I hear that a lot of people want to migrate to...Finland. I'm pretty sure it's not because they like Finland's climate, or scenery. I don't think it's got anything to do with the physical geography of Finland. I think that they want to move to Finland because they like Finland's political, legal, and social institutions, and all the good things those institutions bring. They want to live somewhere that is ruled by Finns.
There are two ways to satisfy that desire.
1. We can move the people who want to live there to the country they want to live in.
2. We can move the country they want to live in to the people who want to live there.
If nobody cared about physical geography, those two solutions would be exactly the same. But if people do care about physical geography, and want to move to Finland despite not liking its climate, the second solution would be better.
Letting people migrate across borders is not enough; we need to let land migrate across borders too.
So instead of moving the people across the borders, we should move the borders across the people. What people are really voting for, when they vote with their feet, is imperialism. They want to be ruled by foreigners.
Imperialism has a bad name only because, in the past, countries moved to places where the people living there didn't want to be ruled by foreigners. But that is not what we are talking about here. New imperialism would be different and much better than the old, precisely because we are talking about moving countries to places where the people living there do want to be ruled by foreigners.
There is of course a practical difficulty, because unanimity is rare in practice. A minority of people living in any given geographical area might not want a bunch of foreigners coming in and taking over. But that same argument applies to both of the two ways of resolving the migration problem. And it can be resolved more easily in the second way. If (say) half of Nigerians would prefer to live in Finland, then Finland should take over half of what is currently Nigeria (preferably that half with the highest density of people who prefer to live in Finland, to reduce moving costs), and let the disaffected minority move to the remainder of Nigeria.
Instead of thinking about borders as geographically fixed, we should think of borders as geographically fluid markers of boundaries between rulers, moving back and forth across the land according to the ebb and flow of preferences of who wants to live under which ruler.
Obviously I am just using Finland as an example in this thought-experiment. The real world Finland is much too small a country to take over half of Nigeria. And my guess is that nearly all the people who want to move to Finland would be equally happy to move to Sweden or Denmark or even Germany, France, or the UK. Rather than individual European countries doing it alone, like under old imperialism, new imperialism should be a pan-European project.
Fortunately, Europe already has in place the institutional structure that could implement renewed imperialism, namely the EU itself. But perhaps the US and Canada (as countries founded by European immigrants, to which many people want to emigrate) could join the EU in this pan-European project. And there's no reason, of course, that renewed imperialism should be restricted to European countries. Perhaps many people want to live under Japanese rule too, for example.
I fully recognise that many readers will find my proposal for a renewed imperialism absurd. That's because you think of the current location of borders as somehow sacred. You might even want to start a war to protect the existing location of your borders if a bunch of foreigners tries to cross some arbitrary line on the map, and move that line to somewhere else. But unfortunately, the attitudes behind those sentiments are really just based on an irrational fear of foreigners. Economic theory, and econometric studies, clearly show that competition between countries for people and land will maximise economic welfare just like competition between firms for customers. Customer loyalty to a particular brand reduces competition, and leads to a less efficient allocation of resources.
This policy proposal would make an improvement to global human welfare that is far bigger than any other policy (like global free trade, for example). If Europe moved to the poor countries, there is no reason why the people currently living in those poor countries could not have European levels of GDP per capita and standards of living.
And remember, for every desperate migrant you see voting with his feet to live under European rule, there must be hundreds more equally desperate people who would like to vote the same way too, but who can't move so easily.
During the colonial era, the representatives of foreign powers found that it was a lot easier to work with local notables and local monopolies rather than trying to untangle the local power structures and replace them with something in their own image. That never happens. So the Finn, on arriving in the failed state, will find the same level of exasperation as the local. It's one thing to enslave people and steal their rubber. It's another to build a healthy society.
There is entropy. Trying to reform a bureaucracy is like trying to straighten out and arrange a pile of hay into little rows. It requires enormous energy from outside the system and even then there are unintended consequences as crooks route around your reforms. Or you can try to burn the whole thing down. Or you can leave.
