This will be the first of three posts on the topic of “open borders and the economic frontier.”
I am indebted to commenter BK for making the major subject of my academic research, on the basis of which I hope to make my name as an academic economist, relevant to this blog. In a long series of comments at my post “The American polity can endure and flourish under open borders,” and previously at “Garett Jones responds…” BK digs up some numbers and makes a sort of loose empirical case, based on the experience of what Amy Chua calls “market-dominant minorities” in many countries around the world, that segregation of humanity based on cognitive ability, with race as a proxy, actually makes the world economy as a whole more productive:
Chinese-Singaporeans generate income almost twice as great in mostly Chinese Singapore as the large Chinese-Malaysian minority does in Malaysia (about $70,000 per annum vs about $38,000), even though there are less than 3 million Chinese in Singapore but almost 7 million in Malaysia. But the Chinese make up 75% of Singapore vs 25% of Malaysia…
There is a Chinese elite, but this isn’t enough to fix the institutions, which have to represent the general population. All this occurred in the context of strong legal discrimination in favor of Malay majority, racialized anti-business sentiment, and big gaps in political views between Chinese and non-Chinese Malaysians. Using the above statistics, if the Chinese-Malaysians could have done as well as Singapore by also seceding from Malaysia into Chinese-dominated countries, total GDP of the region would rise substantially just from letting the Chinese-Malaysians free of the Malaysian electorate, even if incomes back in Malaysia plummeted. But it gets even better: Singapore lets in millions of guest workers from non-Chinese Malaysia, among other places, who send back huge quantities of remittances. Singapore generates more innovations in science and technology with positive spillovers for the rest of the world.
Basically, patterns like this seem to suggest that total GDP and welfare are much increased by international segregation by IQ and other characteristics contributing to productivity and performance, and that giving every country in the world demographics representative of the world would be devastating…
I’ll try the analysis again for a different region, randomly selected to be Africa.
The obvious data are the economic evolution of Zimbabwe (formerly Rhodesia) and South Africa after universal suffrage and the end of apartheid. This is complicated by the fact that both countries were suffering economically from crippling sanctions before majority rule, as well as internal racial conflict which were then lifted and replaced with foreign aid as part of an intentional effort to make post-suffrage conditions better than pre-suffrage conditions.
In Zimbabwe the aggregate economic effects have not been good, despite the moral virtues of eliminating the old racist system (which economically inefficiently prevented smart black Rhodesians from competing with white skilled labor, in addition to its other nasty features)…
In South Africa growth has been better than during the period of severe sanctions, but disappointing expectations, combined with big blows to life expectancy and human development, in part through policy such as denial that HIV causes AIDS..
In 2009 Whites in South Africa earned about R136k Asian R56k, mixed-race or “coloured” 28k, and black 19k. The population numbers today (from wikipedia) are 9.2%, 2.6%, 8.8% and 79.4%. So rounding up 40% of income was going to whites, 5% to Asians, 8% to mixed-race people, and 48% to blacks. A just-finished census reports that income disparities and population ratios are about as estimated then, and GDP per capita overall is $11,900, with the white South African income.
So, it seems that world GDP would not be much increased if the South African whites had all been shipped to the United Kingdom…
Next look: Latin America, first checking Brazil and Mexico, selected as the top two on this list:
and making up over 300 million people by themselves. There, self-identified whites have GDP per capita far below the EU average, or Portugal or Spain (European ancestry is mostly from the colonial powers but not a huge majority).
However both countries are heavily admixed, so self-identification translates to a different ancestry than places with less mixture. Brazil seems to be >(2/3) European genetically, with Mexico self-identified ‘Mestizo’ somewhat less (they make up about 80% of the population. So comparing self-identified Portugese-ancestry ‘whites’ does not give us a clear comparison group to match against Portugal.
http://en.wikipedia.org/wiki/Race_and_ethnicity_in_Brazil#Admixture http://en.wikipedia.org/wiki/Race_and_ethnicity_in_Brazil#Racial_disparities http://en.wikipedia.org/wiki/Mexico#Population_genetics
We can say that if one could proportionally scale up the population of Europe (weighted across European countries by their contribution to the Mexican and Brazilian populations, so especially Spain and Portugal) by the population of these countries multiplied by their European ancestry, total world GDP would be substantially increased, despite the fact that Portugal and Spain are relative economic laggards within Europe…
This is a strikingly good numerical analysis to appear in blog post comments! Scoring it not on an ordinary blog-post-comment scale, but on a peer-reviewed academic journal scale, I find it to be rather weak, but still not easy to defeat. What BK purports to show empirically may be summarized (I think) thus:
1. There is a correlation between the predominant race in a country, and its level of development.
2. Similar race-income correlations are observed in many countries, with the races that comprise the populations of the wealthiest countries tending to be the most productive members of societies in which they are the minority as well.
3. But productive races tend to be less productive when they are minorities than when they are in the majority.
4. Moreover, the gap in productivity between members of productive races in countries where they are the politically dominant majority, vs. countries where they are market-dominant minorities, is large enough that segregating market-dominant minorities into separate economic communities, assuming their productivity would then rise to the level currently observed in countries where the same race is the majority, would raise world GDP, no matter how negative the effect of such segregation might be on the poorer majorities thus left behind.
5. Applying this to migration policy, an open borders policy that undid the segregation currently built into the world order, turning the racial majorities in the Western and East Asian countries at the economic frontier into domestic minorities, would likely reduce global GDP.
6. Admittedly, in the short run, global desegregation might have effects that could be regarded as desirable even if it did reduce average GDP, if, as the logic of the examples suggests, it reduced global inequality.
