All posts by Nathan Smith

Nathan Smith is an assistant professor of economics at Fresno Pacific University. He did his Ph.D. in economics from George Mason University and has also worked for the World Bank. Smith proposed Don't Restrict Immigration, Tax It, one of the more comprehensive keyhole solution proposals to address concerns surrounding open borders. See also: Page about Nathan Smith on Open Borders All blog posts by Nathan Smith

How (Open Borders Can Help) to Win Cold War II

It took two World Wars to defeat German imperialism. Now it looks like it will take two Cold Wars to defeat Russian imperialism. Unless the West chooses not to. If the West declines to resist Russian expansionism, or dilly-dallies too long, expect a crescendo of chaos. The world order subsists on a fine web of international law norms, foreign policy doctrines, tacit and explicit guarantees and threats, precedents and balances of power. That’s why “isolationism” is at bottom just a naïve failure to recognize that people respond to incentives. In the 1930s, aggression was contagious. Italian, German, Japanese, and eventually Soviet aggression encouraged and accelerated one another because they were all testing and eroding the same system of international law. If Putin’s conquest of Crimea is allowed to stand, it will not be the last.

But in a confrontation with Russia, does the West actually have the moral high ground? The democratic governments of the West are really rather wicked institutions. The deportation of millions by the US regime over the last 20 years is a crime considerably less than slavery, but on the order of Jim Crow segregation, and worse than the WWII internment of the Japanese. US fiscal policy preys ruthlessly on the young, sucking away their earnings to finance retirement programs that will be bankrupt long before they retire. Religious freedom, for the sake of which America was founded, is under unprecedented attack. Putin’s claim that Russia is standing for Christian values over against a decadent West is not wholly spurious: his regime has banned abortion advertising, and abortion has been plummeting, and Russians are surely less afraid than Americans that their churches will be harassed or closed down by the LGBT lobby. Russia is decent on immigration, too. It has the largest foreign-born population in the world after the United States, and accepts many immigrants from places like Central Asia who could hardly hope to get into the West.

As for Crimea, what exactly is wrong with Russia’s annexation? That it violated “sovereign” borders? But so did the US-led campaigns in Kosovo and Iraq. While the West obviously had far stronger humanitarian reasons to intervene in Kosovo and Iraq than Russia did in Crimea, the strength of a humanitarian case for intervention is a fuzzy variable. And while the Crimean referendum was obviously a farce, it’s surely true that many, and likely true that most, Crimeans prefer to join Russia. “Consent of the governed” as a political principle seems to imply a right of secession. Of course, that’s not a principle international law recognizes, and it would lead to chaos if it did. But democracies need noble causes to be willing to fight, and insisting on the integrity of the historically accidental borders of Ukraine against the will of the Crimean people hardly qualifies.

The trick, then, is to wage Cold War II in ways that will both be effective, and will make the West’s cause more just. Here, open borders can help. The ideas below are selective applications of the open borders ideology, which would be of great practical value in defeating Putin. I recently discussed them with a foreign policy specialist who knows a lot about Russia. Such ideas had never occurred to her before– they’re not the sort of things Washington talks about– but she agreed they’d be effective, albeit they’re politically infeasible. Well, perhaps. But sometimes geopolitical struggles can move the Overton window very far and very fast. Here’s hoping.

1. Insist on freedom of movement within Ukraine, including Crimea.

Never mind who rules Crimea. Insist that all Ukrainian citizens should have free access to it. Russia has hitherto been pretty accessible for Ukrainians, so Russia might concede this, but to the extent that there’s any interference with Ukrainians’ freedom of movement “within their own country,” make that a cause celebre. This will help to prevent the legitimacy of the annexation of Crimea from congealing. International non-recognition of Crimea will keep getting talked about. There will be no normalcy for Crimea until it is under Ukrainian rule.

2. Insist that Russians traveling to Crimea need Ukrainian visas, but make them available easily.

On a related point: let Ukraine offer Russians visas to visit Crimea, but insist that they need them. When ordinary Russians want to travel to Europe, ask them whether they have been in Crimea since April 2014. If so, charge a fine, which will be forwarded to the Ukrainian government as compensation for trespassing on their territory without permission. (I consider it legitimate for a properly constituted and internationally recognized government to demand that foreigners visiting their territory have visas, provided that the visas are freely available and can only be denied on very limited grounds related to public health or safety.)

3. Let Russians visit Ukraine and the West freely to live and work; but tax them to compensate Ukraine; and require them to take civics classes, so as to bring them up to the standard of decent, civilized conduct which their homeland lacks.

This is a variation of the DRITI policy. Let Russians come to the West to work. But impose a special tax, and use the proceeds of the tax to finance Ukrainian resistance to Russian aggression. Say: “Yes, Russians, you can live and work in the West. We even exhort you to do so, so as to avoid supporting Putin by paying taxes to him and listening to his propaganda. But you have to show penitence for your homeland’s aggression by paying taxes to help its victims fight back against it.”

Also, set up classes in the West, and require Russians to attend them occasionally– don’t make it too burdensome, once per three months is enough– to instruct them in the values that peaceful, civilized, democratic nations live by. Some will scoff at them, no doubt, but I think they could be fairly effective. And the fact that the courses would be mildly humiliating is useful. It would make it clear to Russians that their country’s behavior puts them a step below citizens of other nations on the moral scale.

4. Welcome young Russian men of conscription age to enter the West, and even bribe them.

Russian conscription is rife with human rights abuses, with draftees sometimes being treated little better than slaves. So there is a human rights case for treating all young Russian men of conscription age as refugees. But there is also a ruthless realpolitik logic to welcoming young Russian men to the West: it directly depletes Russia’s military resources. I would go further than just letting them in, without the usual taxes and civics classes. I would pay them to come, e.g., $1,000/month. If we end up hosting, say, 3 million young Russian men, that’s $30 billion a year. A small price to pay to defuse the greatest military threat the West faces today. And it would drive Putin crazy.

5. Make this offer to China: if China joins in sanctions against Russia, the West will demand that Taiwan gradually open up to immigration from the Chinese mainland; but if China ever recognizes Russia’s annexation of Crimea, the West will immediately recognize Taiwan’s independence.