At the turn of the Century many idealistic Chinese were exasperated at the backwardness of their nation, particularly as neighboring Japan was rapidly modernizing. Many founded various ideological movements to try to also modernize China and were struck by the seeming hopelessness of the task. Here is an autobiographical from a book of stories by Lu Xun: (https://www.marxists.org/archive/lu-xun/1922/12/03.htm)
The jury is still out whether these idealistic communists did more harm than good in trying to reform China. It's very difficult to shape society and point it in some direction. The imperialists never bothered -- they extracted raw materials and got the hell out. People who stayed behind mostly failed. The history of coming up with better institutions is soaked in blood and extreme luck. Who would have guessed that out of the dark ages in Europe a liberal society would arise whereas the existing advanced societies in the middle east would stagnate.
Posted by: rsj | November 07, 2015 at 10:08 AM
You sound an awful lot like Arnold Kling, Nick. He talks about competitive government and this is basically the same idea. If people could essentially subscribe to their preferred government (or bundle of policies)--barring the difficulties related to infrastructure like roads--all the beggar-thy-neighbor political assertions about Group X needing to pay more in taxes and Group Y deserving more benefits, would die a pretty quick death.
My main argument against what I think is otherwise not a bad idea, is that it would leave the poor worse off. But clearly there is no political party concerned about that group anyway.
Posted by: Shangwen | November 07, 2015 at 10:16 AM
Finland is a democracy. I suspect that anyone who moves there does not want to be ruled by Finns but will want to ultimately rule along side of Finns. As opposed to ruling along side of his / her former countrymen & women. If you emigrate you're looking for new friends, probably because you've given up hope that your old friends will change.
Posted by: Oliver | November 07, 2015 at 10:23 AM
I like what Oliver says. I'll also add that the institutions Finns create for one another are going to be different from the ones the create to exercise imperial rule over foreign populations. This is an old, old, really old trope. It's one of the key themes in Thucydides, for instance. For all their internal injustices, the Brits were a lot nastier to the Indians. Or consider the Anglo settler societies of the US, Canada and Australia -- how they arranged their internal affairs and how they ruled over indigenous people.
What's interesting to me is that, as an economist, this didn't immediately pop into your mind, because it's readily explained by incentives. (There are also evolutionary behavioral explanations; it's really overdetermined.)
Posted by: Peter Dorman | November 07, 2015 at 11:29 AM
rsj: "The history of coming up with better institutions is soaked in blood and extreme luck. Who would have guessed that out of the dark ages in Europe a liberal society would arise whereas the existing advanced societies in the middle east would stagnate."
Yep. The Scottish Enlightenment is another (smaller) example.
And whatever it was that caused the "European Advantage", the chances of it sticking around forever are not good. We can only hope that the Chinese, or Indians, or whoever, learn from European mistakes, and do a bit better, and don't make a host of new mistakes.
Oliver and Peter: who said the ex-Nigerians to whom Finland moved wouldn't have a vote, just like other Finns?
Peter: it was already in my mind. It was (implicitly) part of my argument. Does physical geography matter? Did the anglo settlers who moved to US, Canada, Australia, suddenly start acting like the natives in those countries, because their physical geography changed? No. Countries are clubs of people, not areas of land. That same argument cuts both ways, against both versions of "Open Borders".
Posted by: Nick Rowe | November 07, 2015 at 11:50 AM
"Countries are clubs of people, not areas of land. That same argument cuts both ways, against both versions of "Open Borders"." - why? Are you making an implicit assumption that clubs are good/efficient or at least a necessary evil? Actually not just that but that the specific configuration of clubs which exist right at this moment are good/efficient or at least a necessary evil?
So countries are clubs. It might be better if the clubs are bigger and people can choose which club they join. I don't actually have problem with your version of colonialism, given some provisos and caveats which Peter alludes to above.
Posted by: notsneaky | November 07, 2015 at 12:57 PM
There's one similarity with land though. The question "who gets to belong to a club" / "who owns the right to a particular set of institutions" is sort of like the question "who deserves to own land". Institutions are build up, usually incrementally, over long periods of time. Most "natives" presently living in a given country did not have anything to do with building up these institutions - they just "inherited" them like somebody inherits land, or a membership in a restrictive club. Ok, so their ancestors had something to do with building up these institutions and one could argue that parents have the right to make bequests on their children. (The analogy with land breaks down a bit here since land is rival and institutions aren't, so actually most of the ancestors of most of the natives also did not have anything to do with building up the institutions, they just free-rode on the building up of a few others). But just like with land the question becomes "ok, but how did your ancestors get that land?" with institutions the question is "how did your ancestors get to build those institutions?". And if we give present day natives privileges based on the good things their ancestors did, we should also hold them responsible for the bad things their ancestors did. How about we trade Closed Borders for massive Reparations for slavery? (That's actually the only scenario where I think reparations might make sense)
Actually the non-rivalry of institutions versus the rivalry of land might be quite important here.
