Friday, December 9, 2016

Mises on Mass Immigration

We must remember that Mises – as a Classical Liberal – was a doctrinaire supporter of laissez faire open borders.

In Mises’ book Omnipotent Government: The Rise of the Total State and Total War (1944), written during the Second World War, he admits an exception to open borders:
“Pacifism is doomed in an age of etatism. .... [sc. Liberalism] did not declaim against war; it sought to establish conditions, in which war would not pay, to abolish war by doing away with the causes. It did not succeed because along came etatism. When the pacifists of our day tell the peoples that war cannot improve their well-being, they are mistaken. The aggressor nations remain convinced that a victorious war could improve the fate of their citizens.

These considerations are not a plea for opening America and the British Dominions to German, Italian, and Japanese immigrants. Under present conditions America and Australia would simply commit suicide by admitting Nazis, Fascists, and Japanese. They could as well directly surrender to the Führer and to the Mikado. Immigrants from the totalitarian countries are today the vanguard of their armies, a fifth column whose invasion would render all measures of defense useless. America and Australia can preserve their freedom, their civilizations, and their economic institutions only by rigidly barring access to the subjects of the dictators. But these conditions are the outcome of etatism. In the liberal past the immigrants came not as pacemakers of conquest but as loyal citizens of their new country.” (Mises 2010 [1944]: 106).
So at least Mises had the intelligence to recognise that the last thing that America needed in WWII was to allow millions of immigrants from Germany.

But what about when Third World cultures are very different from the culture of the Western world, and mass immigration into the West causes severe social and cultural problems?

Mises, it appears, never thinks of this, nor has anything to say about it. Mises may as well be an unhinged multiculturalist for whom all cultures are equal and substitutable.

Later on in Omnipotent Government, Mises has this to say:
“We have already pointed out that the maintenance of migration barriers against totalitarian nations aiming at world conquest is indispensable to political and military defense. It would undoubtedly be wrong to assert that under present conditions all kinds of migration barriers are the outcome of the misguided selfish class interests of labor. However, as against the Marxian doctrine of imperialism, almost generally accepted today, it is necessary to emphasize that the capitalists and entrepreneurs in their capacity as employers are not at all interested in the establishment of immigration barriers. Even if we were to agree to the fallacious doctrine that profits and interest come into existence because the entrepreneurs and capitalists withhold from the worker a part of what should rightly be paid to him, it is obvious that neither their short-run nor their long-run interests push the capitalists and entrepreneurs toward measures which raise domestic wage rates. Capital does not favor immigration barriers any more than it does Sozialpolitik, whose inextricable outcome is protectionism. If the selfish class interests of big business were supreme in the world, as the Marxians tell us, there would be no trade barriers. The owners of the most efficient plants are—under domestic economic freedom—not interested in protection. They would not ask for import duties were it not to compensate for the rise in costs caused by pro-labor policies.

As long as there are migration barriers, wage rates fixed on the domestic labor market remain at a higher level in those countries in which physical conditions for production are more favorable—as, for instance, in the United States—than in countries offering less favorable conditions. Tendencies toward an equalization of wage rates are absent when the migration of workers is prevented. Under free trade combined with migration barriers there would prevail in the United States a tendency toward an expansion of those branches of production in which wages form a comparatively small part of the total costs of production. Those branches which require comparatively more labor (for instance, the garment trade) would shrink. The resulting imports would bring about neither bad business nor unemployment. They would be compensated by an increase in the export of goods which can be produced to the greatest advantage in this country. They would raise the standard of living both in America and abroad. While some enterprises are menaced by free trade, the interests of the bulk of industry and of the whole nation are not. The main argument advanced in favor of American protectionism, namely, that protection is needed to maintain the nation’s high standard of living, is fallacious. American wage rates are protected by the immigration laws.

Pro-labor legislation and union tactics result in raising wage rates above the level secured by the immigration laws.” (Mises 2010 [1944]: 244–245).
It is, more or less, true that Big Business loves cheap labour, and has a long history of promoting Third World mass immigration into colonies created by Europeans, whether in Canada, America, Australia or New Zealand, and increasingly even Europe itself.

