Tuesday, April 25, 2006
Why does the retail investor shun the capital market?
The European Dream
A Tale of Two Lefts
Transnational Engagement, Remittances, and Their Relationship to Development in Latin America and the Caribbean Manuel Orozco et al.. : Institute for the Study of International Migration, 2005
AIDS in Latin America Tim Frasca. : Palgrave Macmillan, 2005.
Democracy in Latin America: Political Change in Comparative Perspective Peter H. Smith. : OUP, 2005
Una vida por la palabra: Entrevista con Sergio Ramírez Silvia Cherem Sacal. : Fondo de Cultura Económica, 2004
The European Dream: How Europe's Vision of the Future Is Quietly Eclipsing the American Dream
"Identity and Violence": Idealistic thesis
Sunday, April 23, 2006
India, not Nepal, needs a constituent assembly
- The House will always have the support of at least half the concerned voters,
- the government will always have the confidence of at least half the House,
- and candidates at both levels, knowing that one day they may need the support of at least half the voters will, even in the first round, refrain from casting their appeal on narrow and sectarian lines.
The merits of the scheme are not in doubt. The mystery is why we do not adopt it. Pran Chopra The Hindu Thursday, Apr 20, 2006
A nation is more than a collection of whatever population happens to reside within its borders
Nations can and do choose differently how they share rewards: that's politics, not economics
Thursday, April 20, 2006
Vedanta to set up university in Orissa
Tuesday, April 18, 2006
Economics as a guide to human behaviour
Monday, April 17, 2006
Growth at a robust exponential rate for centuries to come
2. Commit to the cosmic/utopian destiny depicted in section XVI with the whole of our body, heart, mind, and soul — and further commit to allowing the time-reverse influence of this Holy Destiny to "impregnate" each one of us at the deepest level of our being.
3. Utterly renounce the logic and politics of scarcity and "limits to growth," and in so doing, commit wholeheartedly to a destiny in which the total population, macro-economy, and use of energy will grow at a robust exponential rate for centuries to come.
4. Utterly renounce the politics of coercion and the use of centralized political power for achieving even the most enlightened of goals — and pursuant to this, embrace Holographic Libertarianism as our basic political stance (as depicted in the attached chart).
5. Embrace the four-fold perspective in its full symmetry (as depicted in the attached charts) and make it the basis for the hyper-holism that reconciles religious opposites — and further embrace both: a) the cultivation of humanity's receptivity for visionary hyper-holistic ideas, and b) the insemination of said ideas as a sacred duty (as depicted in section XII).
6. Suspend judgement against the conservative elites (and the socio-economic leviathan that they have created in the corporate/banking/political world), and instead view them as puppets dancing to the tune of archetypal forces — and beyond that, see if we can we find the courage to walk up to the "devil himself" and say, "hey we've got a win-win deal for you."
7. Agree to wade into the morass of counter-cultural thought without preconceptions pro or con — and by exploring the issues in depth, disentangle the "bramble" in which political, ecological, technical, and economic issues are routinely confused with each other, and/or desperately embraced as pretexts for underlying agendas of a wholly different nature.
Friday, April 14, 2006
Immigration ‘solutions’, Part IV
There is, of course, the perennial favorite that we "need" immigrants to "do work that Americans won't do." But what is the basis for this claim?
What specific jobs in this country are performed exclusively by immigrants? Indeed, in what jobs are immigrants an absolute majority? Those who make this sweeping claim seldom offer a speck of evidence to support it.
In some particular places, such as California, agricultural jobs seem to be almost exclusively filled by immigrants. But, in a country with huge agricultural surpluses costing the taxpayers billions in subsidies and storage costs, why is there a "need" for more workers to increase the surpluses and the costs?
One editorial cartoon pictured consumers confronted with $20 lettuce because immigrants no longer grew or picked it for low wages. But it is our agricultural subsidy laws which drive up the price of fruits and vegetables by taking vast amounts of this produce off the market, in order to keep prices artificially high.
If this surplus produce is not grown in the first place, that just saves subsidy and storage costs. The price of the fruits and vegetables sold in the market need be no higher than right now.
