The “sanctity of borders” has been the central doctrine of the post-Cold War world order. It is very topical because of the Russian invasion of Ukraine which seems to have taken place on February 27, 2014. For the record, Putin has denied that Russian forces seized Crimea, claiming the pro-Russian forces are local militias. The US State Department has provided evidence that Putin is lying. As an intermittent Russia watcher, my impression is that words have an instrumental rather than a veridical function for Putin, and have little value as evidence for anything except what he thinks it is in the interests of Russian power to fool the world into believing at a particular moment. Be that as it may, the Crimea crisis is a dire threat to the global principle of sanctity of borders.

I have a schizophrenic attitude to the “sanctity of borders.” On the one hand, as I put it in the title of a previous post, “The Modern Borders Regime Was Designed to Secure International Peace,” which I just reread. It’s worth rereading now. Both there and in an earlier post, “Deepening the Peace,” I argue that the Wilsonian world order that, in the course of the 20th century, gradually succeeded in partitioning the world into sovereign democratic or pseudo-democratic nation-states with well-defined borders, has been (since World War II) strikingly successful in maintaining peace. I derived these ideas some time back from an excellent book by Michael Mandelbaum, The Ideas that Conquered the World: Peace, Democracy and Free Markets in the Twenty-First Century (but the book is really about the 20th century). For evidence on the world’s growing peacefulness in general, see the Human Security Report and Steven Pinker’s The Better Angels of Our Nature: Why Violence Has Declined. (I find the latter book obtuse in many ways, but it musters the evidence convincingly.) I think the “sanctity of borders” as a principle of international relations is a crucial factor explaining the world’s unprecedented peacefulness.

This is partly why I have hitherto been skeptical of the peace case for open borders. While prima facie plausible, it seems empirically false. The Golden Age of Open Borders ended in World War I. The closed borders post-WWII era was much more peaceful. Correlation does not prove causation, of course, but the fact that the data seem to show the opposite of what the peace case would predict, makes it seem unpromising.

Now, to immigration restrictionists, “the sanctity of borders” has another meaning: borders are morally significant lines which individuals cannot cross without wronging all the inhabitants of the nation whose territory they have entered. Either governments per se, or the people through their governments, have a kind of collective right in the entire territory of a nation, which undocumented immigrants violate. Governments act justly when they restrict immigration, regardless of what their reason may be or whether they have any reason at all. There is no right to migrate; on the contrary, nations enjoy a right, analogous to private property rights, not to be migrated into without their (suitably defined) consent. Thus borders are sacred.

“Sanctity of borders” in this sense, I deny. I think it lacks moral or philosophical justification, and the belief in it is immensely harmful to human welfare. Governments do not really enjoy this right. When they act on their belief that they do, they act wrongly. The world would be a better place if they correctly understood that they do not have this right, that on the contrary there is sometimes a right and in any case a liberty to (peacefully) migrate which governments may justly infringe only in exceptional cases.

Is my rejection of “sanctity of borders” against international migration inconsistent with a favorable attitude to “sanctity of borders” in international relations. No. The reconciliation is easy: I could simply assert that governments have a right to defend their borders by force against armed invaders, and a duty not to send armed invaders into other countries, but that they do not have a right to deny entry to peaceful immigrants who intend only consensual and rights-respecting interaction with a country’s current and lawful residents. Maybe I would assert that. But I would qualify my support for sanctity of borders in other ways. And here my opinions track those of many “liberal internationalists” in the foreign affairs community.

There have been many instances of humanitarian intervention by Western democracies since the end of the Cold War, including: Rwanda; East Timor; Sierra Leone; Yugoslavia, and in particularly the 1998 war in Kosovo; and most recently, the 2011 intervention in Libya. All these wars tend to violate the principle of “sanctity of borders,” in the sense that military forces cross an international border without consent of the recognized, sovereign government of that country. Is it hypocrisy, then, to object to Russia’s invasion of Georgia in 2008, or of Ukraine in 2014, on the ground that it violated “the sanctity of borders?” No, but the sanctity of borders must be qualified. It could be restated:

(1) “No government should send military forces across the sovereign borders of another, not having been attacked, unless this is necessary to prevent a massive human-rights violation, such as genocide or ethnic cleansing, currently in progress [humanitarian intervention], and to prevent such a crime is the government’s only important motive [disinterestedness].”

That would justify the war in Kosovo and some others, but not the 2003 invasion of Iraq. If we want to justify that too, we could offer the following:

(2) “No government should invade another country that has not attacked it, except to prevent extreme human-rights abuses or remove a totalitarian regime; furthermore, it should do so without intent of annexation or economic exploitation, without partition except as a last resort to prevent human rights violations, with fair advance warning, multilaterally and with the active support of other nations, and with a domestic record that gives it a credible chance of establish a rights-respecting regime in place of that which is removed.”

Principle (2) would justify the West’s humanitarian interventions, as well as the 2003 invasion of Iraq, but condemn Russia’s invasions of Ukraine and Georgia. But am I just moving the goalposts? Is principle (2) actually rightin some fundamental moral sense? Does it allow too much, in authorizing so many interventions? Does it forbid too much, condemning some military interventions that are really justifiable?

For example, in Ukraine, Russia acted non-transparently and without fair warning, by stealth and surprise, in a situation where no major human rights violations were taking place, without a credible chance of establishing a rights-respecting regime because they don’t have one at home, with what seems to be an intent to partition Ukraine, and likely with an intent to annex Crimea. Yet Russians could make a plausible cause that the majority of the population of Crimea wants to be partitioned from Ukraine or even annexed to Russia (there may be a referendum about this in Crimea). Why shouldn’t the will of the Crimean majority decide whether the country is to be part of Ukraine or not? And why shouldn’t Russia help the Crimean majority attain its goals?