The destruction of high wages in the West and the tendencies “toward an equalization of wage rates” is a capitalist wet dream. Mises certainly wanted it. But of course it means the destruction of high wages, labour rights, working conditions and living standards in the West.

Mises’ rosy picture of what would happen in America under free trade and free movement of people is of course a fantasy world as delusional as utopian Communism, and all dependent on the fiction of
(1) wage and price flexibility leading to a clearing of product markets and the labour market, and

(2) Ricardo’s fallacy of the benefits of free trade by comparative advantage.
Once we relax these assumptions Mises’ vision falls apart – just as America has fallen apart from free trade and increasingly free movement of people over the past 40 years.

Mises also analyses the open-borders policies that might hypothetically be pursued by Marxist internationalists or a world Communist state:
“A socialist world-embracing management could, of course, consider a policy under which all human beings are treated alike; it could try to ship workers and capital from one area to another, without considering the vested interests of the labor groups of different countries or of different linguistic groups. But nothing can justify the illusion that these labor groups, whose per capita income and standard of living would be reduced by such a policy, would be prepared to tolerate it. No socialist of the Western nations considers socialism to be a scheme which (even if we were to grant the fallacious expectations that socialist production would increase the productivity of labor) must result in lowering living standards in those nations. The workers of the West are not striving for equalization of their earnings with those of the more than 1,000 million extremely poor peasants and workers of Asia and Africa. For the same reason that they oppose immigration under capitalism, these workers would oppose such a policy of labor transfer on the part of a socialist world management. They would rather fight than agree to abolition of the existing discriminations between the lucky inhabitants of comparatively underpopulated areas and the unfortunate inhabitants of the overpopulated areas. Whether we call such struggles civil wars or foreign wars is immaterial.

The workers of the West favor socialism because they hope to improve their condition by the abolition of what they describe as unearned incomes. We are not concerned with the fallacies of these expectations. We have only to emphasize that these Western socialists do not want to share their incomes with the underprivileged masses of the East. They are not prepared to renounce the most valuable privilege which they enjoy under etatism and economic nationalism—the exclusion of foreign labor. The American workers are for the maintenance of what they call ‘the American way of life,’ not for a world socialist way of life, which would lie somewhere between the present American and the coolie level, probably much nearer to the latter than to the former. This is stark reality that no socialist rhetoric can conjure away.

The same selfish group interests which through migration barriers have frustrated the liberal plans for world-wide peaceful cooperation of nations, states, and individuals would destroy the internal peace within a socialist world state. The peace argument is just as baseless and erroneous as all the other arguments brought forward to demonstrate the practicability and expediency of socialism.” (Mises 2010 [1944]: 110–111).
On the one hand, Mises is correct that mass Third World immigration into the West would provoke a tremendous backlash, because it would severely lower wages and living standards.

We are seeing such a backlash today, but the difference is that it is being pursued by neoliberal governments whose economic policies of free trade and open borders are much closer to Mises’ Classical liberalism than anything demanded by Communists.

And, in reality, Mises’ Classical liberalism – if it attempted to totally abolish national borders and allow millions to pour into the West – would also provoke massive popular hostility and social conflict in the West, of a similar type to that which he envisages in some hypothetical Communist world.

Yet, as far as I can see, Mises – whatever practical exceptions he may have made during wartime – was still ideologically and theoretically committed to this Classical Liberal insane-asylum world of free trade and open borders. So why couldn’t he see how socially and culturally destructive and doomed to failure such open borders policies would be?

This issue is precisely one of the keys to understanding what has gone wrong in the West: free movement of people is a suicidal policy for the Western world.

Yet so many of our political ideologies are pushing this policy endlessly, whether it is Conservative neoliberalism, leftist neoliberalism, the cultural left, the Classical liberals, open borders libertarians, Marxist internationalists, and even the Labour parties or leftist parties that have recently rediscovered some left-wing economics.

In fact, ideologically both (1) Classical liberalism/libertarianism and (2) Marxism/Communism share the same insane vision of our world: one without national borders and with the mass movement of people to destroy traditional cultures, ethnicities and identities.

