Time to reject false choices and fears about immigration

Basic freedom of movement across borders is fundamental to human dignity.

Srinivasa Ramanujan isn’t a name most people know, but his story illustrates the power of migration to improve the world.

Born to a poor family in southern India in the late nineteenth century, Ramanujan displayed a remarkable mathematical mind from an early age, developing complex theorums as a teenager.

He was a genius, but he left school in poverty and seemed destined to live a life of subsistence. By chance, Ramanujan was discovered by another Indian mathematician and ended up at Cambridge, producing ingenious new ideas and eventually becoming the first Indian to be elected a Fellow of Trinity College.

Ramanujan was lucky. Had he not been discovered when he was, he could have easily spent a life in poverty, his genius untapped and giving nothing to the world.

The west’s immigration laws make it remarkably difficult for latter-day Ramanujans to exploit their potential. Ramanujan represents not just the geniuses lying fallow in subsistence agriculture, but all human talent that is not being tapped to its full potential.

Whether the reasons are poor governance, cultural constraints, poverty or other restraints on human productivity, billions of people are being condemned to lives of relative squalor, with no way out.

A person’s productivity is enormously dependent on the circumstances they find themselves in. Taxi drivers in New York City, over 90 per cent of whom are immigrants, earn between $25,000 and $28,000 a year (£). Taxi drivers in, say, Benin can expect to earn less than $1,440 a year for exactly the same work.

Lowering the borders to allow more people from poor countries to come and work in the developed world would harness this and make the world dramatically richer in a very short space of time.

A 2011 study of the existing research around the GDP benefits of immigration by Michael Clemens of the Centre for Global Development (Economics and Emigration: Trillion Dollar Bills on the Sidewalk?) found that removing all barriers to migration could increase global GDP by between 67 per cent and a whopping 147 per cent – in other words, more than doubling global GDP. (In contrast, the studies reviewed found that removing all global barriers to trade – still an important goal – would increase global GDP by between 0.3 per cent and 4.1 per cent.)

Would these benefits mostly accrue to the host countries, depriving poor countries of the productivity of human capital? It doesn’t look like it. Development economist William Easterly has cited four reasons that "brain drain" from poor countries is a good thing: benefits to the migrants themselves, benefits to their families (through money sent back by those migrants), new skills and fresh ideas from migrants who do return home, and the global "brain gain" of tapping talent and unleashing the ideas of more people.

A World Bank study that compared the per-capita income gain to Tonga from microfinance, deworming programmes, conditional cash transfers and a seasonal migrant worker programme in New Zealand. The results were staggering – migrant workers sent home huge amounts of cash, increasing spending and investment in Tonga to raise per-capita incomes by 30 to 40 per cent - see graph below.

Graph from David MacKenzie on the World Bank blog.

We should reject the false choice presented by opponents of immigration between a fortress Britain and being "swamped" by immigrants. Fears of the welfare state being overrun are misplaced and do not reflect the reality that immigrants are actually helping to support state services. Immigrants to Britain pay more in taxes to the state than they consume in services – and since the average immigrant to Britain is young, we are counting on increased immigration to support our aging population.

There is a lot of evidence to suggest that immigrants are more entrepreneurial than the average person, as you might expect of someone who has travelled halfway across the world in search of a better life. A 2006 study in the US (pdf) found that "50 per cent of Silicon Valley engineering and technology startups were founded by immigrants (as were 25 per cent of such startups nationwide)." And, of course, the more innovation that takes place anywhere in the world, the better off we all are.

To libertarians and liberals, basic freedom of movement across borders is fundamental to human dignity. But everyone should be eager to make the world’s poorest better off and unlock the talent of more people like Srinivasa Ramanujan.

Sam Bowman is the head of research at the Adam Smith Institute

The backdrop to a speech about immigration. Photograph: Getty Images
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Theresa May's big thinker - an interview with George Freeman

The Conservative policy board chair on the meaning of Brexit, state intervention and whether "Mayism" exists.

Theresa May’s three months as Prime Minister have been marked by ruthless changes of both personnel and policy, from grammar schools to fiscal targets. The man tasked with overseeing the latter is George Freeman, a newly bearded 49-year-old who jokingly describes himself as “a designated thinker”.

“It’s a huge privilege,” Freeman told me when we met recently in Westminster. “As [May] has indicated, she’s determined to open up the policymaking process to good ideas from a much wider pool.”