I think the best answer is that a world order based on a qualified sanctity of borders, as expressed above in Principle (1) or Principle (2), has proven itself quite effective in maintaining international peace. But that answer is not fully adequate, because man does not live by peace alone, and in all sorts of other ways, the contemporary world order is not conducive to the flourishing of much of the human race. The world order based on “sanctity of borders,” which Putin is now vigorously subverting, though impressively peaceful, has never been particularly rational or just. There was vast economic inequality between rich and poor nations. Totalitarian dictators like Saddam Hussein, whom the West had power to overthrow, were left in power, to the infinite detriment of their abject peoples. The 2003 invasion of Iraq has mitigated this problem a bit, but has not no way to guarantee people against getting trapped in a totalitarian nightmare regime. Many borders were drawn in a highly arbitrary fashion. Some states were rigged to fail by a disadvantageous geography or ethnic makeup. Ukraine, though far from the least fortunate of the world’s countries, is a good example of the arbitrariness of established borders, and the harm they do. There was never any very good reason for predominantly Russian Crimea to be part of Ukraine. It was a historical accident.

There have always been lots of plausible reasons to renegotiate all sorts of borders all over the world. Borders had to be treated as “sacred” precisely because they were so arbitrary and indefensible. We can’t offer a good reason why Crimea should be part of Ukraine, because there isn’t one and never was. Nor, for that matter, is there a good reason why Chechnya should be part of Russia, or Taiwan part of China, or why most of the borders in Africa should be as they are. But start to redraw them, and you open a Pandora’s box.

One of the more arbitrary borders in the world was that between Iraq and Kuwait, and just for that reason, the Gulf War of 1991 was so important for establishing the principle of “sanctity of borders.” That war, with full UN backing, embodied more than any other the principle of “collective security” which the US had been seeking to establish as the basis of the world order since Woodrow Wilson’s Fourteen Points. The League of Nations had embodied it, rather naively and ultimately without success. The United Nations had embodied it, but UN processes quickly got caught up in Cold War realpolitik and didn’t work the way they had been intended. But suddenly, in 1991, with the fall of the Soviet Union, a UN-backed US-led genuinely global coalition applied overwhelmingly force to reverse an act of aggression. The very arbitrariness of the border thus defended clarified that it was precisely the principle of sanctity of borders, i.e., of any internationally recognized border, that was being established. It was a watershed. To this day, the world is full of little countries with little militaries that go unafraid among the nations. They have confidence in collective security, in the US-led UN-based world order, in international law. It was the 1991 Gulf War, above all, that made that possible. Meanwhile, however, humanitarian intervention has been undermining the principles of that world order. In particular, the 1998 war in Kosovo, leading to its declaration of independence in 2008, and the 2003 war in Iraq, undermined it.

The Iraq War of 2003 had a justification in international law: Saddam had committed himself to letting the international community verified that his country was free of WMDs, then he’d kicked out the weapons inspectors. UN Resolution 1441, authorizing the use of force, was passed. But there was still something lawless about the way the war was initiated. For one thing, the US administration said that it wanted UN authorization, yet would intervene with or without it. The US administration didn’t seem to be reacting to anything Iraq had just done. In that sense, the 2003 invasion of Iraq was a “war of choice.” There was certainly a humanitarian argument for overthrowing what everyone recognized to be a brutal totalitarian tyranny. But Saddam’s Iraq wasn’t engaged in genocide just then. The invasion of Iraq was part of a broader, much-misunderstood response to 9/11, and in that respect it was effective: Al-Qaeda was lured into a deadly trap. But to accept that as a reason to violate “Iraq’s sovereignty” was to set a dangerously ambiguous precedent, easy to manipulate and turn in sinister directions. The US wasn’t disinterested the way it had been in Kosovo or East Timor, and that made it more dangerous. The “sanctity of borders” was certainly violated in the sense that an international frontier was crossed by armed force, and the ex post justification, that a people was being liberated from tyranny, could easily turn into a program for wars all over the world, since there are plenty of genuinely tyrannical governments left standing. On the other hand, there was no question of the US annexing Iraq, and it didn’t partition it either. In that sense, the sanctity of borders was respected. But it was nonetheless a blow to the principle.

In the spring of 2008, Kosovo declared independence from Serbia, and this was recognized by many countries around the world including the US and most of western Europe. Russia was on the side of Serbia, a fellow Orthodox Slavic nation, and it’s probably in reaction to this that Russian-backed separatists in South Ossetia, a province of the US-allied Republic of Georgia, grew more active… and a war took place in August 2008. How exactly this occurred isn’t entirely clear, since Russia is an unfree and secretive country. The outcome was that Russia occupied two provinces of Georgia, South Ossetia and Abkhazia, and supported their declarations of independence, which however have gone almost entirely unrecognized by the rest of the world. But while Russia didn’t procure international recognition for its new occupied territories, it didn’t face any real consequences either.

Obama came into office and immediately sought to “reset” relations with Russia, as if the breakdown in relations were the US’s fault. I think this basically reflects Obama’s uncritical, knee-jerk rejection of the legacy of the Bush administration. Obama appeased Russia by withdrawing plans to create a missile defense complex in Poland, among other things. To my mind, the “reset” was a huge mistake on the part of the Obama administration, and it’s the main reason why Russia has now occupied Crimea. Russia paid no price for its aggression in Georgia, so now it has done it again, on a larger scale. The West could have done plenty to punish Russia without going to war: boycott the Sochi Olympics, expulsion from the G-8, sending arms to Georgia, a military buildup along the Russian border, targeted sanctions, trade restrictions. It could have boycotted the 2014 Sochi Olympics, or agitated for them to be moved elsewhere, a blow to Russian prestige. It should have done all that, but it might not have worked, and it might have risked escalation into war. What made it difficult, though, was that Russia’s position– that South Ossetia and Abkhazia should be separated from Georgia because their populations seemed to want to– was morally plausible. At any rate, to risk war with Russia for such a dubious cause would have seemed odd.

