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Few people now bat an eyelid at the movement across borders of skilled professionals, in particular those from rich countries. It is considered normal, and perfectly acceptable, for an American management consultant – even one of Indian origin – to ply his trade in London, or for a German banker to be based in New York. Within the EU, this freedom extends to all workers, whatever their qualifications – albeit with temporary restrictions on the movement of labour from the eight relatively poor ex-communist countries that joined the EU in 2004 to most of the richer members. Yet most people baulk at the thought of people from poor countries coming to work in rich ones.
Why? Why can computers be imported from China duty-free but Chinese people not freely come to make computers here? Why is it a good thing for French insurance salespeople to hawk policies in Poland but a bad thing for Polish plumbers to offer to fix French pipes? Why is the door open for American managers to run factories in Honduras but the door slammed shut for Hondurans who want to work in American factories? Why, in short, is free trade and the free movement of Western elites a wonderful thing but the free movement of everybody else unthinkable? And why is it a good thing for workers to move within a country to where the jobs are, but a bad thing for people to move between countries for the same reason?
Until recently, Communist China strictly curtailed its people’s movement. Unless you were a privileged party official, you needed a special permit to move – or even travel – from your home town to another part of the country. It sounds like a totalitarian nightmare, yet it is not too far removed from the situation that those on the other side of the global migration apartheid find themselves in.
China has now relaxed its constraints on internal migration and has witnessed the biggest movement of people in history as peasants flock to the cities to make a better life for themselves working in factories, fuelling the country’s explosive economic growth. So would relaxing rich countries’ controls on immigration from poor countries provide similarly spectacular economic gains?
Most likely, yes. Sober-minded economists reckon that the potential gains from freer global migration are huge, and greatly exceed the benefits from freer world trade. As I explained in my first book, Open World: The Truth about Globalisation, the freeing up of global trade in manufactured goods in the second half of the twentieth century led to a quintupling of the world economy and an unprecedented rise in living standards in both rich countries and poor. So just think how opening our borders to migrants could transform our world for the better in the twenty-first century.
Historical experience certainly suggests it would do a lot of good: the United States’ stunning economic growth between 1870 and 1920 coincided with the migration of tens of millions of Europeans to America. A study of fifteen European countries finds that a 1 per cent increase in the population through migration is associated with a boost to the economy of between 1.25 per cent and 1.5 per cent. The World Bank reckons that if rich countries allowed their workforce to swell by a mere 3 per cent by letting in an extra 14 million workers from developing countries between 2001 and 2025, the world would be $356 billion a year better off, with the new migrants themselves gaining $162 billion a year, people who remain in poor countries $143 billion, and natives in rich countries $139 billion. And those figures grossly underestimate the likely economic gains from the added diversity and dynamism that immigrants bring. Foreigners don’t just slot in to vacancies left by local people; they bring different skills, varied views, diverse experiences and a zeal for self-improvement that combine with the talents of local people to boost innovation, productivity and economic growth. Would the US be as dynamic and successful without all its immigrants trying to get ahead?
If you are sceptical about the merits of globalisation, you may not be swayed by the argument that the case for freer migration follows on logically from the case for freer trade – although you might be, since I am essentially arguing that rich countries should open their borders to service-providers from poor countries, which is not a million miles away from arguing that rich countries should open up their markets to farm produce from poor countries. But another way of looking at the case for freer international migration is this: if you want to help people in poor countries, freer migration is one of the most effective ways of doing so.
Campaigners for global justice quite rightly argue that rich-country governments should increase their aid to poor countries. Currently, aid is pitifully low, at a mere $79 billion or so a year, the equivalent to each of us in rich countries donating a miserly $1.60 a week (86p) to those in poor countries. Worse, a lot of this aid fails to benefit needy people: it is spent on fat fees and five-star hotel bills for Western consultants, ends up in the Swiss bank accounts of African dictators, or is simply wasted. In short, poor countries need not only more aid, but better-targeted aid – which is exactly what migrants provide.
According to official figures, people from poor countries working in rich ones send home some $160 billion a year. Informally, they are reckoned to send home a further $320 billion a year. That makes $480 billion, or six times official government aid. It is also nearly three times the $166 billion in foreign direct investment that developing countries received in 2004… Better still, it ends up directly in the pockets of needy people, who can choose how to spend it as they see fit… So just think how much people in poor countries would benefit if rich countries allowed in more immigrants. Or, to put it another way, if you believe that the world is an unequal place and that the rich should do more to help the poor, then freer international migration should be the next front in the battle for global economic justice.
Excerpt copyright: Philippe Legrain, 2006. Reproduced by permission of publisher Little, Brown/Abacus
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