Three Cheers for Migrants!

borderless economicsMy favorite story in this easy read is that of Mei Xu, the founder of a multimillion dollar multinational firm straddling the US and China. Daughter of two teachers who were “re-educated” at labor camps during China’s Cultural Revolution, Mei was a journalism student at the University of Maryland in the early 1990s when she identified a market need in the US. Though Americans were in spoilt for choice when it came to apparel, she noticed, the same was not true in the case of home décor items. She asked her sister in China to send her for a sample of locally-made items, and took them to a trade show in North Carolina. Very soon she was receiving multi-million dollar orders from the likes of retail store Target, and today the annual sales of her company, based in suburban Maryland, are around $100 million.

The story illustrates many of the claims that author, a former business reporter for the Economist, makes in favor of greater international migration. People who cross borders to study, work, settle or to return back to their homelands tend to be unusually resourceful, and they weave a web of links along which information, ideas, capital, and contacts flow. And such flows enrich both the destination and the receiving countries of the migrants—a phenomenon that book describes with a engaging mix of reporting, testimony, and academic research. As an immigrant myself, I found this argument quite uplifting and endearing.

As an economist, I was already aware of some of the economic mechanisms through which immigrants enhanced economic growth. Immigrants augment the labor stock of rich countries and send massive amount of highly beneficial remittances to poor countries. What I learnt from the book were the so many other ways migrants enhance the their original and destination societies.

Because people tend trust people within their own ethnic or religious group, global migration, by extending these networks, makes a lot of global trade possible. Cases in point are the outsized role that the overseas Chinese and the Jewish Diaspora have played an in international trade. The diasporas also play an outsized role in the movements to reform their homelands. The economic success of the NRIs (Non-resident Indians) made their motherland reconsider its moribund economic policies in the 1990s. The Chinese diaspora provide a safe haven for Chinese dissidents who continue to push for reform from the outside. And America’s position as the top destination for international migrants gives it an enormous competitive edge, and by successfully assimilating the immigrants, the country also wields enormous soft power across the globe. Unfortunately, the country is in danger of frittering away its enormous advantage due to the misguided resistance to immigration of many within the country. It has not been able to reform its immigration system to take better advantage of its position.

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