Immigration, exploitation, and social democracy

A simple, amoral, model of an immigrant is a pair of hands attached to a mouth. From the selfish, amoral, perspective of incumbents, in aggregate, immigration is desirable if the value produced by the pair of hands is greater than the value eaten by the mouth.

However, as always in social affairs, the phrase “in aggregate” is home to many devils. From the perspective of many incumbents, immigrants are undesirable not because they are lazy scroungers, but precisely because their hands are willing to work so hard relative to what their mouths are fed. Exploitable, exploited, immigrants compete with domestic workers, and threaten labor bargaining power writ large. Exploiting immigrants domestically then comes to parallel exploiting comparative advantage internationally (where, of course, comparative advantage often means exploitable labor in foreign lands). It creates a bigger (domestic) pie “in aggregate”, but creates winners and losers. In a political system that enfranchises the potential losers, especially one with lots of veto points, exploitative immigration that would be valuable in aggregate may be blocked.

This can be understood as a kind of coordination problem among incumbents. If the winners from exploitative immigration would compensate the losers for their loss of bargaining power and so income, then all incumbents could be made better off. But institutionally, what kind of mechanism could be made to do that? Well, suppose we tax the increment of real income that employers gain from both exploiting new immigrants and hiring native workers on more favorable terms, and use the resulting revenues to fund benefits for the poor? No, that wouldn’t do it. Domestic full-time workers, even under somewhat less favorable terms than they might have faced without immigration, are unlikely to qualify under the society’s definition of “poor”. Households anchored by such workers define the bulk of the public. In relative terms they are typical, median. So a state that redistributes from the richest to the poorest won’t solve the coordination problem that prevents incumbents in aggregate from seeking to exploit new immigrants. A “liberal welfare state” isn’t enough.

Suppose instead we tax the increment of real income that employers gain from both exploiting new immigrants and hiring domestic workers on more favorable terms, and use the resulting revenues to fund universal benefits? These do reach, and so can compensate, the incumbent workers whose bargaining power has been reduced by exploitative immigration. States that redistribute into universal benefits, rather than help for the poorest, we describe as social-democratic.

Often social democracy and immigration are thought to be in tension with one another. The assumed basis for the tension, however, is that social democratic benefits will enable immigrants’ mouths will eat more than their hands produce. When immigration and immigration policy are framed in humanitarian terms, and if immigrants are provided social democratic benefits immediately and on the same terms as incumbent citizens, then yes, there are tensions between social democracy and immigration.

But if immigration and immigration policy are framed in selfish terms, then soft, pink social democracy becomes a hard-nosed solution to the coordination problem that prevents enrichment of incumbents by exploitative immigration. The mistake made by actual social democracies, with respect to immigration, hasn’t been their openness to it. On the contrary, it’s been their passivity, allowing mass immigration to be defined in reaction to humanitarian crises elsewhere rather than designing voluntary pathways for large numbers of people to migrate under terms that support rather than undermine the social democratic benefits enjoyed by incumbents.

What might these pathways look like? First, in order to minimize their effect on incumbent worker bargaining power and so discontent, immigrant workers might be employed in domains that are distinct from the occupations of incumbents, “they only do the work that we don’t want to.” Then, in oversimplified, completely amoral and antisocial terms, you might imagine a permanent, growing corps of guest workers, who come voluntarily to be employed on openly exploitative terms, because despite the exploitation they still earn more when employed productively in developed countries than they would earn at home.

We do see this kind of policy, in Middle Eastern countries especially. However, wiser polities will not craft policy in completely amoral and antisocial terms. Antisocial policy might make a polity wealthier temporarily but also weaken it, increasing the costs (economic and social) of maintaining domestic security and cohesion, while creating reputational and diplomatic vulnerabilities. Social democracies in particular flatter themselves as solidaristic and virtuous polities. Policy that undermines that often self-fulfilling self-perception should be scored as very costly.

So a canny social democracy will craft institutions of gradual integration. New immigrants would begin highly exploited in sectors of the labor market segmented from incumbent workers, but over time the exploitation and segmentation they face would decline. Second generation immigrants, or those who migrate as children, would be integrated as fully and quickly as possible. Incomplete integration and continued exploitation of second generation immigrants is a source of social instability and often a security concern, as unlike first generation immigrants, second generation immigrants have not chosen their status and have no lived experience of opportunity or escape, gratitude for which might compensate for the fact of exploitation.

Slow integration out of segmented, exploitative labor markets into the more comfortable mainstream is a tried and true formula for value extraction by immigrant-accepting nations. It’s been the formula the United States has used, when it has best succeeded as a “nation of immigrants”. Interestingly, it is also a formula urban China has stumbled into, accepting internal migrants from rural areas on exploitative terms, but working increasingly to integrate their children. Usually this strategy is tacit rather than open. In the United States, some categories of legal immigrants have full rights, but nevertheless wield limited bargaining power due to language barriers and various forms of ghettoization. Some categories of legal immigrants (seasonal workers, H-1B visa holders bound to a sponsoring employer) face formal restrictions that limit their bargaining power and constrain the domains in which they work. Illegal immigrants, of course, lack nearly all legal protection and so work under extremely exploitative terms.

