Tag Archives: Open Borders comments

Open borders and the economic frontier, part 3

Last fall I wrote two posts, Open borders and the economic frontier, part 1, and Open borders and the economic frontier, part 2, which were meant to be the first two parts of a three-part series, which sought to address the large macroeconomic question of whether open borders would cause the global economic frontier to move forward faster or slower. BK had made a loose empirical argument in the comments that the more productive ethnic groups seem to be most productive when they are in the majority, less so when they live as minorities among other ethnicities. In part 1, I gave the following reasons why I was skeptical of BK’s empirical analysis: (a) the weakness of the theoretical links between race, cognition, and GDP; (b) the fact that the poor/racially disadvantaged countries are concentrated in the tropics; (c) the pattern that the racial minorities BK’s argument focused on tend to have arrived under imperialist auspices as colonizers or settlers and are therefore particularly alienated from the population; and (d) the prevailing view in our culture that “racism” is scientifically erroneous. In part 2, I explained how, in my own theoretical work, growth is modeled as “exploration of the goods space” through an expansion of the “endogenous division of labor” as capital or population expands, and applied it to the data BK had highlighted. Using the EDOL model, I derived a new theory of relative growth and decline in the 20th century, namely, that the automotive revolution altered economic geography, reducing the economic distance between all manner of points connected by land, while increasing the distance between points separated by the sea: thus Britain and its empire suffered, while the United States and contintental Europe were big gainers, and the Soviet Union also benefited.

But let me step back a bit. Economic growth is very important because, in the long run, small changes in growth rates can alter the human condition enormously. If we can raise the long-run growth rate of per capita income merely from, say, 2% to 3%, that will make our grandkids 70 years from now twice as rich as they would have been if the slower growth trajectory had been sustained. In 700 years, this small change would make our descendants over a thousand times richer than they would have been. Lately, this important topic has become the subject of a large literature, mainly in economics though it spills over to other fields as well. I got a Masters in International Development and a PhD in economics and I’ve been exposed to a lot of this literature, yet I nevertheless feel inadequate to the task of summarizing it. Still, here’s a very rough typology of theories. Continue reading “Open borders and the economic frontier, part 3” »

Open borders and the economic frontier, part 2

In the first post in this three post series, I gleaned a theory of the economic frontier from some of BK’s comments and offered a few of my own responses. In this post, I’ll expound my own theory.

Two general points. First, how the economic frontier advances is both enormously important for human welfare and quite mysterious. It is important because long-run economic growth will determine how well we can mitigate world poverty and deliver ever-improving lives to future generations. A tiny increase in the rate of advance of the economic frontier, say from 3% to 5%, would make our descendants a century hence almost an order of magnitude wealthier. Second, open borders would likely affect the rate of advance of the economic frontier. Before reading BK’s comments, I had pretty much taken it for granted that open borders would boost growth, at least in the short run, as people move from low-productivity countries to high-productivity countries. Based on Clemens (2011)  and Kennan (2012), the modal result of formal studies so far seems to be that open borders would double world GDP, and the assumptions on which this result is based are actually conservative in some ways, e.g., they don’t assume that everyone would migrate to where their marginal product is highest. Negative institutional/productivity side-effects of open borders on frontier countries would have to be very large to offset this, but such effects are not beyond the range of plausibility.

My theory, which I’ll call the “Endogenous Division of Labor” or “EDOL” model, was the topic of the second chapter of my dissertation, Complexity, Competition and Growth (but don’t pay $103, it’s available here for free). More recently, and I think more accessibly, I published a new version as an SSRN working paper here, under the title “Development as Division of Labor: Adam Smith Meets Agent-Based Simulation.” All the data is drawn from a simulation I wrote, which is introduced in this video, and I’ll be happy to send the simulation (as a runnable JAR file) if you’re interested in exploring its properties on your own. It’s not that user-friendly, but I’ll even be glad to give you a tutorial via Skype. I’ll also be glad to present it at academic conferences or seminars or whatever. I think it would lend itself to public presentation quite well, though I haven’t got the chance to transfer. I’m trying to publish it. So far, the Journal of Political Economy rejected it, with some harsh but useful feedback. I plan to submit a completely rewritten version to the Journal of Economic Growth. Any feedback is welcome.

Continue reading “Open borders and the economic frontier, part 2” »

Poor countries and IQ externalities

BK helps make the case for open borders in poor countries:

Interesting point by Jones: if high-IQ people produce positive externalities well above their market wages in poor countries, then citizenists in poor countries should be willing to offer larges subsidies for high-IQ immigration:

“If IQ has the sizeable positive externalities posited here, then there may be room for a Coasian bargain between countries with low current LV IQ and higher IQ individuals in other countries.  One purely suggestive possibility: If the ratio of private to public benefits of higher IQ are even half as large as the 6:1 ratio suggested by Jones and Schneider (2010), a low LV IQ country could rationally offer a 100% subsidy for any wages a high IQ immigrant earns in excess of that nation’s median wage.  In practical terms, a 10 year income tax holiday for permanent immigrants with engineering degrees could accomplish the same goal of encouraging high IQ immigration. “

Favoring engineers seems too much like “picking winners,” and I don’t think the research is really there to support anything so specific (don’t forget that the most obvious externality of engineers, that they invent things, is global in nature) but a simpler policy recommendation to derive from this argument would probably imply that poor countries should simply open their borders to immigrants from rich countries. Rich countries generally have higher average IQ, certainly higher levels of education, and probably other traits– work ethic, perhaps, or trustworthiness– that make their home countries productive. I don’t have great data on this– go, IMPALA!— but I’m pretty sure it wouldn’t be very easy for an immigrant from the US or Western Europe, with or without an engineering degree, to migrate to India or Malawi or China or Russia and just get a job, never mind a tax holiday. Why don’t poor countries offer free immigration to holders of US, EU, Japanese or South Korean passports? I suspect that it’s some combination of (a) elite protectionism– a corrupt business elite makes the rules and doesn’t want the competition from capable Westerners or East Asians– and (b) global norms– rich countries have migration restrictions and they’re either blindly imitating or else retaliating out of pride against countries that exclude them. But it would be interesting to investigate further.

