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Socialism and Foreigners

A cartoon published by the Danish newspaper Politiken showing Inger Støjberg, the country’s integration minister, lighting candles on a Christmas tree that has a dead asylum-­seeker as an ornament, December 2015

A cartoon published by the Danish newspaper Politiken showing Inger Støjberg, the country’s integration minister, lighting candles on a Christmas tree that has a dead asylum-­seeker as an ornament, December 2015

Socialism, in its Scandinavian form, is not friendly to foreigners. Hugh Eakin discovered this and writes about it in “Liberal, Harsh Denmark” (New York Review of Books, March 10, 2016).

Denmark is the very model of the modern Social Democratic state:

known for its nearly carbon-neutral cities, its free health care and university education for all, its bus drivers who are paid like accountants, its robust defense of gay rights and social freedoms, and its vigorous culture of social and political debate, the country has long been envied as a social-democratic success.

But the Danes do not like immigrants:

Denmark has long led the continent in its shift to the right—and in its growing domestic consensus that large-scale Muslim immigration is incompatible with European social democracy.

The attitude against immigrants has grown harsher by the month:

In early September, Denmark began taking out newspaper ads in Lebanon and Jordan warning would-be asylum-seekers not to come. And by November, the Danish government announced that it could no longer accept the modest share of one thousand refugees assigned to Denmark under an EU redistribution agreement, because Italy and Greece had lost control of their borders.

The new law, which passed with support from the Social Democrats as well as the Danish People’s Party, permits police to strip-search asylum-seekers and confiscate their cash and most valuables above 10,000 Danish kroner ($1,460) to pay for their accommodation; delays the opportunity to apply for family reunification by up to three years; forbids asylum-seekers from residing outside refugee centers, some of which are tent encampments; reduces the cash benefits they can receive; and makes it significantly harder to qualify for permanent residence. One aim, a Liberal MP explained to me, is simply to “make Denmark less attractive to foreigners.

Why is enlightened, socialist Denmark so hostile to foreigners?

the Danish welfare system [has] an unusually important part in shaping national identity. Visitors to Denmark will find the Danish flag on everything from public buses to butter wrappers; many of the country’s defining institutions, from its universal secondary education (Folkehøjskoler—the People’s High Schools) to the parliament (Folketinget—the People’s House) to the Danish national church (Folkekirken—the People’s Church) to the concept of democracy itself (Folkestyret—the Rule of the People) have been built to reinforce a strong sense of folke, the Danish people.

Ethnically and religiously homogenous Scandinavia has been able to construct a welfare state because everyone looks like and largely acts like everyone else. The countries feel like a big family, and as in families, people are willing to support, however grudgingly, the ne-er-do-well brother-in-law.

But Moslems are foreigners, and their customs and actions make it impossible for the Danes to regard them as fellow-Danes. Nor do the Moslems seem to want to assimilate; they want welfare, but they don’t want to become Danes, whose culture they dislike, despise, sometimes murderously hate.

Socialism has never caught on in the United States because of the ethnic and religious heterogeneity of the country. Bernie Sander’s was elected in 96% white Vermont, and has done well in states with mostly white voters and poorly in states with large minority populations. Not even African-Americans like Socialism; they want programs targeted at them not at everyone in general.

The liberal academic Robert Putnam investigated the effects of diversity at the neighborhood level and as not happy with what he found:

It HAS BECOME increasingly popular to speak of racial and ethnic diversity as a civic strength. From multicultural festivals to pronouncements from political leaders, the message is the same: our differences make us stronger.

But a massive new study, based on detailed interviews of nearly 30,000 people across America, has concluded just the opposite. Harvard political scientist Robert Putnam — famous for “Bowling Alone,” his 2000 book on declining civic engagement — has found that the greater the diversity in a community, the fewer people vote and the less they volunteer, the less they give to charity and work on community projects. In the most diverse communities, neighbors trust one another about half as much as they do in the most homogenous settings. The study, the largest ever on civic engagement in America, found that virtually all measures of civic health are lower in more diverse settings.

The more similar people are, the more they trust one another. This is true at both the neighborhood and national level. At the national level, such trust enables a society to develop a strong social democracy. People know how other people think and act, and trust the government to spend a huge share of national income effectively. But diverse societies have less trust; in some societies trust does not extend beyond the family or tribe, and the state is too weak to function at all (e.g. Iraq).

So the best foundation for a social democratic state is homogeneity. The more diverse the society, the harder it is to implement social democratic programs, because each group suspects that the other group is benefiting more.

Denmark children

Denmark is still the happiest country in the world, along with the other Scandinavian countries, the Netherlands, New Zealand, Australia, Canada, all “fairly homogeneous nations with strong social safety nets.” The homogeneity, social democracy,  and happiness are all closely connected.