It would be better for all concerned if de facto policies of exploitative immigration were formalized and their terms rendered explicit. So long as immigration into developed countries is perceived by incumbents as costly and altruistic, the large fraction of such countries’ populations that struggles to afford the costs they face already will oppose it. While the terms of exploitation-until-slow-integration remain tacit and denied, societies will be needlessly riven by conflict between justice-oriented activists, who will point to the exploitation and proclaim it illegitimate, and business interests whose capacity to benefit from exploitation drives the opportunity to immigrate in the first place. Developed country populations should understand how accepting and in fact competing for immigrants is in our direct material interest. With segmented labor markets and social democratic benefits, that “our” can include the whole incumbent population. Immigration is what makes universal health care affordable, one might point out, if inexpensive nurses’ assistants are drawn from the new arrivals. Migrant construction workers let us build social housing. Immigrants should understand in advance the exploitation they will encounter, but also its duration and limits. If the terms of both temporary exploitation and eventual full integration are explicit, they become a basis for competition among destination countries to attract migrants. New immigrants might start off enjoying somewhat threadbare public benefits, but graduate into full citizenship with full benefits over an agreed period of time. A path to full citizenship is essential on social grounds, for societies that do not wish to become divided into oppressively sustained permanent castes.

Under this policy regime, developed countries come to compete over the rate of exploitative immigration they can attract and tolerate. Since the surplus from exploitation declines over time with each cohort of immigrants, sustaining the surplus requires continual new entrants. Different countries’ social capacity to accommodate or integrate immigrants will always be a limiting factor, and quite legitimately. But countries that find ways to ramp up their capacity to continually accept immigrants with minimal social or cultural disruption would benefit, directly and visibly, from doing so.

We began with a simple, amoral model of an immigrant, a pair of hands attached to a mouth, and a very economistic view of a polity as an aggregation of people seeking material value. We might add to our model of an immigrant a soul. An immigrant is not a mere object that produces surplus or costs, but a subject whose welfare we care about and whose fellowship we enjoy. Our polities are not mere aggregates of selfish people but also nations, groups that seek to thrive together and forge a common future. Accepting immigrants in ways that materially strengthen our polities is good for both the humans that join us and the nations that we constitute together. Obviously we can get it wrong. If we are too exploitative, or fail at our promise to integrate over time and (especially) generations, we can harm both migrants and the fabric of our societies. If we are too generous, or if we fail to distribute widely the surplus that immigrants generate, accepting newcomers may not be politically sustainable, and rather than integration we may end up with interethnic recrimination. But between those two hazards lies huge potential opportunity, for migrants, their children, and for the societies capable of accepting and, only temporarily, exploiting them.

Update History:

  • 30-Dec-2023, 4:20 p.m. EST: “but over time the exploitation and segmentation they face”

2 Responses to “Immigration, exploitation, and social democracy”

  1. Detroit Dan writes:

    Immigration is a force of nature, driven by inequality between countries, as well as by opportunity. Managing immigration is a complex task, as it involves ethnic, economic, political, and environmental factors in both the from and to countries, and also in international relations. Considering the U.S. as a nation of immigrants, for example, we see that attempts to control the process were at times racist and were generally ineffective in terms of justice for the natives (incumbents). We’ve been doing better in recent years, but tensions still exist and need to be addressed. This post provides some good broad principles for nations on the receiving side of human migration.

    There are also larger issues related to the forces driving and enabling immigration. Consider the matter of political intrigue. Yasha Levine is writing a book titled The Soviet Jew: A Weaponized Immigrant’s Tale. In my world view, we need to consider the role of global power politics with regard to immigration. To what extent are immigrants exploited not just for economic gain, but for political gain? Just as economic exploitation can harm workers in receiving nations, so can political exploitation harm political liberals in receiving nations. The political situation in Europe, since the failed Arab Spring, provides a clear, if not straightforward, example of this. Steve’s post addresses these political concerns in a practical manner, but the root cause is another matter.

    Looking at the West as a U.S.-centered empire is a useful lens in this respect. In an effort to strengthen the borders and extend the frontiers of our “liberal democratic” civilization/empire, we reward citizens of the empire with the ability to immigrate to the more prosperous nations of the empire. Similarly, we encourage dissidents in enemy nations to immigrate to nations within the empire. In this manner, the Western empire is strengthened politically in relation to foreign competitors such as Russia and China. There is a risk that healthy competition between empires becomes overshadowed by power politics and propaganda, with immigration being weaponized. How should our policy prioritize amongst applicants so as to promote peaceful and cooperative international relations?

    So I am agreeing with the post, while also urging consideration of the larger geopolitical framework. Thanks as always for the thought provoking and constructive words.

  2. Jonathan Monroe writes:

    While this is a good theory of how the politics of immigration should work in a well-led social democracy with rational self-interested voters, it doesn’t describe how immigration politics does work in the Anglosphere.

    If immigration politics was driven by rational self-interested voters, we would see low-wage workers opposing immigration and pensioners supporting it. In fact pensioners are the core vote for UKIP/Brexit/Boris and are heavily over-represented among anti-immigration Republicans. The strongest pro-immigration constituency is “woke” white people, who are disproportionately young – and who are very clear that their voting behaviour is driven by values and not interests.