The economy of more immigration

The International Herald Tribune has an article about immigration as a means to solve economic problems. Lant Pritchett, who puts forward the ideas, is no idealist. He thinks with a purely economic mind. How much money do "rich countries" earn by letting in more immigrants, and how much money do "poor countries" earn by sending surplus labour abroad? Both sides win, so let's do it, is his credo. However, he is willing to accept that the workers are denied the right to bring their families and the hope to ever get citizenship.

He points out that incomes in the rich countries today are about 50 times those of poorest ones, but in the late 19th century, the ratio was only 10 times.

Regardless of his other opinions, that seems to be the crux. As the richer countries keep the people who happened to be born in poor countries out, the differences increase. The bigger the difference, the worse the conflicts when they happen.

If the difference had stayed at a 10 to 1 ratio, would thousands of people have died trying to reach Europe the last few years? If the difference increases above 50 to 1, how many people will die in the future? How desperate measures will they be prepared to take?

The really ridiculous thing is that the real difference actually is smaller than 50 to 1. Prices in rich countries tend to be higher than in poorer countries, so even if you have a higher salary, you are not necessarily much better off.

That is why opening the borders may be such an efficient solution. Prices go down in the rich countries. Salaries go up in poorer countries. Prices may also go up in poorer countries and salaries may go down in richer countries, but it is not certain. What is certain is that the differences would diminish, and with them much of the current tension and the risk for future conflicts.