The contribution of open borders ideology here is that, while China’s claim to territorial sovereignty over Taiwan seems hard to justify, open borders principles would support recognizing the right of Chinese from the mainland to travel to or settle in Taiwan. And that might certainly be a step towards the reintegration of Taiwan with China, so China would welcome it.

I could write a lot more about how the West should deal with Russia (but just this one: turnabout is fair play, so the West should say that by violating the territorial integrity of its neighbors, Russia has forfeited its own, and declare that Chechnya and Kaliningrad can expect the West’s support for their independence whenever they want to seek it). But I think the strategic use of key open borders tenets would be very effective, far more so than anything the West is doing now, maybe more effective than anything else the West could do. The beauty of it is that while these policies would be extremely damaging to the Russian state, they would on balance be beneficial to the Russian people. And for that reason, they would make it much harder for Putin to promote Russian solidarity against the West. They would also make it more difficult for Putin to claim the moral high ground. Russians are obsessed with moral equivalence and claiming that whatever their government is doing, the West does it, too. So you might really see Russia competing with the West to use open borders as a geopolitical weapon, e.g., trying to deplete Western military resources by welcoming Western young men to Russia. That would be good for freedom of migration, but it would also show that Russians are far more willing to “vote with their feet” in favor of the West, than vice versa.

Make More Singapores!

I have advocated the DRITI policy– instead of coercively restricting migration, tax it and use the proceeds to compensate natives– for years, and Principles of a Free Society was written, if you like to think of it that way, as a political philosophy suited to undergird DRITI policies. By now, this has become a standard part of the case for open borders. Thus, in “Meant for Each Other: Open Borders and Western Civilization,” Bryan Caplan writes:

Still worried [about open borders undermining natives’ wages]?  There’s a cheaper and more humane remedy than keeping foreigners out: Charge them an admission fee or surtax, then use the proceeds to help displaced native workers.

Which is the same idea as DRITI. Not that I’m blaming Caplan for borrowing the idea from me without acknowledgment. Caplan knows I advocate migration taxes. He even wrote one of the blurbs for Principles of a Free Society. But Gary Becker proposed a migration tax to the IEA back in 2010. Actually, that was four years after I published the idea, but Becker had written about it before, in an op-ed in the 1980s. Recently, at the APEE conference in Las Vegas last April, Richard Vedder also proposed a migration tax. The idea is really too obvious to quibble over its paternity. It’s a simple cross-application of the standard free-trade advocacy truism– “yes, free trade has winners and losers, but tax the winners to compensate the losers”– to migration policy. I’m not sure whether Caplan got the idea from me. I’m pretty sure that if he hadn’t got it from someone, he’d easily have thought it up on his own. It’s a no-brainer for economists, but somehow policymakers are blind to it. Or so I thought.

What I didn’t realize is that Singapore already has something close to a DRITI policy in place, as Carl Shulman reports. From 1970 to 2010, the number of foreign workers in Singapore rose from just over 20,000 to more than a million, a third of the labor force, and still rising. Most of these are not the high-skilled workers that OECD democracies tend to privilege. Nearly a million are here on low-skilled “work permits,” including foreign domestic workers (214,500) or construction workers (319,100). How is the number of immigrants regulated? First, by Foreign Worker Levies, i.e., migration taxes, a policy variable. There are also Dependency Ceilings, maximum foreign shares of an employer’s workforce. Shulman doesn’t say how often these are binding, but they seem liberal, e.g., 87.5% of construction crews can be foreign. And how much do migration taxes raise?

Levies for unskilled workers range from $3,600-$9,000 per annum. With around a million workers subject to levies, the proceeds to Singapore should be in the billions of dollars (all figures are Singaporean dollars, about 0.8 $USD each).

Total levies collected amounted to $1.9 billion in 2010 and $2.5 billion in 2011. Total government operating revenues in 2010 were $45.5 billion and $50.5 billion for 2011, so worker levies alone accounted for 4-5% of operating government revenue. Since then the migrant population has grown substantially and levies have been hiked, by a third or more in many cases, with further increases scheduled, so the current percentage is likely significantly higher. Even so, the figure will be small compared to the economy, because low-skill workers contribute disproportionately little to economic output, but is high as a proportion of compensation costs. While Singaporean natives with such low incomes would pay no income tax, the top levy rates for unskilled workers (charged to employers) can be half or more of wages.

In short, while we can quibble about details, Singapore more or less understands and is applying and applies the citizenist case for open borders. Singaporeans benefit from cheap cleaners, bus drivers, and domestic workers. And they don’t just benefit themselves; foreign workers also gain opportunities. As Vipul Naik pointed out in conversation, if all developed countries adopted policies like this, migrant wages and wages in migrant source countries would be competed up. I might argue for slightly different moral side-constraints (e.g., I wouldn’t endorse deportation of pregnant women), but it would be a great thing for both economic development and freedom if other developed countries followed Singapore’s lead.

Lastly, a more general point. Singapore is amazing. Every time I read about policy in Singapore, I find myself involuntarily thinking Wow! This is the most enlightened regime on earth. Perhaps that’s a slight exaggeration, but few would deny that Singapore is a spectacular success. So why don’t we make more of them? Much of the key to Singapore’s success seems to be simply that it’s a sovereign city-state. In general, sovereign city-states make wildly disproportionate contributions to civilization. Think of the city-states of ancient Greece, Athens and Sparta and Corinth, birthplaces of philosophy, history, science, and democracy. Or the city-states of Renaissance Italy– Venice, Florence, Genoa– which were also gloriously accomplished in arts and letters and sciences. Today, Hong Kong has a kind of partial sovereignty. It, too, is a dazzling success, whose success has spilled over in a massive way. Hong Kong has been a major catalyst for China’s economic take-off. Yet, perversely, we have established a system of international sovereignty which makes it impossible to found new sovereign city-states. We need charter cities.