Even in fields like engineering or science, where particular immigrants bring particular skills much in demand, that is no argument for tolerating illegal immigration. Tolerating illegality means that the immigrants determine what kinds of people enter our country and become part of the U.S. population, whether or not their skills, attitudes or behavior are wanted by Americans.
A broader economic claim is that immigrants add to the national output, benefiting us all as consumers. Plausible as this might sound, its logic will not stand up under scrutiny.
If more immigrants are a good thing, where do we stop — and why? Why not fling the doors open to all the people who want to immigrate here from Haiti or Cuba or anywhere else?
Even if every one of those immigrants added to the national output, that does not mean that today's American population would be economically better off after this unchecked influx from around the world.
After all, people not only produce, they consume — and some consume more than they produce, courtesy of the American taxpayers.
Nor are our schools or our neighborhoods improved by becoming a tower of babel or scenes of clashing standards of behavior, noise, or violence. We need to count all costs, not just money costs.
Why is this a far more prosperous country than the countries from which most of our immigrants come? Many of those countries are well endowed with natural resources but are lacking an economic and political culture that would allow those resources to be used to produce better results than the poverty which drives their people to other countries.
When you import people, you import cultures. Those cultures no longer give way to the American culture when "multiculturalism" is a dogma and its apostles and activists make it necessary for American laws, language, and culture to give way, or at least accommodate growing alien enclaves in our midst.
A nation is more than a collection of whatever population happens to reside within its borders. Something has to unite those people if the country is not to degenerate into the kind of unending internal strife brought on by Balkanization in many countries around the world, not just in the Balkans.
It can be a matter of national life and death whether a country is or is not united against its external enemies. Internal disunity contributed to the decline and fall of the Roman Empire over a period of centuries and to the much faster collapse of France, which surrendered after just six weeks of fighting in 1940.
A generation earlier, a united France had fought on for four long years, despite far higher casualties than in 1940.
Unity and patriotism are not luxuries. Survival in an international jungle depends on them. What are dangerous luxuries are the open borders which erode national solidarity. The fact that we are already at each other's throats over the immigration issue is an ominous sign.
Secular Fundamentalists and Other Simple People of Faith
- Have you ever known a generative person in whose presence you experience the bracing flow of "life" along your keel?
- Have you ever been in the presence of a stagnant and lifeless person in whose presence you feel your soul being sucked out of your body?
The spiritually generative lumin being does not merely report reality. Rather, such an individual imparts reality. You might say that they are a door. Or you might say that they are a way. Or perhaps they are even the life. They know. And we know that they know. And soon enough, we know too. Call it recognosis and ruahcollection. posted by Gagdad Bob at 4:32 AM 39 comments
Right rules for India’s democracy
- First, ‘requisite variety’ — the presence of diversity together — is an essential requirement for healthy evolution of complex, self-adaptive systems. Therefore representatives of all stakeholders must be present in the dialogue, even though it may make it more difficult to arrive at consensus easily.
- Second, effective dialogue requires that the representatives chosen be individuals who are capable of listening to others, not those given to repeating and defending their own points only.
- Third, the participants must be committed to stay with the dialogue, and not dip in and out at their convenience.
- Fourth, the dialogue should be conducted on the basis that there will be no winners and losers — either everyone wins or everyone loses.
- Fifth, the easy way out to a (shallow) consensus, that of settling on the lowest common denominators will not be adopted. Instead, through deep questioning, listening, and searching, the highest common factors will be found. Because these are indeed the minimal critical rules the system, with all its diversity needs.
- And sixth, the process of dialogue must be expertly facilitated.
This may sound like harder work than marching in and out of the well of the House or making speeches at seminars. But this is what the healthy evolution of our democratic country requires. And surely the futures of a billion people in our evolving country deserve at least this much from people who care and who aspire to lead. Also We must improve the quality of public debate
France lives today, more than ever, in a utopian fantasy
By luck I was able to escape in reality, and arrived in Paris in 1998. With its emphasis on individual rights, this city opened doors for me. Little by little, I became political; intellectual debates began to have meaning. They were not just blather. But with its racism, the city closed other doors. With time, the meaning disappeared and blather became the rule.
