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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Chuka Umunna calls for "solidarity" among Labour MPs, whoever is voted leader

The full text of shadow business secretary Chuka Umunna's speech to Policy Network on election-winning ideas for Labour's future, and the weaknesses of the New Labour project.

There has never been an easy time to be a social democrat (or “democratic socialist” as we sometimes call ourselves in Britain). Whereas the right can demonise the poor and extol the virtues of the market, and the hard left can demonise the market and extol the role of the state, our position of constraining the domination of markets and reforming the state is, by definition, more complex.

It is nonetheless the case that social democracy has a historic responsibility, in every generation, to renew democracy and preserve a civic culture. This is achieved not through soundbites and slogans, but through the hard-headed development of a progressive politics that reconciles liberty and democracy, new comers and locals to our communities, business and workers, in a common life that preserves security, prosperity and peace.  This historic mission is all the more urgent now and my determination that we succeed has grown not weakened since our election defeat last May.

But, in order to be heard, it is necessary to make balanced and reasonable argument that both animates and inspires our movement, and which is popular and plausible with the people.  The first is pre-requisite to the second; and there is no choice to be made between your party’s fundamental principles and electability. They are mutually dependent - you cannot do one without the other.

We are in the midst of choosing a new leader and it is clear to anyone who has watched the UK Labour Party leadership election this summer that amongst a significant number there is a profound rage against Third Way politics – as pursued by the likes of Bill Clinton, Tony Blair, Gerhard Schröder and others - as a rejection of our fundamental values.

In the UK there is a view that New Labour accepted an uncritical accommodation with global capital that widened inequality, weakened organised labour and we were too close to the US Republicans and too far from the European left.

I do not believe this is fair, not least because we rescued many of our public services from the scrap heap when we came to office in 1997 and there were very significant achievements  we should celebrate.  New Labour renewed our National Health Service in a fundamental way; we built new schools and improved existing ones; we set up new children’s centres all over the country; we brought in a National Minimum Wage; we worked with others to bring peace to Northern Ireland; we introduced civil partnerships.  Just some of our achievements.

However, though we may take issue with the critique, I do not think we can simply dismiss out of hand those who hold critical views of New Labour. Like any government, the New Labour administration made mistakes - it could and should have achieved more, and done more to challenge the Right’s assumptions about the world. In the end, it is not unreasonable to be ambitious for what your party in government can achieve in building greater equality, liberty, democracy and sustainability. It is far better we acknowledge, not reject, this ambition for a better world, as we seek to forge a new politics of the common good fit for the future.

Realising our values in office has been disrupted by globalisation and the surge of technological forces that are displacing and reshaping industry after industry.

Some argue that globalisation as an ideological construct of the right. But we must recognise that we live in an increasingly integrated world in which markets have led to an unprecedented participation of excluded people in prosperity, a rise in living standards for hundreds of millions  of people and a literacy unprecedented in human history – this is particularly so in emerging economies like my father’s native Nigeria. And the internet has led to a level of accountability that has disturbed elites.

Yet, this has been combined with a concentration of ownership that needs to be challenged, of a subordination of politics that requires creative rather than reactive thinking, and these global forces have exacerbated inequalities as well as helped reduce poverty.

So it is important that we understand the sheer scale and impact of new technologies. At the moment we are engaged in a debate about Uber and its threat to one of the last vestiges of vocational labour markets left in London, those of the black taxi cabs and their attainment of 'The Knowledge'. But the reality is that within the next decade there will be the emergence of driverless cars so we have to intensify our exploration of how to support people in a knowledge economy and the realities of lifelong learning, as well as lifelong teaching. As people live longer we will have to think about how to engage them constructively in work and teaching in new ways.

Once again, I'm addressing all of this, Social Democracy requires a balanced view that domesticates the destructive energy of capital while recognising its creative energy, that recognises the need for new skills rather than simply the protection of old ones. A Social Democracy that recognises that internationalism requires co-operation between states and not a zero sum game that protectionism would encourage.

Above all, Social Democratic politics must recognise the importance of place, of the resources to be found in the local through which the pressures of globalisation can be mediated and shaped. Our job is to shape the future and neither to accept it as a passive fate nor to indulge the fantasy that we can dominate it but to work with the grain of change in order to renew our tradition, recognising the creativity of the workforce, the benefits of democracy and the importance of building a common life.  Sources of value are to be found in local traditions and institutions.

This also requires a recognition that though demonstration and protest are important,; but relationships and conversations are a far more effective way of building a movement for political change.

One of the huge weaknesses of New Labour was in its reliance on mobilisation from the centre rather than organising. It therefore allowed itself to be characterised as an elite project with wide popular support but it did not build a base for its support within the party across the country, and it did not develop leaders from the communities it represented. It was strong on policy but weak on strengthening democratic politics, particularly Labour politics.

Over half a million people are now members, supporters or affiliated supporters of our party, with hundreds of thousands joining in the last few weeks. Some have joined in order to thwart the pursuit of Labour values but many more have joined to further the pursuit of those values, including lots of young people. At a time when so many are walking away from centre left parties across the Western world and many young people do not vote let alone join a party, this is surely something to celebrate.

So it is vital that we now embrace our new joiners and harness the energy they can bring to renewing Labour’s connection with the people. First, we must help as many them as possible to become doorstep activists for our politics. Second, I have long argued UK Labour should campaign and organise not only to win elections but to affect tangible change through local community campaigns. We brought Arnie Graf, the Chicago community organiser who mentored President Obama in his early years, over from the U.S. to help teach us how to community organise more effectively. We should bring Arnie back over to finish the job and help empower our new joiners to be the change they want to see in every community – we need to build on the links they have with local groups and organisations.

I mentioned at the beginning that in every generation Social Democracy is besieged from left and right but the achievements of each generation are defined by the strength of a complex political tradition that strengthens solidarity through protecting democracy and liberty, a role for the state and the market and seeks to shape the future through an inclusive politics. Solidarity is key which is why we must accept the result of our contest when it comes and support our new leader in developing an agenda that can return Labour to office.

Yes, these are troubled times for social democrats. All over Europe there is a sense among our traditional voters that we are remote and do not share their concerns or represent their interests or values.  There is surge of support for populist right wing parties from Denmark to France, of more left wing parties in Greece and Spain and in Britain too. There is renewal of imperial politics in Russia, the murderous and abhorrent regime of ISIL in the Middle East, volatility in the Chinese economy and in Europe a flow of immigration that causes fear and anxiety.

But, the task of Social Democracy in our time is to fashion a politics of hope that can bring together divided populations around justice, peace and prosperity so that we can govern ourselves democratically. We have seen worse than this and weathered the storm. I am looking forward, with great optimism to be being part of a generation that renews our relevance and popularity in the years to come.

Chuka Umunna is the shadow business secretary and the Labour MP for Streatham.