Trade, Development, and Immigration

Why we need to be more honest with ourselves on immigration

On 7 May 2019, the FREER group held a panel discussion entitled “Freer movement? Immigration post-Brexit”. One of the panellists was the IEA’s Head of Political Economy, Kristian Niemietz, the author of the paper “Immigration: Picking the low-hanging fruits”. The article below is a rough transcript of his opening remarks.


When we talk about “immigration”, we’re really talking about two very different subjects, which often get conflated. One is the economics of migration. The other is the cultural impact of migration.

The first issue is about the impact of immigration on the labour market, on the housing market, on the healthcare system, on the education system, on infrastructure, on public finances, and so on. The second issue is about the impact of immigration on less measurable outcomes, such as social and cultural cohesion.

These are very different subjects, and there’s little overlap between them. Depending on which of these you focus on, you can come to very different conclusions about what the “ideal” immigration system should look like.

If you follow the immigration debate in Britain, you can easily get the impression that the concerns people have are 90% about economics. We talk a lot about overstretched public services, a lack of school places, a lack of GPs, wage dumping and traffic congestion. Anxieties about immigration, it seems, are economic anxieties.

And I don’t buy it. I don’t think this is true. I don’t think this is the way most people think about immigration.

In fact, as I show in my paper, there is good evidence to suggest that concerns about immigration are predominantly cultural, not economic. Cultural concerns outweigh economic ones.

But they are also much harder to talk about. People who have these concerns generally don’t want to express them, because they’re afraid that they will be branded as bigots and racists. Understandably so. It is, of course, true that accusations of that kind are thrown around very carelessly and casually these days, and not always in good faith.

So people hide behind economic arguments. Economic anxieties become a way to rationalise cultural anxieties. It’s easier to talk about school places and overwhelmed GP surgeries. But that doesn’t mean that that’s what this is truly about.

If you don’t believe that this is a fair description, just do the following simple thought experiment. Imagine the 5 million British expats, who live permanently abroad, decided to move back to Britain. All of them. All at once.

This would not technically be immigration. But in terms of its economic impact, it would be indistinguishable from a very large wave of migration.

But the public reaction would be very different. Do you think anyone would be opposed to this? Do you think anyone would argue that those people should not be allowed back in, because we don’t have enough school places or enough nurses?

Of course not. There would be near-unanimous agreement that those people should be welcomed back, and that, if the capacity to accommodate them is not there, then the solution is to expand that capacity, not to shut out the people.

If there aren’t enough houses – build houses.

If there aren’t enough roads – build roads.

If there aren’t enough nurses – hire nurses.

If there aren’t enough teachers – hire teachers.

And where are the resources to do this supposed to come from? The answer is very simple. The newcomers (or returners) themselves would provide them. Those people would not just passively consume public services that are already there. They would also actively contribute to the provision of new and expanded public services. They would not just be NHS patients. They would also be taxpayers, they would be employers or employees, and some of them would themselves be doctors, nurses, teachers, engineers, construction workers. So broadly, they would provide the additional public services themselves. In aggregate terms, they would pay their way.

This little thought experiment shows that the capacity argument is nonsense. In economic terms, immigration is just a source of population growth, it just means that Britain becomes a bigger country, population-wise. And you cannot sensibly claim that it’s impossible to provide housing and public services for a population of more than 66 million people. Because there are already countries with a population much larger than that. Japan has a population of almost 130 million people, and a much higher population density than Britain, and they’re doing far better than Britain in terms of housing affordability and healthcare outcomes. Germany has a population of 82 million people, and roughly the same population density as Britain. They’re also doing far better in terms of healthcare outcomes and housing affordability. Population size is irrelevant. It’s a complete non-issue.

Now don’t get me wrong. I am not suggesting that there is no difference between immigration, and a return of expats. Of course there’s a difference. That’s the whole point of the exercise. It’s about separating the economic impact from the cultural impact. In the case of the homecoming expats, there would be no cultural impact. Integration would not be an issue. English language skills would not be an issue. There would be no tensions between those homecomers and the people who are already here. Nobody would worry whether they fit in well, whether their values are compatible with those of the settled population.

That’s why the system that I’m describing in my paper is not a system of completely open borders. It stops well short of that. If you’re an open-borders libertarian, which, I’m guessing, some of you will be, then you will not be fully satisfied with this paper.

This is because I accept that there are cultural anxieties around immigration. I don’t fully share them myself, but I certainly don’t dismiss them as bigotry. I think there’s nothing illegitimate about feeling somewhat protective of the character of your local area. There’s nothing illegitimate about worrying about social cohesion.

What I’m saying is that we should stop obsessing about “the scale of immigration”. The scale is irrelevant. The numbers are irrelevant. We should abolish the net migration target. We should abolish the visa cap. We should abolish all policies aimed at reducing overall numbers.

And above all, we should stop fighting proxy wars. We need to be more honest about immigration. We should stop hiding behind economic arguments when the arguments we’re having are not really about economics at all. And we need an immigration policy that accommodates the public’s true concerns, without destroying the huge economic benefits of a liberal approach to migration.


Head of Political Economy

Dr Kristian Niemietz is the IEA's Head of Political Economy. Kristian studied Economics at the Humboldt Universität zu Berlin and the Universidad de Salamanca, graduating in 2007 as Diplom-Volkswirt (≈MSc in Economics). During his studies, he interned at the Central Bank of Bolivia (2004), the National Statistics Office of Paraguay (2005), and at the IEA (2006). He also studied Political Economy at King's College London, graduating in 2013 with a PhD. Kristian previously worked as a Research Fellow at the Berlin-based Institute for Free Enterprise (IUF), and taught Economics at King's College London. He is the author of the books "Socialism: The Failed Idea That Never Dies" (2019), "Universal Healthcare Without The NHS" (2016), "Redefining The Poverty Debate" (2012) and "A New Understanding of Poverty" (2011).

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