As a teenager I was enthralled by The Economist—the logic of liberal economics was elegant, almost beautiful in its simplicity. I was a student. I valued parsimony. The Economist provided this, boiling macroeconomic events down to their core components and causal mechanisms—it made economics digestible.
I also valued objectivity, or at least its pretense. The magazine’s lack of authorial attribution flavored it with the bland spice of impartiality—it was consistent, both ideologically and rhetorically. It gave me what my young mind craved.
Twelve years on and I’ve finally cancelled my subscription. I hate The Economist. Why? A good case-in-point is their recent article If borders were open: A world of free movement would be $78 trillion richer. The best way to approach this is to dissect the article in detail, exposing its major flaws and biases.
The article’s thesis is that by allowing the free movement of labor worldwide, we could double global economic output. This would make everyone significantly richer, and therefore better off. The article begins by taking a progressive position:
Labour is the world’s most valuable commodity—yet thanks to strict immigration regulation, most of it goes to waste… Mexican labourers who migrate to the United States can expect to earn 150% more. Unskilled Nigerians make 1,000% more.
Essentially, The Economist presumes that it is rational to maximize global wealth. But this is not always true. Rationality depends on your perspective. Take America’s illegal immigration crisis for example. There is no question that illegal aliens are better-off in America than they were in their homeland—it was rational for them to migrate.
But the converse is not true: illegal immigration has hurt America’s citizens economically by depressing wages, increasing the demand for government services (and therefore taxes), and reducing the need for automation. It was not rational for America to leave the border undefended—even though doing so may have increased global wealth in the aggregate.
Two things can be rational, and yet mutually exclusive. The Economist ignores this fact. It continues:
If borders were open, how many people would up sticks? Gallup, a pollster, estimated in 2013 that 630m people—about 13% of the world’s population—would migrate permanently if they could…
Strangely, The Economist did not use Gallup’s latest poll (published 2017) on global migration. The newer poll states that just over 700 million people, or 14 percent of the world’s population, would like to migrate if they could. Of these people, some 147 million would move to the USA, while 168 million would choose Western Europe.
Specifics matter. Economists like abstract concepts and numbers—the more dissociated from reality the better. This makes the math easy, elegant. But there is a downside: the more abstract the number, the less we care. Joseph Stalin was right when he said ‘one death is a tragedy; one million, a statistic.’
So let us reframe Gallup’s findings in terms of natural frequencies. The Economist thinks it is rational to usher in 157 million immigrants into America—particularly those from the poorest countries. This is one immigrant for every two Americans. Take a moment to think through the consequences of such a high level of migrant-saturation.
The Economist Lies About the Link Between Open Borders and Crime & Terrorism
The Economist then goes on to summarily dismiss the problems you likely considered, calling them irrational or, at best, ‘open questions.’ The problems identified and rebutted are as follows.
If lots of people migrated from war-torn Syria, gangster-plagued Guatemala or chaotic Congo, would they bring mayhem with them? It is an understandable fear…but there is little besides conjecture and anecdotal evidence to support it . . .
A study of migration flows among 145 countries between 1970 and 2000 by researchers at the University of Warwick found that migration was more likely to reduce terrorism than increase it…
The Economist argues the worn-out progressive talking-point that immigration makes the host nation safer by decreasing crime levels and decreasing the likelihood of terrorism. Neither of these claims is necessarily true.
As with everything, the devil’s in the details. Were America to open up its borders to foreign labor as The Economist recommends, from where would the bulk of immigrants come? Presumably from the same destinations which are currently leading the pack: Mexico, Central America, the Philippines etc. If this is the case, we could expect to see crime rates rise dramatically following such a large influx of people.
Why? Because illegal immigrants from these regions commit crimes at a much higher frequency than do American citizens, or legal immigrants. For example, according to a report from the Washington Examiner fully 75 percent of all federal drug possession charges were levied against illegal aliens. Likewise, another report from the National Review revealed that illegals are 350 percent more likely to commit murder in New York City. Part of this is cultural—the crime rate for illegal immigrants often conforms to the rate in their homeland—and part of this is due to the nature of illegal immigration. Law-abiding people tend to immigrate legally, while individuals who do not respect the law have no compunction when it comes to hopping the border. Unfortunately, these are the very type of people who would benefit most from open borders.
A second example worth mentioning is the case of the migrant crisis in Sweden, as this probably best reflects what a large-scale, legal open borders policy would look like. Sweden has accepted over 320,000 migrants since 2014. During this period crime exploded. For example, the number of sexual assaults and violent crimes committed by Swedes of immigrant background (including asylees) has tripled, while the number of robberies and other petty crimes has doubled.
The magazine’s second point is that terrorism and immigration are not linked. Depending upon the place of origin of said immigrants, this is risible. The evidence is readily available and easily observed: there have been no terrorist attacks in low-immigration countries like Poland and Japan, while there have been many in high-immigration countries like France and Germany. This point is self-evident.
Furthermore, The Economist completely misrepresented the study they cite from the University of Warwick. The study does not show that “migration was more likely to reduce terrorism than increase it.” Instead, it argued that the overall level of immigration is not strongly correlated with terrorism—what matters is the country of origin:
[The researchers] found that migration can under some specific circumstances be a vehicle for and driver of terrorism. The researchers detected that there was an increase in terrorism in a country that accepted migrants from another where terrorism is rife. However, countries, which accepted immigrants from countries where there is no or a low level of activism, did not suffer exposure to terrorism.
