Want to Grow the Economy? Abolish Immigration Restrictions
WANT to grow the economy? Then abolish immigration restrictions.
No, not abolish immigration, this isn’t the BNP newsletter. Rather, the one big thing, the biggest thing in fact, that we could do to grow the world economy is to abandon all immigration restrictions.
That’s the outcome of a new research paper at least. In economic terms the argument is sound and beguiling. A very large part of how much you earn, how much you can produce, what your labour is worth (all, roughly, synonyms for each other) comes from where you had the good or ill fortune to be born.
Be born in a poor country and your labour is worth very little. Be born in a rich one and it’s worth a fortune. And yes, by global standards, even UK minimum wage is a fortune (no, really, £12,000 a year is very definitely riches compared to all the world).
So, if you allow people to move from poor countries to rich ones then their labour becomes worth more. Their output is worth more. Thus the world has just become richer.
As I say, in economic terms the argument is sound and beguiling: in political terms of course it’s never going to happen. We might be happy enough to allow the country to be over run with Polish plumbers (although even that caused some heart ache) but no one at all is going to get elected insisting that all and any random Ethiopian (just as an example) can come and work in the UK.
A pity really, as the increase in riches would be many times the increase from any further changes we might make to the free movement of capital or goods and services. And it has worked before too: back in hte late 19th century, onoe third of the population of Sweden buggered off to North America. The places they went to, like Wisconsin, are among the richest parts of the continent.
Posted: 13th, September 2011 | In: Key Posts, Money Comments (4) | TrackBack | Permalink
