Features Australia

Open borders capturing elites

22 April 2017

9:00 AM

22 April 2017

9:00 AM

Over recent months considerable global attention has focussed on the issue of immigration, but most of this discussion has centred on political developments. What is less well understood in the general community is the extent to which the ‘open borders’ philosophy has captured elite policy-making circles around the world, a phenomenon evident here as much as anywhere else.

The intellectual origins of the open borders movement are relatively recent, with real lift-off occurring in the 2000s through an odd combination of radical Left groups in Europe and economists in North America. In Europe, radical Left groups took the principle of freedom of movement within the European Union and extended it to the utopian aim of abandoning all borders across the globe and granting people the right to live wherever they wish. The British Communist Party, for example, now lists global open borders as a moral imperative and key political goal. Roughly parallel with the rise on the extreme Left, a number of economists, mostly working in the United States, started claiming borders to be inefficient barriers to people movement and modelling what they saw as the resulting economic costs from a global misallocation of resources. Economists form the intellectual core of the growing Open Borders movement advocating the end of migration restrictions.

With economists providing ‘proof’ that borders are inherently inefficient, high-minded policymakers of left and right now feel permitted to advocate for ever greater labour mobility. In a relatively short amount of time, a significant collection of mutually-supporting advocates has emerged: economists who assert efficiencies wherever mobility increases, diplomats who appreciate making offers of migration access, business people in developed countries who like lower-cost labour, and immigration advocates pressing for easier access to the First World.

Among international organisations such as the United Nations and the OECD, support for more open borders is strong and growing stronger. Many advocates recognise the political sensitivity in advocating such goals, so that when Hillary Clinton spoke of her ‘dream’ of hemispheric open borders it was to an ‘off-the-record’ meeting at a Wall Street bank rather than a public audience.

Australia is not immune to these global developments, and among thought-leaders and policymakers the support for open borders is increasing. In December Australia’s pre-eminent foreign policy think tank, the Lowy Institute, produced a report arguing that Australia should grant Pacific Islanders unlimited access to live and work in Australia. Co-authored by a former senior Reserve Bank official, the report estimated that around 900,000 islanders would move to Australia and compete with mostly lower-skilled Australians for jobs. The report accepted that there might be risks to Australia from lower wages and the development of a welfare-dependent underclass, but argued that the ‘profound development benefits’ to our neighbours outweighed these dangers. Institute of Public Affairs senior researcher Dr Mikayla Novak, regarded as one of Australia’s leading classical liberal economists, has recently advocated completely open borders as being ‘economically beneficial, morally virtuous.’ The former Treasury official claims that such a move would potentially double world output and alleviate poverty.

Earlier this year the ACCI made the radical suggestion that genuine free trade entails the free movement of people in addition to goods and services. ‘If the [free trade] deals genuinely sought free trade,’ wrote CEO James Pearson in the Financial Review, ‘they would be simple documents stating that the parties agree there shall be no restrictions on trade, investment or movement of people between the two countries. Full stop. That’s it.’ (Italics added).

The notion that FTAs should remove all barriers to people movement between countries is extreme, but it is building on the increasingly common practice of governments to incorporate immigration measures in free trade deals. Where FTAs once dealt with issues like beef and cars they are now increasingly seen by government officials as opportunities to increase imported labour.

There are a number of problems with these developments, so let’s start at the top. The economic theory that having borders is inefficient is – not to put too fine a point on it – preposterous. A world without borders would be Mad Max mayhem rather than Rousseauian picnic, and the anarchy unleashed by uncontrolled migrating masses would see global economic activity plummet. Also nonsensical is the assumption that increasing labour mobility is inherently good for the economies of developed countries. Countries have optimum levels of immigration up to which their economy benefits and beyond which prosperity diminishes.

At excessive levels, economic impairment doesn’t just happen through burdens on welfare systems and government services, and possible downward pressure on domestic wages, but the potential importation of values antithetical to liberal democracy (such as authoritarianism, tribalism, nepotism, caste-ism, racism, theocratism, hostility to free speech and science, etc.). Such developments can invite negative secondary effects as unhappy domestic populations resort to populist policies as remedies. Open borders advocates regard countries like France, with its recent history of large scale immigration from poor countries, as immigration success stories where barriers should be removed altogether, but most observers would accept that the Enlightenment values that underpinned France’s prosperity are under threat from misguided government policy.

The end product of the open border economic assumptions, mistaking volume for prosperity, is a permanent ratchet towards convergence with less developed countries. A slide towards the status of a middle-income country is quite possible even as economists tout the higher overall GDP. So what is the solution?

On his first day as PM, Malcolm Turnbull made a top priority of maintaining Australia’s status as a high wage, First World country. This was the right call from the leader and it should remain the lodestar guiding policy across the board. Policymakers should ignore the siren calls of open borders advocates and treat borders and limits on immigration levels as inherently efficient prerequisites for maximising economic strength.

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