France lives today, more than ever, in a utopian fantasy. The gap between the political leadership and the people is enormous. The elites seem to speak to us of outdated concepts, far, very far from reality. France can't deal with its "foreigners" who have French nationality and does little to integrate them into society. Islam is the second religion of the country, yet France cannot speak intelligently to its millions of Muslims; it calls us all the "Muslim community" as if there were only one way to be a Muslim.
France knows that it needs to change its economic system, but each attempt is blocked, as it was this week with Prime Minister Dominique de Villepin's bid to encourage businesses to give jobs to young people by loosening the strict labor laws governing their hiring and firing. It's often said that the French are all grumblers, and that cliché is more than true.
While the students who have been in the streets are right to protest against the precarious life that awaits them, it's also true that the French are timid, even frightened of change, as we saw last year in their strong reaction against the entry of Turkey into an enlarged European Union. Turkey, long considered part of Europe, suddenly didn't qualify, in the French view, for the rights and privileges of the union.
The disturbances last November in the poor, predominantly minority suburbs of Paris, the banlieues, surprised many in France. Their surprise in turn surprised me, showing me to what extent, even in this country proclaiming itself for fraternité and the rights of man, society is divided into two classes, the rich and the poor. Exactly like Morocco.
And in the face of these disturbances how did the government react? What were its proposals for helping the banlieusards to feel as French as everyone else? It contented itself with declaring a state of emergency for three months. That's it.
Since then, the news media have finally deigned to take an interest in the people who live "elsewhere" (what, another country?), but the banlieusards are in agreement that nothing has changed. They predict that there will soon be another explosion, more violent this time. In the meantime, the French political class, with its short memory, is preoccupied with only one thing, the 2007 presidential elections.
This week, Mr. de Villepin and President Jacques Chirac withdrew the troublesome labor law, saying that they wanted to replace it with ... what exactly? Nobody is sure, but students are ending their blockades and protests. As with the disturbances of last November, I suspect the government will play another magic trick: making believe that something is being done even as the problem festers.
That's the France where I live today. A country of culture, of liberty, of myths, of illusions about battling for something. A country of the past, passed by. My mother, who lives in Morocco, called me a few days ago and asked me a strange question: "Where are you, my son?" Not understanding what she meant, I made her repeat her question twice. I answered, after a pause, not sure of myself, "In France, still in ...." She didn't let me finish. "But what is France?" she asked. I still don't know what to answer. Abdellah Taïa is a novelist and memoirist. This article was translated by The Times from the French.
Now it is conservation that is radical
The North Bund district is being demolished to create Shanghai's new passenger ship terminal along the banks of the Huangpu River.
"On the one hand you will see something like New York's financial district, and on the other, you will see new industrial infrastructure: one of the biggest ports, one of the biggest automobile factories, the biggest shipyards," said Mr. Wu, who is the project designer for the 2010 World Expo, a vast undertaking that is driving much of the change. "You cannot find these things in New York."
Within the next four years, Shanghai, the backdrop of so much upheaval and so many rebirths since it became the prized treaty port for European powers in the mid-19th century, will be utterly transformed once again. But critics say it will lose as much, in texture and vibrant community life, as it stands to gain in dazzling, futuristic projects. The notion of what warrants conservation has been highly restrictive, amounting to several hundred buildings in a city of 18 million and to parts of 12 districts, like the leafy and increasingly gentrified former French Concession neighborhood.
Mr. Wu, a 46-year-old urban designer, describes how China's greatest city is racing to be greater still, aiming for the top as it ascends the hierarchy of world cities, with one eye on longtime champions like New York, and another on its fraternal rival, Beijing.
Like China's capital, which is undergoing a crash rebuilding program in time for the 2008 Summer Olympics, Shanghai is using its role as host of the World Expo to shift what had already been a hugely ambitious remake into high gear. By the standards of recent urban development projects in the West — the so-called Big Dig in Boston, say — the scale of what the city is undertaking is astounding.
