Migration as poverty reduction

Immigration is a great way of reducing poverty. A new paper (pdf) by John Gibson at the University of Waikato and colleagues has established this in a neat way.

Each year, Tongans wanting to migrate to New Zealand are randomly given permits to do so. Comparing permit-winners who migrated to those who didn't win the ballot allows us to see the impact upon incomes of migration: because the ballot-winners, being drawn at random, are otherwise similar to the losers we get a relatively clean measure of the effect of migration.

Gibson and colleagues estimate that a ballot winner who migrates earns an average of NZ$340 per week, compared to NZ$126 for losers who stay in Tonga. That's almost a tripling of income. It amounts to a lifetime gain of well over £100,000. Controlling for the difference in cost of living between Tonga and New Zealand doesn't much affect the results.

This is consistent with a finding by Orley Ashenfelter - that people doing the same job (working in McDonalds) earn ten times as much (pdf) in real terms in rich countries as in poor ones.

You might think this is trivial: people in rich countries are richer than those in poor ones - big deal. I'm not sure it is. The fact that incomes differ so much for similar people - ballot winners and losers or McDonalds workers - shows that such differences are due far more to the luck of where we were born than to personal qualities. We westerners often forget this: we were born on third base but congratulate ourselves on hitting a triple.

All this poses the obvious question: what right do we in the west have to deny others the chances that we got through the sheer good luck of being born in the right place? Does the one-in-a-millionish chance that a migrant might be a terrorist justify inflicting poverty upon tens of thousands of decent but unlucky people? Even if we concede that there are other costs to host countries - such as a loss of social cohesion and less internal redistribution - do these justify inflicting mass poverty? If so, how? As Bryan Caplan says, your love of your countrymen  may tempt you to treat foreigners unjustly, but it's no excuse for treating them unjustly.

Of course, it's not just the impact of immigration upon rich countries that matters. So too does the impact on poor ones. Paul Collier has suggested that migration hurts these by depriving them of talented energetic people. But is this really an argument for migration controls? Forcing people to work within a particular country for substantially lower wages than they could get elsewhere is a form of slavery - more so than the high taxes of which right-wingers often complain.

I know the terrible Paris attacks might well cause a backlash against immigration. But this makes it all the more necessary to point out that there is a strong moral case for migration as a means of lifting people out of poverty. The question is whether morality trumps practicality, and if so why.

Comments

[Staberinde]

Rather than encourage immigration to the rich West, why not simply expand the rich West's territory? We invade, remove the dictators and theocrats, invest in infrastructure, give everyone democracy and better standards of living.

After all, Chris can't be arguing that our wealth derives from our physical assets. It's surely from the nature of our civil societies. Good places to do business, stable, human rights etc.

So solution #1 is to bring the world's poor here. And solution #2 is to bring Western civil society to poor parts of the world. I see a strong equivalence between the moral case for immigration and the moral case for liberal interventionism.

[gastro george]

"Chris can't be arguing that our wealth derives from our physical assets."

But you could argue that our wealth derives (at least partly) from their physical assets.

[Staberinde]

"But you could argue that our wealth derives (at least partly) from their physical assets."

Indeed!

How sad that the absence of human rights, democracy, rule of law etc. prevent the world's poor from exploiting their own resources as effectively as we have, prompting them to migrate. What if they could stay home and enjoy the fruits of their resource wealth?

Liberal interventionism: it's imperialism without the theft. And no less moral than mass migration!

[Mustsign topost]

"golden shower as rain" logic. Exploit the 3rd world then when they emigrate exploit the 1st world... win win

[Bob]

"The paʻanga is the currency of Tonga. It is controlled by the National Reserve Bank of Tonga (Pangikē Pule Fakafonua ʻo Tonga) in Nukuʻalofa. The paʻanga is not convertible and is pegged to a basket of currencies comprising the Australian, New Zealand, and United States dollars and the Japanese yen."

Pegged currency.

Greece vs. Germany all over again.

[Ralph Musgrave]

Chris completely misses the point that the poverty of poor countries presumably results from cultural or genetic traits of its people. If those traits are imported to rich countries, the latter may lose as much or more than the migrants gain.

