July 23, 2015    3 minute read

UK Immigration Policy – A radical free market view

   July 23, 2015    3 minute read

UK Immigration Policy – A radical free market view

The classical liberal/libertarian viewpoint represents a disliking towards government intervention in the vast majority of cases and dislike all blocks on the movement of goods, capital or people, as this slows economic growth. It is worth stating why immigration on balance is a good thing, it has provided motivated workers, filled skill gaps and it has created a more open and diverse society. Therefore the ideal solution is a complete open door policy so anybody can choose to live in any country, which would be amazing for global economic growth, specialisation and increasing individual liberty.

However, we do not live in an ideal world. The reason this idea would not work is because we, in the UK, have a welfare state. Job seekers allowance is £65.50 a week, £3,500 (or $5,500) a year, whereas GDP per capita in Pakistan is $1,000 a year. JSA is by no means the most generous of our benefit payments. In Bangladesh, GDP per capita is about $700 a year, and is the 7th largest immigrant community in the UK. Housing benefit is approximately £200-400 a week and then factor in child benefit on top makes this country a very attractive place for non-productive economic migration.

This creates a serious market distortion, the attraction of a generous welfare state on the poorest globally cannot be overstated, notwithstanding the cost of living in the UK and the fact many of the aforementioned benefits are often not available on arrival.

This has led a lot of people to ask for state interventions. If you are going to adopt this as a second best policy, and for example if you are going to cap non-EU migrants how do you decide who is deserving of a chance to work in the UK. It must however be stressed that we are discussing economic migration only. The current system is incredibly bureaucratic and must be one of the least efficient and effective means of deciding who should these migrants be.

Professor Gary Becker, a previous Nobel prize winner in economics, suggested a method of how we could create a relatively liberal, marketised system of immigration. The idea is very simple, you sell the right to work in the UK. You sell off the number of visas you desire to and he thought a figure of around $50,000 could be appropriate. You could of course have different grades of visa, depending on length of stay and access to the welfare system and the NHS for example.

This settles many of the questions surrounding non-productive economic immigration and takes the decision of who is deserving out of government hands. The fixed point in this system would be the number of visas issued annually and the price would vary in the same way stocks and shares do. A loan system similar to the student loan system could be operated to pay back the loans, by private institutions or employers could also sponsor people to come into the country.

Whilst this is a radical idea and could meet some opposition, I would love to hear your opinions on this topic in general, as well as any thought you may have on this article in the comments section.

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