Along the western banks of the Huangpu River, site of the historic Bund thoroughfare, a 2,000-plus-yard-long stretch of the waterfront is being razed and redeveloped. The essence of the Bund, a virtual museum of Western architecture, flush with classical, Gothic and Art Deco landmarks, will be preserved, but densely inhabited neighborhoods at its edge are already being demolished.
This fresh development zone in the heart of central Shanghai, facing the newly minted skyscrapers of the Pudong district across the river, and every bit as attention-grabbing, will extend more than 700 yards inland at its widest point, with sleek halls and pavilions and green spaces.
Nearby, there will also be a modern passenger ship terminal and the world's fastest commercial train service, a high-speed magnetic levitation line from Shanghai's international airport, will be extended to Hangzhou, a city 100 miles to the southwest. The airport, meanwhile, is adding a second terminal whose futuristic design by the Xian Dai Architectural Design Group, is to complement the original terminal, designed by the French architect Paul Andreu.
Mr. Wu said that the architectural layout of the riverside project would take advantage of seasonal winds to assist climate control and that a water purification project aims to make the river water that flows through a 1.8-mile canal safe enough for swimming.
If the Expo seems intended to dazzle — and it is — the project is merely the central nugget of a far larger undertaking, one that will leave very little of this huge city untouched. Shanghai already boasts 4,000 skyscrapers, nearly twice as many as New York, and plans to add 1,000 more in the next decade. Elevated expressways are being built to channel above-ground traffic, and a gigantic push is under way to expand the subway system.
Many feel, though, that what Shanghai is losing is even more vital than what it will gain. Shanghai was China's first, and remains its most distinctive, experiment in modern urbanism, and conservationists say that much of what made it so special in the last century will soon fall victim to the wrecking ball.
The severe damage begins at the very edge of the Bund, in the crowded neighborhoods peopled by generations of workers who have migrated here during more than a century's worth of economic booms. They have fashioned what has come to be Shanghai's signature urban lifestyle: walkup apartment buildings, often connected by a network of lanes, and an extraordinarily rich street life steeped in street cuisine, open-air produce markets and the ever-present bicycle.
Many of these neighborhoods, often starting just a couple of blocks in from the grand riverfront, or at its northern and southern ends, are already being demolished. Another area facing destruction soon, the north bank of Suzhou Creek, is of prime interest both to big developers and to historians and preservationists. The buildings there are of uneven architectural interest, though many are considered precious. But the area is considered a vital matrix of Shanghai's authentic lifestyle.
Chen Guang, an architect who belongs to a civic group involved in conservation efforts makes clear how precarious the situation is, both for the city's old neighborhoods and for those who wish to preserve them. "Our group is comprised of people who share an interest in protecting old neighborhoods," he said, "although we don't use the word protect in our name, even if this what we dearly hope to do."
By the time of the World Expo, in 2010, Mr. Chen estimates, only five percent of the old neighborhoods existing in 2003 citywide will remain. "Suzhou Creek is a bit special for us, though, because of its special status in Shanghai's history, and it has many units that are still intact. Suzhou Creek is a complete entity unto itself, in the same way that the Bund is a unit."
The city's plans call for the leveling of much of the creek's north bank and building green promenades in place of the old tenements and brick-walled lanes. In Shanghai, as in the rest of China, where development proceeds largely by fiat, such things can happen with astounding speed. While rules have recently been amended to help residents bargain for better compensation from developers, there is no real choice about moving.
There have been no public hearings, and no votes on the matter. Even budget estimates are hard to come by. Shanghai's eviction of hundreds of thousands of mostly low-income people from the city center has caused occasional protests, and there have been persistent reports of large-scale, high-level corruption involving politicians and developers.
Shanghai is building no new housing for low-income residents in the city's core. "Shanghai is a 100 percent private market," said Cheng Yun, chief researcher at the Shanghai offices of Centaline Property Consultants, a Hong Kong real estate company. "There is no social development in the central city. This is unique in the whole world, and it is not healthy."
The city's approach to public information about real estate is also unusual by the standards of most nations. The press is barred from reporting on ties between officials and developers, and even detailed maps showing patterns of demolition and redevelopment are as closely held as secret documents.
