On Free Immigration and Forced Integration
by Hans-Hermann Hoppe
I
An influx of migrants into a given-sized high-wage area will lower nominal wage rates. However, it will not lower real wage rates if the population is below its optimum size. To the contrary, if this is the case, the produced output will increase over-proportionally, and real incomes will actually rise. Thus, restrictions on immigration will harm the protected domestic workers qua consumers more than they gain qua producers.
Moreover, immigration restrictions will increase the "flight" of capital abroad (the export of capital which otherwise might have stayed), still causing an equalization of wage rates (although somewhat more slowly), but leading to a less than optimal allocation of capital, thereby harming world living standards all-around.
In addition, traditionally labor unions, and nowadays environmentalists, are opposed to free immigration, and this should prima facie count as another argument in favor of a policy of free immigration.
II
As it is stated, the above argument in favor of free immigration is irrefutable and correct. It would be foolish to attack it, just as it would be foolish to deny that free trade leads to higher living standards than does protectionism.
It would also be wrongheaded to attack the above case for free immigration by pointing out that because of the existence of a welfare state, immigration has become to a significant extent the immigration of welfare-bums, who, even if the United States, for instance, is below her optimal population point, do not increase but rather decrease average living standards. For this is not an argument against immigration but against the welfare state.
To be sure, the welfare state should be destroyed, root and branch. However, in any case the problems of immigration and welfare are analytically distinct problems, and they must be treated accordingly.
The problem with the above argument is that it suffers from two interrelated shortcomings which invalidate its unconditional pro-immigration conclusion and/or which render the argument applicable only to a highly unrealistic – long bygone – situation in human history.
The first shortcoming will only be touched upon. To libertarians of the Austrian school, it should be clear that what constitutes "wealth" and "well-being" is subjective. Material wealth is not the only thing that counts. Thus, even if real incomes rise due to immigration, it does not follow that immigration must be considered "good," for one might prefer lower living standards and a greater distance to other people over higher living standards and a smaller distance to others.
Instead, a second, related shortcoming will be the focus here. With regard to a given territory into which people immigrate, it is left unanalyzed who, if anyone, owns (controls) this territory. In fact, in order to render the above argument applicable, it is – implicitly – assumed that the territory in question is unowned, and that the immigrants enter virgin territory (open frontier). Obviously, this can no longer be assumed. If this assumption is dropped, however, the problem of immigration takes on an entirely new meaning and requires fundamental rethinking. (...)"
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