Now, after Putin’s invasion of Ukraine, the West finds itself in a position something like what it faced with Hitler in 1938. This is not a polemical reductio ad hitlerum, but an analytical device and a mnemonic. Putin resembles Hitler enough that Hitler’s career sheds light on Putin’s. Hitler and Putin came to power in countries bitter about losing major wars. Each was fiercely indignant about the fall of the former regime. (Putin has called the Soviet breakup “the greatest geopolitical catastrophe of the [20th] century.”) Both rose in the context of a struggling democracy which they proceeded to eviscerate, clamping down on political parties and press freedom and imprisoning opponents. Both spread anti-Western attitudes through official propaganda.

By late 1938, Hitler had an impressive record of bloodless conquests. He had remilitarized the Rhineland, contra Germany’s agreements in the Versailles Treaty; executed an Anschluss or union with Austria, which was then confirmed by “referendum”; then occupied the Sudetenland, a majority-German region of , this time with the active support of France and Britain, which were hoping to sate Hitler’s territorial ambitions to avoid war; and then occupied the rest of Czechoslovakia. None of this had met armed resistance, and naturally it did much to fuel Hitler’s popularity in Germany. Note that all of these early Hitlerian victories could plausibly be defended in terms of the Wilsonian principle of national self-determination. The West had greatly strengthened Hitler by letting him achieve all of this so easily. But what was the alternative? As long as Hitler had a plausible moral justification for his moves, however legally unacceptable they may have been, it was hard to muster the moral will to go to war with him. And so the rules of international legality were eviscerated, and a new system of incentives developed, and countries began to align themselves with Hitler. If Britain and France had fought in 1936, it would have been an easy win. By waiting to 1939, they almost handed Hitler the world on a platter.

Now, differences. First, Russia’s relative power is much less than Germany’s was. Second, whereas Russia is an authoritarian semi-dictatorship which has increasingly stifled dissent, it is not a totalitarian regime like the Nazis or the Soviet Union. Consequently, Russian public opinion is less crazy. Russians have more access to international news. Third, there isn’t a Russian ideology in the way there was a Nazi ideology. Fourth, Putin was less ruthless in establishing his regime. And I doubt that we’re on the brink of World War III. But the dilemma the West faces is similar to what it faced in 1938: either plunge into a nasty, dangerous confrontation that could lead to war for the sake of a not particularly just cause (keeping the Sudetenland in Czechoslovakia, or Crimea in Ukraine), or let the central stabilizing principle of the international order be eviscerated, and live in Putin’s world.

Bryan Caplan asked for predictions about Ukraine. I’ll offer a few. For now, Putin’s invasion of Ukraine looks unpopular in Russia. If Crimea secedes in some fashion, which it probably will, I doubt that Putin’s gambit will be so unpopular a year from now. I think Russians are afraid of the reactions of the West, but the West’s reaction will be feeble enough that, in Russians’ eyes, events will prove Putin right. Putin will be strengthened at home. Meanwhile, a few other things will happen:

• Other secessionist movements around the world will be emboldened. They will behave more provocatively, and start to look for foreign patrons.
• Demand for nuclear weapons will increase. Crimea will persuade many that nuclear weapons are the only real security in Putin’s world, and also, and worse, that they allow a nation to engage in aggression with impunity. I was tempted to say “fifteen nuclear powers by 2020,” but I don’t know enough about the supply side. Maybe nuclear weapons are too difficult for some regimes to get. But more will want them.
• Military spending will rise in many countries.
• Many regimes will try to alter the ethnic “facts on the ground” in their favor, burdening human rights in pre-emptive strikes against possible secession movements.
• If Crimea’s independence is widely recognized, Taiwan will start to use it to bolster the case for their independence. This raises the probability of a China-Taiwan war.
• The trend towards declining violence documented by the Human Security Report will stall or go into reverse.

Now, all this is causing me to reassess the peace case for open borders. Until now, I had been skeptical because the status quo seemed to be doing so well. But now it looks like the status quo may be breaking down. There’s a civil war in Syria which no one knows what to do about. In view of the empirical regularity that democracies do not fight each other, the global spread of democracy was an encouraging sign for the future of world peace. But democracy seems to be in decline. Democracy failed quickly in Egypt. The Pax Americana seems to be giving way to a more chaotic period of interregnum.

And so, let me suggest that it would be useful if open borders, the right to migrate, could be deployed in a somewhat opportunistic factor as a means to peace. Consider the case of Ukraine. One reason Russians care so much about Ukraine is that Kiev is so central to Russian history. It was where Russia began. Russians want to have access to it. If Ukraine joins NATO and the EU, immigration restrictions will probably be tightened in ways that make it harder for Russians to live and work there, or even to travel there. It’s not really clear why Russians should have less right of access to a place important to their culture and history like Kiev, than Americans have to a place important to our culture and history, like New York. Might it not help to reconcile Russians to Ukraine’s absorption into Europe, if their right to live and work in Ukraine were recognized and guaranteed? In principle, Russians’ right to live and work in Ukraine is separable from Moscow’s right to rule Ukraine.

Again, consider the situation of a Russian-speaking voter in Crimea, faced with a referendum on separation from Ukraine and incorporation into Russia. One major benefit of becoming part of Russia is that he will gain the right to live and work in Russia. This is quite valuable, since Russia is both big– many options– and richer than Ukraine. While it might seem even more valuable to have the right to live and work in Europe, (a) that is not being offered at the moment, and (b) for a Russian-speaking Crimean, the cultural transition would be much harder. Now, suppose arrangements could be made, such that Crimeans would be part of a free migration zone which includes Russia, so that Russians could move to Crimea and live and work there, while Crimeans could live and work in Russia. That might make it easier to reconcile pro-Russian Crimeans to the cancellation of a referendum on independence.

