The author of this piece should talk to some of our Senators. His last comment made me pause. I have not heard talk like this in the U.S. Congress.
"So let us try to have an honest discussion, based on the best possible analysis and consideration of the ethics. If immigration is to continue at a substantial (if reduced) rate, all these issues must be confronted. If not, the debate is certain to become ever more unpleasantly xenophobic. This is not an area for stealth, but for policies that are far more open, transparent and better justified than hitherto."
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Why immigration is hard to tackle
By Martin Wolf
Published: November 2 2007 02:00 | Last updated: November 2 2007 02:00
London Financial Times
Does a country have the right to determine the composition of its population? If so, how should it do so? These questions are hard to answer. That is presumably why the government has run what amounts to a "stealth" immigration policy. But that approach is now unworkable. The time has come for a debate. That debate should focus on whether restricting immigration is legitimate, desirable and feasible. Only then can one decide what policy to pursue.
The government is in difficulties on this topic, for three reasons. First, the inflow has been substantial. Between 1997 and 2006, gross immigration was 4.8m and net immigration 1.6m, or 7.8 per cent and 2.6 per cent of the 2006 population, respectively. The latest projections suggest that the population might rise by 4.4m between 2006 and 2016, with immigration generating close to half of this increase.
The second reason is that the government seems to have little idea how many immigrants are in the country. It has just had to admit that the number of foreign-born workers who had arrived since 1997 was 1.5m. Foreigners also seem to have filled more than half of the additional jobs created since 1997. Aware of the potential political risks, the government has announced the continuation of controls on workers from Romania and Bulgaria, and introduced a point system to manage immigration of workers from outside the European Union. A panic-stricken Gordon Brown, prime minister, has even proclaimed "British jobs for British workers".
The third and most fundamental reason is that the government never made a case for such levels of immigration. So how should one go about having such a debate?
A good starting point is whether a country is morally entitled to restrict migration. Philippe Legrain, a notable economist and author, takes a strong position on this, most recently in a robust contribution on migration to a report from CentreForum, a liberal, London-based think-tank*. His argument is that freedom of movement is a human right. The implication is that a country should be defined as a set of institutions that controls a given territory. Its people have no right to determine the composition of its population. I understand the argument, but do not agree with it. A country is not just a set of institutions, but also a home. People do have a right to decide who enters their (collective) home.
Yet even if one agrees that a country has a right to restrict immigration, it does not follow that it ought to do so. Mr Legrain argues that it is not just in the global interest to have free migration, but also in that of recipient countries. A standard "gains from trade" analysis would suggest that this should be true. But if one is to argue for free movement of labour on economic grounds one needs a sense of the likely consequences. Analyses of free migration in the presence of huge real wage differentials suggest that we would end up with vast informal sectors and shanty towns. That is what happens within poor countries. Why should it not happen across the globe? I cannot see how one would persuade a host population that this outcome would be in their interests.
So the debate has to be over what are still controlled levels of migration. What is most striking here is the poor standard of the government's analysis. The Home Office's recent contribution to a House of Lords economic affairs committee inquiry discusses the impact on the size of the economy. For those of us who are not seduced by the "lump of labour" fallacy, there is no doubt that a bigger labour force would make the economy larger. So what? If one is trying to persuade people that immigration is in their interests, one has to analyse its impact on the gross domestic product and its distribution, after subtracting the incomes earned by migrants. So far as I can see, the Home Office does not even attempt to assess this.
Mr Legrain has little doubt. His position is that immigrants are almost always complementary to domestic workers and so raise their productivity and incomes. A particular benefit, he argues, is diversity. These points have force. But he also assumes, less credibly, that there are few negative consequences of diversity or a denser population.
Yet what is most striking in this debate is how little we know. The case for an analysis similar to Sir Nicholas Stern's on climate change policy is overwhelming. Of course, a review would be pointless if it were impossible to control immigration. While the extent to which this is possible is limited, it is not utterly infeasible. But we should certainly move to market-compatible systems, such as auctions of work permits, rather than arbitrary point systems.
So let us try to have an honest discussion, based on the best possible analysis and consideration of the ethics. If immigration is to continue at a substantial (if reduced) rate, all these issues must be confronted. If not, the debate is certain to become ever more unpleasantly xenophobic. This is not an area for stealth, but for policies that are far more open, transparent and better justified than hitherto. Let the debate begin.
*Globalisation: a Liberal Response, www.centreforum.org
martin.wolf@ft.com
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