Posted by: notsneaky | November 07, 2015 at 01:39 PM
Oliver and Peter: who said the ex-Nigerians to whom Finland moved wouldn't have a vote, just like other Finns?
Maybe I misunderstood you. You said 'ruled by Finns'. That's synonymous with 'not ruled by Nigerians' which I assumed included the emigrants themselves.
Also, why haven't half of all Nigerians already chosen leaders who are more typically Finnish in mentality than Nigerian if that's what they want? Why was Berlusconi in power for ages whereas technocrats like Prodi hardly last one term?
I think changing institutions is a generational project, rather than an manegerial problem. It's easy to point out the errors, even for those affected by them, but incredibly difficult to actually do something about them because people themselves need to change first.
Posted by: Oliver | November 07, 2015 at 05:53 PM
This sounds like a grand idea. Since many from the United States fled to Canada during the Vietnam era, perhaps Canada should simply absorb the United States and make a more efficient whole. Or since Canadians are constantly coming to the U.S. to pursue opportunities not available in Canada, that clearly means that Canadians want to be ruled by Americans, and we should just finish what we started in 1812-14. Go imperialism, and welcome to the New American Empire!
Posted by: Andrew Jackson | November 07, 2015 at 08:29 PM
For those who are hung up on voting: My thought experiment is that if you get a democratic imperial power, you get to vote, if you are living within its new borders, just like the people living within its old borders. Anyone living in a democracy is ruled by all the other people living in that democracy. If I live in Finland I am ruled by Finns, whether or not I have the right to vote, or exercise my right to vote.
But is it such a big deal?
There are currently 3k(?) people camped out in Calais desperately trying to enter the UK illegaly. They won't have the vote if they succeed. Do you think they really care whether they have the vote or not? If you offered people a choice: "OK, you can come and live & work in the UK legally, but you can't vote", how many potential migrants would accept vs turn down the offer? Gastarbeiters in Switzerland can't vote IIRC.
And there is a helluva lot more to political and legal and social institutions than just voting.
Posted by: Nick Rowe | November 08, 2015 at 07:38 AM
Oliver: "Also, why haven't half of all Nigerians already chosen leaders who are more typically Finnish in mentality than Nigerian if that's what they want? Why was Berlusconi in power for ages whereas technocrats like Prodi hardly last one term?
I think changing institutions is a generational project, rather than an manegerial problem. It's easy to point out the errors, even for those affected by them, but incredibly difficult to actually do something about them because people themselves need to change first."
Those are the right questions to ask. But it seems to me those exact same questions apply to *both* variants of Open Borders. Why should physical geography matter for institutions? Why should a change in physical geography suddenly change the institutions people create and maintain?
Posted by: Nick Rowe | November 08, 2015 at 07:42 AM
notsneaky: "Actually the non-rivalry of institutions versus the rivalry of land might be quite important here."
True. In an e.g. agricultural economy, the labour/land ratio would matter a lot, and free geographical flows of labour would be needed to equalise Marginal products of labour. But then Europeans would be emigrating to Africa, I think. Which is what they used to do, under old imperialism.
But if institutions were really non-rival, and that were a big deal, big countries would be richer than small countries.
"(That's actually the only scenario where I think reparations might make sense)"
I think that's where it makes least sense. Take the US for example. Open Borders would reward the African descendants of those who sold them into slavery, and (possibly) punish the African-American descendants of slaves. (Though the latter group are much richer than the former group, which tells us something important.)
But I'm no guilt-ridden ethno-masochist who can be swayed like that. In the olden days, IIRC, anyone who could benefit by enslaving foreigners (or even their own people, like Russian serfs) would do so. The only reason mass slavery wasn't more common was that in Malthusian equilibrium, where people will work for food anyway, there isn't much point. Otherwise, if you defeated foreigners, and couldn't tax them, you would mostly just kill all the men and old women, and keep the young women and grab the land. Like Isis. The olden days weren't very nice. The olden days changed (mostly) because Europeans changed the rules, even though they could benefit under the old rules. And if reparations become a thing, I'm going after free Arab oil, and free Icelandic (Viking) fish.