Indeed, if Ukrainians could all along have been an overlapping zone of free migration between Russia and Europe, such that Ukrainians could live and work in either Russia or Europe, and Russians and Europeans could live and work in Ukraine, need the tensions into Ukraine ever have come to this pass? Europe-oriented Ukrainians could be confident that the influence of Europe would be sustained, while Russia-oriented ones would not fear being cut off from their homeland.

At bottom, the trouble with Ukraine is not that her people can’t get along with each other, as that the sovereign democratic nation-state model just doesn’t fit it very well. Some other arrangement is needed to avoid conflict, which combines integration and fluidity with the autonomy of regions and ethnic communities, and which recognizes and gives institutional protections to the links Ukrainians feel to different communities beyond Ukraine. The state sovereignty model is too crude to accommodate these needs.

If we’re entering a more chaotic era, that’s not necessarily a bad thing. It will probably be more violent: that’s just reversion to the historical mean. Minimizing violence was one thing that the late 20th-century Wilsonian world order did exceptionally well. But it may also be more creative, more just, and/or more interesting. As we muddle through, the single most important thing we can do is to advance individual rights on any front we can. Formal, democratic, constitutional processes may become less important, and hopefully some powers, such as the power to restrict migration, will be taken out of their hands. Protection of human rights should not be the responsibility only or primarily of sovereign states towards their own citizens, but churches and all sorts of civil society organizations and of conscience, as well as international organizations, should find ways to do it, and existing states should probably start doing it for people other than their own citizens. Apologies if this is vague, but it’s my dim glimpse of what may be in store for us.

Tyler Cowen is a remarkable thinker. He is a sponge for information and a great summarizer, categorizer, and synthesizer thereof. It is a service in which our age, with its sprawling clamor of disparate thought, greatly needs. Perhaps Cowen’s gifts are inseparable from his compulsive moderation, which often spills over into muddle-headedness. Cowen couldn’t be such a good listener if he didn’t give muddle-headed people a hearing. If he was as lucid and logical a thinker as Bryan Caplan, he’d see through nonsense too quickly and wouldn’t have the patience to read/blog it so that we don’t have to.

Nonetheless, with all due respect, I must remark that a recent post in which he goes after Bryan Caplan as a “False Cosmopolitanite” is singularly demonstrative of the inferiority of Cowen’s philosophical and logical acumen relative to Caplan’s. Caplan hasn’t responded to it yet– perhaps he won’t, either because he’s busy or because it would be so embarrassingly easy– but I think I have a pretty good idea what his response might be. Cowen writes:

Enter the intellectuals, whom I call The False Cosmopolitanites… The intellectuals… push for marginal moves toward a stronger cosmopolitanism, even though in a deconstructionist sense their inflated sense of superiority and smugness, while doing so, is its own form of non-cosmopolitanism… Sailer can skewer The False Cosmopolitanites, who serve up a highly elastic and never-ending supply of objectionable, fact-denying, self-righteous nonsense… Embedded in all of this, Caplan is more particularistic than he lets on, embodying and glorifying a form of upper-middle class U.S. suburban culture of which I am personally quite fond. Sailer is… a non-conformist and smart aleck who plays at the status games of The False Cosmopolitanites.  Sailer insists on relativizing and deconstructing The False Cosmopolitanites, which is fine by me, but at the same time he overestimates their power and influence…

There is not the slightest inconsistency between “embodying and glorifying a form of upper-middle class US suburban culture” and favoring open borders. Cowen’s critique is a complete, unmitigated nonsequitur. No reconciliation of Caplan’s two positions (pro-suburbia and pro-open borders) is really needed, but if he felt the need to dispel any slight persuasive force Cowen’s remarks had on weak-minded readers, Caplan could answer in either or all of the following ways.

1. Open borders will not disrupt the upper-middle class suburban culture of which he is fond. There’s little reason to think it would lead to more crime. If it did, the boost to GDP from open borders would easily fund a few more police. Many immigrants might integrate pretty easily into upper-middle-class suburbia, but if it takes soaring new tenements and sprawling shantytowns to house the immigrant multitudes, there will be plenty of land on which to build those while leaving room for a lot of upper-middle-class suburbia, too.
2. Open borders will, moreover, give more people access to the American suburban life Caplan is so fond of. If Caplan thinks so highly of middle-class suburbia in America, by all means let’s try to give as many people as possible access to this fortunate existence.
3. Even if open borders did threaten the American suburban lifestyle, it is not in the least inconsistent to say that protecting that lifestyle is not an adequate motive for immigration restriction policies that is by far the greatest cause of dire poverty in the world. Americans probably wouldn’t need to sacrifice suburban comfort to accommodate open borders, but if they did, that would be a small price to pay for the global gains that could be expected.

Doubtless, there are counter-arguments to all these claims, but that’s beside the point. If Caplan believes (1), (2), and/or (3), Cowen’s suggestion that Caplan is a “False Cosmopolitanite”– inconsistent– for being pro-suburbia and pro-open borders, fails.

Whether or not Caplan, or open borders advocates generally, are guilty of “smugness” or an “inflated sense of superiority” is entirely beside the point. Really, we all have better things to do than talk about the tone in which the arguments are stated. Our business is to evaluate their truth. Are governments justified in using force to prevent peaceful migration, or not?

The answer to that question has nothing to do with whether one is “cosmopolitan” in the sense of liking multicultural art, or having foreign friends, or liking foreigners, or thinking that all cultures are equally valuable or anything of the sort. It is entirely consistent to think most foreigners are morally inferior to Americans and still think we ought not to coerce them to stay in foreign countries. For that matter, it would be eminently consistent to support open immigration because one thinks most foreigners are morally inferior to Americans, in hopes that exposure to the moral influence of American society will improve them.