Low IQ is just one of the possible undesirable genetic traits found in some poor countries, as was discussed in this Adam Smith article:

http://www.adamsmith.org/blog/economics/garett-jones-vs-bryan-caplan-on-immigration/

Another point, also missed by Chris, is that mixing two cultures results in the loss of two cultures and the creation of a new hybrid culture. E.g. English derives from French, Latin and Anglo Saxon.

Multiculturalism, far from that ever popular “enrichment” it’s supposed to bring, arguably results in cultural impoverishment for the world as a whole.

[gastro george]

Puts on tin hat ...

[Bob]

It always amuses me that the left cannot see the problem with free movement of people. It means that you can't improve your welfare state for the people that are already here beyond a very low point. You are committed to a chase to the bottom in state provision.

So my challenge to the left is simple. If you really believe that open borders to 23 million unemployed people across Europe (or even the entire world!) isn't a problem for public services such as schools, hospitals, social housing, as well as the environmental carrying capacity of the country, then implement a Job Guarantee.

Explanation here:

http://www.3spoken.co.uk/2015/11/job-guarantee-jobs-for-people.html

Read it?

At the living wage, to anybody who wants it working for the public good. Got it?

Then do it tomorrow.

Because if you won't implement a Job Guarantee then what you are actually doing is condemning those that are here to poverty because you want to keep your 'internationalist' credentials.

You are deliberately restricting access to a decent income to the poorest in the nation (and even worse restricting social security to those you have invited into the UK on visas and EU passports!) - as a way of controlling inward migration flow.

Stealing skilled people from other countries diminishes the capacity of that other country to develop. (Are they really so overrun with doctors in India, and their standard of heath so good that they can spare them for our benefit?).

Stealing unskilled people from other countries increases GDP and the profit share, but does not result in any more of the out of work residents of the UK getting a job, higher wages, or any of the businesses improving their productivity.

Business should work with what we have. Of course sometimes immigration is necessary.

Both the left and the right are wrong on immigration. And it's got to the point where there isn't even a debate any more.

We need to focus on ending poverty here in the UK. But if we invite people into this country they should have the same rights and responsibilities and access to social security as the rest of us, including access to a basic income if one exists. To do so otherwise *is* racist.

A rational immigration policy is one that concentrates on high value individuals and one that makes those visas very expensive for the businesses involved. That way business is more likely to choose to improve the capital stock of the nation rather than going straight for the 'nick somebody else from abroad' option.

Yes we need the release valve of immigration to get around persistent shortages on the supply side in high value services, but business should never profit if they use that option. The value should really accrue to the state to offset the additional social costs of maintaining a higher population.

Full employment is when you have more vacancies than people to fill them. In other words you can walk out of a job and into another one. Business should always be short of people and forced to innovate to get around that restriction. That's how we progress. That's how we avoid a persistent chase to the bottom.

The pragmatic way to open borders is simple. As part of implementing the Job Guarantee you restrict the open borders to other parts of the world that have an equivalent Job Guarantee programme and social infrastructure (universal healthcare, etc.) If you don't come from such country then you have to apply for a visa and be assessed.

It's quite difficult for a foreign leader to argue against that position, because if they do then they are essentially saying they want to dump their unemployment in the UK rather than deal with it themselves. The push back would be: Implement a Job Guarantee and we'll gladly remove the restrictions for your country.

Gradually the open borders areas expands.

So as well as solving the unemployment and underemployment and poverty problems permanently (and eventually around the entire world hopefully!), you make the Job Guarantee a viral requirement for open access to your advanced economy. At a stroke we have a positive reason for a temporary restriction on free movement.

[Bob]

"This is consistent with a finding by Orley Ashenfelter - that people doing the same job (working in McDonalds) earn ten times as much (pdf) in real terms in rich countries as in poor ones."

Ah this BS gambit...

Why does anybody do that, and not automated burger-flipping machinery?

Because immigrants are cheap, the cost of importing them is socialised, and therefore it is not worth building the robotic machinery needed to eliminate the job.

[Staberinde]

Just look at London vs. the North. The North migrated to London because that's where the jobs and infrastructure were. And now there aren't the jobs and infrastructure in the North. Companies won't locate there because even the goddamn train lines aren't electrified - and the brightest and best have moved to Shoreditch.

