranger, a criterion by which we shall be judged: “For I was hungry and you gave me food, I was thirsty and you gave me drink, a stranger and you welcomed me” (Mt 25:35).

The Apostle Paul asserts the absolute equality of all people before God: “There is neither Jew nor Greek . . . for you are all one in Christ Jesus” (Gal 3:28). In Christ, the human race is one before God, equal in dignity and rights.

This is powerful stuff, and it made me think how different this language is from the usual rhetorical framework for the immigration debate. In the US at least, the focus is always on economics, with the burden of proof lying on the immigration advocates to show that there are huge economic gains to be had and high school drop-outs won’t be hurt too badly, and of course that migrants aren’t terrorists by nature. These are all silly arguments, and Catholic thinkers somehow manage to cut to the moral heart of the matter, powerfully asserting what most of us seem too embarrassed to declare outright: All human beings are morally equal. We are all worthy of the same ethical consideration. And if we can do something to help a fellow human being in need, that is, all else equal, a fine thing. We shouldwant to help even if we decide for some practical reasons that we can’t. Wanting to help is the starting point.Getting bogged down in technical debates about whether and exactly how much immigration benefits natives risks an ethical blunder, ceding the terms of the debate to restrictionists who will focus on economic minutiae that would be absurd in other contexts. (If a new invention were predicted to perhaps cause a 1% decrease in the wages of 6% of the population while everyone else benefited from the productivity gains, no one would blink). Of course we all want pareto-optimal policy changes, where absolutely everyone benefits by the departure from the status quo. Yet this happy congruence is clearly not always either possible or even relevant.The granddaddy example of this is slavery. In the early nineteenth century, the debate over abolition was colored by the fact that entire economies were built on the peculiar institution. If slaves were freed, a lot of plantation owners would suffer severe economic setbacks. Abolition of slavery, possibly the greatest moral victory the world has ever seen, did not happen because slave owners were persuaded they would be made better off by the deal. Abolition was achieved because the abolitionists persuaded enough free people of the moral truth that slaves are human beings and are therefore should be accorded basic human rights.

The civil rights victories over the Jim Crow regime were likewise not achieved by sophisticated economic arguments about how integration and human capital development among blacks would ultimately benefit even white supremacists. No, it was Martin Luther King Jr and other Civil Rights leaders appealing to the sense of fairness among the empowered.

Women did not win their suffrage and the rights to work and own property by convincing the contemporary enfranchized that men would stand to gain materially from women’s empowerment. No, feminists persuaded enough men in power that the radical notion that women are people was simply true. The injustice of enforcing power structures based on amoral accidents of birth was laid bare.

Expanding empathy played a role in each case above, getting the privileged parts of society to see that, but for a roll of the dice, they could have been born with a different color of skin, or a different gender, or in chains, or on the wrong side of a border. Even a morally perfect being or a divinely chosen people could find themselves with the short ends of these sorts of sticks.

At its most basic articulation, the policy of open borders asserts the individual’s presumptive human right to move freely about the world, and live where she wishes to live. The status quo global policy of constraining an individual to live where she was born, for the morally arbitrary fact that she just happened to be born there, is a transparently unjust institution. The only relevant economics is that this injustice is magnified by the poverty it inflicts on hundreds of millions of people.

Introducing Paul Crider

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In our never-ending quest to find new interesting perspectives on open borders, we are happy to introduce a new blogger to Open Borders: The Case, Paul Crider!

Paul received his PhD in physical chemistry and has conducted post-doctoral research in Germany. He supports open borders with rare exceptions such as disease quarantines. He came to open borders through a naturally cosmopolitan attitude combined with support for bleeding heart libertarianism. He hopes to write on issues showing the compatibility of open borders with multiple political ideologies, while also arguing open borders as the next step in the civil rights movement.

We look forward to Paul’s contributions and hope to see a lot of good discussion arise from them!