I doubt that Cowen could even define his terms “particularist” and “cosmopolitan” in a minimally satisfactory way. The suggestions that being “smug” is “non-cosmopolitan” and that “glorifying suburbia” is “particularist” suggest that whatever Cowen means by the terms is so stultifyingly subjective that they couldn’t do any real work in any sensible argument about open borders. Is my meta-ethics of universal altruism plus division of labor “cosmopolitan?” I do insist that we should ultimately place equal value on the welfare of foreigners. But I am not at all “cosmopolitan” in the sense of airy detachment from “particularist” cultural traditions: on the contrary, I’m a Christian, and support open borders partly from Christian reasons. But then, does the fact that Christianity is global and universalistic religion– Jesus said to “make disciples of all nations” (Matthew 28:19)– make me cosmopolitan again? Such questions are unanswerable and fundamentally silly.

Cowen says that “Sailer insists on relativizing and deconstructing The False Cosmopolitanites, which is fine by me.” Why is it fine by him? We intellectuals have a primary duty to truth. Part of that duty includes taking the claims of other scholars seriously, answering argument with argument, not engaging in ad hominem attacks and low blows against one another’s motives. Cowen should know better than to approve of Sailer “relativizing and deconstructing” Caplan.

By the same token, calling Caplan a “False Cosmopolitanite” ought to be beneath Cowen. Has Caplan ever claimed to be “cosmopolitan” in any sense, let along Cowen’s strange subjectivist sense? If he hasn’t claimed to be a Cosmopolitanite, he can’t be a false one. In general, while I often disagree with Caplan– I find his “common-sense case for pacifism” very naïve, for example– “false” is a very inapt description of him. On the contrary, much of his charm lies in his extreme ingenuousness. But the “False Cosmopolitanite” label is especially fatuous because Cowen’s concept of “cosmopolitan” is so confused, and its logical connection to open borders, for or against, so non-existent.

Cowen says that his “perspective is a synthetic one,” but the post is calculated to give “synthetic perspectives” a bad name. There can be a conflict between synthesizing and seeking truth. In this case, Cowen’s attempt to be a sort of hybrid of Bryan Caplan and Steve Sailer yields a singularly muddled contribution to the debate. Tyler Cowen must try harder to think clearly.

To estimate the global economic impact of opening the world’s borders to migration involves heroic extrapolation. It is therefore a task in which theory must do most of the heavy lifting, with empirical work limited to determining plausible parameter values. To people who are cynical about economic theory, this makes the double world GDP literature so speculative as to be irrelevant. And cynicism about economic theory is a reasonable attitude to have. After all, economic theories, especially the most abstract ones, tend to start from very questionable assumptions, and they usually make some very implausible predictions, too, if one knows how to tease them out. (Often, theorists hide these.)

I was reminded of this recently by Carl Shulman’s take on the “double world GDP” literature, in which he pointed out something I didn’t notice about John Kennan’s “Open Borders” paper when I tried to summarize it for general audiences a few months ago: the enormous size of predicted migrant flows. Carl writes:

To estimate migrants from a country Kennan multiplies an estimate of a country’s national labor force by 1 minus 1/(the relevant place premium)… In the appendix of his paper, Kennan lists relative wages, labor forces, and other information on 40 less-developed migrant source countries. This leaves out many other countries, but since the world’s most populous ones are included the group would still account for most migrants…

From this sample over 75% of the labor force are predicted to migrate. As noted above, this leaves out many countries, children, and women not in the labor force, among others. If we included family members and other countries the implied number of migrants looks like it would exceed 3 billion.

Kennan doesn’t mention explicitly how many migrants his theory predicts, possibly because it would make his theory too easy to mock. The prediction, once Carl brought it to my attention, struck me as implausible, and provoked me to develop my own model to extrapolate the impact of open borders, which is the topic of this post.

I haven’t calibrated my model to the data yet, so I can’t say in this post whether my theory confirms the “double world GDP” estimates or not, or how many migrants it will predict. But further thinking about Kennan’s model has made me less skeptical of Kennan’s high estimates of how much of the world population would move. Emigration sources like Iowa and Ireland have a fraction of the population that they would, had they retained all their natural increase over the periods when emigration was rife (most of the 20th century for Iowa, the 19th century for Ireland). Granted, the cultural barriers to emigration from Iowa and Ireland were unusually low for their times– Iowa and Ireland are both English-speaking places whose emigrants went to English-speaking places– but (a) I suspect people overestimate cultural barriers to migration, and (b) American-led cultural globalization is such a powerful force these days that I suspect emigration from Tajikistan or Mali to America today faces smaller cultural obstacles than emigration to the US by, say, Russian Jews in the 19th century.

In developing a theoretical model to facilitate extrapolation of the impact of global migration flows, one problem is that “general equilibrium” models do a lousy job of explaining the current global distribution of income, and therefore seem like unreliable guides to the hypothetical global distribution of income under open borders. Some time ago, Robert Lucas pointed out that if the Solow model, still the most influential model of long-run economic growth, is used to explain global income differences, it would also predict vastly higher returns to capital in poor countries than in rich countries, and that if capital is mobile, all new investment should occur in poor countries.  Mankiw, (David) Romer and Weil (1992) “fixed” the Solow model by augmenting it with human capital, only to generate the absurd counter-factual prediction that returns to human capital should be far higher in poor countries, and skilled workers should be migrating from rich countries to poor countries, rather than other way around. Later, Mankiw and (Paul) Romer (1995) had a standoff in which Romer pointed out this glaring weakness in the “human-capital-augmented” Solow model. Romer (1990) has become one of the most cited papers in development economics and the flagship of the “endogenous growth” literature, but Romer’s ideas about ideas only underline the point that since ideas are non-rival and only partially excludable, they can’t do much to explain international differences in income. The conventional wisdom at this moment in time can probably be summed up: “ideas explain long-run growth, institutions explain cross-sectional income differences,” with institutions, about the definition of which there is little agreement and which formal economic theory is mostly unable to elucidate, winning by default because theories that are clear enough to be falsifiable have tended to be falsified. To me, it’s a rather glaring and obvious weakness that totally different theories are invoked to explain international and intertemporal income differences.

