The Hollywood starlet and the immigration albatross

Conjure up in your mind, if you possibly can, the image of Margot Robbie sat in a bath, barely covered with suds, drinking champagne, and talking about naughty bankers, bond markets, and profits from housing loans taken out by the most financially precarious. 

Now imagine having that scene interrupted by a policy wonk droning at you that, actually, the causes of the subprime mortgage crisis were not rooted in the unchecked avarice of participants in free market capitalism, but in Bill Clinton’s 1992 policy proposals to use private pension funds to capitalise government priorities, such as affordable housing, to “generate long-term, broad based economic benefits.” 

At this point, would you like to hear more about the Clinton Administration strongarming banks into issuing unsound loans by exploiting a minor provision in a 1977 housing bill, the Community Reinvestment Act, or would you like to go back to Margot Robbie in the bathtub?

This isn’t short of the scenario that most people found themselves in a decade or so ago whenever they suggested that Britain ought to have a modicum of increased free market capitalism. It was hard enough in the years after the real-life financial crisis to try to sell deregulation to the unconvinced, but the success of the movie adaptation of Michael Lewis’s The Big Short meant that if members of the public knew anything about financial markets, it was about mortgage-backed securities, collateralised debt organisations, and big banks being bailed out by the taxpayers.

Is it coincidence that the movie featuring Margot Robbie in a bathtub making a bogeyman out of capitalism came out right before the UK allowed a large surge in immigration immediately post Brexit? If we’re being completely truthful, and as much as it would more neatly tie this article together, yes it was entirely a coincidence. But the two things are nevertheless not unconnected.

Post 2008, free market ideas were deeply unpopular in Britain. Getting embroiled in debates and arguments about the right levels of immigration restrictionism was not something that many had any huge appetite for on top of that. While the revealed preferences of voters may have been as they ever have been — for decreased immigration — the cultural climate of stated preferences did not reflect that. And so the libertarian right broadly coalesced around a consensus view that they floated above such unpleasantness and that immigration was not only not something to be reduced, but something to be indiscriminately encouraged. Engaging in restriction and discrimination according to quality, skills, or cultural incompatibility at the border was tantamount to the state interfering with free enterprise much the same as licencing or regulatory restrictions. 

In addition, these new arrivals possessed an intangible quality that was imbued in them by dint of having crossed the frontier of a sovereign state which turned them into economic rocket ruel. Free markets and free movement of people were inalienable and if you couldn’t have both then you might as well not really bother. 

Free markets and free movement of people were inalienable and if you couldn’t have both then you might as well not really bother

It was a reasonably successful conceit in that it made right libertarians quite popular on mainstream panel shows and current affairs shows. It was popular with “Business” since it provided a large supply shock forcing down labour prices — to the point where labour is so cheap at the point of delivery (if we ignore the welfare subsidies) that we can simply have a man on a bicycle fetch us a can of Coke from Tesco from our sofa for a few pounds. As Labour and Conservative MPs bickered about anti-immigrant nastiness, the free market representative could be a pleasant breath of fresh air suggesting that we could just be nice to everyone. Did it then give them a platform to shift the needle on genuine free market causes? No, it did not. But it was probably a more pleasant experience than being pilloried.

The idea that immigration should not be decided by the state is of course not completely false. But it is quite a difficult position to defend in an economy with a welfare state, and still harder in an economy so distorted by its generosity as Britain’s. I have written before about what immigration might look like in a privatised economy: 

Every tree and blade of grass, every road, every hospital, every square would be privately owned either by an individual, or by a group bound by contract. It’s easy to see how these private communities could compete to ‘back winners’.

This, however, was not a prerequisite sold by the libertarian right. Immigration could come first and messy problems of the welfare state could be dealt with later.

The problem is that the enormous levels of immigration did not only fail to deliver the economic rocket fuel of the pro open borders most blustering of claims, but also brought with it strains at every level of British life.

There are the very visible problems of trying to integrate extremely culturally foreign people into British life when they have by their sheer numbers very little need, desire, or ability to integrate. A trickle of immigration from one part of India dispersed around the country and those new arrivals might feel some level of need to modify their way of life so as to fit in with those of their host country, but from 2021 to the end of 2024 around 850,000 Indian nationals arrived long-term. With Indian immigration adding up to roughly 1.5 to 2 million Indian nationals over the last decade there is very little reason to make concessions to the natives — with all of the resultant frictions that may entail.

I don’t single out India because Indian immigration brings with it notably high levels of crime on a per capita basis (Albania topped recent league tables based on the prison population, followed by Kosovans, Vietnamese, Algerians, Jamaicans, Eritreans, Iraqis and Somalis). Rather, it’s because the huge numbers are the result of immigration riders inserted into trade deals. India needs to create approximately 7.85 million new non-farm jobs per year until around 2030 to absorb the growing workforce and keep employment stable. Cumulatively, this implies a need for roughly 47–50 million new non-farm jobs by 2030. The easiest way to tip the scales is to offload as many of these workers as possible to other economies. This also adds a stream of remittances to the Indian economy. When post-Brexit leaders celebrated their newfound abilities to sign trade deals with India, the agreement to take in hundreds of thousands of low-skilled Indian workers was sold to the public as a cherry on top of the cake.

By having bound themselves so tightly to the idea that high immigration was not just a function of free markets but a desirable one, anybody now advocating for free market libertarianism in Britain is now associated with all of the worst aspects of high immigration and it has real consequences.

Public policymaking is about trade offs. It is extremely clear that the trade offs of immigration are no longer tolerable to a majority of voters — something likely to be spelled out in this week’s council elections in England and Wales.

If, for example, lower regulation, smaller state campaigners want to convince the public that planning reform is worth the risk of lack of security, they need to be able to convince them that they have sincerely repudiated their views on immigration for immigration’s sake.

Not In My Backyard-ism is an entirely reasonable response towards a state that has ignored demands for lower immigration

Planning reform is nigh on impossible to implement in a Britain with high levels of immigration to the point where it is causing a vicious cycle. New dwellings cannot be more easily built because opposition to housebuilding remains one of the strongest weapons available to residents that do not wish to be negatively impacted: Not In My Backyard-ism is an entirely reasonable response towards a state that has ignored demands for lower immigration. It is also very hard to convince people that those new homes will not be vehicles to social change when the most vocal advocates for deregulation of planning have spent the last decade preaching the merits of immigration. The result is that net migration flows increase pressure on a constrained housing stock, forcing up prices and exacerbating both economic damage and ill will, and the cycle continues.

The same flows through the rest of public policy. The public is far more accepting of welfare reform than popular culture surrounding austerity would suggest — the British public intuitively understands sounds finances to a far greater degree than they are credited for, but at the same time will not accept cuts if there is a feeling that the wool is being pulled over their eyes. A shrinking of the welfare state is unlikely to be tolerated for existing voters if there is a perception that there is another planeload of non net contributing new arrivals already in the air and ready to sop up that released public spending.

As much as it would be expedient to its cause, there is unlikely to be a movie moment that will help the free market movement break with its open borders reputation as effectively as Margot Robbie damned it for permitting a financial wild west. I don’t think we’re getting Sydney Sweeney quoting Murray Rothbard in a jacuzzi any time soon, for example.

Free market, pro liberty campaigners may have felt battered and bruised post 2008, but unless they are prepared to examine their failings and be willing to enter the often unpleasant immigration debate in a sincere way then their ideas will be consistently dismissed. Immigration is a property rights issue above all, and libertarians would do well to remember that.