Tuesday, December 1, 2015
Monday, November 30, 2015
One question I get asked quite a bit is how I, a person with a postgraduate degree in economics, can oppose immigration. Am I not aware of the fact that most economists support virtually open borders? What reason could I possibly have for going against the consensus on this issue?
First, we have to understand why most economists support immigration. In neoclassical models, it's very hard for immigration not to be positive: Transactions only take place when both parties involved in the transaction are made better off. Hence, if an employer hires an immigrant, it must mean that both the immigrant and the employer are better off. And the surplus generated from this transaction (relative to if the employer had had to hire a less-efficient native citizen) will make the economy as a whole better off, creating more jobs and an overall higher living standard.
All economists however recognize the problem of externalities. The classic case is when a consumer buys a product from a company that dumps the toxic waste of its factory into a river, killing the fish. Sure, the consumer may be better off, and the company may be better off, but the fishermen who depend on that river for a living are not. Under this scenario, trade could actually make society as a whole worse off if the loss to the fishermen is great enough to outweigh the surplus of the consumer & company. Either way, pretty much everyone agrees that those hit by externalities - the fishermen in this example - deserve compensation in some form (exactly how this should be done has been debated for a hundred years and will be debated for a hundred more among economists).
Externalities, of course, do not always affect the financial well-being of those hit by them. If a nightclub opens up in your neighborhood, you may suffer from noise pollution that prevents you from sleeping or concentrating (hence why there are building regulations), and that's another externality that, from a social viewpoint, may well overwhelm the positive value created by the trade (between the nightclub and its guests).
This brings us to the first type of negative externality associated with immigration, which I have nick-named cultural pollution: When you welcome immigrants, you effectively welcome their cultures as well. This affects every neighborhood where immigrants move in. It really shouldn't be so difficult to grasp: If you get new neighbors who have completely different habits from you - for instance, if they play loud music all night, then that affects you. And with middle eastern immigrants, it's hardly as innocent stuff as just loud music - you'll watch your neighborhood turn into a particularly nasty episode of CSI. It's particularly bad if you're a woman of course - In Sweden, men from the middle east are more than 20 times as likely to commit rape and sexual assault compared to ethic Swedes. And sadly, since humans have a tendency to base our behavior on the behavior of those around us - we judge our behavior as good or bad depending on whether it's better or worse than the people we surround ourselves with - this means regular Swedes will engage in morally ambigious behavior. You may not feel so bad about groping a girl if your neighbor is a rapist, and you may not feel so bad about slut-shaming a girl verbally if your colleague makes his wife wear a burqa ("at least I'm not as bad as him!").
The cost of this type of cultural pollution is of course hard to calculate, but no-one should doubt that it exists. That is why we see "white flight" in Sweden today, with ethnic Swedes abandoning immigrant-heavy areas en masse. Of course, with Sweden's extreme rent control policies (quite possible the most severe rent control regulations anywhere in the world), getting out isn't easy as finding accommodation in another city may include queuing for years or even decades, but those who can leave do so.
There are two other costs however that are not so obvious: Immigrants eventually become voters. In Sweden, it's even easier than in other places as you don't even have to know the language to become a citizen. Now, if you look at this from the native population's point of view, there is a problem: The likelihood that their collective will is going to prevail decreases as the immigrant population increases. If 100 % of the voters are natives, then the natives' will is going to prevail all the time - win a majority of the natives, and you win the election, since there's no-one else voting.
But if the native population are only say 80 % of the total population, then you could win a decisive majority among them and still lose the election if the immigrants give their votes en masse to your opponent.