Piketty, inequality, and open borders

A society in which the rich have a very high degree of economic, political, and sociocultural influence is an unpleasant society in many ways.
Read more at–bradford-delong-is-surprised-by-the-poverty-of-conservative-criticism-of-capital-in-the-twenty-first-century#OS2DZ3JavDCdtOT1.99

Thomas Piketty’s just-released Capital in the 21st Century has been much talked about, e.g. by Greg Mankiw, Brad DeLong , Reihan Salam, Megan McArdle and Tyler Cowen, for starters. Reviews aside, Bryan Caplan’s post about (the myth of) the “hollowing out” of the economy, or Scott Sumner’s (tentative) advocacy of 80% marginal tax rates on consumption (more here) seem to show how Piketty’s influence has steered the conversation towards more talk about inequality.

I’ve read only a little, but already Piketty has opened my eyes to a possibility I had never before seen. Let r be the return on capital, e.g., the 7% long-run average return on US stocks. Let g be the (per capita) growth rate of the economy as a whole, e.g., 2%. An abstract “capitalist” will see his wealth, and therefore income, grow at rate r, minus his consumption, which is perhaps small compared to his income. An abstract “worker” will see his income rise at (roughly) rate g. So what happens to inequality? As long as r>g, it keeps increasing. Without limit. While r>g seems to be true, there are a lot of reasons why r>g as a story of ever-increasing inequality probably isn’t a good description of the real world. But I’m indebted to Piketty for elucidating the conceptual possibility.

Is ever-increasing inequality driven by r>g disturbing? Maybe not. As long as g is positive, the workers are still getting better off. Moreover, for r>g to drive ever-increasing inequality, the capitalists have to be rather abstemious, which takes some of the sting out of increasing wealth inequality. Capitalists have more, but don’t live that differently. If, on the other hand, capitalists dissipate their wealth on luxury consumption, that seems more offensive, then r>g increasing inequality.

Much depends on one’s “social welfare function” (SWF), that is, on how much you value the welfare of different people, and how much you think the millionaire’s marginal dollar is worth, compared to the pauper’s. Suppose desirable outcomes for society are defined by V=a1*f(W1)+a2*f(W2)+…+an*f(Wn), where individuals 1… n are all the members of society, a1… aN are parameters that govern the importance we replace on the welfare of difference individuals (in a “democratic” SWF a1=a2=…=aN), W1… Wn represent (in a concession to Piketty’s preoccupations) the wealth of the individuals (though Scott Sumner would rightly stress that consumption inequality is what we should really care about), and f is some function, the shape of which is the crucial, defining feature of the entire SWF (assuming that we’re all “democrats” and value everyone’s welfare equally). Presumably the first derivative of f is positive (each marginal dollar is worth something) and the second derivative of f is negative (each marginal dollar is worth less than the last), but– this is the key– by how much does the marginal value of a dollar decrease as one gets richer? A SWF in which the second derivative of f is only slightly negative might be called “right-wing” or “conservative,” in the sense of being relatively indifferent to inequality, while a SWF in which the second derivative of f is more negative is “left-wing,” more sensitive to inequality.

Here John Rawls offered an implausibly extreme answer: that society should only maximize the welfare of the worst-off, and in effect, should be completely indifferent to whether the not-worst-off are only slightly above the minimum, or enjoy vast prosperity and affluence. This is very odd. The wealth of millionaires is doubtless less good than the same wealth would be spread out among the poor; but surely it is worth something. I would have called Rawls the “far left” of the plausible set of SWFs. Yet as far as I can tell, Piketty’s social welfare function is to the left of Rawls’! The (unsympathetic) Wall Street Journal writes that…

Mr. Piketty urges an 80% tax rate on incomes starting at “$500,000 or $1 million.” This is not to raise money for education or to increase unemployment benefits. Quite the contrary, he does not expect such a tax to bring in much revenue, because its purpose is simply “to put an end to such incomes.”

while the (sympathetic) Brad DeLong, summarizing Piketty’s argument, does not say that capitalists are in any way impoverishing the workers by their epic feats of accumulation, but rather, that “A society in which the rich have a very high degree of economic, political, and sociocultural influence is an unpleasant society in many ways.” If DeLong and the WSJ (as I read them) are correctly characterizing Piketty’s position, then in his SWF, the first derivative of f is negative at some point. We should not just want to burden the rich a bit in order to bring ourselves up a bit. We should actually want to pull the rich down, even if we hurt ourselves in the process. I’ll be on the lookout, when I get a chance to read the book through, for whether Piketty really believes this. It would be an intriguing oddity.

My response to what I’ve gleaned about Piketty’s argument so far is twofold:

1. Western society already has a sufficient response to excessive wealth accumulation in monogamy. I like Scott Sumner’s 80% MTR on consumption, in principle, though I think it would be hard to implement. But I think monogamy basically is an 80% MTR on consumption, or more. If an amoral rich man could buy a harem, he could really hit the poor where it hurts. But if he can’t, the joke is on him. It would take some ingenuity for a monogamous man to come up with a way to spend tens of millions of dollars without generating major positive spillovers. If he sends his mediocre kids to Yale, they might not learn that much, but he’ll be subsidizing scholarship and science, as well as cross-subsidizing the educations of other, brighter students on financial aid. Or, if he hires a scholar (e.g., Adam Smith) to accompany his kid on a Grand Tour of Europe, the scholar will probably use the time to write a magnum opus on the side (the Wealth of Nations). If he goes to the opera, the music his money buys will soon get recorded and show up on everybody’s iPod. If he buys great paintings, which he probably doesn’t have the capacity to appreciate that much, cheap prints of those paintings, almost as good as the originals, will get made and sold by the thousands to middle-income art lovers to decorate their walls with. And the paintings will end up in museums sooner or later, to edify the common man. If he buys a huge mansion or yacht, his small body can’t occupy most of its rooms. To get any use of it at all, he needs lots of guests. Spillovers again. And of course, he’d have to be an idiot not to see that he’ll get far more satisfaction from giving his money away to a chorus of praise and gratitude, than from attempting to “consume” far more he can use to satisfy his needs. And so the rich become the great philanthropists, and I think a marginal dollar in the hands of the Gates Foundation is worth about a hundred times as much as a marginal dollar in the hands of any democratic government on earth. The Rockefeller Foundation financed the Green Revolution while the US government pours most of its money into pampering the elderly. Again: inequality without monogamy– harems and eunuchs and child brides, etc.– really is horrible. But the West has achieved the inestimable triumph of caging the selfish genes even of the very rich.