The concerns of many of those forced out are much more down-to-earth. "We have to move to an area which is far away from here, a suburban area, and we don't want to go there," said Zhu Yumei, 57, a woman who has lived her whole life on the north bank of Suzhou Creek. City officials say that they are mindful of the need to preserve a slice of the old town, but that working block by block with residents in buildings that have suffered decades of decay is impractical.
They contend that although less pronounced than in many Western cities, the hollowing of the central city is part of a broader regional trend. "From Singapore to Tokyo, Asian cities are experiencing this emptying out," said Tang Zhiping, a senior city planner. "It's more appropriate to compare Shanghai to places like these."
For others, though, that is precisely the fear, that in a few short years Shanghai will have become just another in a group of largely anonymous Asian megacities in its haste for sleek modernity.
Zheng Shiling, the dean of urban planners here, and a man who has worked hard to lobby city officials on the importance of historic preservation, said: "Government officials like to be promoted according to their achievements, and that means having something to show. So this is an approach for government officials, not an urban planning approach."
In the 1960's, Mr. Zheng said, building new things in Chinese cities was revolutionary. Now it is conservation that is radical. "Once the reform period started, we wanted to have everything at once," he said. "We were constructing modernization, but without a clear mind of modernity."
Europe Stalls on Road to Economic Change
Forward with Ambedkar
- First, in seeking to safeguard the interests of Dalits, Ambedkar was merely reacting to the profound divisions created by the practice of untouchability, whereby Hindu society had condemned millions to an inferior status.
- Secondly, Ambedkar saw the struggle for a better deal for Dalits as part of the incomplete project for the creation of an Indian nation. India, he felt, was not yet a nation. It was merely a set of peoples — Hindus, Muslims and Dalits — living together in a geographical area. Liberty or independence by itself could not mark the completion of the Indian project, it merely marked the beginning. It was only when Indian society embraced the ideas of equality and fraternity as well that India could develop a sense of nationhood.
This would require, among other things, challenging the varnsashrama dharma that lay at the core of Hinduism. Ambedkar subscribed to the ideal of a socialistic society but he did not see communism as the route to salvation. He disliked the violence and totalitarianism inherent in communism, he was disappointed that Indian communism was blind to caste and, importantly, he was alive to the role of competition in fostering economic growth.
A socialistic society, he felt, must be created not through coercion exercised by the state but by Indian society accepting its responsibility towards the underprivileged. The clamour today for reservations in the private sector shows that Indian society is still far from fulfilling this responsibility. Gandhi’s use of Hinduism as a uniting principle for India served the purpose of achieving liberty for Indians. Nehru laid the political and economic foundations of the Indian nation-state. The time is now ripe for the creation of a genuine social democracy along the lines of what obtains in much of Europe, one in which religion is confined to its appropriate sphere and economic growth becomes more, not less, inclusive. For the realisation of such an ideal, Ambedkar emerges as the authentic Indian icon of the twenty-first century. (The author is a professor, IIM Ahmedabad)
Hispanic entitlement to participation in the "American" dream
Thursday, April 13, 2006
Editorial: People Power
The immigration rallies of recent weeks have drawn an astounding number of people around the country: Monday's "national day of action" was attended by an estimated 180,000 in Washington, 100,000 each in Phoenix and New York City, 50,000 each in Atlanta and Houston, and tens of thousands more in other cities.
Adding in the immense marches last month in Los Angeles and Chicago, the immigrants and their allies have carried off an amazing achievement in mass political action, even though many of them are here illegally and have no right to vote. Whether the rallies leave you inspired or unnerved, they are impossible to ignore.
This nation is deeply divided and undecided about illegal immigration. The ambivalence runs deep. Americans can hardly even agree on whom they are talking about. Listen to debates from talk radio to the Senate, and you will hear utterly incompatible descriptions of the same group of people. The nation's 11 million to 12 million illegal immigrants are either an occupying army of thieves, snatching jobs and subverting our laws, or they are a wholesome community of strivers, eager to build families and chase the American dream.Monday's rallies were a decisive victory for the more positive vision. In Washington, as elsewhere, the mood was as mellow as the crowd, which was dominated by parents of young children. (You can shout all the fiery slogans you want, but you will never be threatening with a baby in your arms.) An 86-year-old Salvadoran, Maria Guevara, sat in a folding chair and waved a plastic American flag as a friend, Ana Santos, held a placard to keep the sun out of her eyes. Ms. Guevara was as placid as if sitting beside a pond, though all around her it was noisier than a baseball stadium.