Posted by: Nick Rowe | November 08, 2015 at 08:20 AM
I hope to see Bryan Caplan's comments in this thread. :)
Posted by: ThomasH | November 08, 2015 at 08:31 AM
We actually have a good example of this theme being played out in the Occupied Territories.
Posted by: ThomasH | November 08, 2015 at 08:40 AM
It seems to me that countries are neither areas of land nor clubs of people but collections of institutions. For practical purposes, Alaska and Hawaii are part of the USA because they have successfully imported its institutions (partly but not entirely through the legal process of becoming US states), not because their people have arbitrarily joined the club of mainland US residents. The critical question is to what extent institutions are likely to be linked to geography. I think the extent is fairly large. Given that migration is difficult, an influx of Nigerians isn't likely to be large enough to change dramatically the institutions in place in the land known as Finland. On the other hand, if the Finns were simply to take over Nigeria, they would have a devil of a time trying to get their institutions to replace those currently in place in that physical location. So I think there is a case that open borders are a better policy than imperialism. (Maybe I'm damning with faint praise here.)
This seems somehow related to the question of monetary regimes and the possibility of deep negative interest rates. Can we get people to stop pricing in paper money terms? The answer isn't obvious, because, as with immigration and imperialism, institutions aren't necessarily easy to predict or control. Anyway, sorry for the digression.
Posted by: Andy Harless | November 08, 2015 at 09:04 AM
I've already noted to my wife that we should move to Canada from here in the US. The precipitating change would be another republican party electoral success. It would signal that I do not belong.
I would prefer a common sense place that still has self-govt working for the bulk of society, and with the Trudeau election Canada looks very, very good.
So how do I do that; aren't your immigration laws in the way a bit?
Wouldn't Canada be even better if some 10 M US liberal-thinking, common sense people moved there (and since I am talking mainly about those who have the wherewithal to move, this group would bring personal net worth, so no economic drain, quite the opposite I think)? Shouldn't you be competing for in-migration now?
Posted by: JF | November 08, 2015 at 09:12 AM
I think you underestimate the extent to which geography does matter. In your example, bringing Finland to Nigeria, where would the Fins get their vodka? World they bring all their crops and institutions to Nigeria? In essence a Neo Finland without the snow? That is imperialism or as Crosby terms it Ecological Imperialism. You are suggesting that only the political mileu be imported but So much of culture evolves around the available resources and climate, that I ain not sure that Nigerians could ever be Fins. That is not to say that there can be no democracy in Nigeria, but it would be Nigerian democracy with it's own quirks. Aside from that, as an economist you should be well aware how much space matters. Things closer together are more similar than things far apart.
Posted by: Nicholas | November 08, 2015 at 12:35 PM
One of my first thoughts on reading this post was, "but of course the people who actually go to Finland are likely to invest more in adapting to Finish society than the hypothetical people who would have Finland come to them!" I wonder the extent to which migration works because migrants don't fully reflect their society of origin, but are the ones who are motivated/ambitious/flexible enough to leave?
This should be testable enough; the harder it is to move to a country (ideally for exogenous reasons like geography), the better-off the migrants there should be, ceteris paribus. I assume there's a literature on this...
Posted by: Jacob | November 08, 2015 at 12:40 PM
Nick,
"Economic theory, and econometric studies, clearly show that competition between countries for people and land will maximise economic welfare just like competition between firms for customers. Customer loyalty to a particular brand reduces competition, and leads to a less efficient allocation of resources."
This is a bad analogy simply because efficient allocation of resources in economics assumes a fixed supply of those resources. Has there, is there, or will there ever be a fixed supply of laws?
At the extreme, I would choose the system of laws that I write myself - I am king of my own country. If everyone operates based upon that premise - we each as individuals obey our own set of laws - would economic welfare improve or falter?
Posted by: Frank Restly | November 08, 2015 at 12:52 PM
JF: Let's face it: 1776 and all that was a bit of a mistake, in hindsight. Can't have any republicans up here though, only loyal subjects of Her Majesty.