2. To the extent that inequality is an evil worth worrying about, there is no justification for diverting our attention from any policy response other than that of opening borders to migration. Fortunately, Piketty is not one of those contemptible humbugs who profess to care about inequality, yet oppose or ignore immigration. He has a few pages on immigration reform late in the book, and is unabashed in his support for more freedom of migration, with essentially no qualifications. But the passage doesn’t suggest that he has anything like an adequate appreciation of its importance. A vast amount of inequality depends merely on the luck of what country one is born into. While global wealth taxes would presumably weaken incentives and reduce global GDP, even if they made it more equally distributed– and it would require a terrifyingly invasive state to enforce them– open borders would double world GDP and make it more equitably distributed. So, let’s open the borders first. We’ve got plenty of work to do to get there. Then, if inequality still seems like too much of a problem, we can talk about whether a more invasive state, and weaker incentives to work, save, innovate, trade, economize, etc., are a price worth paying for still more equality.

P.S. It’s a little off-topic, but if we’re worried about r>g, the real fix is Social Security privatization. Forcing up the savings rate would mean more capital, lowering its marginal product– lower r— and raising the growth of the economy– higher g.

UPDATE: Minor corrections were made after this was first posted.

A society in which the rich have a very high degree of economic, political, and sociocultural influence is an unpleasant society in many ways.
Read more at–bradford-delong-is-surprised-by-the-poverty-of-conservative-criticism-of-capital-in-the-twenty-first-century#OS2DZ3JavDCdtOT1.99
A society in which the rich have a very high degree of economic, political, and sociocultural influence is an unpleasant society in many ways.
Read more at–bradford-delong-is-surprised-by-the-poverty-of-conservative-criticism-of-capital-in-the-twenty-first-century#OS2DZ3JavDCdtOT1.99
A society in which the rich have a very high degree of economic, political, and sociocultural influence is an unpleasant society in many ways.
Read more at–bradford-delong-is-surprised-by-the-poverty-of-conservative-criticism-of-capital-in-the-twenty-first-century#OS2DZ3JavDCdtOT1.99
A society in which the rich have a very high degree of economic, political, and sociocultural influence is an unpleasant society in many ways.
Read more at–bradford-delong-is-surprised-by-the-poverty-of-conservative-criticism-of-capital-in-the-twenty-first-century#OS2DZ3JavDCdtOT1.99

Wielding Power

In the third issue of Wielding Power, the winning essay in response to the question “Should Nations Restrict Immigration?” is written by me. Open Bordersreaders, an intelligent lot as far as I can tell, might consider submitting to future competitions. The editor, Ryan K. Johnson, who blogs here, is an astute reader and critic, open-minded, and a lover of good arguments, who skillfully outlines the arguments of contributors in the margins. Interestingly, all three winners favored open borders! But Ryan Johnson himself doesn’t.

In a blog post introducing the issue and inviting further debate, Johnson offered me this challenge:

Nathan- I’m curious what you think about the risk of political instability or nativist backlash from open borders. Why do you think those aren’t serious concerns?

I wouldn’t say they “aren’t serious concerns,” I’d say that these arguments against open borders are overwhelmed by the case in favor. But it’s worth explaining why I give them limited weight.

“Nativist backlash” might mean different things, ranging from scattered grumbling to ferocious ethnic violence. Grumbling is of minor importance. People grumble about high gas prices and the inconvenience of complying with the tax code, but those are minor problems. Violence, of course, would be a dire concern, but first, I doubt it would come to that, and second, it’s ethically undesirable to reward violence-prone natives by giving them what they want.

My other response to the “nativist backlash” concern is that, as I explain in the article itself, I advocate taxing migration, and using the proceeds to compensate natives, and I think this would be quite effective in defusing nativist backlash. To the complaint, “They’re taking our jobs,” would come the answer, “Yes, but we’re getting checks in the mail from the IRS, financed by their taxes. Some of us may be earning less, but just about everybody’s living standards are higher.” I don’t think that would completely eliminate nativist backlash. Some would just hate to see the streets cluttered by impoverished foreigners. Maybe some would feel that a certain dignity associated with self-reliance had been lost, and that they’d prefer a lower living standard from one’s own wages to a higher living standard financed by foreigners via the government. On the other hand, one would hope that there would be at least some public understanding of the absolutely enormous power of open borders to raise global income and alleviate world poverty, and some pride in being part of that. All in all, if you could get over the huge hurdle of passing open borders (with migration taxes) in the first place, I doubt there would be all that much backlash afterwards.

Political stability is related to nativist backlash, but in some respects a distinct concern. Even if natives were wholly welcoming, on principle, or because they liked getting immigration-financed checks from the government, immigration might lead to political instability because immigrants would make public opinion more fragmented and multipolar, or because they were more prone to extremism, or tolerant of corruption. And since immigrants to a country like the US would be, on average, much poorer than natives at first, they might have an incentive to vote for distribution.

Except that they wouldn’t have the vote for a while. I advocate a rather long-drawn-out path to citizenship, involving mandatory savings which must be accumulated and then forfeited in return for becoming an American. Immigrants under this visa would have an attractive alternative to staying in America: return home, with a good deal of money to start a new life. Those who don’t especially like America, those unwilling or unable to learn the language and assimilate, and those whose economic prospects in America are poor, would probably find it in their best interest to sojourn in America for a few years, then return home to a life of comparative affluence on the money they were forced to save in the US. Those who chose to stay would likely have an economic profile closer to that of natives. How they would vote, I can only speculate; but I doubt they would deviate from natives in a radical or destabilizing way.

Of course, immigrants could destabilize the American polity through street activism or violence. Violence, I consider unlikely. Even if immigrants under open borders numbered well over 100 million, as Gallup has suggested they might (and I agree), they would still be outnumbered by natives, and more importantly, any immigrant group, e.g. based on ethnicity or nationality, would be vastly outnumbered by natives plus other immigrants, who would likely side with natives against violent activism. Fundamentally, immigrants would have agreed to come into the US under certain policies, and while not all of them would continue to accept the legitimacy of those policies, I think most would. People’s promises do generally mean something to them. But if systematic, political violence from immigrants were a clear and present danger, that would be a ground for restricting immigration by the groups most inclined to foment it. As for street activism, that wouldn’t matter much as long as natives are unpersuaded by their protest slogans. If crowds of immigrants march through the streets demanding equal taxes and voting rights, natives can just shrug and say, “Whatever. When you came, you agreed yourself to pay extra taxes and not have the right to vote. You’re a lot better off than you were in Bangladesh. Get over it.”

