No Profit From Free Immigration
The demand for unrestricted immigration has made the journey from socialist and liberal youth organisations to parliamentary politics. But Sweden already has labour force immigration. It is now possible for a Japanese computer programmer that Ericsson wants to hire to move to Sweden. The new thing with free immigration is, in practice, unrestricted immigration of non-labour force immigrants, mainly from poor countries.
Some think tanks believe that all immigration is an economically profitable business, including the asylum immigration that Sweden has already had. The Centre Party’s immigration policy spokesperson has said, ”Free immigration is a hugely good deal for Sweden”.
This is not, however, the conclusion of national economic research, which distinguishes between different forms of immigration. That the labour migration of skilled workers to the United States is profitable does not prove asylum immigration of low-skilled immigrants from Afghanistan to Sweden is also profitable. The conclusion from the research is that immigration may be profitable or loss making, depending on the immigrants’ training and level of integration in the labour market. The most thorough analysis of the issue in Sweden has been done by Professor Jan Ekberg. It concluded that current immigration costs the equivalent of 1.5-2 per cent of GDP, and that the positive labour market effects of immigration are small, because the employment rate of immigrants is low.
It is not a strange conclusion – people who do not work or who have low wages in a welfare state get both transfers and services from the public. The poorest people in a welfare state consume more than they produce – that’s a big part of the point of having a welfare state. This is necessarily funded by taxpayers.
The national economic argument for free immigration, in other words, does not add up. It is no coincidence that no welfare state has ever experimented with unlimited immigration.
A weightier argument than free migration being a profitable business for Sweden is that it is a matter of principle.
The principal argument in favour of free immigration is that all people are equal and have the right to free movement. The nation state is an illegitimate construction and has no right to restrict the freedom of movement.
The conclusion that freedom of movement should stand above all other principles does not follow, according to classical liberalism. The most important example of the tension between freedom of movement and other principles is private property. The right to private ownership restricts freedom of movement, and is considered to prevail within liberal theory.
There is in fact a fundamental conflict between property rights and freedom of movement. The exclusion of others is the foundation of ownership. Unlike anarchism and socialism, liberalism asserts the ownership principle over freedom of movement. According to this interpretation of the concept of freedom, it includes the right to exclude others from one’s property, even in cases where others are considered to be in greater need.
Liberals have no problem with private ownership implying the exclusion of others and preventing free movement. It does not sound nice, but the purpose of the access codes, doors and fences is to exclude others. Liberals also agree that people can own and exclude others collectively. Thus, we have no problem with private companies’ right to not accept new owners, or private hunting clubs only allowing members to hunt on their land. The principle of ‘equal rights for everybody’ is not interpreted to mean that all people have a right to your property.
Citizenship, in the context of the liberal, democratic nation state, can be seen as a form of collective ownership. Citizens collectively own trillions in the form of collective property and annual tax revenues. In addition, citizenship means the right to use power over others. Immigration is not just a contractual exchange between immigrants and their employers; it means the redistribution of resources and power from existing- to new owners. Therefore, all citizens have the right to collectively decide on immigration.
The most important liberal thinkers did not support free immigration in a world where there is even a small welfare state. Milton Friedman supported free immigration in a world without a redistributive state, but also explains why it would not work in the U.S. today:
For it is one thing to have free immigration for jobs. It’s another thing to have free immigration for welfare. You cannot have both. If you have a welfare state, if you have a state where every resident is promised a certain minimum wage, or a minimum level of existence, whether he or she works or not, produces or not: then it is actually impossible.
Even Friedrich Hayek pointed out that there should be a basic protection for the weak in society, and writes:
The recognition that every citizen or resident of a country is at least entitled to a minimum standard, according to the country’s average level of prosperity, is to recognise a kind of collective ownership of the country’s resources, which is not compatible with the idea of ??an open society regarding movement and which raises serious issues.
It is evident that, in years to come, it will be absolutely impossible to ensure an adequate and uniform minimum standard for all people everywhere, or at least that the richer countries would not be content to ensure a standard for its citizens no greater than can be ensured for all people in the world. But if the citizens of a particular country are guaranteed a minimum standard higher than that applicable in the rest of the world, this minimum becomes a privilege that requires certain restrictions on free movement of people across borders.
Sometimes liberals try to escape this dilemma by saying that they are for free immigration and that the welfare state should be abolished. But the welfare state’s existence is not something one can reason away on the basis of one’s own political preferences, but is part of the objective reality to which one must relate. Similarly, it is not a logically rigorous argument to say that one is for the bombing of Iran, but against civilians being killed, and thereby believe that one has solved the dilemma.
Even if all Swedes tomorrow became libertarians and abolished the welfare state, it would re-emerge through free immigration. This is because the poor immigrants, who have a vested interest in a welfare state, also have the right to vote. Meanwhile, free immigration means, sooner or later, the indigenous population finds itself in a minority position. To abolish the welfare state and simultaneously have free immigration is only possible in a two-tier nightmare society, in which immigrants and their children themselves do not get to vote.