Related thoughts: (1) Would it be easy for rich countries to negotiate away restrictions against their nationals working in poor countries, in return for a bit more openness to migrants from those countries, or perhaps other concessions, e.g., aid or trade? (2) Would a high-profile open-borders movement in the US and/or Western Europe, even while unsuccessful domestically, change the climate of ideas and persuade poor countries to open their borders to migration, to gain the “moral high ground?”

The case for open borders is universal

I am indebted to commenter Caroline for asking a very important question in a comment:

I’d like to hear Vipul blog on the case for open borders for India. Surely India can use 100 million African imports? And what’s the justification for closed borders with China, Pakistan and Bangladesh?

Why should we Westerners have all the fun?

Another comment in a similar vein is from Mary:

Why don’t you tell Australia, commie China, why don’t you tell corrupt socialist India that Pakistan has the right to stream over it’s borders and take it over. You won’t because what you mean is, that the rest of the world has the right to violate US sovereignty, no it doesn’t. The US is a sovereign nation, it’s not a cesspit for slumdogs to fill.

In later agreement with Mary, Caroline writes:

Vipul writes: It’s also worth noting that, de facto, the right to invite, and the right to migrate, predate nation-states. Border controls are a relatively recent innovation.

A world population of 7 billion people is a relatively recent innovation as well, as is relatively cheap and fast mass transportation. And Mary is correct, although her words are inelegantly expressed: how come we never hear the open borders crowd agitating for the “benefits” of a mass immigration free-for-all for China, India, Africa, South America?

Vipul might have more takers for his position if he argued vociferously for open borders for India, for example. Of course, then he’d have to face the RSS and the rest of the Hindu nationalist crowd, who sometimes aren’t very nice, to put it mildly.

And before you point out that India is too crowded, polluted and overpopulated to allow open borders and indiscriminate immigration–why should people who squat out baby after baby with no thought to how they will be fed and housed, and who voluntarily pollute their nation excessively, be the only people who are allowed to have national sovereignty?

Are you then saying that people who stewarded their lands properly, and reproduced responsibly–i.e. us Westerners–are the only people in the world who don’t have the right to national sovereignty?

If so, then it’s the case of the good being punished and the bad being rewarded.

In a blog post titled Parable of the Neighborhood Watch, Sonic Charmer makes a related point (although this is not the focus or thrust of his post):

All the Smart People in your Neighborhood Watch nod their heads. They can think of no counterargument, and certainly don’t want to appear selfish and chauvinistic. And so, before long, before you even really know what happened, your Neighborhood Watch – the one you set up and contributed your money and time to for the sole purpose of, well, watching your own neighborhood – is spending most of its time worrying about and patrolling Other Neighborhood, judging its success on the basis of whether crime is being reduced there.

The funny part is, Other Neighborhood already has its own neighborhood watch group, and they’re not at all swayed by these moral arguments. They focus solely on their own neighborhood and never give it a second thought.

How would you feel at that point? Tricked? Hoodwinked? Scammed? At best, if you had a great attitude and the means, you’d be like ‘oh well, I guess I have to start up a whole new Neighborhood Watch now’. One that actually serves the purpose for which you intended the other one.

Other commenters, including commenters on Steve Sailer’s blog, have made similar points.

Before proceeding, I want to thank Caroline, Mary, and Sonic Charmer for making the key point: the case for open borders does not solely apply to any one country. I enthusiastically agree. As I see it, there are two related points being made:

  1. Open borders advocates, in so far as they focus only on immigration to the United States, are applying a double standard, and/or being hypocritical.
  2. Even if open borders advocates intend to be even-handed in their treatment of nations, the de facto effect of their advocacy is disproportionately on the United States.

A limited self-defense

I don’t claim to speak for all open borders advocates. But I will try to address these critiques specifically in the context of this website. My blog post is largely an elaboration of point (1) in my reply comment to Caroline.

First, right from the inception of the site, I have been focused on making the case for open borders from a universal perspective. As I write on the site story page:

Most websites dealing with migration issues do so from a very country-specific perspective. They are thus able to focus on the details of specific laws and concrete numbers. But it’s hard to separate out the country-specific aspects of their analysis from the generic arguments being made. With the Open Borders website, I’ve tried to separate out the generic arguments from the country-specific arguments. Since country-specific arguments already receive so much attention elsewhere, building the country-specific pages typically requires linking to existing resources. As of November 2012, all the country-specific pages are US-specific, but this may change with time as more content is added.

For examples of this distinction, see crime (generic) versus Hispanic crime and illegal immigration in the United States (US-specific). Or see suppression of wages of natives (generic) versus US-specific suppression of wages of natives (US-specific).

In fact, I faced the very same frustration that Caroline probably did: the over-reliance of open borders advocates on one particular country (often, the US) rather than a discussion of how the case for open borders may be made universally.

Back in April, I wrote a positive review of Peter Brimelow’s Alien Nation, where I indicated my agreement with

Brimelow’s critique of the restrictive immigration policies of countries other than the US, and his argument that the moral case for open borders should apply to all countries, not just the US (Page 251 onward, Chapter Doing The Right Thing? The Morality of Immigration)

followed by a lengthy quote from Brimelow’s book. Continue reading “The case for open borders is universal” »

Open borders and the economic frontier, part 1

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. Continue reading “Open borders and the economic frontier, part 1” »