My own belief is that the original sin of the growth literature is that it neglects the division of labor, specialization and trade, increasing returns, in short, the first three chapters of The Wealth of Nations. It neglects them because these happen to be inconsistent with general equilibrium and “competitive” markets in the peculiar sense which 20th-century mathematical formalism in economics gave to that word. This blind spot also makes mainstream economics unable to explain why there are cities. And so it is with cities that my model begins.

Warning: from here on, non-economists will have to pick their way through the technical apparatus of a formal economic theory. I’ll explain as I go as best I can, but the content of the model is really explained in the equations. At a later stage, I plan to calibrate this to the data– or perhaps get a co-author to do so– and generate one of those rather spuriously precise estimates of how much open borders would raise GDP, followed by remarks on parameter sensitivities that hardly anyone really reads, etc. More interesting than the final numbers are the reasoning and scenarios one passes through along the way.

The starting place for my model is the city-level production function…

(1)

where Y is the city’s GDP, A is the “total factor productivity” of a city, h is the average level of human capital in the country (not just the city), N is the population of the city, and α and β represent the “output elasticity of capital,” i.e., the % change in output for a % change in capital, holding all else constant, and the “output elasticity of (effective) labor,” i.e., the % change in output for a % change in (effective) labor, that is, the number of workers multiplied by their average human capital.

Importantly, I do not assume that α+β=1. On the contrary, my presumption is that α+β>1, that is, that there are increasing returns at the city level, for the reasons Adam Smith understood well, namely, that the division of labor is limited by the extent of the market. Because of increasing returns, we cannot interpret α and β as Cobb-Douglas exponents. We cannot assume that if capital receives 30% of national income, then α=0.3. I tend to think that, as Paul Romer among others has suggested,  the output elasticity of capital, i.e., α, is more than capital’s share of income, and I suspect that labor may get more than its marginal product, too, due to various political distortions.

By the way, the model can accommodate the case of decreasing returns, α+β<1, as well. This assumption, too, can be plausible at the city level, given the scarcity of land. It would not imply the obvious counter-factual prediction of “backyard capitalism,” with people spreading out evenly over the land, or among the cities, because some cities have higher “total factor productivity” than others. But generally I think increasing returns are the most likely.

Multiplying population by average human capital to get “effective labor,” a method adopted for convenience, tends to downplay potential complementarities between skilled and unskilled labor. In effect, I assume that tools and/or time can substitute for skill. This assumption is not entirely satisfying, but at least it avoids the very counter-factual prediction that skilled labor will emigrate to where it is scarce and can earn more.

“Total factor productivity” deserves comment. This term is borrowed from the large “growth accounting” literature, which grew out of Solow (1957), and I believe the concept is fundamentally flawed, because it assumes away for no good reason what Adam Smith and I think a real understanding of economic growth starts with: increasing returns, gains from specialization and trade. Think of “total factor productivity” as a black box: for reasons we don’t understand, some places/times are more productive than others. However, the fact that I make “total factor productivity” a city-specific parameter has ramifications for its interpretation. A is a kind of pure place premium: it’s the (cultural, historic, geographic, political, whatever) difference between London and San Francisco and New York and Mexico City and Fresno and Gary, Indiana, etc., not the (political) difference between being under US sovereignty and being under British or Mexican or Tibetan or Malawian sovereignty. And because I am determined to accommodate increasing returns, the place premium won’t have to do nearly as much work as it does in some theoretical models.

Imputing “total factor productivity” to cities might seem to give the cities an anomalously large role in determining living standards. After all, aren’t national and regional policies important too? Actually, I am not assuming that productivity is entirely locally determined. If national or regional policies are important to productivity, they would be reflected in higher A for all the cities in the nation or region.

My assumption is that labor is mobile within each country, but not internationally, and the wage in each city must be competitive with other cities. But big cities have to pay higher wages, because there are “congestion disutilities,” which reduce a worker’s utility, as follows:

(2) 

where U is the worker’s utility when w is his wage and N is the population of the city he lives in. The parameter σ regulates the extent of congestion disutilities. For example, if σ=1/3, then if City M is eight times as big as City N, the prevailing wage in City M must be twice as high as that in City N. To be competitive, then, the wage w in a city must be:

(3) 

where w0 is the “base wage” in the nation as a whole. This “base wage” is probably the single best indicator of worker utility in the model. Its definition is a bit subtle, though. It is the wage a worker would earn in a hypothetical city of population 0, where he would suffer no congestion disutilities at all. All workers will actually earn more than this, because they all live in cities with at least some population.

How should “congestion disutilities” be interpreted? Many options here: pollution, crime, the absence of green grass and fresh air, tighter regulation of land use. But probably the best interpretation is: high urban rents. Land markets are difficult to model, and congestion disutilities are an indirect way of taking land scarcity into account. You can build high-rises to economize land, but people tend to prefer houses (with yards) to high-rises, and high-rises are expensive to build.

Note that without the congestion disutilities, the model would become degenerate, because the nation’s whole population would concentrate in one city, except in the special case of decreasing returns. This would occur for two reasons. First, the city with the highest “total factor productivity” would always outbid other cities for population. Second, increasing returns would continually reinforce its advantage as it grew. Congestion disutilities, however, may put a limit on metropolitan growth, as the higher wages the city can pay because of increased productivity are eventually overtaken by workers’ aversion to overcrowding and high rents.

