Why Is Opening Borders Good for Poverty Reduction and Economy?

Bryan Caplan 城读 2022-07-13

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Why Is Opening Borders Good for Poverty Reduction and Economy?

Opening all borders could eliminate absolute poverty worldwide and usher in a booming worldwide economy.

Bryan Caplan and Zach Weinersmith, 2019. Open borders: the science and ethics of immigration, First Second.

Sources:

https://www.smbc-comics.com/openborders/

https://www.hoover.org/research/graphic-case-open-borders

Policy-makers have long been locked in a heated battle over whether, how many, and what kind of immigrants to allow to live and work in the country. Those in favor of welcoming more immigrants often cite humanitarian reasons, while those in favor of more restrictive laws argue the need to protect native citizens.

But economist Bryan Caplan at George Mason University adds a new, compelling perspective to the immigration debate: He argues that opening all borders could eliminate absolute poverty worldwide and usher in a booming worldwide economy―greatly benefiting humanity.

You may not agree with every point of view and every solution of the book, but it does raise brainstorming questions, and some of the theoretical concepts and data are enlightening.

What makes this book special is its format, which presents arguments, evidence, and ideas in cartoons. To compensate for the limited text that cartoon can contain, which makes it difficult to fully develop, footnotes are included at the end of the book to provide additional explanations and give sources for data and arguments.

Chapter 1 presents the problem of global apartheid caused by the setting of national borders; Chapter 2 discusses the wage multiplier effect of open borders, which is estimated to increase global GDP by 50-150%; Chapters 3-5 refute common arguments against immigration: that it causes mass poverty, fiscal bankruptcy, migrant crime, and that it poses challenges to freedom; Chapter 6 offers keyhole solutions to common problems; Chapter 7, "All Roads Lead to Open Borders," provides a philosophical perspective on why open borders should be implemented. The chapter discusses each of the seven philosophical perspectives: utilitarianism, egalitarianism, libertarianism, cost-benefit analysis, meritocracy, Christianity, and Kantianism, and the authors argue that each philosophical perspective leads to the conclusion that we should have open borders.

Why can't countries just have open borders?

Four common arguments against immigration

The benefits of open borders: wage multipliers

The main economic argument in favor is one that Michael Clemens, an economist at the Center for Global Development, has made: namely, that when poor people move from areas where they are badly paid to richer countries like the United States, their wages multiply. A striking graph shows that the "wage multiplier" in moving from poorer countries ranges from a low of 1.5 for people coming from Mexico to a high of over 13 for people coming from Nigeria. This happens immediately and, therefore, the gain cannot be attributed to the skills they gradually gain here.

Many Americans gain, too. We gain as consumers from the new goods and services that are now somewhat less expensive. Four groups that are clear gainers are property owners (from the increased demand for housing); retirees (currently 25 percent of direct-care workers are foreign-born); working moms (from cheaper child care); and construction workers (the increased demand for housing leads to increased supply.)

China is the best example of benefiting from open borders in the past 4 decades. In 1976, China's real GDP, in 2014 dollars, was a measly $504 billion. Then when China moved closer to a market economy, hundreds of millions of Chinese farmers moved to cities to take advantage of the new opportunities generated by that market economy. The result: by 2014, China’s GDP was 20 times as high, at $10 trillion in 2014 dollars. And that's with a population that was only 47 percent larger. So per capita GDP increased from $538 to $7,333, an increase of 1,263 percent.

For the view that immigration imposes a fiscal burden, the authors give detailed data and estimation that the immigrant groups both high- and low-skilled, is predominantly of working age, with low numbers and proportions of children and elderly people, who pay more tax than they spend on welfare and thus have a low fiscal burden. However, the fiscal impact of low-skilled elderly immigrants is negative.

The authors also give strong evidence regarding concerns about immigrant crime, especially terrorism: from 1975-2015, the percentage of all deaths from terrorism in the United States was 0.44% of all deaths from murder, and the percentage of all deaths from foreign-born terrorism was 0.39% of all deaths from murder, which is much lower than deaths from car accidents and even lower than the probability of dying from lightning.

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