Sunday, 25 February 2018

Economic Myths: Immigration and economic growth

City AM is a cheer leader for landlords and banks (it's the newspaper equivalent of the Taxpayers' Alliance). It has consistently been in favour of liberal immigration policies for foreign workers, which gives us a bit of a clue a to who benefits most from immigration of foreign workers. NB, I am heartily agnostic on the issue and have no strong view one way or another.

But, like the right wingers who insist that reductions in tax rates always lead to higher tax revenues overall, they have jumped the shark with this:

Economists have repeatedly warned that a government can either have economic growth or it can have net migration reduced to the tens of thousands.

It cannot have both.


Woah, woah, woah! If that were true, then overall global GDP growth would always be zero. It would increase in immigration countries and fall in emigration countries in equal and opposite measure. That is clearly not the case, and I doubt that any serious economist has ever said anything quite as stupid as that.

7 comments:

Mike W said...

'Economists have repeatedly warned that a government can either have economic growth or it can have net migration reduced to the tens of thousands.'

And insofar as you can use that fine theory to explain lets say, Japanese economic growth from 1945,then it is surely true and sound :) :)

It made me think: It is Steve Keen's constant refrain that we ask Neo Lib economists: who have removed banks and money from their 'barter model': to explain how to use central banks, money, and money creation to Guv and us serfs. Do we have the same problem with the Neo Libs who have removed population (Malthus) and demographics from the center of their thinking?

I always find it hard to track down who, in fact, is advising Guv on our population/economics: which academic department they are actually trained in: and what models they use. But I'm guessing here not: 'Imagine Robinson and Crusoe on an island, Robinson has two hooks, etc, etc.

Mark Wadsworth said...

MW, re Japan, excellent example of a zero-immigration, zero-population growth country. That's exactly the sort of thing I mean.

Mark Wadsworth said...

As to who is advising the govt on immigration? Some unholy alliance of the EU, bankers, landowners and the do-goody PC brigade.

paulc156 said...

GDP growth is interesting but what really matters is obviously GDP growth per capita. You could double the population and double GDP and on average no one would be better off. In truth a good bit of our GDP growth in recent years is due to such population growth. Investment is far more important and insipid investment growth such as we have had is perhaps the flip side of large scale net inward migration.

Mark Wadsworth said...

PC, exactly. Whereby "investment" is devilishly difficult to measure.

L fairfax said...

Paulc156
"GDP growth is interesting but what really matters is obviously GDP growth per capita"
Yes it should be, not sure it matters to our politicians.

Mark Wadsworth said...

LF, the pol's couldn't give a shit.