Another Great Argument In Favour Of Immigration

Which is that immigration can shake up the power and economic structure of the society into which people are immigrating. This is of course what some people worry about concerning immigration. But it is entirely possible for a society to become too static in economic terms and thus something that shocks that stability can be beneficial to all:

Mass migration to the United States shaped the U.S. economy in a variety of ways. Most vital was the continuous instability it brought. Local monopolies of labor and enterprise were broken up by immigrants. Techniques of production were upset by the succession of new views and conflicting attitudes. Where business had a monopoly, where labor controlled entry to an occupation, where engineers promulgated a traditional method of production – there resources were unlikely to be used with high efficiency. But the free market in ideas, the persistent competition of novelty, kept surfacing ever more efficient production techniques, then got them adopted.

Think this through in a slightly different manner. The way in which entry of a Walmart into a local economy kills off the Mom and Pop stores. This is, of course, why we see rather large numbers of the sort of people who own local retail businesses agitating against the idea that Walmart should be allowed to enter their local market. But the entry of that Walmart into that local market undoubtedly lowers prices for consumers: which is the point of our having an economy in the first place, we want consumers to be better off over time. Walmart is being those immigrants into that local economy. As is any business that expands into new territory of course: it’s an immigrant into a new part of the economy. And such business migration does much the same as immigrants themselves. Breaks up the locally stable economy.

We could look at this through the trials and tribulations of the old producers in that market. And indeed in some industries in the US, in some places, that is the way that we do look at it. Certain states, for example, insist that if you are to enter a certain line of business in that state then you must have the agreement of your soon to be competitors that you should be allowed to enter that business. The downside of this is of course that those extant businesses are able to extract oligopolistic profits from consumers due to the legal barriers to competition. And as above (and as both Smith and Bastiat pointed out) we’re really supposed to be looking at the economy from the point of view of consumption, not production.

Note that if the new business entering the area doesn’t make the consumers better off then that new business will fail in that area: it’s only if consumers become better off that they will patronise it after all.

So, another reason why immigration is to be welcomed: it stirs up the economy to the benefit of all.

My latest book is “23 Things We Are Telling You About Capitalism” At Amazon or Amazon UK. A critical (highly critical) re-appraisal of Ha Joon Chang’s “23 Things They Don’t Tell You About Capitalism”.

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Another Great Argument In Favour Of Immigration
immigration – Yahoo News Search Results
immigration – Yahoo News Search Results


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