This can be seen in Lenin’s panegyric to the mass movement of people in 1913:
“Capitalism has given rise to a special form of migration of nations. The rapidly developing industrial countries, introducing machinery on a large scale and ousting the backward countries from the world market, raise wages at home above the average rate and thus attract workers from the backward countries.

Hundreds of thousands of workers thus wander hundreds and thousands of versts. Advanced capitalism drags them forcibly into its orbit, tears them out of the backwoods in which they live, makes them participants in the world-historical movement and brings them face to face with the powerful, united, international class of factory owners.

There can be no doubt that dire poverty alone compels people to abandon their native land, and that the capitalists exploit the immigrant workers in the most shameless manner. But only reactionaries can shut their eyes to the progressive significance of this modern migration of nations. Emancipation from the yoke of capital is impossible without the further development of capitalism, and without the class struggle that is based on it. And it is into this struggle that capitalism is drawing the masses of the working people of the whole world, breaking down the musty, fusty habits of local life, breaking down national barriers and prejudices, uniting workers from all countries in huge factories and mines in America, Germany, and so forth.

America heads the list of countries which import workers. ….

The bourgeoisie incites the workers of one nation against those of another in the endeavour to keep them disunited. Class-conscious workers, realising that the break-down of all the national barriers by capitalism is inevitable and progressive, are trying to help to enlighten and organise their fellow-workers from the backward countries.”
V. I. Lenin, “Capitalism and Workers’ Immigration,” Za Pravdu No. 22, October 29, 1913.
And, finally, in Engels’ The Principles of Communism (written in 1847):
“What will be the attitude of communism to existing nationalities?

The nationalities of the peoples associating themselves in accordance with the principle of community will be compelled to mingle with each other as a result of this association and thereby to dissolve themselves, just as the various estate and class distinctions must disappear through the abolition of their basis, private property.”
Whereas a Communist like Engels can happily admit to wanting the dissolution of national cultures and nationalities, the Classical Liberals and libertarians would bring it about, if not by intent, then by the consequences of their laissez faire theology.

Mises, Ludwig von. 2010 [1944]. Omnipotent Government: The Rise of the Total State and Total War. Ludwig von Mises Institute, Auburn, Ala.


  1. In most economist's arguments -- Landsburg is a clear example -- you see then dealing with abstractions like the prospective immigrant's labor or his demand. If all people brought with them were their labor or their demand their arguments would be pretty decent. But people bring a lot more than their disembodied labor and disembodied demand: they bring themselves too, with their attitudes and practices and values (and eventually votes), and this is no part of the economists' arguments or models. There are social and liberty costs that they completely ignore.

  2. Interesting and good food for thought. As always however, there's a balance to be had between Unrestricted Immigration on the one hand and Xenophobic targeting of people groups on the other. As always, Compassion must rule 1st & foremost. The basic Spiritual principles of Sewing and Reaping have yet to fail anyone, and they stand above the controversies nursed by Austrians and Keynesians alike.

  3. Mises is a great hypocrite: he fled to the US as a refugee in 1940 and then wanted to slam the door shut behind himself. We would have been better off perhaps if he and his teachings remained in Austria.

    My own father fled Vienna the year before, and was allowed in even though (at age 14) he was currently in the Hitler Youth. He then served for 3 years in the US Army in Africa and Europe as soon as he turned 18.

    1. On one occasion, PM Bruno Kreisky of Austria proved himself a greater wit than his interlocutor, John Kenneth Galbraith. When Galbraith asked Kreisky what he attributed Austria's prosperity to, Kreisky said its exports. Puzzled, Galbraith asked of what? Kreisky: "Economists".

  4. Ironic, given how closed off communist nations were despite their commitment to internationalism. With only a few exceptions must were extremely tough to get in or out of permanently. Even today China and Cuba still have some of the smallest foreign populations.

  5. And good luck to them. It's only Western regressive leftists who think that the international solidarity of workers means letting them in to your own country in unprecedented numbers.