The case for doing exactly the opposite of what Donald Trump is recommending

images-12The current debate in U.S. and European politics centers around: how do we strengthen our borders and prevent too many people from entering our prosperous countries?  But you might be interested to learn that a number of macroeconomists think that open borders and unlimited immigration might actually provide significant benefits—not just for the people looking for a better life, but also for the people already living in the prosperous nations.

The analysis starts with surveys of immigrants going back to ancient times, and including the people who migrated to the United States as the country was transitioning from a third world backwater to the most powerful nation in the world.  The immigrants, almost unanimously, were looking for an opportunity to make a better life for themselves and their families.

When workers move from a poorer country with limited opportunities, harsh regulations, rampant violence and impenetrable social structures, they typically double, triple or even increase tenfold their income, raising total world economic output accordingly.  A recent article in the American Economic Association’s Journal of Economic Perspectives has calculated that a world of open borders would double world GDP.  The article says that our immigration restrictions are the equivalent of leaving trillion dollar bills on the table.

Meanwhile, opening our borders would function as the biggest poverty alleviation program in history.  If the developed world were to increase their immigration flows enough to raise the labor force by just one percent, the additional economic value created would be worth more to the migrants than all of the world’s official foreign aid combined.

But what about the people already living in the country that suddenly opened its borders, either a little bit or a lot?  The economists point out that new immigrants often possess skills different from their hosts, and those differences enable workers in both groups to better exploit their special talents and leverage their advantages.  The additional GDP provides more tax dollars, more opportunities, more potential buyers of what companies are selling and more output to sell overseas.

The final argument is a moral one.  The United States experienced its most rapid expansion and prosperity as it experienced wave after wave of hungry, ambitious immigrants, and their energy created the country we live in today.  But now a mixture of religion and politics seems to suggest that we should now refuse others membership in our club.  But where does that come from in our religious background?  Is there any moral framework—unitarian, libertarian, Christian, Hebrew—that regards people from foreign lands as possessing fewer rights and moral worth than others who have been lucky enough to have been born in the right place at the right time?

The question that the economists are asking us to consider is: are we getting our political debates exactly backwards?  It’s an interesting question that almost certainly won’t generate a rational, considered political discussion.

About the Author: Bob Veres has been a commentator, author and consultant in the financial services industry for more than 20 years.  Over his 20-year career in the financial services world, Mr. Veres has worked as editor of Financial Planning magazine; as a contributing editor to the Journal of Financial Planning; as a columnist and editor-at-large of Dow Jones Investment Advisor magazine; and as editor of Morningstar’s advisor web site:

Mr. Veres has been named one of the most influential people in the financial planning profession by Investment Advisor magazine and Financial Planning magazine, was granted the NAPFA Special Achievement Award by the National Association of Personal Financial Advisors, and most recently the Heart of Financial Planning Distinguished Service Award from the Denver-based Financial Planning Association. 


JEP (25,3) p. 83 – Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?

What is the greatest single class of distortions in the global economy? One contender for this title is the tightly binding constraints on emigration from poor countries. Vast numbers of people in low-income countries want to emigrate from those countries but cannot. How large are the economic losses caused by barriers to emigration?

The Case for Getting Rid of Borders-Completely

No defensible moral framework regards foreigners as less deserving of rights than people born in the right place at the right time. Please consider disabling it for our site, or supporting our work in one of these ways Subscribe Now > Alex Tabarrok is a professor of economics at George Mason University.


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