Thursday, January 21, 2016

Open Borders in Europe means More Neoliberalism

An International Monetary Fund study is gushing over the benefits of 1.1 million new migrants in Germany.

Why, you ask?

Once you put aside the minor point about a temporary boost to GDP, we get to the real issue: according to the pro-business IMF, Germany can get migrants into jobs in the coming years by ramping up “labor-market flexibility” – which is nothing but neoliberal code for smashing up what’s left of German labour market regulations and trade unions, since unhinged neoliberal ideologues always think that if only wages were made more flexible, then the economy would adjust to full employment. This is delusional fantasy.

Unfortunately, the sober reality is also sinking in that, as described here, most of the migrants are unskilled or semi-skilled workers, who will do little except compete for scarce jobs with domestic German low-skilled workers, and in the process drive wages down. Economists even talk about lowering Germany’s minimum wage to effect the needed labour market flexibility, and the IMF suggests the same thing and for other European states to boot!

It will take years for the state to teach the new arrivals German and make them into highly-skilled workers for German industry or services, and one can barely believe that the Germans will suddenly become Keynesian big-spenders to stimulate the domestic economy.

In the absence of government stimulus and with a weak private sector (and a possible global economic downtown this year), more mass immigration means more unemployment, and more demand on Germany’s welfare state, which in turn could easily provoke neoliberal demands to slash welfare to “incentivise” unemployed people into work.

The effect of all this should be perfectly clear: open borders means an intensified neoliberal assault on the population. It surprises me that more left-wing people don’t see it.

One can barely believe it, but according to this report here, an average of 3,000 people a day are still pouring into Germany from Austria.


  1. OK, do you believe that

    a) Mass immigration was deliberately encouraged as social engineering and a Trojan Horse to implement policies that certain statesmen prefer?


    b) This mass immigration is just a circumstance that happens to offer those statesmen an opportunity for certain policies to be pushed?

    1. There's no sinister conspiracy, it is nothing more than a development that happened whose practical effect -- when people in power design economic policy by means of neoclassical economics -- is to increase the same neoliberal program that has been going on for years.

      As for Merkel, her original decision to open the borders was a policy choice for humanitarian reasons, not for some sinister motive.

    2. What about the Labour Party in the 90s? They admitted it was to change the culture and the electorate.

      I mildly dispute your theory about Merkel. I think posturing -- virtue signalling -- was and is still a huge motive for her and her supporters.

  2. There is a link between the Troika economic policies in Greece and this rise in immigration.

    An article by the British Iraqi journalist Ghaith Abdul in the London Review of Books dated 8 October 2015 'Some Tips for the Long-Distance Traveller' confirms that the stream of boats from Turkey only started when the Syriza government reversed the previous 'turn back the boats' policy.

    As reported in the FT today Schauble is talking about a Marshall Plan for the Middle East to stop the tide of refugees.

    It would have been simpler to apply this idea in Greece.

  3. LK, why do you think Germany refuses to accept virtually all Ukrainian migrants who reach its borders?

    1. Do you have evidence that they are turning away Ukrainians?

      If they are really turning away genuine Ukrainian refugees from the civil war, then that is a strange double standard, given their willingness to take refugees form nations far away from Europe.

      Of course it could be that the Ukrainians in question may be mere economic migrants, not refugees, in which case there is no legal reason why the EU should take such economic migrants.

  4. LK, why do you think it's now the "liberal" position to accept millions of "refugees" while the "conservative" position is to turn them away. This seems backwards to me, since a flood of immigration gives businesses what they've always wanted: Cheap, unorganized labor.

    1. You wouldn't have to look hard to find neoliberal conservatives in favour of open borders.

      Aren't Jeb Bush and other prominent Republicans in favour of amnesty and citizenship for illegals in the US?

  5. LK, why do you think it has become the "liberal" position to want to accept immigrants? The rich have traditionally been the ones who wanted great influxes of labor, as it meant they had to pay their workers less. Why is the left letting identity politics drive them to contradictory policies?

    1. Complex reasons. Extreme multiculturalist ideology is one reason. The influence of Marxist/left libertarian open borders utopian nonsense is another. No doubt you could add other reasons to the mix.

  6. Great post but I do wish you wouldn't strawman left libertarians. As a Green who are the UK's slept libertarians (sort of) open borders are a long term aspiration not a right now policy which is about discrimation.
    These are from out policies for a Sustainable Society document (really needs a guide on how to read it as it's very nuanced)
    Background MG101 The existing economic order and colonialism have both been major causes of migration through direct and indirect violence, disruption of traditional economies, the use of migrants as cheap labour, uneven patterns of development and global division of labour.

    MG102 We are aware that, in the 21st century, there is likely to be mass migration of people escaping from the consequences of global warming, environmental degradation, resource shortage and population increase.
    MG200 The Green Party's highest priority is the creation of a just and ecological world order in which environmental devastation is minimised and needs can be met without recourse to migration.

    We are well aware of the causes.