7. However, in the long run, what matters most is how fast the economic frontier moves forward. If progress at the frontier is slowed, all future generations will suffer, and by their numbers, they easily outweigh the welfare of the current inhabitants of the earth in any utilitarian calculus. Because ideas are non-rival, progress at the economic frontier probably depends on global GDP, with a larger global GDP meaning a larger market for all goods. Therefore, we should protect future generations by maintaining the kind of global segregation that facilitates the maintenance of wealth-fostering institutions.
By the way, Open Borders’ page “Killing the Goose that Lays the Golden Eggs” quotes writers (Two Things and ParaPundit) with views similar to BK’s, along with a rebuttal that I wrote even before Open Borders: The Case existed. I must admit that at that time, the arguments of Two Things and ParaPundit struck me as absurd. Now, thanks to BK, I take them more seriously, though I still disagree. As I observed even then, the striking thing about this argument against open borders is that it accepts, or at least is consistent with, a utilitarian-universalist ethical perspective. It is a refreshing change from the oft-heard restrictionist line that closed borders helps “us,” or certain groups within the “us,” and that it hurts “them” is not our problem.
It would be overreaching to claim that the numerical patterns BK notes support the idea that the current worldwide migration control regime is optimal, and BK doesn’t claim that. In one comment, BK said that the keyhole solution I proposed in Principles of a Free Society “sounds fine, as long as the price of citizenship isn’t set too low.” He seems to favor expanded immigration from high-IQ countries like China and Russia.
So why am I not convinced?
First, I’d like to see a stronger theory behind the race/cognitive ability => institutions causal link. “IQ varies systematically across racial/national groups” + “low-IQ voters support bad policies” only applies (if at all) to democracies, and many of the patterns in institutional quality that BK observes seem to antedate widespread democratization. Even whether it applies in democracies can be questioned, given that the “self-interested voter hypothesis” seems to be false,
Second, the fact that many of the countries with productive races in the role of market-dominant minorities are located in the tropics casts doubt on BK’s analysis. Worldwide, countries in the tropics tend to be a lot poorer. Why that is so is not clear. David Landes, in The Wealth and Poverty of Nations, suggests a few reasons, including disease (usually more of a problem in tropical climes) and the simple fact that it’s hard to work when it’s hot. Jared Diamond’s Guns, Germs and Steel suggests another explanation: that the package of domesticable plants and animals in temperate zones is more favorable to development, and especially that the Eurasian landmass was not only well-endowed with them to begin with but, because civilization began early, had a lot of time to breed them into maximum usefulness. The tropics are at a disdavantage because the crops best perfected by man tend not to grow well there. I’m not sure whether this has been studied, but another possibility is that there’s less need to work hard in the tropics, since one doesn’t need as much clothing or fuel, nor perhaps as much housing, outdoors being usable year round for purposes that would have to be done indoors in colder climes. Some of these causal links might work through culture in the long run rather than directly, in which case we would not expect people from temperate cultures to be less productive when transplanted to the tropics. But if tropical location lowers productivity, then much of the poverty of Spanish American whites relative to their European counterparts in continental Europe might be explained by geography, leaving less to be explained by the race/cognitive ability => institutions link. And yes, Singapore is tropical despite being in the tropics, but it seems to be very much an outlier. Note, too, that South Africa, which is not in the tropics, was where BK didn’t find evidence of a penalty to whites for being in the minority.
Third, in many of the cases BK looks at, white or Northeast Asian minorities came as immigrants or even colonialists, and consequently are viewed as outsiders or even as past enemies. This factor would not cross-apply to migrants to an enlightened US or western Europe which opened its borders. The contrast between Russia and the US in the 19th century is instructive. Both were continental empires with highly diverse populations, but in Russia these diverse peoples had been brought under Russian imperial rule by colonization and/or conquest, whereas in the US these diverse peoples had arrived as immigrants. Russian imperial subjects had never consented to rule from Moscow, and I think (partly from regional expertise in this case, as I’ve studied Russian history a fair amount, and lived in a lot of post-Soviet republics, and speak Russian) that this is an important reason why they never “assimilated” as ethnic groups in America, nor developed the same kind of loyalty to the Russian state. Consequently, nothing like the breakup of the Soviet Union could happen in America. In this respect at least, I expect open borders today would resemble the 19th-century American experience rather than that of the various colonial empires that left behind a white or Asian productive elite amidst a poorer native majority.
Fourth, I am uncomfortable with the vaguely racist character of BK’s argument. But let me make it clear that I am not using “racist” as an epithet. The way our society (or I should, my society, given the international authorship and audience this blog seems to have: American society) uses the word “racism” is problematic. It tends to conflate (a) hatred of other races, and (b) belief that some races are somehow systematically superior to others in important ways, e.g., average IQ. While (a) is morally reprehensible, (b) is not morally reprehensible in general, though it might be so to some extent if such a belief is not honestly and rationally arrived at but springs from dislike of another race. Yet (b) is quite consistent with the most ardent concern and consideration for the cognitively challenged races. It is not really appropriate to excoriate (b); it is more appropriate to examine the evidence. Now, I am not racist in either sense (a) or sense (b). But it’s quite possible that my reasons for not being racist in sense (b) are perhaps inadequate. I have theological reasons of a sort, which I won’t go into here… perhaps they don’t make sense, but I find it hard to question them. Also, I defer to authority: the falsity of racism is believed by so many smart people that it’s hard to believe it’s wrong. It seems, not impossible, but a bit unlikely that an anti-racist consensus would have become so firmly established in very educated nations if it were factually false. But I am far from being an expert here. Of course, it bears repeating that BK is only using race as aproxyfor cognitive ability.
I have a fifth reason too, but it depends on some of my own theoretical work that I’ll explain in the next post.