This is not a hypothetical scenario - in Malmö, Sweden's third biggest city, the social democrats are in power only because of the votes of muslims (who go 80-90 % for the left) who make up 25 % of the city's population (immigrants in total are 40 %). The ethnic Swedes - those who haven't fled yet - overwhelmingly hate the leftist city council, but it doesn't matter. The Social Democrats of Malmö of course are aware of who their voters are, and like any other political party with a decent survival instinct, they make sure to keep those voters happy by in this case ignoring child abuse and children being kept home from school (especially common with girls), not to mention rampant antisemitism (including vandalism against synagogues) that has led to an exodus of the city's formerly significant Jewish minority, which the mayor of the city commented on by essentially stating that the Jews had themselves to blame since they refused to condemn Israel. Of course, when half your voters are Muslim, and 40 % of Muslims (in Sweden) hold systematic anti-Semitic beliefs (basically; they're Nazis but without the Aryan supremacy stuff), you better look the other way when synagogues burn if you want to keep your office. Another example from outside of Sweden is Rotherham, UK where the authorities covered up a pedophile ring run by Muslims that raped and sold thousands of non-Muslim kids. The people in charge of the cover-up, instead of going to prison, were overwhelmingly re-elected by the voters of Rotherham - a majority of whom just so happen to be Muslim.
This is of course not a problem if the immigrants assimilate so that they for all practical purposes (including in terms of political philosophy & values) act like the native population. But limited immigration is a necessity for assimilation to happen - it doesn't guarantee assimilation, but it at least makes it possible. There are no historical examples where mass immigration of people from a wildly different culture has been followed by assimilation.
But then what about the economics? Even if we recognize that the native population is disadvantaged by having their influence over their own country reduced, how can we be so certain that this is a bad thing economically?
All economists agree that economic policymaking matters. We may not agree all the time on exactly which policies should be pursued, but we agree that it matters. However, in a democracy, it's the people who decide what policies are actually pursued in the end.
Imagine if a country were to get a massive inflow of communist immigrants. How would that affect the economy? On the neoclassical surface; it would be great. The neoclassical model makes no difference between political beliefs of immigrants after all (so all the benefits of lower labor costs and increased economic efficiency still apply), but in reality, if Sweden - a country with less than 10 million inhabitants - would welcome 1 million communists, we would see a left-wing turn in our economic policies. We would see reduced protection of property rights and we would see an increased acceptance of civil disobedience (commies believe in violent revolution after all) and disincentives to saving & innovation. 1 million commies would not be enough to turn the country into the Soviet Union through democratic means (they'd still be far outnumbered), but you're kidding yourself if you don't think they'd have a destructive effect on economic policies.
Of course, the immigrants we receive now are not communists. They do however come from cultures with similarly destructive ideas about economics - cultures in which women do not work (that's 50 % of all doctors, engineers & lawyers gone - do I need to explain why that's bad?), in which charging interest is seen as unethical (and without interest the capitalist system cannot work), and which tolerate corruption and nepotism to a much greater degree than we do (not saying we're perfect or anything). Is this marginally preferable to communism? Sure. But it's another negative effect of immigration - more specifically, immigration from third world countries - that economists generally ignore. And this effect – which also falls under the umbrella of cultural pollution – obviously increases in the long run as immigrants tend to have a higher birth rate than the native-born population.
Finally before I finish up, I would like to point out that even without the externality of cultural pollution, there is absolutely no guarantee that immigration will be a net economic positive in countries that have a welfare state (which is the case in all of Western Europe and to a lesser extent the United States). This is because if an employer imports a worker from another country instead of hiring a citizen, this means that the unemployed citizen who would have been hired had the employer not had the option of hiring the immigrant will continue to collect unemployment benefits, at a great cost to the state – this cost is often great enough to entirely cancel out the tax revenue collected from the immigrant. For the transaction to be “good” from a social viewpoint, the immigrant would have to be a lot more efficient than any currently unemployed citizen, to compensate for the fact that hiring an immigrant means that we as a society have to pay unemployment benefits to one of our citizens who otherwise would have been hired & off the dole. If the immigrant does not get hired he’ll never move to our country in the first place, so we won’t have to pay unemployment benefits to him (that’s his native country’s problem). The exception here of course is when there are no unemployed citizens that fulfill the criteria of the job being offered.
As the refugee crisis continues, I will certainly have reason to return to this topic in the future. For now; thanks for reading and if you have any thoughts, please leave a comment.