Andy: " Given that migration is difficult, an influx of Nigerians isn't likely to be large enough to change dramatically the institutions in place in the land known as Finland. On the other hand, if the Finns were simply to take over Nigeria, they would have a devil of a time trying to get their institutions to replace those currently in place in that physical location. So I think there is a case that open borders are a better policy than imperialism. (Maybe I'm damning with faint praise here.)"
rsj made a good comment on this, IIRC, on a previous related post. Something like: we need some sort of non-linearity or hysterisis in the function that relates institutions to people, to explain why one sort of migration would be better than the other. If you slowly add Nigerians to Finns, the mixture is mostly Finnish. If you slowly add Finns to Nigerians, the mixture is mostly Nigerian. Even if you end up with the same 50-50 in both cases. Lets call it the Mayonaisse effect (add oil to eggs or eggs to oil??)
Spot on with monetary regimes, I think. Network effects create hysterisis.
Jacob: that sounds reasonable to me. A lot depends though on whether you get a trickle of immigrants from various sources or a flood from one place all at once.
Posted by: Nick Rowe | November 08, 2015 at 05:05 PM
Andy: on immigration there are numerous examples of large scale immigration of one people into the geography of another people. Zionists and palestine (though Uganda was considered - wonder how that would have worked out), Armenians in LA, Chinese in Singapore, chinese into various "China town"s, Hispanic into southern US, Indians into England, Huns in Italy, Mongols in China, Mongols in India, Britans into England, Arabs into northern Africa and southern spain, English and Spanish into Americas, etc etc etc.
A small immigration seems more likely, but large immigrations - even by militarily weak people - does happen.
Posted by: Squeeky Wheel | November 08, 2015 at 10:32 PM
Nick, I love your idea! ... and I'm fully prepared for my bit of California to proudly hoist the Maple Leaf over our courthouse... depending, of course, on the outcome of the 2016 election. Perhaps I'll write a letter to the editor referencing this post.
Posted by: Tom Brown | November 08, 2015 at 11:53 PM
It'd be an interesting experiment to have the Turks and Caicos voluntarily join the Canada club and see if how it works out. There wouldn't be the same complications associated with colonialism because they'd be doing it voluntarily.
No doubt there would be many professors from a variety of disciplines - including economics - willing to make the sacrifice to do field research.
Posted by: Patrick | November 09, 2015 at 02:32 AM
Nice theory. I have often times wonder why Spanish farmers doesn't grow tomates in Africa instead of dealing with illegal immigrants to do the plantage work in Spain. But But it might not be possible without Star Wars class imperialism.
In practical terms it is not about the half ready to immigrate but the small minority making chaos in the countries where people immigrates from. For example Iraq where most of the people is coming to Finland is a mess because of well you know why. It is not like the solution can be pressed from outside - democracy seems not to be an exportable good. We better to concentrate on substitutes like education..
Posted by: Jussi | November 09, 2015 at 02:53 AM
"I think that's where it makes least sense. Take the US for example. Open Borders would reward the African descendants of those who sold them into slavery, and (possibly) punish the African-American descendants of slaves."
I mean that a situation with Close Borders is one where Reparations would possibly make sense, not that Open Borders would be a form of Reparations. Assuming realistically that it'd be impossible to target the tax incidence which would fund reparations so that it falls only on descendants of slavemasters, I see no reason why a son of a Mexican immigrant who came here in the 1970's should pay for something that white people did back in the 1850's. But in a counter factual where US had had Closed Borders since the Civil War it'd might just be possible to make the descendants of those who actually owned slaves pay.
Posted by: notsneaky | November 09, 2015 at 03:41 AM
"The only reason mass slavery wasn't more common was that in Malthusian equilibrium, where people will work for food anyway, there isn't much point."
But your examples sort of point to the fact that slavery was quite common. Theoretically too that's at best a debatable proposition. In Malthusian equilibrium slave wages are driven down to the same demographically determined level as free wages. BUT at any point in time (even long run Malthusian equilibrium), a slave worker gets paid less than their marginal product. Which means that switching from a slave system to a free labor system entails losses for the slave owners.
Posted by: notsneaky | November 09, 2015 at 03:48 AM
notsneaky: I'm still trying to get my head around the Malthusian/slavery point. Right now I'm thinking that in Malthusian equilibrium mass slavery would not make sense (since free workers would work for the same as what it cost for the slaves to just barely reproduce themselves), but there would be exceptions, like salt mines with very high death rates, or enslaving people just past childhood (where the parents had already paid the investment).