And what has become of London? Unaffordable accommodation. Commuters packed like cattle. Overstretched public services and no place to bring up a family unless you're a millionaire.

Most people on the Left think the answer to London and the nation's problems involves making the regions better places to live, work and do business. Not squeezing millions more into London or concreting the green belt.

Just as we need to inject cities like Liverpool with London's magic formula, surely the answer to global inequality isn't mass migration, but an injection of Western values and practice into the world's poorly governed regions?

[Bob]

The solution is to create Jobs where people live. The Job Guarantee also solves a *very significant* micro-economic issue - commuting. By creating jobs where people live it prevents people from having to go so far for jobs and live on top of each other, which wastes time and fuel.
Look at the link above I posted.

[Jim]

In other news, if I drop an ice cube into a vat of boiling water, the ice cubes melts and becomes (to intents and purposes) as hot as the vat of water. Ergo if I drop a million ice cubes into the vat, the same thing will happen.

I think thats what the logic of this piece tells me anyway..........

[Bob]

"surely the answer to global inequality isn't mass migration, "

It's not just mass migration. It's FORCED mass migration. The 'progressive left' want you to wonder the world looking for a minimum wage job. They have already got their dream in Europe and now the push is on to abolish borders completely and anyone who disagrees is a filthy white male privileged bigot.

Net migration into a country is a 'beggar thy neighbor' policy. You'll note that Dillow's analysis is entirely from an *individual* viewpoint. Sod all those people who are left behind. We'll flood the UK with immigrants.

It's once again taking a narrow viewpoint and curve fitting data to fit that viewpoint. That's what lefties do. Lefties love to talk in AVERAGES.

[Bob]

"As Bryan Caplan says, your love of your countrymen may tempt you to treat foreigners unjustly, but it's no excuse for treating them unjustly."
And who the fuck is Bryan Caplan? Another lefty pissing on the UK working poor?

By what? Disagreeing on open borders? Why does he think "love of fellow countrymen" has anything to do with it? This is standard racial and ethnicity based attacks from the lefties who have no actual arguments.

The lefty conflation of skilled migrants with unskilled migrants and trying to hide the latter under the coat tails of the former has poisoned the discourse - likely permanently.

Take a look at this chart (you know actual EVIDENCE):
http://1.bp.blogspot.com/-w5-6GGdNBAY/U49HhtkFd6I/AAAAAAAAAQ8/8ElWZbjkECw/s1600/BpRe7W8IIAAGqcS.jpg-large.jpeg
Notice the big jump in desired hours (top line) around 2004. I wonder why that is?

For immigration to have a positive effect it needs to be of high value. That helps to ensure that the multiplier is large, and that the new jobs created by the cascade have a chance of being of a low enough level to soak up the remaining people on the unemployment queue.

However if you allow an unskilled migrant to come in, then the chances of creating a job that will match somebody else decrease significantly. The multiplier doesn't have as strong an effect. More likely you will just recreate nearly the same job you just filled.

And that is what we see. Over time the number of people goes up, the number of hours demanded goes up, but the rate of under engagement stays about the same. If the total goes up and the rate stays roughly the same then the number of people unemployed, underemployed and inactive continues to go up - each one of those cases being a personal disaster for the individual involved.

[Lord]

All of this applies equally to inheritance and property. Love of your children may tempt you to treat others unjustly but it is no excuse for treating them unjustly. Well, even preferring your own and providing them with advantages is treating others unjustly. The world is unjust and that isn't about to change, get over it.

[Bob]

"So solution #1 is to bring the world's poor here. And solution #2 is to bring Western civil society to poor parts of the world. I see a strong equivalence between the moral case for immigration and the moral case for liberal interventionism."
Yeah and they are both a load of crap lefty! Leave the world alone!
"All of this applies equally to inheritance and property."
Interesting that we had Domestic Rates for so long then and house prices were fairly stable post war to the 1970s. Could it be you are talking a bunch of crap.