REMINDER: If you’re interested in blogging for the site in any capacity, please fill out  our potential guest blogger

Understanding the place premium, or; building the economic intuition behind open borders

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There are plenty of misconceptions about the place premium — the arbitrary wage gap between different countries of the world. (The term “place premium” was introduced in a working paper titled The Place Premium: Wage Differences for Identical Workers across the U.S. Border – Working Paper 148 by Michael Clemens, Claudio E. Montenegro, and Lant Pritchett. See also our blog posts that mention the place premium). Some common ones include the mistaken beliefs that estimates of the place premium don’t account for purchasing power, or that the place premium doesn’t adjust for characteristics like job type or labour quality. But even if one avoids these missteps, it can be difficult to grasp the source of the place premium and the intuition around why labour mobility would erode the place premium by increasing real incomes worldwide.

Here’s the classic example of the place premium: the bus driver. You take the bus driver in Yemen and transplant him to the US. Same guy, doing the same job, driving the same bus, even. Just in a different place. You’ve just boosted that Yemeni’s income by about 15 times over, because now he’s ferrying highly-productive Americans instead of relatively unproductive Yemenis. He’s driving them between Boston and New York instead of between Sana’a and Aden. And yes, that 15x multiplier is real — it’s the actual point estimate from the seminal paper on the place premium, calculating the premium between Yemen and the US in terms of real wages, adjusted for all statistically-identifiable characteristics of the worker and the job.

Now, you might contend that the Yemeni bus driver isn’t himself being more productive. After all, he’s doing exactly the same job he was before. The extra income he earns now doesn’t represent any increase in his productivity; it just represents some income he’s siphoned away from Americans, who pay a Yemeni bus driver the wages of an American bus driver, even though he’s plainly less productive than the American who might otherwise drive that bus.

This intuition, I think, is related to why people make a couple of rather unintuitive (to me, anyway) conclusions about the place premium and its implications:

  1. Open borders erodes the place premium primarily, if not only, by redistributing the income of richer people to poorer people. The poor of the world do in fact benefit immensely from migration, but this is not because migration makes them more productive. They simply earn an economic “rent” by taking rich-world wages which are incommensurate with their actual poor-world productivity. World GDP does not actually increase from open borders, and rich-world GDP actually falls.
  2. People in poor countries are poor because they are innately unproductive. This is because of one or both of the following:
    1. Levels of productivity are endogenous to you as an individual, not the society you happen to be in. The value of your work is determined by you and you alone, not the society you live in.
    2. Levels of productivity are endogenous to your country of origin. The value of your work is determined by some combination of your personal qualities and the institutions you grew up in. The society you live in has little to no impact on your productivity.

These claims are incredibly unintuitive to me, because even if they might be true to some degree, there isn’t any economic theory or data to support the strong claim that where you live has no impact on productivity. The very fact that economists who study labour mobility consistently conclude that the gains from open borders would roughly double world GDP means that these conclusions are wrong. Moreover, there are plenty of reasons why your intuitions about the relationship between your environment and your productivity ought to run the exact opposite way.

If you lived in a society currently facing a civil war, or a natural disaster, you would be incredibly unproductive. An engineer isn’t of much use in a famine-ridden country; he has to spend most of his time looking for food, instead of designing bridges. The claim that the society you live in has no impact on your productivity is totally unintuitive; of course the engineer becomes less productive if you take him from his comfy home in an OECD country and plop him into somewhere like Somalia or the Congo. So vice-versa, if you find an engineer in Somalia or the Congo, and you take him with you to somewhere like France or Italy, you’ve immediately increased his productivity. He spends less time figuring out how to get food and shelter, and more time figuring out how to build bridges.

You might protest that this is a high-skilled immigrant, so let’s go back to the bus driver. Exactly the same intuition applies. Take an American bus driver and drop him down in Yemen. Would he still really deserve his American wages in Yemen? Sure, it’s no fault of his own that we’ve forced him to live and work in Yemen instead of the US. But the fact is that the Yemenis he’ll be driving around are less productive than his old American passengers. He used to drive software engineers and Starbucks baristas (you laugh, but baristas save productive doctors and executives plenty of time and money) in the US; in Yemen, he drives shepherds and hotel cooks. Given that the entire productivity of being a bus driver comes from ferrying valuable people around, it’s unsurprising that when the economic productivity of the people he transport drops, his productivity drops as well. So vice-versa, taking a Yemeni bus driver and giving him a bus in the US to drive makes him incredibly more productive. He used to support a small, relatively undeveloped economy; now he supports a much more prosperous economy. His taking that American job has directly lowered the transportation costs for quite a few highly-productive people.

