IN OUR GLOBALISED world, why is it that goods, services and capital can flow ever more freely across national boundaries while people cannot? While trade barriers fall thanks to the WTO and other free-trade agreements, immigration barriers remain as high as ever.
Economists say increased wealth comes from allowing trade and investment to flow freely around the world. Economics textbooks tell us open markets allow capital to be invested where it will earn the greatest return, and goods and services to be sold where there is the greatest demand, leading to efficient distribution of resources.
What nobody points out is that by the same logic, allowing people to move freely across the world also leads to an efficient utilisation of resources.
Just as capital is best used if it is allowed to go where it gets the maximum return, so is human labour most efficiently used where it can command the maximum return.
The normal response to the suggestion that immigration barriers be lowered is for people to throw up their hands in horror and say, how can we allow millions from the poorer parts of the world to travel to Europe and North America and take away people's jobs? Think of the social consequences, think of the racial tensions. It would be a recipe for social disaster.
Closer to home, we hear exactly the same response to the suggestion that barriers to the movement of people between Hong Kong and the mainland be lowered.
Allowing people to cross national boundaries and seek jobs wherever they wish can clearly cause great social disruption. But are those social problems any worse than the ones caused by the flows of capital, technology, and goods and services from the richer to poorer countries?