The next step in the model may seem odd, but it is necessitated by the need to accommodate increasing returns. I assume that the city determines labor demand collectively in order to maximize “rents,” that is, to maximize:

(4)  

“Rents,” in a somewhat Ricardian sense, represent the difference between what the city produces and what it has to pay in competitive factor markets for its capital and labor. Who gets these “rents?” One obvious answer is landlords. Those who have the good fortune to own prime urban land in a modern economy can get very rich without doing a whole lot. Another is the government. When a city can offer higher “total factor productivity” than rival cities, or when increasing returns raise the productivity of its labor and capital, then it can afford to extract extra revenues through taxes and regulations which can then be distributed to various political stakeholders. Rents might also be used to benefit broader humanity or posterity, and I think many great cities really have used their extra productivity in generous ways. We all owe much to the intellectual and architectural attainments of the Greek poleis of the golden age, or the Italian cities of the Renaissance, and probably, also, to some great urban universities of our own day, whose work is meant to, and does, enrich many people beyond the narrow confines of the university or the city.

By the way, if it seems odd to treat cities as rent-maximizing corporations, bear in mind that this is part of my strategy for escaping the trap of “general equilibrium” thinking, whose repeated failures I explained above. I think a deeper revolution in economic theory is needed to escape the legacy of general equilibrium and the constant returns assumption. I’m working on that. But in the meantime, one must make do with these awkward expedients.

Whatever the cities do with their R, to maximize R, they should employ capital K*:

(5) 

for any given quantity of labor N; and they should employ labor N*:

(6)   

Since the expression on the right-hand side of (6) is very complex, we can define…

(7)    

… and …

(8)   

… (or “τ” in this font) and rewrite (6) as:

(9) 

So far, then, our theory predicts the size of city i, given the cost of capital (r), the average level of human capital (h), the prevailing wage (w0), city-specific total factor productivity (A1, that is, in the constant returns case, then is simply 1/τ.

The most interesting case, in my view, is where there are city-level increasing returns, but not enough to induce τ<0. For example, if α=0.5, β=0.6, and σ=0.3, then τ=10. See empirical evidence for city-level scale economies here. It seems that moving someone to a city twice as big will typically raise their economic activity of all kinds by 15%, which is consistent with plugging the parameters α=0.5, β=0.6 into equation (12) below. This yields the surprising yet plausible prediction that small differences in total factor productivity can drive huge differences in city size. For example, if City M is 20% more inherently productive than City N, City M would be over six times as large.

We have determined “population demand” at the level of the city, as a function of the base wage. At the national level, population demand must equal population supply, and the base wage will adjust to ensure this. That is, equation (10) must hold…

(10) 

… and w₀ is the variable that must move to make sure it does, since other variables are either exogenous endowments (A and h), or set at the global scale (r, because of the assumption of international mobility of capital).  The base wage that clears the national labor market turns out to be:

(11)

The base wage is a variable of considerable interest, since it is crucial to the living standards of the populace. Equation (11) shows how it is determined. Several points may be made here:

• The base wage is a decreasing function of the global price of capital. This is not too hard to understand. Labor and capital are complements. If it’s cheap to equip workers with machines, bosses will equip them, make them more productive, and pay them more. If capital is expensive, workers will be less well equipped, and will produce and earn less.
• The base wage is an increasing function of average human capital in the nation. This is rather a welcome prediction since, in fact, workers of a given skill level do tend to earn more in places where the average skill level is higher. Part of the “place premium,” then, is explained not by the black box of “total factor productivity,” but by differences in human capital, and increasing returns. This also suggests a reason why wealthy democracies seem to have such a strong bias in favor of “high-skilled” immigration.
• The base wage is a decreasing function of population. It will turn out on further examination that workers do not actually produce or earn less when the population grows; rather, the decline in the base wage reflects increased congestion disutilities. The elasticity of the wage with respect to population is -1/τ, so if τ=10, as I suggested above as a plausible estimate, then the depressing effect of population on the base wage is rather slight.
• The base wage depends a good deal on a special kind of weighted average of the “total factor productivities” of the nation’s cities, for which summation I will suggest a label: “the national endowment.” Think of the national endowment as including many things: a pleasant climate; beautiful beaches; fair landscapes; good institutions; historic art and architecture; the special beauty of a city skyline; the culture, the feel, the ethos, of famous cities. It includes everything about a country that is valued, beloved, and not readily replicable. In various ways, the national endowment will probably be reflected in market prices and measured GDP, and it will certainly affect utility.

By the way, the model is a bit pessimistic about what is non-replicable. Congestion disutilities would be mitigated if open borders would lead to the founding of new towns. Doubtless it would, and the assumption of this model that no new towns can be founded is extreme, but I think founding new towns does tend to be difficult, and new towns can be a bit dull and blank. Cities that have grown up organically over many generations tend to have a charm about them that’s difficult to reproduce. So while “no new towns” is too extreme an assumption, it does take into account something that is worth taking into account.

On the other hand, the model is rather optimistic in that place premia and the national endowment are not easily diluted. A critic of immigration might expect that if one dilutes the population of a place with hordes of foreigners from poor countries, the special assets that made it productive will be diluted. I don’t think history supports that claim, and the model concedes nothing to it. But while immigrants don’t dilute the basic place premium, they do cause congestion, and low-human-capital immigrants cause congestion while offering relatively little compensation in the form of increased economies of scale. Increasing returns depend on effective labor, congestion on mere population. So it’s not irrational for natives to look askance at mass immigration of poorly educated foreigners.

From here, it is fairly easy to calculate city-level GDP…

(12) 

… and national per capita GDP…

(13) 

… which, unlike the base wage, is positively related to national population (at least if α+β>1), I think because a higher population attracts more capital investment and increases the economic rents enjoyed by the nation’s cities.

Now, the way I extrapolate the economic impact of open borders using this model is simply that open borders cause their human capital averages and national endowments to be pooled. If Country C and Country D open their mutual borders, their cities are included in a single list and a joint national endowment calculated, and a new human capital average is calculated, as a population-weighted average of human capital in each country.

