Wednesday, October 13, 2010

Millions of Lives and Whole Cultures in the Subtext

I just read a discussion in the leading German Newspaper Spiegel -- "Immigration Debate: Germany Needs More Foreigners." By Reiner Klingholz. As the title indicates he argues that Germany needs many more foreign immigrants to keep its economy strong. He is arguing against the trend in Europe to worry about the fact that many Muslim immigrants are not being well assimilated into Western cultures and are too often at odds with modern Western democratic principles and freedoms. There is a series of articles that are well worth reading to keep up with immigration issues in Europe.

Debates about pro-natalist and immigration demographic policies can seem very, very dry and irrelevant to most people. Then following the debates real world policies tilt one way or another and people forget that there were important discussions and that the fate of populations, cultures, and nations were being decided. The realities of the demographic effects settle in and if and when they are noticed they are chalked up to some supposed inevitability like the march of progress or globalization, or Malthusian population growth, etc.

One thing that is noteworthy in the Spiegel article is that the author understands that massive immigration will inevitably change national culture but he shrugs it off saying that culture is always changing anyway. I see this argument in the context of different attitudes between those who think in terms of society and those who think in terms of "an economy."

Those who think of and discuss populations as economies have the habit of "externalizing" social and environmental costs using facile phrases, and shove them off on the rest of us to deal with and pay for. They focus on generating "wealth" in a monetary sense, and push most everything else out of focus.

Maybe Germany should import more foreign labor and accept cultural change. I cannot judge that even though I spent a year there. My point here is instead about the economic perspective that focuses on profits and externalizes so many of the human and environmental costs of doing business and shoves them off on to the rest of us without directly asking. I would like to see everything put out on the table in plain sight, and I think we must do that if we are to make scientifically rational decisions.

This sort of thinking in unscientifically focused economic terms went on in the US around the time of the Nixon and especially the Reagan administrations. Legal immigration to the US was opened up without much if any planning for assimilation. Illegal immigration was progressively winked at. Only a few people interested in demography were paying attention, and essentially none of the media. All this only came to the surface in the last several years. Then once there were complaints that reached media attention businesses began to squeal like stuck pigs that they needed what was in effect this cheap labor, but they did not offer to pay the costs to society. Surprise, surprise. Moreover, by then many legal and illegal immigrants had been integrated into US ethnic communities and not unexpectedly saw the issue as defending their own. Too much discussion got sidetracked into issues about racism and ethnic voter trends.

Great influxes of immigrants were also being encouraged more or less in parallel in Europe and for essentially the same reasons as in the US. The basic dynamic was increasing trade competition and efforts to deal with this in the traditional Western way, by seeking cheap labor to cut the costs of production. Meanwhile Japan was doing a terrific job in the trade wars in large part because of efficient management and production, innovation, and by building employee loyalties. They were offering QUALITY and DURABLE products at reasonable prices. Employee savings were helping to grow the Japanese banks into world powers.

By cheap labor, I should clarify that Western economists had for centuries argued that population pressures would produce competition for jobs that would keep wages low. So I say "cheap labor" but it would be more sophisticated to refer to job competition or wage competition. So to create population pressures they recommended pro-natalist policies to increase reproductive rates, but they also recommended immigration. They also recommended excess population not only for cheap labor but on the premise that poor men would have the incentive to become soldiers.

This Spiegel article is an "artifact" of current discussions that stem from the epic demographic events of the 1970s and from the 1980s on. The subtext all has to do with economies geared to cheap labor and with economic thinking that passes off onto society in general the true costs of making business profits. In effect the business community is covertly getting society to subsidize its production costs.The term is "externalizing" which means leaving significant costs out of economic arguments and equations. The general public and even most politicians do not understand this and are in effect fooled into thinking that mathematically rigorous logic is being presented to them. It is simply remarkable how few responsible people will demand a full cost/benefit accounting -- apparently they simply don't understand the importance of knowing all the facts.

If one does get onto them, the next argument is, "well no one can know all the costs, so it is honest to leave them out of our equations." But then it should be noted that no one can know all the benefits either, and maybe none of them for sure. We would have to do our best in both cases.

And WHO benefits and WHO pays the costs? No arm waving about rising waters lifting all ships, please.

Again, I don't know if this writer is right or wrong in the case of Germany. But I do know that Germany and Europe in general face enormous cultural, political, and security problems because of the economic/demographic POLICIES of the last several decades. I wish them good luck.


  1. Yes. I think all costs and benefits should be looked into before such decisions are made. Some big business types round here have tried to encourage growth too but have run into a brick wall because the reason most of us live here is that there is no growth to speak of.

    Fortunately we are a small enough place to have some influence in the political scene - as the last mayor and council have discovered.

    I have no problem with multi cultural inhabitants on the whole, I have every problem with cheap, imported labour that undermines those trying to make a valid living for themselves (a bit of sour grapes here as I was driven out of business by cheap imports).

    My ideal is an economy that doesn't rely on growth and that supports in some real way, all those who live within it. Any immigration should fit into the economy already present without being exploited.

    I could ramble on for ages about this :)

    viv in nz

  2. "In effect the business community is covertly getting society to subsidize its production costs."

    I would add to this that Wall Street is covertly getting society to absorb the true risks of its gambling.

    Between the two society can't take it. Something has to give. A breakdown will occur, inevitably, in one or more parts of the overall society.

    The usual response from the CEOs and big investment houses is "nobody could have possibly seen it coming!"
    The correct translation of that double-speak is "Leave me and my ill-gotten profits alone!"

    I give you the housing bubble as an example.

    I don't think it's fixable. Not to seem like a pessimist, but these are not random, accidental forces pushing society into various types of stress and breakdown. Generally speaking, there are plenty of economists who see the handwriting on the wall far before disaster strikes. There were economists warning of the housing bubble collapse as far back as 2003.

    It is not that no one is listening. The perpetrators of these profiteering rackets know exactly what they are doing, what the probable costs to society are. Theirs is a calculated scheme to get in, get their profits and be well away from the crime-scene when it all breaks down.

    So what I am seeing is structural. There is something about the way we form governments, and even more importantly, something about the way we structure corporations themselves, that drives these mechanisms of economic suicide.

    What I'm seeing is that the best solution so far has been people like Bill Gates or Warren Buffet, who play ruthlessly in the corporate world, then take their gains and re-invest them in humanitarian benefits.

    Obviously, the system we have does not handsomely reward people who set out with the intent of benefitting society as a whole. They quickly get boxed into the 'non-profit' universe.

    The whole structure is based on the assumption that one should NOT get profits from doing good works, but only from ruthless pursuit of self-gain.

    People who cross that line are called "realists." People who want to benefit society are labeled "idealists" and "dreamers".

    The entire bias is to cut out people who want to do good things and reward the ruthless and greedy.

    I really think that's a fundamental, and perhaps unsolvable problem with our species.