A recurrent complaint against new immigrants — particularly Latinos, the overwhelming majority at most rallies — is that they are slow to assimilate. But these crowds clearly had internalized at least one pillar of the American way: that peaceful dissent can spur a government to action.
Though recent immigration developments in Washington had been a discouraging mix of stalemate and cold political maneuvering, the marchers seemed motivated less by a sense of grievance than by hope, and the pure joy of seeing others like themselves rallying for a precious cause. They were venturing boldly from the shadows and daring the country to change its laws, but were doing so out of a desire to participate in the system, not to undermine it.
This became especially clear when the thousands on the Mall recited the Pledge of Allegiance, reading from yellow sheets printed in English and in a crude phonetic spelling to help Spanish speakers pronounce the unfamiliar words. Something about the latter version — with its strange sense of ineloquent desire — was enough to provoke tears.
Ai pledch aliyens to di fleg
Of d Yunaited Esteits of America
An tu di republic for wich it estands
Uan naishion, ander Gad
Indivisibol
Wit liberti an yostis
For oll.
Monday, April 10, 2006
Trading Up in China
Then along came China, which jumped into the textile market with a bang: a seemingly endless supply of workers ready, willing and able to make T-shirts, bras and other underwear for much less money than workers in South Carolina. Simply put, South Carolina was no longer poor enough. China's move up the textile ladder will produce the same difficult changes that other countries have experienced — among them the persistent problem of what do with the workers whose jobs leave. But workers in China are seeing their wages and benefits increase, and China's progress bodes well for workers in poorer places like Cambodia, Bangladesh and Madagascar. Factory owners may be complaining that they can't find workers in China, but that means they will do what they have always done in such cases: look for cheap labor elsewhere.
These jobs are no picnic. The women and men put in 10 hours a day, six days a week, churning out one garment after another. Much of the time, they have to move far from their families to get work. To make ends meet, most live with five or six others in rooms that have no electricity or running water. Sometimes it's a fight just to get paid. Factory owners and managers in poor countries sometimes delay salaries through incompetence. Such delays are particularly painful because the workers are often paid only once a month. But the alternative is far worse. In the developing world, there is too often little work to be found. In Cambodia, young men spend their days leaning against their rickety moped taxis, hoping for passengers. In Ghana, young girls run up to cars at Accra's few stoplights, selling oranges for nearly nothing. For all the toiling and monotony, factory jobs in these countries can mean survival for a family of six, supported by the monthly paycheck from one sister who sews shirts for the Gap.
All this speaks to how woefully misguided it is for members of Congress to respond to these pressures by trying to stop the flow of goods from China. The better off China is, the better off the rest of the world is — poor countries because they will get a shot at the jobs that leave China; rich countries because many more people over in China may finally be able to afford the expensive goods that are made in America.
Globalizing Good Government
For our study, we began with research by Foreign Policy magazine and AT Kearney, a management consultancy firm, which ranked 60 countries by degree of globalization. Singapore, Ireland, the United States and other countries at the top of the rankings are far more integrated into the world economy than the insulated nations at the bottom like Iran, Egypt and Bangladesh. As the accompanying charts show, we divided the countries into four groups and looked at how each faction performed on policies that shape economic performance.
Take inflation. In a world where investment capital can flit anywhere in the world with the click of a computer mouse, nations should see the virtue of price stability and preserving the value of money. And they do: the more globalized countries we studied had an average inflation rate of 2.3 percent from 2001 to 2003, compared with 10 percent for the nations in the least globalized quarter.
The gist is clear: as nations become more integrated into the world economy, they tend to maintain fewer barriers to trade and the movement of money. They are less likely to impose punishing corporate taxes and onerous regulations. Their technology policies are more favorable to innovation. Nations more open to the world economy score above the less globalized countries in respect for the rule of law and protection of property rights. More globalized countries also offer greater political stability.