[Boursin]

The comments here, as always when this blog discusses any immigration-related subject, are beyond comical. Bryan Caplan is "another lefty"! And poverty is due to genetics. I suppose this means that the human genetic inheritance has suddenly changed completely during the past 200 years, as most of the economic growth in human history up to now has occurred during this brief period?

[Bob]

"Paul Collier has suggested that migration hurts these by depriving them of talented energetic people. But is this really an argument for migration controls? Forcing people to work within a particular country for substantially lower wages than they could get elsewhere is a form of slavery - more so than the high taxes of which right-wingers often complain."
Of course! Exactly like slavery. And yeah high taxes on rich people like Chris are slavery too. Why the fuck not? Oh, I forgot how privileged I am.
"Sir Paul Collier, CBE (born 23 April 1949)[1] is Professor of Economics and Public Policy in the Blavatnik School of Government at the University of Oxford."
Except
a) They can lobby for higher wages and better social infrastructure. You know actually solving the problem. The best thing to do is use 'nudge theory' and say open borders are only available IF this happens.
b ) We accept immigrants that MEET the skills based system, and this only applies to the UK. How is that "Forcing people to work within a particular country for substantially lower wages"? BTW, if a magical oil well and a bunch of natural resources is discovered in every country except the UK, are UK citzens now slaves? I hope not!
c ) So you work in a particular country. I can't afford to go abroad. This is slavery because??

[Bob]

Look at this guy more...
"Collier currently serves on the advisory board of Academics Stand Against Poverty (ASAP)."
Filthy slave owner. What does he know eh Chris?
https://en.wikipedia.org/wiki/Paul_Collier

[Bob]

"Tongans wanting to migrate to New Zealand are randomly given permits to do so. Comparing permit-winners who migrated to those who didn't win the ballot allows us to see the impact upon incomes of migration: because the ballot-winners, being drawn at random, are otherwise similar to the losers we get a relatively clean measure of the effect of migration."
Ha! Clean measure! Except this is complete horseshit - migration should be on skills not randomly. That is stupid.

[Bob]

"The world is unjust and that isn't about to change, get over it."
Another bait and switch argument. Nobody is arguing for changing the whole world, except a few morons. We can change things in the UK though - we have a vote and can debate.
The smaller the political entity the easier it is to get the necessary changes through. Within the UK we could ensure everybody has a job at a living wage easily, decent housing for all, decent pensions and a highly competitive business sector, supported by state funded R&D research, to replace the current oligopolies.

A simple visa system along the lines of Canada or Australia ensures that the flow of migrants into the country is controlled to that which the country's infrastructure can cope with. The only real change from the current situation would be a restriction on low skilled economic migrants from the EU.

[Bob]

I can imagine Chris writing this
"We're forcing people to live in most areas of the UK for substantially lower wages than you can get in London. So should we encourage everybody to emigrate to London - because of course immigration has no effect on the infrastructure, housing, school or support systems in any area. That's why 1841 Manchester and the Cholera epidemic never happened. Anyone who disagrees is a bigot and unjust. Blah blah blah..."

[Blissex]

I find appeals to "justice" as to the political economy of a state quite ridiculous, because states are business arrangements among their members, they are corporations, typically somewhat similar to cooperatives.

First-world states are in effect capital-rich cooperatives, whose members enjoy a much higher standard of living than members of other states because of previously occurring capital accumulation.

That they are capital-rich cooperatives explains why «people doing the same job (working in McDonalds) earn ten times as much (pdf) in real terms in rich countries as in poor ones» (along with Baumol's "cost disease" story).

What our blogger is saying is very simple: that if you give to poor people a free membership of a capital-rich cooperative, the new members will therefore gain a lot of wealth, instantly. That's entirely true. It indeed happens within each first-world capital-rich cooperative anyhow for every newborn.

However gaining a free membership of a capital-rich cooperative may be a christian right, but it is not necessarily a political right, and perhaps it is not perhaps a kind of business donation that members of a capital-rich cooperatative want to extend to everybody else.

From a business point of view of course offering membership of a capital-rich cooperative in a *reciprocal* arrangement with another roughly equivalent capital-rich cooperative poses no problems: so it is fairly ridiculous to have immigration restrictions either way between the UK and the USA or the UK and France, just as between Bristol and Newcastle.