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One-handed Economists

I think it was Harry Truman who said that he wanted a one-handed economist. When asked why, he said, economists were always saying in response to a policy question, “On one hand… on the other hand….” In economics, there are always trade-offs.

In the burst of enthusiasm among “progressive” Catholics that Pope Francis’s criticism of the current economic system, what is often forgotten is that good intentions do not produce good results. Extreme poverty has been decreasing throughout the world at an astonish rate, largely because of policies that allow poor nation to develop trade and bring more people into the market economy.

What this means is that workers in developed countries have felt downward pressure on their incomes. The good factory jobs have disappeared in the US. They have gone overseas where they allow millions to escape destitution and starvation. But profits have not declined. Although the American market may have lost comparative income, the incomes less-developed countries have expanded to produce far more customers for international companies. Inequality may be increasing not because poverty is increasing but because the people at the top have so many more customers. A movie star who has only American fans may be wealthy, but one who has fans all over the world is super-wealthy. But is this really unjust?

Unions gain a comparative advantage in wages for their members by restricting the labor market. They usually kept women and blacks out, and tariffs kept out foreign competition. But American workers now have to compete with workers in India, and the internal labor force has expanded with the addition of women and minorities. Some win, some lose, but overall poverty has been reduced.

Immigration also is a difficult issue. Immigrants put some downward pressure on American wages – how much is hotly contested. The fact that the Wall Street Journal supports open immigration should make one suspicious whether the ordinary workers will benefit from it. Companies would, especially tech companies who can bring in foreign tech workers who will work for less than Americans – who still make pretty good six figure incomes. Is it just to raise wages by limiting competition?

Immigration may also hurt poorer countries, as the most ambitious and educated leave for the U.S. Paul Collier raises the question in his NYT article Migration Hurts the Homeland. It is true that immigrants to the US can send home remittances and also bring home ideas about democracy and justice, but open immigration to the US can be harmful to poor countries.

There is migration that helps poor countries:

Migration is good for poor countries, but not in every form, and not in unlimited amounts. The migration that research shows is unambiguously beneficial is the kind in which young people travel to democracies like America for higher education and then go home. Not only do these young people bring back valuable skills directly learned in the classroom; they bring back political and social attitudes that they have assimilated from their classmates. Their skills raise the productivity of the unskilled majority, and their attitudes accelerate democratization.

And there is migration that can hurt poor countries:

But many poor countries have too much emigration. I do not mean that they would be better with none, but they would be better with less. The big winners from the emigration of the educated have been China and India. Because each has over a billion people, proportionately few people leave.

In contrast, small developing countries have high emigration rates, even if their economies are doing well: Ghana, for instance, has a rate of skilled emigration 12 times that of China. If, in addition, their economies are in trouble, they suffer an educational hemorrhage. The top rankings for skilled emigration are a roll call of the bottom billion. Haiti loses around 85 percent of its educated youth, a rate that is debilitating. Emigrants send money back, but it is palliative rather than transformative.

Even allowing refugees to come and stay in the US can hurt a poor country:

Seemingly the most incontestable case for a wider door is to provide a refuge for those fleeing societies in meltdown. The high-income democracies should indeed provide such a refuge, and this means letting more people in. But the right to refuge need not imply the right to residency. The people best equipped to flee from societies in meltdown are their elites: The truly poor cannot get farther than a camp over the border. Post-meltdown, the elites are needed back home. Yet if they have acquired permanent residence they are reluctant to return.

The type of people who come to the US may help us, but their own countries need them more:

Bright, young, enterprising people are catalysts of economic and political progress. They are like fairy godmothers, providing benefits, whether intended or inadvertent, to the rest of a society. Shifting more of the fairy godmothers from the poorest countries to the richest can be cast in various lights. It appeals to business as a cheap supply of talent. It appeals to economists as efficient, since the godmothers are indeed more productive in the rich world than the poor. (Unsurprisingly, our abundance of capital and skills raises their productivity.) It appeals to libertarians as freeing human choice from the deadening weight of bureaucratic control.

If we allowed open immigration, we might be helping individuals

but we might be feeding a vicious circle, in which home gets worse precisely because the fairy godmothers leave. Humanitarians become caught up trying to help individuals, and therefore miss the larger implications: There are poor people, and there are poor societies. An open door for the talented would help Facebook’s bottom line, but not the bottom billion.

Pope Francis and the American bishops seem unaware of the trade-offs in real-world situations. They want one-handed economists, but alas, real-world choices have unintended side effects. Helping “the poor” is not a simple matter, and good intentions do not guarantee good results.

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