Jussi: "In practical terms it is not about the half ready to immigrate but the small minority making chaos in the countries where people immigrates from."
Under Open Borders, it's not obvious to me that the latter would be more likely to migrate than the former.
Under Closed Borders both rich and poor peoples get to keep their own countries. Under Open Borders, poor people get to keep their own countries (because nobody wants to migrate there), but rich people don't get to keep their own countries. "Please sir, can we have our own country too please?" does have a certain resonance, but ethno-nationalism is lauded for the poor but condemned for the rich. It's funny that the Open Border people don't quote Kipling in support of their view.
Posted by: Nick Rowe | November 09, 2015 at 06:08 AM
Notsneaky,
Recall, though, in equilibrium the difference between the slave MPL and his "wages" (food, shelter, clothing) will represent the slaveowner's cost of capital. So the slaveowner is only worse off by switching to free labour because the shift typically entails his loss of capital (e.g. Emancipated slaves). But this wouldn't be the case if the emancipation of slaves was compensated (as I believe occurred on some British sugar Islands).
Posted by: Bob Smith | November 09, 2015 at 08:35 AM
"Please sir, can we have our own country too please?"
Well, you can (ie. enforce) but is it fair / efficient for the whole?
There are problems with exclusive clubs - the whole idea is straightly odds with the idea of democracy, isn't it? And the idea of nobility, as we are ignoring here the locationals issues, can be supported by the same words as closed borders. Please sir, can I keep my priviledges / birthrights?
"Under Open Borders, it's not obvious to me that the latter would be more likely to migrate than the former."
It seems to me that in many countries the problem is that a small minority gains from chaos, they couldn't rule with democracy, e.g. warlords in Africa. Those guys reap the benefits and are not going to leave.
Posted by: Jussi | November 09, 2015 at 08:58 AM
Slave workers get paid a fraction of their marginal product. Free workers get paid their marginal product. In long run Malthusian equilibrium the payment to either is driven down to a "subsistence wage". So w(Malthus)=w(free)=MPL(free)=w(slave)=p*MPL(slave), with p < 1 . The way this can happen is that MPL(slave) is greater than MPL(free). And the way that happens (without assuming productivity differences between the two) is that in long run Malthusian equilibrium the population of slave workers is smaller than a counterfactual population of free workers. And the way that happens is that along the transition path to that equilibrium, slave workers get paid less than free workers (***) so you wind up with less of them. And this is actually optimal from the point of view of slave owners who discount the future.
This is comparing a slave economy to a counterfactual free economy. But suppose we're in the long run and the status quo is slavery and consider what would happen if at that point the economy switched to free labor. The wage of workers would instantly go up from p*MPL(slave) to MPL(slave). Slave/land owner profits/rents would go down. Of course these higher wages would cause the population of the now-free workers to increases until their MPL goes down to MPL(free)=p*MPL(slave).
Another way to see it is that the slave owners always have the option of replicating the wages that would prevail under free labor if they so choose. Absent any "costs of keeping workers oppressed" that means they will always weakly prefer slave labor to free labor. If they discount the future (from point of view of slave/land owners, slaves are capital) they will strongly prefer slave labor to free labor. More profits today, fewer slave workers and lower profits tomorrow, but that's okay because slave owners are impatient.
While it may be true "free workers would work for the same" the actual wages in a free labor market would be determined by competition among landowners. With slavery the "wages" are determined by how much slave owners discount the future and how elastic population growth is with respect to wages.(**)
(**) Having slave and free labor co-exist is a bit messy. No steady state. The population of one type will either explode or go to zero. Lots of stuff depends on substitutability between free and slave labor (or the good produced by the free sector and the good produced by the slave sector)
(***) It's actually possible that for some kinds of production functions and some kinds of landlord utility functions, if you start with very low slave population, the slaves get paid more along the transition path than free workers. The slave owners effectively "breed them". For awhile. Then it reverts to wages lower than free workers to get that slave MPL higher.
(****) If there's the opportunity to import slaves from outside the economy then you get all the considerations that apply to the open economy Ramsey model.
But I think we're off topic now.
