Not all those who support the free movement of capital across borders support the free movement of people. But if you think free trade is good, the case for open borders should be at least equally compelling.
First, the simple case for free trade in goods.
Different places in the world are better at producing different things. There are two reasons for this. One might be natural conditions. So Canada is good at producing lumber because Canada has a whole lot of trees everywhere.
Another reason that some places are better at producing a thing might be because of years of experience at producing such a thing, and the experience gives rise to a combination of things-such as specialized knowledge, social networks, and maybe a reputation for production that draws the most brilliant minds-that firms can leverage to outcompete others. An obvious example of this is Silicon Valley-a lifeless desert a hundred years ago-which is now well known as the place where all of the best tech in the world is designed.
If the only two places in the world were Canada and Silicon Valley, then Canada would trade its trees for the technological know how of Silicon Valley. Because of trade, Silicon Valley gets more lumber and Canada gets more technological innovation.
This trade would be obviously mutually beneficial, and any government interference with tariffs or subsidies would only create the normal distortions that would result in fewer people satisfying their ends at the cheapest possible cost.
The case for free immigration is similar.
Just as some countries are better at producing a certain product than others, some countries are better at utilizing workers than others.
It should be obvious that some people are more productive in certain environments than others. The world’s best lumberjack would be unemployed in Silicon Valley, but would be highly valued in the forests of British Columbia. Similarly, the world’s best software engineer would be underemployed if all he was allowed to do was chop trees.
Even if the worker isn’t anywhere close to being the best in the world at what they do, they would still be better off if they were allowed to immigrate somewhere that their work was more valued.
A janitor working at an auto shop in Zimbabwe would be much more magically productive if he could be hired at Apple-and it’s not because the janitor would have better access to cleaning equipment at Apple. If the best engineer at Apple quits because the offices are filthy, the global dollar value loss would be huge.
But there is an important distinction between people and things: Unlike things, people can be entrepreneurs. So the more people there are in a relatively free country, the deeper the pool of potential value-adding entrepreneurs.
So hopefully by now you recognize why industrialized countries should not only welcome but encourage immigration from poor or politically unstable countries. But you might be asking, “What about integration?”
Integration is seemingly the biggest problem in places where there is lots of welfare so that immigrants have incentive to move to a new place, but not work.[1]
If immigrants do not have a reason to work, they do not have a reason to integrate. By finding a job, they’ll not only have an incentive to learn the language-but they’ll also have an incentive to learn and adopt the extended culture of the larger society around them.
If there is no reason to integrate, and the cost of finding employment is too high, then there is more chance of ghettoization-leading to a more insular immigrant population. But in North America where the welfare state is less encompassing, immigrants have been able to better integrate.
So to prosper, we should bring in more immigrants. However, we need to end unemployment welfare, forcing them to take jobs and learning the language along with the rest of the culture.
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[1] For more on this, see here and here.
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