Today both researchers and policy-makers agree that refugees admitted to the European Union constitute a net cost and fiscal burden for the receiving societies. As is often claimed, there is a trade-off between refugee migration and the fiscal sustainability of the welfare state. In this lecture, Peo Hansen shows that this consensual cost-perspective on migration is built on a flawed economic conception of the orthodox “sound finance” doctrine. By shifting perspective to examine migration through the macroeconomic lens offered by Modern Monetary Theory, Hansen is able to demonstrate sound finance’s detrimental impact on migration policy and research. Most importantly, this undertaking offers the tools with which both migration research and migration policy could be modernized and put on a realistic footing. Empirically, the lecture brings these tools to bear on the case of Sweden, the country that, proportionally speaking, has received the most refugees in the EU over the years while also having one of the most comprehensive welfare states in the EU.
Immigration
Economics has achieved much; there are large bodies of often nonobvious theoretical understandings and of careful and sometimes compelling empirical evidence. The profession knows and understands many things. Yet today we are in some disarray. We did not collectively predict the financial crisis and, worse still, we may have contributed to it through an overenthusiastic belief in the efficacy of markets, especially financial markets whose structure and implications we understood less well than we thought. Recent macroeconomic events, admittedly unusual, have seen quarrelling experts whose main point of agreement is the incorrectness of others. Economics Nobel Prize winners have been known to denounce each other’s work at the ceremonies in Stockholm, much to the consternation of those laureates in the sciences who believe that prizes are given for getting things right.
Like many others, I have recently found myself changing my mind, a discomfiting process for someone who has been a practicing economist for more than half a century. I will come to some of the substantive topics, but I start with some general failings. I do not include the corruption allegations that have become common in some debates. Even so, economists, who have prospered mightily over the past half century, might fairly be accused of having a vested interest in capitalism as it currently operates. I should also say that I am writing about a (perhaps nebulous) mainstream, and that there are many nonmainstream economists.
The lives of detainees in Australia’s immigration detention centres are controlled by a secret rating system that is opaque and often riddled with errors, a Guardian investigation has found.
Developed by Serco, the company tasked with running Australia’s immigration detention network, the Security Risk Assessment Tool – or SRAT – is meant to determine whether someone is low, medium, high or extreme risk for factors such as escape or violence.
Detainees are also rated for an overall placement and escort risk – which may determine how they are treated while being transported, such as whether they are placed in handcuffs and where they stay inside a detention centre – but aren’t given the opportunity to challenge their rating, and typically are not even told it exists.
Immigration insiders, advocates and former detainees have told Guardian Australia the SRAT and similar algorithmic tools used in Australia’s immigration system are “abusive” and “unscientific”. Multiple government reports have found that assessments can be littered with inaccuracies – with devastating consequences.
In principle, there is no reason why population growth must push up the cost of shelter. Immigrants need homes — but they are also disproportionately likely to work in construction and, thus, increase the economy’s home-building capacity.
The problem arises when governments effectively prohibit the supply of housing from rising in line with demand. Between 2012 and 2022, Americans formed 15.6 million new households but built only 11.9 million new housing units. As a result, even before the post-lockdown surge in migration, there were more aspiring households than homes in America’s thriving metro areas.
This was largely a consequence of zoning restrictions. Municipal governments have collectively made it illegal to erect an apartment building on about 75 percent of our country’s residential land. In large swaths of the country, there are households eager to rent or buy a modest apartment, and developers eager to provide them, but zoning restrictions have blocked such transactions from taking place.
This creates a housing shortage. You can house 32 families much more quickly and cheaply by building a single apartment building than by erecting 32 separate houses. To require all of your community’s housing units to be single-family homes isn’t all that different from prohibiting the manufacture of all non-luxury cars. In both cases, you end up with artificial scarcity and unaffordability.
Not a day passes but English families are ruthlessly turned out to make room for the foreign invaders.” “They can’t get a home for their children, they see black and ethnic minority communities moving in and they are angry.” “Millions of ordinary people up and down Britain are utterly fed-up with how immigration is driving up house prices, rents and flooding social housing.”
Three quotes spanning 120 years, the first from the Tory MP for Stepney, William Evans-Gordon, speaking in a parliamentary debate in 1902; the second from a newspaper interview in 2006 by New Labour minister and Barking MP Margaret Hodge; and the third from a Spectator article last month by the academic Matthew Goodwin. A century across which the language has changed but the sentiment has remained the same.
And now we hear that the Tories are preparing to launch a scheme to provide “British homes for British workers”, promising to make it more difficult for migrants to access social housing, which most cannot access anyway.
[…]
“British homes for British workers” may be an empty slogan but it is one that Evans-Gordon would have understood. Implicit is a sentiment that echoes across the century, at the heart of which is a concern less for working-class wellbeing than for pinning on immigrants the blame for the failures of social policy to improve working-class lives.
Every moment of meaningful change in modern British politics begins with the realisation that politics must act in service of the British people, rather than dictating to them. Margaret Thatcher sought to drag Britain out of its stupor by setting loose our natural entrepreneurialism. Tony Blair reimagined a stale, outdated Labour Party into one that could seize the optimism of the late 90s. A century ago, Clement Attlee wrote that Labour must be a party of duty and patriotism, not abstract theory. To build a “New Jerusalem” meant first casting off the mind-forged manacles. That lesson is as true today as it was then.
It is in this sense of public service that Labour has changed dramatically in the last three years. The course of shock therapy we gave our party had one purpose: to ensure that we were once again rooted in the priorities, the concerns and the dreams of ordinary British people. To put country before party.
None of that was easy but it was necessary. Often, it meant taking the path of most resistance. It meant not just listening to those who felt unable to vote for us but understanding them and acting. The public do not have outlandish or unreasonable expectations. They expect taxpayer money to be spent wisely, our security and our borders to be prioritised and a politics that serves them rather than itself. On each of these, we are now ready to deliver.