Archive for April 17, 2012

More Immigration Won’t Help Old White People

April 17, 2012 10 comments

One of the most important beliefs driving governmental support for increased immigration into western countries goes something like this.

Immigrants (and their kids) will be able to prop up the revenue collection apparatus long enough for old white people to collect their pensions and die of natural causes.

Are you wondering why I singled out the ability to prop up the revenue collection apparatus, rather than more popular reasons like jobs, growth, ideology or multiculturalism? Here is why.. As far as governments, at any level, are concerned those issues are of secondary importance. All governments, and private sector entities, are primarily concerned about the size and growth of their revenue streams. Only large revenue streams with robust growth can allow those in the system to skim enough without making them unstable and collapse onto themselves.

The need for growth is due to the fact that most activities of the government, and private sector, involve skimming ever larger amounts from the real economy into the pockets of the connected and privileged. The public sector and private sector are best seen as two sides of the same coin, rather than ideologically distinct entities. The major difference between them is that the public sector leaks its ill-gotten gains back into real economy far more readily than the private sector, and is therefore often the lesser of two evils. However both of them require a robustly growing real economy to survive for any length of time.

Which brings us back to the current situation in developed countries. The major long term problem for both governments and corporations alike can be summed up as-

Where is the growth in revenue going to come from?

As I have mentioned before- both the public and the private sector owe their very existence to the ability to skim productivity of the economy. However doing so also makes them larger, more rigid and more hungry. The ideal situation for them is one in why the body (system) grows faster than the cancer (major public and private sector beneficiaries). Modern medicine and contraception have decreased (if not eliminated) the very ability of the system to experience any significant endogenous growth.

The public and private sectors in their desperation to keep the revenue stream growing, or at least constant, have opted for ever increasing infusions of people from other countries. While there is some historical basis for this approach, I believe that it will fail to achieve the expected results this time around. Here is why..

1. Lack of adequate and speedy economic integration of new immigrants.

It is a fact that immigrants often have significantly lower incomes than their native born counterparts- even if they have an identical level of education and skills. Whether that is due to racism or anything else is a futile academic exercise. As far as the economy is concerned- lower income translates into lower revenue collection and consumption. It certainly does not help that many immigrants save, or repatriate, money and thus further reduce the potential revenue stream. To put it bluntly, for the purpose of revenue collection- immigration works only if it occurs on a large scale in a rapidly growing economy.

2. Incoming immigrants are no longer that desperate, poor or uneducated.

Another traditional way to exploit immigrants was based on the fact that they used to be desperate, poor and uneducated. The last 30-odd years have witnessed a massive socio-economic change in the world outside developed countries. The average immigrant is no longer that desperate, poor or uneducated- nor are the conditions in their country of origin as bad as they used to be. Cheap communication, outsourcing and globalization have also made inter-country moves rather easy. Consequently much of the leverage enjoyed by the public, and private sector, in developed countries is now gone.

3. Issues related to race and ethnicity.

As many of you aware, most recent immigrants to developed countries are not white. While that in itself would not have been a big issue- the combination of inadequate economic integration, better education, more options and higher self-worth make them significantly less willing to accept levels of abuse which their predecessors accepted without complaining. However the attitudes and behaviors of older white people towards these immigrants have not kept up with the rapidly changing reality. It seems that many white people still inhabit the 1960-1980 era (which is when many of them grew up) and harbor mystical beliefs which allow them to believe that the system won’t fail them regardless of what they do and how they behave towards the very people expected to foot their bills.

What do you think? Comments?