You might protest that while this is true at the individual level, you couldn’t simply take every person from Yemen and put them in the US and expect to achieve the same result. You’d be right, which is why nobody that I know of seriously suggests forcing poor people to immigrate to the rich world. It’s the people who have a lot to gain from immigration — those whose potential productivity means they can reasonably expect a substantial wage hike from moving to a better society even just doing the same work they’re used to doing — that will migrate. People who aren’t productive enough to justify the large financial and non-financial costs of moving simply won’t move. Unless you subsidise migration, you won’t see unproductive people swarming highly-productive societies.

Still, on one level, it can seem intuitive to say that if you’re doing exactly the same job in two different places, your productivity doesn’t matter: you should earn the same wage for the same work wherever you are. But that’s actually incredibly unintuitive. Even if you’re just a farmer, your crop yields depend on where you are. If you can buy or rent land elsewhere that is more fertile, you can do the identical job on that piece of land and immediately become more productive. And that’s just the simplest scenario. If you’re a machinist, you are more productive working in a society with a functioning power supply than you are working in a society with frequent blackouts. If you’re a hairdresser, you are more productive working in a society where your clients are corporate executives instead of a society where your clients are subsistence wage-earners — because even if you save your clients exactly the same amount of time and effort, in one society your clients’ time is worth a lot, and in the other it is worth little.

It might be intuitive to conclude that open borders is simply redistribution, allowing unproductive people to claim wages meant for highly-productive people. But some basic economics suggests this can’t be true. If a Yemeni bus driver is 15 times less productive than a US bus driver, he basically will get his passengers lost or injured so often that the only way his employer can find it profitable to keep him on staff is if they slash his wages down to the levels he earned in Yemen — if they slash his high-productivity wages by 15 times. Something has to give: either he has to be productive enough to merit higher wages, or he has to go back to Yemen and back to his old job. Otherwise, he ends up jobless and destitute in the US.

Having travelled on public transport in different countries, I could swallow the claim that a bus driver from a poor country is only half as productive as a bus driver from a rich country (because of poorer driving habits, etc.), though I’d still be skeptical of it. But I’ve never met a bus or taxi driver who is so thoroughly incompetent that I would deem his driving skills worth 1/5th or 1/10th of his professional counterparts whom I’ve encountered in the rich world.

The place premium doesn’t actually mean all the gaps we see between rich and poor countries would disappear under open borders. Even in jurisdictions with open borders, such as between Guam or Puerto Rico and the mainland US, we observe a place premium where it seems the American bus driver earns 25% to 40% more than his statistically-identical counterpart in Guam or Puerto Rico. That probably is explained by true productivity differences (though some of it might also stem from xenophobia or other reasons making it difficult for a bus driver in Guam or Puerto Rico to undercut a bus driver on the mainland). But nowhere in the history of the world have wage gaps as big as the ones we see internationally today been observed. We can quite surely say that most of the place premium comes from arbitrarily coercing otherwise productive people into staying in unproductive regions or societies.

The intuition behind this is clear: your productivity does in fact depend on where you are. You produce more living in Australia than you do in Antarctica for a reason — just as you produce more living in South Africa than in Zimbabwe for a reason. Whether it’s a better geophysical climate or a better political climate, some places just make us more productive citizens and human beings than other places do. We need a damn good reason to arbitrarily force people to stay unproductive — especially when it means consigning them to a life of grinding poverty that would shock just about anyone reading these words.

The photograph featured in the header of this post depicts Italian immigrants laying tram tracks in Springfield, Massachusetts circa 1900.