The Economist is not only factually wrong when it comes to the link between open borders, crime, and terrorism, but they are also quite content to misrepresent research to prove their point.
The Economist is fake news.
Open Borders Would Not Make Everyone Rich—It Would Make Us Poor
Finally we arrive at the most important section: the crux of the entire debate. The Economist asserts that large-scale immigration enriches the citizens of the host country:
Would large-scale immigration make locals worse off economically? So far, it has not. Immigrants are more likely than the native-born to bring new ideas and start their own businesses, many of which hire locals. Overall, migrants are less likely than the native-born to be a drain on public finances…
Much of this is incorrect. Why? Because the macroeconomic ideas espoused are based on a faulty understanding of how economic growth works and an ignorance of time-horizons. Cheap labor reduces the need for productivity-boosting technology, which can be a significant detriment to long-run economic growth. It is no surprise that economies predicated upon cheap labor, like in Ancient Rome or the Antebellum South, failed to meaningfully advance their technology or industrialize.
There is wisdom in Plato’s aphorism ‘necessity is the mother of invention.’ Economic stressors (from competition to costly labor) have the hormetic effect of causing growth—this explains why the Industrial Revolution occurred in Great Britain, and not France or China (where labor was plentiful).
Aside from this, the preponderance of evidence refutes The Economist’s claim: immigration does not grow the economy.
The most recent, and comprehensive study that looked at the economic impact of immigration was a 642 page report conducted by the National Academies of Sciences, Engineering, and Medicine. The study found that (i) immigration has negatively impacted the wages and employment prospects of American citizens, especially for the working class; and that (ii) although immigration provided a (minor) net economic benefit to America’s citizen population, nearly half of all immigrants were a drain on the economy.
Specifically, the majority of the 40 percent of immigrants who arrived via chain migration, as well as other non-economic channels, cost a negative net present value of $170,000. Net present value is how much money the government would need to invest today, at a yield of inflation plus three percent, to pay for said immigrant’s tax deficit over the course of their lifetime. Of course, the government does not do this, and spends only as it receives, so this lowballs the real number.
According to the Heritage Foundation, each non-economic immigrant—those who entered America as family reunifications, or asylum seekers—more realistically costs a net of $476,000. Over the last few decades the immigration of low-skilled people has cost America trillions.
Other studies concluded the same thing. For example, A recent study by Denmark’s Ministry of Finance found that immigrants were a net drain on the nation’s economy. In fact, non-European immigrants and their descendants consumed 59 percent of the tax surplus collected from native Danes. This is not surprising, since some 84 percent of all welfare recipients in Denmark were immigrants, or their descendants.
The bottom line: open borders will likely not make America richer.
Another study by the Fraser Institute found that immigration costs Canadian taxpayers some $24 billion per year—and this was using data from nearly a decade ago. The number has since increased significantly.
A final study from the UK, conducted by the University College of London found the value of immigration to the economy was contingent upon country of origin. The study looked at the labor government’s mass immigration push between 1995 and 2011, and found that immigrants from the European Economic Area made a small, but positive net contribution to the British economy of £4.4 billion during the period. However, during the same period non-European immigrants (primarily from South Asia, the Middle East, and Africa) cost the British economy a net £120 billion.
The bottom line: open borders will likely not make America richer.
Another major problem that the unknown author dismisses too-easily is the issue of crowding. Today, shelter is more expensive, in real terms, than at any point since 1973. Summing up my previous research on U.S. historical housing prices: in 1973 the median household income was $9,265, while the median sales price of a new home was $29,900—3.2 times the median household income. Compare this to today’s prices: in January 2017 the median sales price for a new home was $317,400, which is 5.6 times the median household income of $56,516. This means that houses are 73% more expensive today, in real terms, than they were in 1973.
And what is driving higher house prices? Predominantly immigration, which has been the engine of America’s population growth for the last four decades. It is a question of basic supply and demand: more people means more demand for housing, which elevates prices. Ideally, housing supply would expand accordingly and prices would find an equilibrium, but building new homes or apartment blocks takes time, and space is limited in the city.
A good example is what has happened in the Canadian city of Vancouver, which is now home to some 200,000 wealthy Chinese expats: property values have risen astronomically, and two-thirds of the rise can be attributed to said immigration, and other Chinese investment. Open borders would compound this problem.
Back to the Curiosity Shop
Perhaps open borders would make humanity as a whole richer. And perhaps the flow of one hundred million mouths into America would enrich our nation, and our people—despite the mountains of conflicting evidence. But even if we buy these conclusions hook, line, and sinker, it still does not follow that we should open the borders.
Economics is an intellectual tool that can help us make better decisions, but it should not make these decisions for us. There are many rational reasons to sacrifice economic expediency for principles of far greater value—family, freedom, nature. China’s economic rise was made possible, in part, due to its ability to bulldoze villages, pollute rivers, and silence critics—all in the name of “progress.”
Economically justified? Certainly. Rational? Perhaps.
But for those who, like Edmund Burke, see the nation not as an assorted collection of atomized individuals, seeking pleasure at the expense of their fellow man, but as a people inseparably bonded to one another through culture and language, and to the past and future through art and blood, sacrifices laid at the altar of economics are of little value. Far more important is the preservation of our nation, be it wilderness or artifice, duty or liberty. The Economist would be wise to remember this.