But otherwise of course the more people from a capital-poor cooperative get a free membership of a capital-rich cooperative the lower is the capital backing each existing member of the latter.

How big is this effect? Well, in the 14th century 1/3 to 1/2 of the population of England "emigrated" (to the afterlife) and this tripled the wages of existing members (reducing property/business profits and inequality), as illustated very clearly in figure 8, page 27 of this paper:

http://www.najecon.org/naj/cache/625018000000000238.pdf

Eventually the previous level of member-to-capital ratio was almost restored by "immigration" (from wombs) prevailing wage levels returned almost back to what they were.

Now the standard prevarication by "sell-side" Economists is that capital is created by labour, so each extra immigrant from a capital-poor cooperative given a free membership in a capital-rich one will automatically build up capital over time and the capital per member ratio will eventually stay the same. The problem with that is that it assumes that natural resources are free, that there are no imports, and that it does not take a long time.

The famous Tonga-NZ case is simply about donating a temporary membership to a few lucky lottery winners to their benefit and mostly that of their employers. The farm property owner lobby is of course powerful in NZ and of course they always complain that cheap hired help is hard to find.

[George Carty]

Surely it would be better for third-world immigrants to go to countries with plenty of land and resources, like the USA, Canada, Australia or Argentina, rather than countries like the UK that are already densely populated?

By the way, how difficult would it be to stabilize the Maghreb countries (Morocco/Algeria/Tunisia) enough to build big retirement resorts there? That would kill two birds with one stone: reducing the cost of providing healthcare and pensions (and eliminating heating costs altogether) for those elderly Western Europeans retiring there, while also providing desperately needed jobs for young Maghrebis.

Many northern Europeans already retire to southern Europe of course, but most southern European countries have demographics even more parlous than the north, while north Africa has far more young people.

[Blissex]

«The only real change from the current situation would be a restriction on low skilled economic migrants from the EU.»

Why not restrict low skilled migration from the North of the UK to the South of the UK?

Why should low-skilled lazy-scroungers from Sunderland STEAL THE JOBS of the low skilled hard-workers of Guildford?

Why shouldn't the «flow of migrants into the» the South from the North be «controlled to that which the» South's «infrastructure can cope with»?

Think carefully about both what the EU freedom of movement is about (for example the 2-3 million UK citizens living or working in the rest of the EU) and who has benefited from unrestricted immigration from the North to the South of the UK, for centuries.

[Blissex]

«Tongans wanting to migrate to New Zealand are randomly given permits to do so. Comparing permit-winners who migrated to those who didn't win the ballot»

IIRC there is a really important detail here: the permit is *temporary*, for harvest season only. The main purpose of the scheme is to benefit the powerful NZ farm lobby at the expense of the NZ underclass.

«Gibson and colleagues estimate that a ballot winner who migrates earns an average of NZ$340 per week, compared to NZ$126 for losers who stay in Tonga. That's almost a tripling of income. It amounts to a lifetime gain of well over £100,000. Controlling for the difference in cost of living between Tonga and New Zealand doesn't much affect the results.»

But note that IIRC the Tongans given a free temporary membership in capital-rich NZ earn their NZ$340 per week and then go back to their lower capital original location and thus lower price, and thus benefit a lot.

[Blissex]

«who has benefited from unrestricted immigration from the North to the South of the UK, for centuries»

As a reminder the UK government was pushing very hard for extending EU membership to Romania and Bulgaria, and was exceedingly eager to encourage emigration of low-skilled romanian and bulgarian workers to the UK as soon as possible.

Sure, part of the UK government's motivation to push hard to extend EU membership as widely as possible and to countries with a significant population and GDP-per-head 1/5th of the EU average was to undermine the viability of the EU (this was countered with the eurozone project), but that was only part of the motivation.

[Bob]

Blissex, you don't seem to get it:
"It means that you can't improve your welfare state for the people that are already here beyond a very low point. You are committed to a chase to the bottom in state provision."
As the UK has control over The North, it could end poverty there. It could try to do this in other countries if they also implement full employment, universal healthcare, etc. Perhaps even provide funding via foreign aid.
Job Guarantee and land tax/basic income mean The North will expand.
But we can end poverty in the UK. Which seems a much more reasonable goal.
That's the pragmatic way to open borders.
You can pull everyone in your country out of poverty with policies lightly coupled with the rest of the world.
Your cynical perspective on things is always helpful though.