After entering parliament as the MP for Mid Norfolk in 2010, Freeman distinguished himself as one of the most intellectually energetic Tory MPs. He founded the 2020 group of Conservative modernisers and became the first ever life sciences minister in 2014. Before this, he had worked for 15 years as a biotech entrepreneur.

Politics is in his blood. The Liberal prime minister William Gladstone was his great-great-great-uncle and Mabel Philipson, the first female Conservative MP, his great-aunt. Yet Freeman attributes his reformist zeal to the belief that “with privilege comes responsibility”. He boarded at Radley College after his parents, both alcoholics, divorced and has spoken of his “emotionally damaged” childhood.

It is unsurprising that May, confronted by the greatest policy challenge since 1945 – EU withdrawal – has called on his services. The chair of the Prime Minister’s policy board, to give Freeman his official title, was a passionate Remainer but told me “we are now all Brexiteers”. The “Brexit roar”, he explained, was “a mixture of very deeply felt concerns and complaints about globalisation, powerlessness and the growing gap between London and [other] places . . .

“There’s an understanding that if we simply delivered Brexit, and didn’t tackle the rest, we would only have dealt with some of the problem.”

His ambition was “to do for our generation what Disraeli did in the 19th century, in understanding that the extraordinarily challenging pace of franchise extension was also a huge opportunity to harness and fashion a New Model Conservative Party”.

Besides abandoning the surplus target (“to boost growth and investment in infrastructure”), Freeman cited welfare policy as a point of departure. The government would “better differentiate” between changes in the welfare budget and systemic reform – a division that May believes was eroded by George Osborne.

The Prime Minister underlined her commitment to industrial strategy by naming a new department after it. But what does it mean? “I think there is a recognition that we are embracing something unrecognisable from the failed ‘beer and sandwiches’ interventionism of the Sixties and Seventies,” Freeman said. “Twenty-first-century Conservative industrial strategy is about backing our science, innovation and knowledge economy, and other sectors where we have serious global leadership.” He spoke of “stepping in where only the state can”, citing the publicly funded Diamond Light Source synchrotron facility, which he recently visited with the astronaut Tim Peake. The government must be not merely “pro-enterprise”, but “more enterprising”.

May has endured her heaviest dissent over education, and Freeman was notably lukewarm about the idea of new grammar schools. “As well as her position” on the latter, he emphasised, “the Prime Minister set out a much broader vision”. Asked whether he understood MPs’ objections to academic selection, he said “there will be all the usual consultation and discussions through parliament about specific measures”.

The Prime Minister has entered office with greater ideological definition to her thinking than David Cameron, who struggled to reconcile his early vision with austerity. Can we speak of “Mayism”? “I’m not sure the ‘ism’ is helpful or appropriate at this stage. The Prime Minister is very strongly driven by her conservative values, and converting those values into effective policies to tackle the challenges we face. I think we have to wait for the judgement of history to define the ism.”

Freeman is close to “DC” (as he calls Cameron) and praised his premiership. “I was very sorry to see him go. But in the end, given the way the referendum turned out, it was inevitable. I thought he handled that whole last week in the most exemplary way: typical of the man. In time, I think he will come to be recognised as a transformational leader who brought the Conservative Party to terms with modern Britain.”

He rejected the former education secretary Nicky Morgan’s suggestion that May would struggle to “reach into” the marginal seats that the Tories won under Cameron. “Theresa May is appealing widely across whole swaths of the country as a One-Nation leader,” he declared.

With the re-election of Jeremy Corbyn, Freeman said, “the centre ground of British politics, once dominated by Blair and New Labour, has been vacated . . . That is a huge opportunity for a One-Nation Conservative Party to demonstrate our relevance beyond our core vote to those around the country who have clearly felt so marginalised.”

Corbyn’s triumph “illustrates the extraordinary challenge for mainstream political parties in this age of asymmetric, post-Brexit politics . . . We now have to use the opportunity of incumbency in government to tackle the root causes of the insurgency that has taken out the Labour Party.”

Freeman acknowledged the risk that Labour’s divisions would produce an internal Tory opposition.

“It also creates a question for the Conservative Party. Will we turn in on ourselves and generate our own arguments, or unite and reach out into the space that Corbyn has vacated?” 

George Eaton is political editor of the New Statesman.

This article first appeared in the 29 September 2016 issue of the New Statesman, May’s new Tories