The assumption that human capital will average out across the two countries is a rather strong one. Is it plausible? While there are, in fact, differences in education and other human capital measures across US cities, they are nothing compared to the differences in human capital between the US and most developing countries. While complementarities between different skill levels are left out of the production function, they are in a sense reintroduced at this stage. Presumably, the interpretation of human capital averaging is that job availability and wages for different types of workers motivates human capital to move to where it is scarce, within a region of free migration. If the internal open borders of the US are one case where human capital averaging seems to have roughly worked, 19th-century open borders in the northern Atlantic region and internal open borders in the EU are two other cases which, if they don’t strictly confirm the “human capital averaging” assumption, at least lend it plausibility. Average human capital converged between the US and Europe in the 19th century, and it is relatively homogeneous across the contemporary EU.

If  the link below works…

Open Borders Impact Example

… it will give you an Excel simulation of US-Mexico open borders that I made, calibrating the above model with crude numbers from off the top of my head. The simulation isn’t super user friendly, but in principle, you could download it yourself, play with the parameters, and see the results. Rather than trying to state in one number what the model “predicts,” I’d rather summarize my preliminary results in a set of scenarios. In all scenarios, the population of “USA” is 300 million, that of “Mexico” is 100 million.

Scenario 1. (parameters: α=0.5, β=0.6, σ=0.35, h in “USA”=20, h in “Mexico”=12, r=5%)

In this scenario, US GDP per capita starts out at $50,500, and Mexican GDP per capita starts out at $15,686. The base wage in the US is 21.9, and in Mexico, 16.7. Under open borders, net emigration from Mexico is 61,632,000, well over half the Mexican population. Joint GDP for the US and Mexico rises from $16.7 trillion to $17.5 trillion, a 5% increase. In both countries, the new base wage is 20.9. This represents roughly a 5% fall in wages in the US, but a 20% rise in wages in Mexico.

Scenario 2. (parameters α=0.55, β=0.6, σ=0.5, h in “USA”=20, h in “Mexico”=10, r=5%)

In this scenario, US GDP per capita starts out at $51,075, Mexican GDP per capita at $10,811. The base wage in the US is 4.76, in Mexico, 3.49. Under open borders, the base wage becomes 4.47, representing a 6% fall in the US, a 22% rise in Mexico. Net emigration from Mexico is 31,352,000.

Most surprisingly, joint GDP for the US and Mexico actually falls in this case, by a little over 2%, from $16.4 trillion to $16.0 trillion. How can that be? How could the movement of millions of Mexicans to a more productive country reduce world GDP? At first, I was baffled by this, but then I saw why it makes sense: under open borders, there is an emigration of “effective labor” from the US to Mexico, as Americans with relatively high human capital emigrate to Mexican cities to escape urban congestion at home. Human capital averaging makes it possible for Mexico’s population to fall by 31% through emigration, even as “effective labor” in Mexico increases by 20% due to immigration of labor with higher human capital.

This is where theory pays off. It expands your mind. I found this scenario hard to believe at first, but after thinking about it a bit, I decided it was plausible after all. Lots of young 20-somethings like to bounce around Europe for a year or two, or ten. You meet American expatriates all over the world. I’ve been one a few times. What are they looking for? “Adventure,” “culture,” “‘romance,” “experience,” “permanent vacation,” joie de vivre… one could toss out a lot of words groping for it, and of course it varies from person to person and place to place, but in terms of this model, it’s (a) to enjoy another country’s “national endowment,” and (b) to escape congestion disutilities.

I can easily imagine a world in which open borders between the US and Mexico leads, not only to massive emigration of unskilled labor from Mexico, but at the same time, to a large influx of college-educated Americans eager to enjoy the Mexican sunshine and beaches, and to live in historic centers without paying the exorbitant rents of Boston or San Francisco. In a country where college-educated people are relatively scarce, young college-educated Americans could often find good jobs, or start businesses. They would earn somewhat less than at home, but it would be a price worth paying for sunshine, adventure, and history.

A few more comments relevant to the plausibility of this scenario. 1) There is already an American diaspora of maybe 6 million. 2) While the fact that most Americans don’t choose to emigrate might suggest the scenario lacks realism, Americans can’t automatically work in foreign countries. See here for a story about the difficulties faced by an American working in France. 3) Under open borders, emigration would become more attractive for Americans, because wages would rise abroad, and there would be more congestion in American cities and less in foreign cities. 4) If nonetheless large-scale emigration of Americans under open borders seems implausible to you, you can pick parameter values that don’t predict that.

Scenario 3. (parameters α=0.45, β=0.6, σ=0.25, h in “USA”=20, h in “Mexico”=8, r=10%)

In this scenario, Mexico essentially empties out. The initial gap is larger: US GDP per capita is $50,232, Mexican GDP per capita, $6,691. The real US/Mexico gap is not that large, but plenty of other countries are even poorer than that relative to the US. Under open borders, net Mexican emigration is 98,743,000. A mere 1.26 million Mexicans stay in Mexico. The base wage falls by 6% in the US and rises by 53% in Mexico. Joint GDP rises from $15.7 trillion to $17.2 trillion, a 9.5% increase.

Tentative conclusion so far: My sense is that economic models predicting that open borders will “double world GDP” will continue to depend on extremely large movements of people. Again, I will not say that such predictions are unrealistic, upon reflection they seem plausible to me. But we should avoid breezily quoting “double world GDP” predictions while allaying or minimizing people’s fears about epic movements of peoples. It is possible that open borders will prove to be a good less radical in its impact than the available theories suggest. But in that case, it won’t double world GDP, or at least, not in the ways that models like Kennan’s suggest.

Some important benefits of open borders, especially the stimulus it would provide to idea generation and institutional export, are omitted from the extant models, including this one. These factors are difficult to incorporate into theoretical models because there is relatively little agreement about what determines the rate of idea generation, or the quality of institutions. I expect that open borders probably would double world GDP with a mere hundreds of millions, not billions, of people actually migrating, but that may be more than I can say with my economic theorist hat on.