In his response to my essay in the issue itself, Johnson writes:

Is there no value in the group and its culture?

The short answer here is “Of course there is… but what does that have to do with anything?” I have a network of friends, family, and acquaintances that I value so much, that without them, life would lose much, perhaps most, of its meaning and value. But to suggest that that’s a reason to exclude immigrants is prima facie a complete nonsequitur. How do the immigrants impair my enjoyment of this network of friends at all, let alone significantly? Would they somehow clog the channels of communication, so that I couldn’t send my friends text messages or e-mails? Would they create so much traffic on the roads that I couldn’t visit my friends?

Yet it may the case– here, see Robert Putnam’s work on social capital and immigration— that immigration dilutes the population of people who are enough “like me” to have valuable interactions. Maybe there’s a lot of value in just being able to walk down the street and start socializing with the first person you meet, having enough in common with them to make this feasible and worthwhile. Let in lots of immigrants, and you have to start picking and choosing who to interact with, if you want to avoid the labor of constantly trying to bridge large cultural gaps. Maybe.

But my experience suggests otherwise. There just don’t seem to be many occasions where significant, valuable actions occur that aren’t filtered by some social setting. Thus, I make friends among colleagues, that is, among people selected for profession and institutional affiliation to resemble me. I make friends at my church, that is, I make friends with people self-selected for a highly specific set of beliefs and values. I have friends from grad school, that is, from a selective educational institution which we both attended. Etc.

I have a feeling that fifty years ago, the US was less fissiparous and fragmented, and that a kind of grass-roots solidarity with the neighbors was more of a reality than it is today. We may have paid a high price for that in conformism and the suppression of creativity and authenticity, and a kind of cultural liberation has taken place which has been at once exhilarating and alienating. That may be the reason for my impression that mere neighborhoods are no longer an important kind of community, and the kinds of community that do matter are immune to geographical dispersion. Whether immigration restrictions would be justifiable if neighborhood solidarity were a more important form of community is a large too large a question for me to deal with just now. (But I think not.)

Meanwhile, never forget that immigration restrictions separate groups as well as binding them together (if they actually do the latter at all). Many people are separated from loved ones by borders.


The Constitution of a City of Refuge

One way to approach open borders is to liberalize migration rules in existing policies. Another is to found new polities with open borders, along the lines of what French philosopher Jacques Derrida called “cities of refuge,” or what economist Paul Romer has advocated under the name “charter cities” (only with open borders). This post proposes a constitution for an imaginary City of Refuge.

It may seem silly to write a constitution for an imaginary city, yet there is a long tradition of doing so, going back to Plato’s Republic. This post, however, does not outline an ideal state starting from first principles. I don’t believe in an ideal state. The state is, at best, a sad necessity for fallen man, and a good constitution can never substitute for a virtuous citizenry. Most constitutions fail. In a sense, all constitutions fail, for even the US Constitution, perhaps the most successful in the world, has been largely eviscerated by the judiciary, giving rise to a regime quite inconsistent with what the US Constitution really authorized. Yet constitutions matter, too.

The below constitution, then, is a kind of draft of what the Constitution of a City of Refuge might look like. It is meant as a spur to the imagination and the critical faculties. It should be read with the following fictional yet plausible background in mind. Imagine that the continuing development of worldwide moral consciousness gives rise to a belief that the right to emigrate is a fundamental human right, which the international community has an obligation to guarantee. But countries still don’t want to do by opening their own borders. Instead, they resolve to create an archipelago of Cities of Refuge around the world. The international community will negotiate with particular countries to carve out small pieces of land from their territories and develop them as Cities of Refuge, perhaps in return for various benefits, including military guarantees of territory, fiscal aid and debt forgiveness, rights to migrate for their own citizens, representation on important international bodies, perhaps merely because they hope the City of Refuge will be a hub of development with positive spillovers, as Hong Kong was for China. Initially, Cities of Refuge would be founded in relatively undeveloped, unpopulated land. The international community would build infrastructure, and they would be populated by migrants. The below constitution would serve as a kind of template, which would be adapted to local conditions and then adopted as the Constitution of a new City of Refuge.


City of Refuge, Constitution

Section I. Framework and Basic Law

Governmental Stakeholders

Governance in the City of Refuge will be based on power-sharing between:

(1) a Coalition of External Agencies;

(2) a Republic, from the Latin res publica, meaning “public affairs,” whose role is to make the city self-governing;

(3) a Host Country government.

The Coalition of External Agencies would include stakeholders like the World Bank, the IMF, the UN, representatives of donor countries, and might include private corporations, universities, churches, and other religious or secular non-governmental organizations. Its composition is expected to vary over time and to be a subject of continuing negotiations between donor governments and the representative bodies of the Republic. The Coalition of External Agencies, whatever its membership, is to be regarded as the representative of the international community, entrusted with developing the city of Refuge, in order to realize the global right to emigrate by ensuring that everyone has somewhere that they can emigrate to.

The Republic, a semi-democratic polity entrusted with giving the City of Refuge a self-governing character, is described in Section III. It will not be considered a “sovereign” polity, but it will have primary responsibility for setting public policy and providing public goods. All taxes collected on the territory of the City of Refuge will go to the Republic.

The Host Country will be held to enjoy formal sovereignty over the territory of the City of Refuge, but to have relinquished most of its rights temporarily to the Coalition of External Agencies and to the Republic. After the pre-agreed Term, the territory of the City of Refuge will revert to the full sovereignty of the Host Country, as Hong Kong reverted to China. The Host Country will also have the right and duty to monitor the treatment of its own nationals on the territory of the City of Refuge, so as to ensure that their natural rights are respected. It shall not, however, use this right and duty as a pretext for seeking special privileges for its own nationals, but rather, shall seek to ensure that its own nationals enjoy all the natural rights that the Republic and the Coalition of External Agencies respect in all persons present in the City of Refuge. Any concession made to the rights of Host Country nationals shall be deemed to be enjoyed equally by non-nationals of the Host Country.