Posted by: notsneaky | November 09, 2015 at 09:30 AM
notsneaky: "And the way that happens is that along the transition path to that equilibrium, slave workers get paid less than free workers (***) so you wind up with less of them. And this is actually optimal from the point of view of slave owners who discount the future."
Aha! Got it. New point to me.
"But I think we're off topic now."
Yep.
Posted by: Nick Rowe | November 09, 2015 at 10:16 AM
Fascinating post, Nick, and great discussion, all. I'm a bit surprised to see very little discussion of how cultural assumptions -- which is a nice way of talking about religion -- shapes the political, legal, and social institutions that makes places like Finland, EU, Canada, US so attractive. It seems to me the conversation will run in circles unless you get into Dierdre McCloskey/John Paul II's territory.
Posted by: Brian Dijkema | November 11, 2015 at 09:19 AM
Thanks Brian! And it has been a good discussion. Trouble is, economists like me aren't really much good at discussing things like this. Dierdre would probably do better. But I don't think we should ignore them.
Posted by: Nick Rowe | November 11, 2015 at 10:25 AM
Is idea this different in a fundamental manner from Romer's charter cities project?
http://urbanizationproject.org/blog/charter-cities
Posted by: Anon | November 12, 2015 at 02:31 PM
Nick, I mean this with (some) seriousness. Why not look in North America where the Finns have colonialized? By far the best senior home I have ever seen (by orders of magnitude) is Finlandia village here in Sudbury. What the Finns have that works is a sense of community and togetherness. What the Finns have that doesn't work is a sense of community and togetherness. Some of my Finnish in-laws are only thrilled with their Finnishness now that they are hundreds of kilometers from their family.
What Finland did successfully was agree as a country on some guiding principles. The country is small enough and homogeneous enough that it worked. It also keeps close ties with the expat community. But let's be clear - it isn't for everyone and some of the common community infrastructure that led to this success (the Finnish Lutheran church for example) is losing its cultural hold.
I hope the institutions - educational, social etc - stand up to the coming changed. But Finland won't be the same in 20 years.
Posted by: Chris J | November 13, 2015 at 11:16 AM
There is a garland of small Finnish flags on my Christmas tree every year. This cultural strength comes with some real costs ;)
Posted by: Chris J | November 13, 2015 at 11:17 AM
One test of immigration arguments is to see how well the arguments apply to states, provinces, cities, etc. If someone moves from Manitoba to Ontario to take a job, it does not necessarily follow that the person wants the borders of Ontario to encompass Manitoba. The person might just be well matched to an employer that happens to be located in Ontario.
Having said that, there are probably many countries that, if given the choice, would like to be part of the US, Canada, UK, etc. For example, it would not surprise me at all that, if they were given a vote, the people in Hong Kong would have preferred to remain part of the UK rather than become part of China [http://www.rfa.org/english/news/china/hong-kong-03142013141313.html]
Posted by: BC | November 14, 2015 at 11:36 AM
Some historical food for thought: Algeria was a French colony for over a century, but its ten million native inhabitants eventually won independence from France (and expelled the million people of European ancestry) in a bloody eight-year war, 1954--1962.
Since the end of the war, significant numbers of Algerians have been emigrating to France. Today, some five million people of Algerian descent live in the country.
The borders have moved, and the people have been following them since. But maintaining French colonial domination was not a workable alternative.
Posted by: Ted | November 17, 2015 at 10:04 PM
It's not about the borders and the rules only.
It's about the wealth, and the systems in place that enable human flourishing.
The problem is that those who live in these countries do not want to share that.
When I move to Finland, I take part in all the benefits of being in Finland (as an illegal immigrant, say), including quadrupling my expected income and being in constant contact with people who will enable me to flourish.
To pretend that only the rules enable flourishing is Naivete. It's the arrangement of atoms all the way down. From the large scale cities to neighborhoods to public buildings, to houses, to their inhabitants, to their well fed brains, to their well selected genes, and it goes on and on. We live in an information economy, but the world is still made of matter. For a piece of matter the size of a human, it makes more sense to move to a better piece of matter, than to try to create a franchise wherever one is.
It's pure econophysics.
That said, a half-great solution is better than no solution at all, and yours pretty good, as far as the available ones go.
Posted by: Diego | November 18, 2015 at 01:28 AM