<!– @page { margin: 2cm } P { margin-bottom: 0.21cm } A:link { color: #0000ff } –>

This post is a slightly amended version of a comment I published in Martin Wolf’s Economists’ Forum on 02/11/2007, in response to Martin Wolf’s column "Why immigration is hard to tackle", in the Financial TImes of 01/11/2007.

I have to declare an interest in the subject of immigration.  I am an immigrant (born in the Netherlands), and so are my wife (USA), my son (Peru) and my daughter (Bolivia).  We have currently 8 operational passports between the four of us (two British, two Dutch and four American).  Even our two cats are foreign breeds – Maine Coon and Norwegian forest cat.  Only the newts in our garden pond are truly British (I think). 

I feel about nationalities/citizenship and passports the way I feel about underwear: always carry plenty of it, and change it regularly. I have been fortunate indeed in that nationality or citizenship have never been a constraint on what I have been able to do.  I served as an external member of the Monetary Policy Committee of the Bank of England before I became a British citizen.  I became Chair of the Netherlands Council of Economics Advisers when I no longer held Dutch citizenship.

From a normative point of view, I am with Philippe Legrain who believes that freedom of movement is a human right.   For me, when it comes to the rights of nations and countries, libertarian political instincts combine with religious convictions: The earth is the LORD’s, and the fullness thereof; the world, and they that dwell therein.  Not: Britain for the British or Scotland for the Scots, or even British jobs for British workers.  I do not recognise national property rights.

Indeed, I would go further than that, and admit to a visceral dislike of and contempt for all forms of nationalism and patriotism.  I consider them regrettable historical accidents – manifestations of communal mental corruption that has too often exploded into collective madness, including  violent confrontations and war.  I recognise the historical reality and continuing  significance of the nation state and the notion of ‘country’, just as I recognise the reality and continuing significance of the HIV virus and of AIDS.  I allow for their existence, while hoping for and striving for their elimination.

I disagree with Martin when he says that a country is not just a set of institutions, but also a home, and that people have a right to decide who enters their (collective) home.  I view a country as a club with a set of institutions and membership rules.  The rules cannot be different for those born in the country (or related through kinship to people born in or resident in the country) than for those contemplating emigrating to that country. Anyone who is willing to abide by the membership rules has the right to join.  Anyone also has the right to leave and to join any other club. 

Under certain circumstances, exit taxes may be appropriate. These are, however, easily abused for opportunistic political ends, or to abrogate the right to leave.  It is clear that, despite remittances and the prospect of eventual return to the country of origin, certain forms of emigration (a brain drain, the departure of qualified doctors and nurses, the exit of the most dynamic and youthful age cohorts) can do serious damage to the rights of those left behind.  Whether compensation is due from the emigrant or from the government of the destination country is an interesting question.

Citizenship  is, in my view, purely residence-based, and residence is a personal choice.  It clearly makes sense, to avoid certain obvious free-rider or collective action problems, to link entitlement to some of the benefits of citizenship in a country to the duration of one’s residence there and/or to the magnitude of the contributions in cash (taxes) or in kind (compulsory military service, jury duty) one has made to the country.

I disagree with Mr. Legrain as regards some of his positive or factual statements about the consequences of immigration on the native population.  There are certainly plenty of instances where these effects can be negative.  Unskilled immigration into the UK may well bring in labour that is complementary to the labour of native skilled workers; it is likely to lower the wages of native unskilled workers, or to displace them altogether if wages are rigid downwards. 

When immigrants are different from natives in appearance or speech, the diversity they bring can as easily become a problem as a benefit.  On the Isle of Dogs in the London Borough of Tower Hamlets, where I lived for many years, the old native population, working class white Englanders left behind and marginalised when the docks left, co-existed badly with the large Bangladeshi immigrant community.  The resulting resentment let to the first election of a BNP Councillor in a local election (in the ward where I lived, Millwall, in 1993). The two communities are brought together only by their shared dislike of the affluent yuppies that are the most recent immigrants into the area.