The US dollar will be legal tender for all debts in the City of Refuge. Other currencies may be used for transactions by mutual consent of the transactors.


English, and the principal language of the Host Country, will be the chief languages of public business, education, and culture.

Basic administration of justice

One of the premises of the City of Refuge is that natural law exists, and that its content has been elucidated by international human rights law, the English common law tradition, and to some extent other traditions, but is also evident to mere enlightened common sense. Natural law will be regarded as more fundamental than, and not overridable by, positive laws promulgated by any Governmental Stakeholders.

Both on the basis of natural law, and as the fundamental premise of its Constitution, the City of Refuge will be bound to respect the right of all persons to freedom of movement. The person and “property in possession” of every human being is to be held sacrosanct, where “property in possession” includes objects physically on someone’s person or kept in a person’s abode and used frequently. It does not include ownership of land or financial assets.

Constitutionally specified details of implementation of the principle of freedom of movement are as follows. The Republic may declare up to 20% of the physical territory of the City of Refuge “gated,” and exclude Sojourners and/or Residents from it. In addition, up to 60% may be privately owned, but physically accessible via public land/easements, and requiring only the permission of the private owner to enter it. And at least 20% must be strictly public, in the sense of no physical exclusion.

The Coalition of External Agencies will initially be tasked with enforcing natural law, i.e., preventing physical violence against persons and theft of property in possession. Later, the Republic may choose to supplement this service with their own administration of justice. This Constitution hereby instructs Sojourners, Residents, and Citizens to disobey the positive laws established by the City of Refuge whenever they violate natural law, and on the other hand, to adhere to natural law even when it is not reinforced by positive law. Individuals’ first allegiance must be to the right, and not to the law. Inasmuch as the Coalition of External Authorities and the Republic fail to secure persons against physical violence or theft, self-defense measures by individuals or groups shall be considered authorized by this Constitution.

The status of Citizen within the Republic is limited to persons who show an understanding of the basic principles of the Republic, and have sworn an oath to uphold them. In particular, Citizens shall not advocate restriction of immigration, on pain of forfeiture of Citizen status.


A military force will be developed under the tutelage of the United States military and other donor countries, with which it is anticipated that it will be allied. Its function is not only the defense of the City of Refuge, but to serve as a rapid-response force for UN peacekeeping and other military tasks of general benefit to mankind and international peace, in the hope that its heroic exploits should redound to the glory of the City of Refuge. The military shall be primarily composed of Citizens of the City of Refuge, but shall have the right to recruit internationally as well in order to maximize professionalism and combat effectiveness.

Section II. Legal Status of Persons

Persons in the City of Refuge will be classified under three legal statuses, Sojourner, Resident, and Citizen, as described below.

Sojourner. Any person present in the City of Refuge who is not a Resident or a Citizen is a Sojourner.

Resident. In principle, any person whose life is centered in the City of Refuge, in the sense that the matrix of their human flourishing is located in it, should be considered a Resident. The Republic should maintain registries of Residents and establish processes for people to acquire Resident status, e.g., one year of physical presence in the City of Refuge, a declaration that the City of Refuge is their abode, evidence of familial and/or friendly connections, livelihood, etc. But it may sometimes be ascertainable that a person possessed Resident status who had not gone through the registry process, if a person was objectively resident in the City of Refuge at a given time. It is not to be regarded as at the discretion of the Republic or the Coalition of External Agencies to grant or withhold Resident status.

Citizen. Citizenship depends on informed, explicit consent to a social contract, which includes both duties and privileges, and consists in participation in the self-governing system of the Republic. The title of Citizen may be conferred in honorary fashion on children of Citizens up to a certain age, but the full rights of Citizens depend on a moderate proficiency in English and the Host Country language, knowledge relevant to civic participation as ascertained by examination, and obedience to natural and positive law. Furthermore, men, but not women, are required to serve in the armed forces of the City of Refuge in order to become full Citizens.

It is hoped that Citizen status will come to be regarded as normative for long-term Residents of the City of Refuge, and as a peculiar honor, but, on the other hand, that Citizen status will not be so economically advantageous that it will be sought primarily for mere economic gain. The Republic has the right to define how people will be admitted to Citizenship, but the criteria for Citizenship should not include race or kinship, religion, or place of birth.


Of Sojourners. Sojourners have a right to integrity of their physical person; to rent housing; to work for wages, though they may be subject to special taxes; to buy goods that are deemed to contribute to their objective flourishing; to the retention of property they carry on their person or keep in rented housing and use frequently; to freedom of speech and religion; and to such minimal freedom of contract as the authorities may deem to arise directly from natural law.

Of Residents. Residents have a right to own land and financial assets, including bank accounts with deposit insurance, backed by the Republic and/or the Coalition of External Agencies. They will enjoy a greater right to freedom of contract than Sojourners do, in that they may use forms of business organization established by statutory law. The general welfare of all Residents is to be regarded as a major governance objective for the authorities of the City of Refuge. In particular, the Republic and the Coalition of External Agencies should seek to secure low unemployment, universal primary education, and significant economic opportunity for Residents. Furthermore, the City of Refuge should provide passports to Residents and seek to secure for its passport-holders, through diplomacy, generous immigration access to other nations. The Coalition of External Agencies, in particular, is tasked with seeking to secure international mobility for City of Refuge passport holders.

Of Citizens. Citizens will have guaranteed access to the gated areas of the City of Refuge, and will have the rights of voting and full civic participation in the Republic. Other rights, such as tax exemptions, tax dividends, free education, etc., may be granted to Citizens by the Republic.

Section III. The Republic’s Legislative Bodies

In addition to natural law, a considerable body of positive law is deemed necessary, for the provision of public goods, the regulation of externalities, and the securing of the general welfare. Moreover, to discern the requirements of natural law, and to implement them administratively, is a demanding task. For this purpose a legislature is instituted.

The legislature of the Republic will consist of two bodies: the Assembly and the Senate.