[Bob]

"Why not restrict low skilled migration from the North of the UK to the South of the UK?"
Why not create jobs in the North of England? Look at Neil W reply on 3spoken.
It conceivably could have happened if the Scots had voted in September 2014 to leave. The push is on for smaller state. That is what happens when you promote individualism. See also Catalonia.
The current borders infrastructure is around the UK which works well (except for N Ireland.)
"undermine the viability of the EU (this was countered with the eurozone project)"
The problem with the eurozone project is it is stillborn. There needs to be a eurozone federal govt or breakup.

[Bob]

"The only real change from the current situation would be a restriction on low skilled economic migrants from the EU.

Why not restrict low skilled migration from the North of the UK to the South of the UK?"
Blissex, if the eurozone had full employment and not the mass unemployment at the most no problem.
"As a reminder the UK government was pushing very hard for extending EU membership to Romania and Bulgaria, and was exceedingly eager to encourage emigration of low-skilled romanian and bulgarian workers to the UK as soon as possible."
Indeed. But me does not = UK govt.
The current government's policy on a lot of things has been shameful. They are running the UK into the ground.

[Bob]

* at the moment.

[Bob]

Here ya go - Neil W replies
"Why should low-skilled lazy-scroungers from Sunderland STEAL THE JOBS of the low skilled hard-workers of Guildford?"

Why should they indeed.

So create the required jobs in Sunderland with a Job Guarantee. Most people from Sunderland wouldn't be seen dead in Guildford if they had a choice.

And that's the point - create the jobs where people are. Having people wandering around the continent like permanent refugees in search of their next meal is destructive to communities and cultures.

It only serves the corporate masters, who then have no reason to innovate their management and control techniques to take the work to where the people are. Hence why we have massive commute times, clogged roads and overloaded trains. "

[Blissex]

«As the UK has control over The North, it could end poverty there. It could try to do this in other countries if they also implement full employment, universal healthcare, etc.»

There is a lot of evidence that the *aggregate* production of a country depends (but for endowment of extractable resources) in the long run on productivity, and that depends on the capital/population ratio, and the distribution of that aggregate production depends even more on that ratio.

Not so much on whether the country does «implement full employment, universal healthcare», even if that can help (as A Deaton showed in his research) to build up human capital. But human capital is not everything as the point that «(working in McDonalds) earn ten times as much (pdf) in real terms in rich countries as in poor ones» story shows.

«Job Guarantee and land tax/basic income mean The North will expand.»

That is by sharing more of the benefits of the capital-stock of the UK South "cooperative" with the members of the UK North "cooperative". But UK elections are decided in the South, not in the North. So we can forget about regional and downwards redistribution like that, at least in the short term.

The North is poor because its stock of productive capital fell precipitously either because of falling behind technical advancements or because of stupid unions pushing it away or because of government policy to smash those unions.

[Bob]

The evidence shows paying *unskilled* workers more make them work harder. Introducing a Job Guarantee at the living wage would allow you to collect that work for the public good. Forcing businesses to compete for staff at the living wage means they have to invest in machinery. So it means bigger pie and more evenly shared pie. And it seems a better choice than Basic Income:
""What's the difference between giving someone $15,000 per year (weekly/monthly), and giving them a $10/hr job 30 hours a week doing what would otherwise go union"

When they get a $10.50/hr job in the normal job sector, there is an automatic reduction in state spending. Which means that you don't have to put taxes up as much to recover, you don't disrupt the private sector pay structure, and the 'dead zone' between the guaranteed income and the income required for a 'normal job' is less.