This is a huge topic and there are many loose ends.  A key question for the ‘countries as open clubs’ view concerns the kind of membership rules that are legitimate.  Clearly a rule for citizenship in a country that reproduced the BNP’s party membership requirement – restricting it to "indigenous British ethnic groups deriving from the class of ‘Indigenous Caucasian’" - would not be my cup of tea.  I would begin by accepting only those clubs as legitimate whose membership rules (in theory and practice) respect the 1948 Universal Declaration of Human Rights. Beyond that, as long as immigrants impose no adverse rights externalities on natives (that is, as long as they do not infringe these same human rights), they should have the right to settle in the country.  Absence of negative rights externalities is compatible with negative conventional externalities (adverse effects on the standard of living of natives, for instance). So it would not be an argument against immigration that it makes (some or even all) natives worse off.  I recognise that, given the political governance realities of nation states, this moral argument will carry little practical weight.

If this policy of free migration were adopted by the EU, this could mean that, say, 150 million people might be queuing up to escape the low-lying areas of the Indian subcontinent and move to western Europe in less than a decade or so.  In addition to great cultural gains and economic benefits for some of the natives (European landlords and those native European workers with skills complementary to those of the newcomers), this would no doubt also create massive disruption, congestion, overcrowding, urban decay and growth of shanty towns in parts of Western Europe, and to drastic declines in the standards of living of native European workers whose skills are rival with those of the immigrants.  The immigrants themselves would on average be significantly better off, or they would not choose to come. 

My position that the wellbeing and rights of actual and potential immigrants count neither more nor less than those of the native-born is of course not exactly the brick with which the house of modern nationhood is built.  In the UK, as in the Netherlands and the US, vile and virulent anti-foreigner and anti-immigrant sentiment is never far from the surface.  The pages of most of the UK tabloids drip with poison when they address immigration-related matters. The flames of xenophobia, racism, anti-foreigner hysteria and anti-immigrant psychosis are also regularly fanned by opportunistic and spineless politicians from both government and opposition parties, oblivious of the damage they do to the social fabric.  Large-scale immigration has often provoked communal violence, and at times enduring civil conflict (as in Northern Ireland, Palestine/Israel, Sri Lanka, Tibet, and Assam). 

Peaceful coexistence and mutual tolerance among diverse communities, and a significant degree of integration and assimilation are necessary for a ‘country as an open club’ to thrive.  The British and Dutch models of multiculturalism, which have encouraged ethnic and religious apartheid, have failed.  Something closer to the original American melting pot model is more likely to be successful.

Despite the shock and horror about the recent UK immigration numbers (and yes, it is a scandal that the data are so poor), the scale of recent immigration into the UK (4.8 million gross and 1.6 million net over the last 10 years according to the (unreliable) official figures) has certainly been manageable from the point of view of the natives.  The net immigration of about 2.1 million expected between 2006 and 2016 also looks manageable, although it will exacerbate pressure on certain key scarce resources (housing, transportation infrastructure, health and education).  We will have to pay somewhat higher taxes to provide the necessary infrastructure and public goods and services.

Immigration has made London the most interesting, diverse, exciting and creative city in the world.  It is no longer be an English city, a British city, or even a European city in anything except a geographical sense, but it is the first true ‘worldcity’ or global city – an open city which belongs to all the people of the world.  This is no doubt why the enemies of the open society, including the suicide bombers that have targeted it and may to so again, hate it so much.  Those who don’t like what immigration has done and will continue to do to London or who feel threatened by it can, of course, under the ‘countries as open clubs model’,  always move somewhere else in the European Union.

The late Harry Johnson, professor of economics at the LSE and the University of Chicago, used to say that the whole ‘aid vs. trade’ debate about how to promote development and eliminate poverty was just shadow boxing.  If the rich, economically developed countries were serious about development and the elimination of global poverty, they would simply open their borders to all comers. He was right.

From the Washington Times, October 19, 2007,  p. 15:

"KABUL The top U.S. general in Afghanistan said yesterday he estimated that Afghanistan’s rampant opium poppy cultivation was funding up to 40 percent of the Taliban-led insurgency.

Gen. Dan McNeill, head of the NATO-led International Security Assistance Force, added he had been told by an international specialist that his figure was likely low and could reach up to 60 percent…"

Nuff said.

Maverecon: Willem Buiter

Willem Buiter's blog ran until December 2009. This blog is no longer active but it remains open as an archive.

Professor of European Political Economy, London School of Economics and Political Science; former chief economist of the EBRD, former external member of the MPC; adviser to international organisations, governments, central banks and private financial institutions.

Willem Buiter's website