The Migration Crisis in Europe, Africa and Asia
Keith Rankin, 3 September 2015
The flood of immigrants into Europe this year represents something quite separate from traditional refugee settlements
that spring up near to borders of conflict zones. This is globalisation in action, not simply refuge from conflict, and
it reminds us of the migration waves of the nineteenth century.
'Globalisation' is a loaded word. To some it's a project, a kind of conspiracy of kindred capitalists the world over to
exploit 90% of the world's population in order to facilitate the aggrandisement of the richest percentile. It is in fact
a reality facilitated by increased connectedness through cheaper transport and telecommunications, and by higher per
capita incomes. Globalisation may also represent a philosophical commitment to cosmopolitan over nationalist living
spaces.
In capitalist terms, it’s the extent to which global markets replace national markets, in goods and services, in
finance, and in labour. It is exemplified by the 'law of one price'. In truly global markets there is one price for milk
powder, one price for pork bellies, one price for cappuccinos, one price for gold, one interest rate for low-risk
inter-temporal trade, and one global wage for unskilled (commodity) labour.
Economists are attracted to the Wilsonian post-WW1 division of the world (referring to Woodrow Wilson) into 200 nation
states; states defined by the literal and metaphoric fences their governments erect. In an economists' ideal Wilsonian
world, an unskilled worker would be paid the same in any of these 200 countries. Likewise a doctor or nurse would earn
the same wherever she or he lived. Richer countries would be richer because they have more skilled workers and employ
more skilled workers, not because they pay unskilled workers more.
In a first-best economists' world, trade and finance would be the main equalising ingredients; people would stay in
their countries of origin. Freely-flowing finance – unspent income from the richest countries – would be invested in
other countries, raising their productivity levels. Large-scale migration would not take place simply because there
would be no benefit; the benefits of global capitalism would come to the people in their own countries, rather than
people migrating to the centres of capital. Capital migrating to labour.
In a second-best (and more realistic) globalised world, labour migrates to capital. Indeed capital may be invested in
that migration. This is the globalised real-world, and it sits uneasily with fenced nation states. Such globalisation is
far from new. Migration of labour to land or capital has always occurred, especially but not only within polities such
as empires or confederations.
Where polities were small – usually because of geographical constraints – migration created new polities; tribes or
island settlements. Thus New Zealand was settled 800 years ago as a migration process where incomes elsewhere (New
Zealand was a classic 'elsewhere') were likely to be significantly enhanced, and it was worth a high-risk venture to
achieve such higher living standards. And there was undoubtedly an 'expulsion' element; those remaining in emigrant
societies gained also from reduced population pressure.
By the early nineteenth century, the European capitalist world was going to hell in a handcart of inequality and
(especially in Britain) deforestation. Evangelical movements signalled that Revelation was imminent. It didn't happen,
thanks to both the seemingly empty 'new world', and to those fossil fuels that we had learnt to exploit. It was an
unparalleled century of global relocation. Labour moved to wherever capital gave it opportunity, within polities and
between them. Six hours in a leaky boat in the Mediterranean is tough and risky. So was six months in
slightly-less-leaky boats, for the most part in the roaring forties of the Southern Ocean. Even fear of being eaten by
carnivores or cannibals could not keep aspirant labour away.
James Belich showed in Replenishing the Earth (2009) that the first explosive migration west in America took place
mainly after war, not during war (especially in the decade after 1815). This was driven by intensified economic
competition and the deployment of new technology that significantly lowered the financial cost of travel. Capitalists
needed other activities (other than war) to finance. Migration became an industry in itself. Capital would not simply
come to the people and make them prosperous where they were. Capital came to the people, enabling the people to move. In
those migrations labour moved to land, which is another form of capital.
We know that economic growth has been strong in Africa this century (see my chart African Economy). Growth has also been strong in Bangladesh, Pakistan and Sri Lanka, countries with emigrant pressure. Likewise in
Britain and Europe in the nineteenth century, growth was as much a feature of the emigrant counties as it was of the
immigrant destinations. But growth during industrialisation (eg the British industrial revolution) was a disruptive
growth, as I think we can assume that African and south Asian growth is today. Even in Iraq and Syria, for the parts
unaffected by IS, the conflicts this year are not as devastating as in previous years. The people coming into Europe
clearly have greater financial means than traditional refugees. These countries are fertile territory for the growth of
a credit-driven emigration industry. Investors in emigrants and emigration networks get their returns when enough of the
emigrants earn enough in places like Germany to service their debts.
Of note are the huge financial surpluses in the north of Europe. Last decade, these surpluses fuelled growth in
consumption and government spending in the south of Europe. Now, the south of Europe is not running these deficits – the
north will not allow them to. So clearly the northern European surpluses are now going elsewhere. Africa, for sure, is
one of those elsewheres. My chart of African growth and balance of payments shows that some parties are lending Africans
lots of money. Those same financial channels will be operating in southwest Asia.
Markets, taken together, are ecosystems. What goes around comes around. I'm guessing that the flood of immigration into
Europe this year is largely facilitated by European investment (much of it indirect, through multiple intermediaries)
into the growing emigration industries of Africa and Asia.
Migration can be good business, on the fringes of legality. Can the rich-country governments stop it through fences and
the like? I don't think so. They would be better off facilitating investments in social services, income security and
opportunities to lead fulfilling and interesting lives in Africa. Rich-country savings will be invested somewhere and
somehow. There are alternatives to the emigration industry as outlets for European investment.
ends