THE ASSEMBLY. The Assembly will consist of 1% of the Citizens at any time, or 1,000 persons, whichever is less, chosen randomly and not by election. As with jury duty in the United States, participation in the Assembly is mandatory for Citizens, should the random selection fall on them. Certain excuses may be allowed for, but an unreasonable refusal to serve in the Assembly is grounds for revocation of Citizen status. Assembly members will be paid the median wage, and may appeal for up to five times this amount if they can show they would have earned more. Assembly duty will last for a minimum of one year. Assembly members who wish to do so may stay on for another year can stay on as non-voting but paid members, who will help to instruct the next Assembly in their duties and influence its deliberations.

The Assembly’s job is to consider petitions originated by Citizens or Residents and approve them, by a supermajority of two-thirds, or reject them. It may also amend them in a fashion consistent with the original intent of the petition, so as to facilitate their implementation. To be considered by the Assembly, petitions need the signatures of at least 1% of the Resident population, or 1% of the Citizen population, and should not violate the natural law or the Constitution. Assembly members may not initiate petitions for consideration during their own terms, but may register petitions for consideration by the next Assembly. The normative procedure for considering petitions is majority vote by all Assembly members. If there are too many petitions for Assembly members to read, the normative procedure for prioritizing them will be by number of signatures, but the Assembly can adopt another procedure if it so chooses.

THE SENATE. The Senate will consist of at least one hundred persons. If one hundred persons meeting the criterion of Senator as described here, enough persons to fill the number will be provided by the Host Country and the Coalition of External Agencies. Thus, for example, if only twenty active Senators derived from the Citizenry of the City of Refuge exist, forty will be appointed by the Coalition of External Agencies, and forty by the Host Country.

The Senatorial Qualifying Exam will be held annually, open to anyone who is interested, Citizen, Resident, or Sojourner. It will be a test of generally but civically-relevant knowledge, resembling the Foreign Service Exam used by the US government to recruit diplomats, but adapted to the particular needs of the City of Refuge. The Coalition of External Agencies, the Republic, and the Host Country will have joint responsibility for its preparation. Its contents are not to be regarded as arbitrary, but rather as objectively representing the best thought and knowledge attained by mankind on civic matters. A high score on this exam will be one of the criteria for attaining the senatorial office.

Citizens who excel on the Senatorial Qualifying Exam, and who have previously served in the Assembly, may be nominated for candidacy to the Senate, either by citizen petitions, by the Assembly, or by the Coalition of External Agencies. Citizens will not solicit nomination to the Senate unless the Senate has fewer than one hundred active members, but may be still be nominated to the Senate by the genuinely independent initiative of others. There shall be no limit on the number of active Senators who may serve at any given time.

Having been nominated, candidates for senatorial office will then be presented to the Citizenry in annual elections, along with a statement of their philosophy of government, prepared by the candidates. Senatorial elections are the only occasion when Citizens will vote. The vote will be conducted on majoritarian lines, with this modification: votes will be weighted so that men, collectively, and women, collectively, have equal weight. Senatorial elections will not be adversarial. Rather, voters may approve or reject each senatorial candidate separately.

Persons elected as Senators of the City of Refuge shall retain that rank permanently as an honorary title. However, the voting privileges and salary of Senator shall be conditional on continuous residence in the Republic and regular attendance at Senate meetings, as well as other conditions of conduct that may be stipulated by the Assembly as fitting for the dignity of a senator. A total senatorial salary will be split equally among all active senators.

Rules about senatorial conduct cannot be retroactive. They are to be regarded as under the arbitrary discretion of the Assembly, and not as arising from natural law. For example, the Assembly might rule that senators must not work in the financial sector, deal in lewd art, divorce their spouses, or possess more than $1 million in net worth. However, rules of conduct for senators must not violate freedom of religion, e.g., it should be regarded as unconstitutional to require a senator to trample on the Cross. Moreover, senators whose lifestyles are inconsistent with newly promulgated rules can ask for a three-year reprieve as that adapt to new expectations. Also, if rules of conduct require senators to spend money, e.g., to maintain a lifestyle of peculiar dignity and decorum, they may document their expenses and require compensation from the Republic.

In addition to approving petitions, senators can award up to 10% of the Republic’s tax revenue, at their own discretion, as public monuments and beautification of the City, as well as awards for inventions, achievements in poetry and the arts, military heroism, and other great services to the City.

Section IV. Public Finance

Basic government functions in the City of Refuge will be guaranteed by the Coalition of External Agencies, as a last resort, but deemed primarily the responsibility of the Republic. The Republic will not be authorized to borrow, but must pay for spending out of current revenues or by selling accumulated assets.

Spending. The Republic will dedicate funds to agencies or classes of persons, while funds permit. If funds are available, in the form of tax revenues or saleable assets, funding commitments will be met in full. If funds are insufficient, they will be met proportionally. Prioritizations may be set in place, such that some dedicated funding will be paid in full before other categories of dedicated funding begin to be paid.

Taxes. Residents and Sojourners shall be subject only to indirect taxes, which may include wage taxes, rent taxes, car taxes, tariffs on international trade, financial transactions taxes, taxes on bank accounts, user fees for government services, land taxes, excise taxes and luxury taxes, corporate taxes, and sales taxes. Income and wealth taxes on Residents and Sojourners will be deemed impermissible, as an excessive invasion of their privacy.

By contrast, Citizens will be required to report their incomes and net worth annually to the Republic and pay income and wealth taxes. In return, they may be exempted from indirect taxes and made eligible for social insurance, subsidized education, and other benefits.

Budget process. Budget proposals may originate through petition or be proposed by the Assembly or the Coalition of External Agencies, but their passage is ultimately the responsibility of the Senate, to be exercised in a fashion consistent with the framework of law established through the petitionary process. The Senate shall not have an obligation to pass budgets annually. Rather, as long as revenues are sufficient to cover expenses, taxes will be collected and dedicated funds paid out by whatever rules are in place. The Senate may, however, change the taxing and spending rules at any time, if such changes command the assent of two-thirds of active Senators. If revenues fall short of expenses, the Senate shall be obligated to revise the taxing and spending rules so that dedicated funding obligations can be met. In this case, a simple majority suffices to make changes to the budget.

Laws and mandates passed through the Assembly and the petition process which involve changes in budgetary rules will be incorporated into the taxing and spending rules which comprise the budget. However, the Senate can defund such laws and mandates if it deems such changes desirable from a budgetary perspective. In that case, after a reasonable lapse of time, they shall be considered null and void.

