by Ha-Joon Chang in 23 Things they Don’t Tell you about Capitalism states something few heterodox economists are prepared to discuss:“Wages in rich countries are determined more by immigration control than anything else, including any minimum wage legislation. How is the immigration maximum determined? Not by the ‘free’ labour market, which, if left alone, will end up replacing 80–90 per cent of native workers with cheaper, and often more productive, immigrants. Immigration is largely settled by politics. So, if you have any residual doubt about the massive role that the government plays in the economy’s free market, then pause to reflect that all our wages are, at root, politically determined.” Chang, Ha-Joon. 2011. 23 Things they Don’t Tell you about Capitalism, Thing 1: There is no such thing as a free market“… the living standards of the huge majority of people in rich countries critically depend on the existence of the most draconian control over their labour markets – immigration control. Despite this, immigration control is invisible to many and deliberately ignored by others, when they talk about the virtues of the free market.I have already argued (see Thing 1) that there really is no such thing as a free market, but the example of immigration control reveals the sheer extent of market regulation that we have in supposedly free-market economies but fail to see.
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Lord Keynes considers the following as important: Ha-Joon Chang on Wage Determination in First World Nations
This could be interesting, too:
“Wages in rich countries are determined more by immigration control than anything else, including any minimum wage legislation. How is the immigration maximum determined? Not by the ‘free’ labour market, which, if left alone, will end up replacing 80–90 per cent of native workers with cheaper, and often more productive, immigrants. Immigration is largely settled by politics. So, if you have any residual doubt about the massive role that the government plays in the economy’s free market, then pause to reflect that all our wages are, at root, politically determined.”So why, then, you might ask, has the left been taken over by bizarre people obsessed with the cult of open borders?
Chang, Ha-Joon. 2011. 23 Things they Don’t Tell you about Capitalism, Thing 1: There is no such thing as a free market“… the living standards of the huge majority of people in rich countries critically depend on the existence of the most draconian control over their labour markets – immigration control. Despite this, immigration control is invisible to many and deliberately ignored by others, when they talk about the virtues of the free market.
I have already argued (see Thing 1) that there really is no such thing as a free market, but the example of immigration control reveals the sheer extent of market regulation that we have in supposedly free-market economies but fail to see. While they complain about minimum wage legislation, regulations on working hours, and various ‘artificial’ entry barriers into the labour market imposed by trade unions, few economists even mention immigration control as one of those nasty regulations hampering the workings of the free labour market. Hardly any of them advocates the abolition of immigration control. But, if they are to be consistent, they should also advocate free immigration. The fact that few of them do once again proves my point in Thing 1 that the boundary of the market is politically determined and that free-market economists are as ‘political’ as those who want to regulate markets. …
Countries have the right to decide how many immigrants they accept and in which parts of the labour market. All societies have limited capabilities to absorb immigrants, who often have very different cultural backgrounds, and it would be wrong to demand that a country goes over that limit. Too rapid an inflow of immigrants will not only lead to a sudden increase in competition for jobs but also stretch the physical and social infrastructures, such as housing and healthcare, and create tensions with the resident population. As important, if not as easily quantifiable, is the issue of national identity. It is a myth – a necessary myth, but a myth nonetheless – that nations have immutable national identities that cannot be, and should not be, changed. However, if there are too many immigrants coming in at the same time, the receiving society will have problems creating a new national identity, without which it may find it difficult to maintain social cohesion. This means that the speed and the scale of immigration need to be controlled.”
Chang, Ha-Joon. 2011. 23 Things they Don’t Tell you about Capitalism, Thing 3: Most people in rich countries are paid more than they should be
Under a logically consistent free market economics, free movement of people is essentially the corollary of free trade. A real free market means abolition of national border control, which is exactly what the extreme anarcho-capitalist and libertarian lunatics want, and what the neoliberal elite who control the EU want inside their union as well (that is, complete internal free movement of people, despite serious differences between Western and Eastern Europe in the standard of living and wages).
Why so many on the left have become so unhinged on this issue is the million dollar question.
BIBLIOGRAPHY
Chang, Ha-Joon. 2011. 23 Things they Don’t Tell you about Capitalism. Bloomsbury Press, London.