It is important to remember that most of the classical liberal thinkers did not see the nation state as illegitimate. This is an idea that evolved among today’s libertarians and which has been, in my opinion, more inspired by cultural radicals rather than classical liberal analysis. To regard the nation state as a legitimate and effective design is hardly the same thing as being nationalist. That the great classical liberal thinkers did not put more time to articulate defence of the nation state is not because they were against it, but because almost no one questioned the legitimacy of the nation state. John Stuart Mill writes:
Where there is some degree of national spirit, there is an apparent reason to combine all the members of that nationality under the same government, and then a government specifically for them.
It is also no coincidence that Adam Smith’s book was called The Wealth of Nations. Liberals saw the nation as a legitimate design that basically reflected the organisational forms that citizens themselves supported.
The democratic state is a defence and cooperation pact. The most fundamental purpose of government is to maintain a monopoly on violence. Nozick, among others, sees the watchful state as legitimate, despite the absence of voluntary contracts. Because we are in a democratic system in which we relinquish power over us to other citizens, immigration and the awarding of citizenship always entails a redistribution of power from existing- to new citizens. The nine million that live in Sweden now are existing citizens, and together own 100 percent of the political power. If there are nine million new citizens, you transfer half the power from existing- to new owners. Therefore, citizens have a legitimate right to determine who is allowed to immigrate to the country.
I would go a step further than describing the state as simply a monopoly of violence. Even when common safety is achieved, there is a range of other issues where we benefit from the adoption of common decisions, such as the construction of infrastructure and primary education. Even these aspects of the state are democratically legitimate. The transfer of citizenship entails, therefore, apart from the transfer of power, a transfer of material resources from existing- to new citizens.
But if the state is legitimate as a construction, why precisely is the nation state a legitimate organisational level? Given that people prefer to live in a society, and given that it is then beneficial to take certain decisions together, there naturally arises the question of which level you should put the state on.
It is no coincidence that the organisational level at which most states are organised is national. The nation is a rational level where there is community, where you often communicate in the same language, where people share a common culture and history that connect them to each other, and where they have similar preferences.
A current example of problems with groupings other than nations is the euro countries. Within the EMU, there is not enough strong community, trust and reciprocity that Germany and Finland should want to donate some percentage of their GDP to rescue the Greek economy. This makes the euro countries an unnatural and dysfunctional polity.
The nation state was not created overnight by voluntary formal contract. Instead, it grew through an organic, Hayekian process. It is important to remember that this was also how private ownership emerged.
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We never sat down and signed a contract in which we promised to accept private ownership; it is an institution whose legitimacy developed gradually over time. Both private property rights and civic rights are, thanks to this process, today legitimate among an overwhelming majority of the population. That we have not bothered to write in a formal social contract for private property rights and democratic citizenship is mainly because they are so obvious. If we had a referendum on whether private ownership or the nation state of Sweden should be eliminated, there is no doubt what the outcome would be.
The legitimacy of private ownership is mainly based on the fact of you, or those who left the property to you, at some point created it. The legitimacy of civic ownership of Sweden is based exactly the same way on the fact that Swedish institutions and assets were created by the ancestors of today’s citizens, who chose to hand them over as inheritance.
But can the nation state be legitimate if people are involuntarily born into it?
It is not possible for a person to choose which nation they will be born into, just as it is impossible for them to choose their parents. We accept the legitimacy of the family and private property, even though people cannot choose their parents, and we accept the nation state’s legitimacy even though people cannot choose their nation before they are born.
That we accept the citizenship of an inherited state is not stranger or less legitimate than property being inherited. The right of parents to prioritise their own children in terms of care, education and property is a key principle of liberalism.
The opposition to the nation state’s right to maintain public property is not without historical parallels. Early socialists did not believe that the owner had the moral right to exclude others from their assets, especially when the poor had greater needs than the rich. They therefore called for coercive redistribution, primarily of private property through collective ownership of land and the ‘means of production’, or even all possessions.
Today, this ideological position has essentially been abandoned. Even the Swedish Left today usually respects private property. We are not required to give away our private property to the poor, not even to worn beggars on the subway or famine victims in other countries. Both liberals and social democrats now have a more mature approach to these moral problems, rooted in the realisation that the maintenance of private property in the long run is best for society. With the exception of the communists, the majority do not interpret the principle of the equal value of all as the equal right to each other’s property.
The classical socialists did not accept private property as legitimate, and therefore wanted to reallocate resources from the rich to the poor within countries. Today, there are those who do not accept civic ownership as legitimate, and therefore want to reallocate resources from rich to poor, between countries. The movement for the abolition of private property was a historic mistake. The reason for the mistake was basically that the socialists had no theoretical knowledge about why private property was a legitimate and effective institution. Similarly today, the movement to abolish civic ownership is based on a superficial analysis of the institutions it proposes should be abolished.
Tino Sanandaji is a PhD and researcher in national economics at the Institute of Industrial Research.