People don't like paying taxes. They like other people to pay taxes. "
A lot of work in the UK is "learn by doing."
There is discussion here where I have voiced your concerns.
http://www.3spoken.co.uk/2015/11/job-guarantee-jobs-for-people.html?m=1

[Bob]

I am aiming for a more equal society over time (I am left wing.) JG is the “mechanism” for this. (Yes, you will probably disagree with this but I am explaining my reasoning)
You will probably have basic income from nationalised land and energy (nuclear power IMV.)
Eventually VERY FAR in the future once everything is automated we all end up on a state funded job so we can have an income to buy the stuff the machines produce.
Add up how much a home, power, food, etc costs and set the job guarantee at that would do nicely for most advanced nations. Where prices creep up you tax away the excess profit and redistribute downwards until it stops.
What wage the private sector has to bid to take people away from JG is market determined. If they don’t bid for certain functions that then more of the economy moves into the public sector until they do.
“Where prices creep up” is a conditional. Don't ignore that conditional.
The alternative is that prices don’t creep up and capitalists ‘pay’ for the JG via quantity expansion in the economy – which is how everybody would prefer that it was paid for.
How much the JG costs is entirely in the hands of the capitalists. If they invest, quantity expand and hire then it is very likely that it will pay for itself easily and the capitalists will be much better off than before.
That’s what happens when you concentrate on making the pie as big as possible rather than concerning yourself solely with getting the biggest slice.

[Bob]

(cont)
This is "virtual machine capitalism" - socialism with capitalism run on top.
Capitalists must then compete for labour from the JG pool - investing and training to receive any profits. It's the latter that is the valuable process in capitalism - just as the heat out of a nuclear reactor is the valuable bit. To get that you simply have to contain the nasty stuff using effective engineering.
That is what MMT is all about - effective engineering to make the system work properly.
If the JG is £10 per hour then capitalists must compensate people properly for doing anything else that is less pleasant than the JG job. That may be money, or it may be promises - but compete they must. It's the lack of competition in the labour market that is causing the current malaise.
If capitalists can't make a profit out of a process, then the process either dies, or if it is considered to have public value it becomes part of the JG job list.
Overtime you get towards equality as you move the bottom to the top.
What many on the left struggle with is that things still need to be made - which capitalism is very good at - and you have no other rational mechanism by which relative value is ascertained even remotely accurately (as Chris keeps pointing out.)
Once you strip rents and oligopoly out of the system competitive valuation is pretty effective - particularly when you no longer have to worry about whether a business lives or dies.
It's a bad idea to throw the baby out with the bathwater. We tried that with the Russian based systems, and they don't work. That's why China changed course.
The thing about the 'captains of industry' is that ultimately they only have one vote each.

You then limit *open* immigration to countries also with a Job Guarantee and similar social infrastructure. This is the pragmatic way to open borders. This is a sanction that says "improve your social infrastructure and join us."
The JG can be the GPL of the people - guaranteeing you a job and an income wherever you go.
It really dosen't have to be like this Blissex. Perhaps I am a starry eyed idealist but we can end poverty, unemployment, artificial borders that divide humans.
But not enough people know what is at stake and people are too greedy and stupid to let it happen.

[Blissex]

«Well, in the 14th century 1/3 to 1/2 of the population of England "emigrated" (to the afterlife) and this tripled the wages of existing members (reducing property/business profits and inequality), as illustated very clearly in figure 8, page 27 of this paper»

Just put it here for the lazy:

http://imgur.com/70ME1nJ

because it is a very important graph indeed.

[Bob]

Black Death. Yes? ;)

[Bob]

"However gaining a free membership of a capital-rich cooperative may be a christian right, but it is not necessarily a political right, and perhaps it is not perhaps a kind of business donation that members of a capital-rich cooperatative want to extend to everybody else."
Excellent points.
I think not all at once. You extend it gradually. For example implementation of a Job Guarantee in the US will be closer to breaking rocks until their society gets more sophisticated. But gradually things change if you can push in the right direction.
How do you have the power to push left wing policies without your cooperative being capital rich?
It is going to be difficult to get internal redistribution, never mind that.

[Bob]

Blissex, these policies will increase UK capital stock instead of current clownish leadership. What about native poor Brits (like me!)
"A rational immigration policy is one that concentrates on high value individuals and one that makes those visas very expensive for the businesses involved. That way business is more likely to choose to improve the capital stock of the nation rather than going straight for the 'nick somebody else from abroad' option."