The French contretemps illustrates why labor policies are less sensitive to globalization than factors like taxation and trade barriers. As long as workers refuse to acknowledge that they are competing in a world economy, they will petition a wealthy government to protect their jobs. This in turn slows job growth and raises unemployment, creating a greater demand for expensive and expansive safety nets for idle workers.
Still, globalization may yet alter labor policies. France, Germany and other countries are beginning to recognize that their labor rules are uncompetitive, and the timing of change is a political question, not an economic one.
Globalization's critics argue that a more open world economy sets off a race to the bottom by encouraging countries to jettison protections for consumers, workers and the environment. In reality, the opposite is true. If our data demonstrate anything, it is that globalization prompts a race to the top by pushing countries to abandon policies that burden their economies in favor of those that fuel growth and economic opportunity. Richard W. Fisher and W. Michael Cox are, respectively, the president and the chief economist of the Federal Reserve Bank of Dallas. Peter Hoey is an illustrator in Arcata, Calif.
How to Lose the Brain Race
In making immigration laws, Congress caters to cheap-labor industries like agribusiness and sweatshop manufacturing while shortchanging the high-tech, high-wage industries on which the future of the American economy depends. Witness the Senate bill's provision to admit 400,000 temporary workers a year, or roughly four million a decade, in addition to the 12 million mostly low-wage illegal immigrants already here, many of whose status would be legalized. Few if any of those guest workers would go to universities, corporate campuses or innovation clusters like Silicon Valley. They would head straight to restaurants, hotels and plantation-like farms.
While the United States perversely tries to corner the market in uneducated hotel maids and tomato harvesters, other industrial democracies are reshaping their immigration policies to invite the skilled immigrants that we turn away. Britain is following Australia and Canada in adopting a points system that gives higher scores to skilled immigrants with advanced education and proficiency in English. British, Canadian, German and even French universities are overflowing in undergraduate and graduate enrollment as they absorb the foreign talent that America is repelling.Whereas Senator Feinstein fears that foreigners are snatching places at American universities from deserving American students, the fact is that our universities are weakened when fewer talented international students enter their programs.
In recent years, skilled immigration to the United States has been accommodated chiefly by the H-1B visa program. But like all guest-worker programs, the H-1B program pits American workers against foreign workers lacking full legal and political rights. Because H-1B workers depend on employer sponsorship to remain in this country, unscrupulous employers can blackmail them into working longer hours for lower pay than American workers. Skilled workers admitted under a points system, by contrast, would be able to quit their employers in the United States and find new ones at will without risk of deportation.
Will admitting more immigrants drive down the wages of American workers? That may be true in unskilled jobs, since there is a fixed number of bedpans to be emptied and restaurant meals to be cooked in the United States. But it isn't necessarily true for skilled workers, at least not in the long run. That's because more talent means more innovation and opportunities for all, immigrant and native alike. The growth economist Paul Romer has spoken of the prospector theory of human capital. The more prospectors there are, the more likely it is that some will find gold. As the history of Silicon Valley and other tech centers proves, brain work migrates to where the brain workers are. It's a kind of Field of Dreams in reverse: You will build it, if they come.
Even if a skill-based immigration system did reduce incomes for the elite, that would not be the end of the world. For a generation, college-educated Americans have enjoyed a seller's market in professional services and a buyer's market in the labor of landscapers and nannies. If skilled immigration were increased while unskilled immigration were reduced, the wages of janitors would go up while the salaries and fees of professionals would fall, creating a broader middle class and a more equal society.The United States can always use another Albert Einstein or Alexander Graham Bell. But with the vast pool of poorly paid, ill-educated laborers already within our borders, we do not need a third of a million new ones a year. What the space race was to the cold war, the "brain race" is to today's peaceful global economic competition. The comprehensive immigration reform America needs is one that slashes unskilled immigration and creates a skill-rewarding points system modeled on those of Australia, Britain and Canada. In encouraging skilled labor, Congress for a change might perform some of its own. Steven Clemons is the director of the American Strategy Program at the New America Foundation. Michael Lind is a senior fellow there.