Piketty Rediscovers Friedman
Soon he'll find out about supply and demand, incentives even...
A standard piece of wisdom from St Milt:
There is no doubt that free and open immigration is the right policy in a libertarian state, but in a welfare state it is a different story: the supply of immigrants will become infinite.
If everyone here gets oodles of money from the state - from everyone else that is - and anyone can come here then the system’s simply not supportable. QED.
Which makes this from Thomas Piketty so interesting:
Michael Sandel: Let me test your international socialist principles with a question about borders. Is there any good principled reason not to have open borders?
Thomas Piketty: I think the free circulation of people always comes with some specific public goods that need to be financed, whether it’s education, transportation or the environment. To take an example, European Union member states have decided that you are free as a student to go to any E.U. country where you want to study. I think it’s a fantastic principle, one of the great achievements of the European Union. The only problem is that we didn’t plan anything to pay for this.
Students from Norway or Germany who go to French universities pay close to zero. But students from Mali or Bangladesh have to pay 5,000 euros or 10,000 euros each to come. Is this the best we can do? I’m not sure. I would like us to have more free circulation, greater possibilities for students to come. But this would have to come with some international tax regime that will pay for it.
That’s a specific example but it illustrates the general point I want to make. If we plan sufficiently well the funding of public services — universities, hospitals, housing, transportation, infrastructure — I don’t see any reason to have strong restrictions on free circulation. Of course, that’s a big if. But the point is we should be very close to free circulation and open borders.
That’s the same problem. The Piketty solution - “international tax system” - is that the people in the rich countries pay for a welfare state for everyone and therefore open borders are possible. Which, indeed, they would be. For the problem from both St M and TP is having to pay for immigrants. You can’t have the free flow if you’ve got to pay for them. To which there are two possible answers. Don’t allow the immigration that you’ve got to pay for or pay for everyone immigrant or not.
And to be honest about it I prefer the Piketty solution. No, really.
It’s not, in fact, possible to increase taxation in the rich countries. Well, not very much at least. Might be possible to squeeze another 5% of GDP - of everything - out in some places. But not much more than that. But the suggestion is that those rich world taxes now need to be spent on education, health care, child benefit and the rest for all 8 billion on the planet. Hey, we could even think of moral reasons why that should be so.
But think a little more. The amount that can be paid to any benefits claimant in the rich world in such a system is going to be minimal. It’s actually going to be about the amount that will pay for child benefit - say - in the scummiest poverty on the planet. We’ll be talking 50 cents a day sort of level. And, to be honest, I’m OK with that.
Yes, we all know that a $ is worth more to someone who only has a $ than to someone who has $100. The rich world poor do have $100 already. And most of the rich world poor do have $100 a day already - that’s $36,000 a year and yes, including rent, the NHS, free education for the kiddies and so on then they do. So, those rich world benefits recipients are exactly the people who should have money taken off them to provide those benefits for the global poor.
That is, a system of global benefits would mean benefits would be at global levels. Massively, hugely, below current rich world benefit levels. Which is great, obviously.
People have been misunderstanding Piketty. He’s been muttering about how we’re going to return to 19th, even 18th, century levels of inequality. What none of us realised is that he intends to aid us in getting there - in this example, making servants affordable again.
For if there’s to be a global welfare state then welfare benefits are going to be set by the living costs, living standards, of Addis Ababa. Which is absolutely fabulous - going to make servants in Aldershot entirely affordable, isn’t it?
Living in a European capital (800.000) with 50% immigrants and 70.000 students (30% foreign) i'd call this piece theoretical bs. There isn't a European nation where muslim immigrants haven't built parallel societies, holding profoundly unwestern and illiberal povs on democracy and church & state.
Add to immigration the import of US critical theory, woke and DEI ideas which have been adopted by almost the entire msm, punditry and politics: centrists (Christian democrats (what's left of them), classical / modern liberals), social democrats (what's left of them) and the green left. And add emerging political parties based on ethnicity, voting ethnic...(the whole 2nd chamber votes for a Turkey-critical motion while the ethnic Turks are the sole 'against' voters).
So let's trump St Milt (pun intended) and Sandel, Piketty AND obviously Worstall and their sterile abstractions which say nothing about civic life, society, nationhood and all the other vulgarities that stand in the way of the 'optimal' economy (these gentlemen - like all leftists - simply don't HAVE to reflect because they're not touched by the consequences of their positions) with Hayek:
'Intellectuals, according to Hayek, are drawn to utopian visions. First and foremost among those visions is the creation of a new social order, specifically one designed by “experts.” They also have the hubris to anoint themselves as the experts to design this new order. Hayek wrote:
The intellectual, by his whole disposition, is uninterested in technical details or practical difficulties. What appeal to him are broad visions, the spacious comprehension of the social order as a whole which a planned system promises'.
Boing...
I think the flaw in this argument is the assumption that migrants' incomes will not rise after immigration, and they will remain poor (and therefore net welfare recipients) upon moving to the west.
In fact, the vast majority of them will get jobs, just like the vast majority of western-born people do. Yes, their education levels are on average lower, which may push their wage levels down relative to natives; but they also have an age profile much more skewed towards young adulthood, which pushes those average earnings back up again. (People don't migrate here to get a pension!)