Excess revenue. If revenue exceeds spending, the surplus will be used to purchase US Treasury bonds, or whatever asset the Senate shall deem suitable, up to a threshold, initially set to $5 million. Excess revenue above this amount will be divided equally and paid out to Citizens. The threshold may be raised or lowered with the consent of the Senate and the Assembly.

Section V. Education and Public Discourse

Freedom of conscience, speech, and religion will be recognized as fundamental principles of the City of Refuge.

The primary role of government in education will consist in scheduling regular public examinations, equally available in English and in the Host Country language. Such exams will be part of the basis for determining eligibility for Citizen status, and for senatorial candidacy, but they should also be developed and administered in such a fashion that they are regarded by private sector employers as valuable indicators of human capital.

Compulsory education in publicly-provided schools will be regarded as a violation of the right to be educated in a manner consistent with one’s beliefs. If the City of Refuge chooses to educate children at the public expense, it must do so through a voucher system, so that the ideological content of education may be determined in the marketplace of ideas and not by government fiat. However, the City may disqualify schools from the receipt of voucher funding on grounds of underachievement on public examinations of objective knowledge.

The Constitution of the City of Refuge will make no commitment to neutrality among opinions, religions, worldviews, etc. On the contrary, it will leave Governmental Stakeholders free to give law and policy an educative function, and to seek to shape public opinion, e.g., through publicly financed and administered news media. The City has a positive right to express its own views and opinions, but not a negative right to suppress the views or opinions of others. There shall be no censorship of opinions and views.

While freedom of conscience, speech, and religion are recognized as fundamental rights, Citizenship is not a right, but a privilege, and may be made conditional on expressed opinions. The right of the Republic to regulate the speech of its members, arising from the principle of freedom of association, will be used in only two respects:

1. Citizens shall not advocate the violation of the human rights of others, in particular the freedom of migration which is the City’s raison d’etre.

2. Citizens shall not assert a right of the City of Refuge to secede permanently from the Host Country.

Any Citizen who is found to have expressed these forbidden opinions may be stripped of Citizenship. The Coalition of External Agencies shall be primarily responsible for the disqualification of Citizens who advocate restrictions of migration or violation of human rights. The Host Country shall be primarily responsible for the disqualification of Citizens who advocate secession.

Section VI. Dissolution

At the end of the pre-agreed period, the City of Refuge will revert to the sovereignty of the Host Country, which may choose to what extent it will maintain the institutions that have evolved in the meantime, or assimilate them to its own internal institutions. However, the Host Country agrees to permit all Citizens and Residents of the City of Refuge to become citizens of the Host Country at this time, on equal terms with existing citizens.

If, at the time when reversion to full Host Country sovereignty is scheduled, the Coalition of External Agencies deems that the Host Country has refused to guarantee the continued right of residence of inhabitants of the City of Refuge, it may postpone the reversion of the City of Refuge to Host Country, until such time as the Host Country has provided such guarantees.


It is fascinating to think about what kind of society would emerge in the framework of a Constitution like this. I don’t know of course, but I have a few guesses.

Imagine Singapore juxtaposed on a UNHCR-administered refugee camp. I think Cities of Refuge would tend to be a little like that. Smart policy, foreign aid, and entrepreneurial migrants would generate a lot of economic growth, but masses of desperate people would be difficult to absorb comfortably. You might see skyscrapers next to shantytowns.

There would be an eccentric element in the population, misfits and outputs from all over the world, dangerous or innocuous. It would be a mecca for market-dominant minorities, as well as for NGOs and international humanitarian types– another interesting juxtaposition.

A romantic element in the population would be international couples who had trouble getting visas to one another’s countries.

Universities would love it, because they could attract students from all over the world, without needing to worry about processing visas. In general, there’d be a lot of learning and self-improvement. MOOCs would do brisk business.

Culturally, the mixture of people of so many backgrounds would be discombobulating, as well as stimulating. However, a cultural center of gravity might be created through a fusion of (a) an international Americanized bourgeoisie with (b) a large influx of Host Country nationals. Others could assimilate to this culture, but there would be large pockets of unassimilated immigrants from particular regions. All in all, the cultural landscape would be rather clannish and segregated. Nonetheless, I don’t think it would be too difficult to secure civil peace and make the interaction of races and cultures fruitful rather than hostile.

The Cities of Refuge would attract religious communities persecuted in their homelands, and would become centers of Christian missions as well.

There would be enormous economic inequality in the City, but not so much among Citizens. Some very rich tax refugees would settle in the Cities of Refuge, but might prefer not to become Citizens because they would then be subject to income and wealth taxes, as well as Assembly and (for men) military service obligations.

Much depends on whether Citizens would really come to feel pride in their City, and in the attainment of various offices and honors within it. But I think they would. Human beings thirst for recognition, and I think many a downtrodden refugee would be greatly moved and inspired by a chance to be called Citizen of a famous City, and to have a real role in its self-governing constitution– much more of a role, indeed, than the typical citizen of a Western democracy enjoys.

head contests of Republican against Democrat, or Labor against Conservative. The frequent need for supermajorities would make mere partisan victories rather hollow. Note that the rules for joining the Senate tend to impede political ambition, since one can’t be elected Senator without serving in the Assembly, and that depends on random chance. The Constitution is designed to encourage government by a consensus among ordinary Citizens, as opposed to competition among elites. In my view, the combination of ethnic fractionalization with democracy tends to be disastrous precisely because democracy is divisive, and while fomenting divisions can be usefully stimulating when there is sufficient pre-existing homogeneity, it is dangerous when the population is already fragmented. So my Constitution is designed to foment not division, but consensus.

The Citizens themselves may amount to a kind of elite. They are likely to be a minority of the resident population, more rooted and better educated. That they receive direct transfers out of excess tax revenues will give them a strong incentive to run the City of Refuge in a way that fosters wealth creation and keeps government small. Participation in the military and the Assembly will strengthen their attachment to the Republic, and their knowledge of its procedures.

All these guesses may be far off the mark, but one thing I can say with confidence. A passport-free Charter City would be a fascinating place.