How Great We Are

billbartlett at dodo.com.au billbartlett at dodo.com.au
Wed Jun 5 01:09:59 PDT 2002


At 3:43 AM -0400 4/6/02, Yoshie Furuhashi wrote:


>>Please explain why they [the welfare state & open borders] are incompatible.
>
>Will there be enough jobs for all who would come if there were open borders? What would be the impact of uncontrolled immigration on wages?

Are there be enough jobs for all without open borders? Clearly the answer is no, so shortage of jobs doesn't imply the death of the welfare state. In fact it is the shortage of jobs which *necessitates* the welfare state.

As for the impact of immigrants on wages, they can effectively compete for most jobs all over the world even without emigrating. If the potential immigrants can't come to the capital, the capital can emigrate to where the surplus wage-workers are. Perhaps that is the best solution anyhow, but it is short-sighted to believe this doesn't have exactly the same effect on market prices for labour as the other way around.

The fact is that the jobs *will* go to those who will work cheapest, or as Jack London put it, give "more for least" and this will determine market prices for labour everywhere. The only difference is that, in a welfare state, welfare does at least put some kind of floor under market prices for labour. Either the capital will go to Mohammed or Mohommed will have to go to where the capital is. If capital must emigrate in order to take advantage of cheap labour, then tax revenue is lost in the old country, undermining the welfare state in that jurisdiction.

Bill Bartlett Bracknell tas



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