Gurminder K Bhambra

Migration, intersecting with the politics of austerity, remains one of the defining social and political issues of our times. It has been amplified in the UK by the debates around Brexit and has once more come to the fore in the light of restrictions placed on movement as a consequence of the Covid-19 pandemic. At the same time, images of refugees and asylum seekers continue to be used across Europe to stoke questions of legitimacy and related fears of white replacement, not just on the right, but also from figures ostensibly associated with the left.

The German movement, Aufstehen, for example, was set up to counter the message of the right-wing ‘Alternative for Germany’ (AfD) with what they call ‘Attrition for Germany’. This involves arguing, as Wolfgang Streeck does, against the use of national taxes to aid migrants and refugees – something that is presented by him as ‘morally obligatory expropriation’ – and to ‘barricade the remaining territory of the welfare state against the invaders’ (quoted in Slobodian and Callison 2019: 44). In this way, they replicate rather than counter the rhetoric of the AfD which sees an irreconcilable tension between what is presented as economic migration (invaders) and social welfare for citizens.

The fundamental assumption underlying such arguments is that the national patrimony available for distribution is precisely that – national. That is, it is wealth that has been generated through the activities of national citizens over time and whose use and distribution ought to be regulated for ‘the people’ properly understood, whose contributions and efforts it represents. This framing, as I have argued elsewhere, fails to acknowledge the wider colonial histories that produced appropriated wealth that is now represented as national and used as the excuse for further excluding broader populations from its redistribution.

The period of the pandemic has made obvious the extent to which European nations are empirically multicultural and, indeed, could not function without their ethnic minority citizens and migrant populations, both settled and temporary.

The period of the pandemic has made obvious the extent to which European nations are empirically multicultural and, indeed, could not function without their ethnic minority citizens and migrant populations, both settled and temporary. It is precisely these populations, across the continent, that are disproportionately carrying the burden of maintaining the health and lives of national populations under lockdown.

In the UK context, whether one looks at the National Health Service or at the key workers staffing supermarkets and corner shops, delivering food and other necessities, operating public transport, cleaning workplaces, collecting rubbish, and being chartered in to pick fruit and vegetables – these workers are disproportionately migrants, both from the EU and further afield, and ethnic minority British citizens. They are central to the very functioning of society and yet much political discourse is oriented around a politics of resentment and division that refuses to recognise them.

Across the political spectrum, then, scholars have been presenting arguments about the demise of the welfare state as a consequence of (racialized) migration. This is often further linked to the rise of a politics of recognition which, it is suggested, has contributed to the breakdown of the national and class solidarities necessary to the maintenance of social democracy. However, in his superb new book, A Modern Migration Theory, Peo Hansen systematically dismantles the idea that there is a trade-off between migration and the sustainability of the welfare state.

Using the insights of Modern Monetary Theory (MMT), Hansen demonstrates that there is no economic cost to migration that is borne by the host population. Indeed, he shows that the real-world consequence of Sweden’s response to the refugee crisis of 2015 was the opposite of what most politicians and scholars had predicted (and, which many still believe) – that spending on refugee integration was not a cost, but a means of investing in people, or real resources, and welfare, something which stimulated the economy. Instead of undermining the welfare state, it made welfare viable for the whole population – a political truth that takes on a new resonance in the light of the Covid19 pandemic.

For readers in the UK, it is well to reflect on the characteristics of a welfare regime in which such a ‘natural experiment’ to test a modern migration theory could occur. As Hansen shows, it is not a regime that is absent the rhetoric of austerity and a national politics of resentment. However, it is a welfare regime in which standards of welfare represent legal obligations where central government funding had to follow increased refugee reception and demand for goods and services. This underpinning guarantee for welfare is what is at issue. But it is what has enabled the demonstration that the negative fiscal consequences of spending on maintaining those guarantees has not arisen. Xenophobia may yet determine the future of welfare states in Europe, but the mask of austerity has slipped.

We are delighted to relaunch Discover Society: New Series with a symposium on Peo Hansen’s politically urgent book. An opening article by Hansen, setting out the key themes and ideas of his book, is followed by contributions addressing a variety of issues. Fiona Williams examines the inequalities of gender and care in the context of migration; Adrian Favell focuses on the implications of Hansen’s arguments in terms of where the problem lies in Europe; Maya Goodfellow brings in a consideration of the UK’s active construction of a hostile environment for migrants; Fadhel Kaboub uses Hansen’s arguments to think through debates around climate reparations and the green new deal; and Lucy Mayblin focuses on the asylum system itself.

A Modern Migration Theory reveals the xenophobic reality that is hidden beneath discourses of sound finance and claims of fragile solidarity alike. It has the potential to transform our understandings of modern migration and to open up the space for different political possibilities. The strength and vitality of the responses by the contributors to this symposium are testament to the importance and significance of what is being put forward.

We hope you enjoy the different contributions to the symposium.

Gurminder K Bhambra is Professor of Postcolonial and Decolonial Studies at the University of Sussex. She is a Fellow of the British Academy and co-editor of Discover Society. She is author of Connected Sociologies and the award-winning Rethinking Modernity: Postcolonialism and the Sociological Imagination. She is also co-editor of Decolonising the University and has a co-authored book forthcoming, Colonialism and Modern Social Theory.

Header Image Credit: patrice-photographiste (cropped) 

References

Slobodian, Quinn and William Callison 2019. ‘Pop-Up Populism: The Failure of Left-Wing Nationalism in Germany,’ Dissent 66 (3): 41-47

TO CITE THIS ARTICLE:

Bhambra, Gurminder K. 2021. ‘Editorial: Rethinking Modern Migration’ Discover Society: New Series 1 (1)

Peo Hansen

Over a few days this past summer, as I was putting the finishing touches to my book, A Modern Migration Theory, my daughter developed a pain in her left foot after having twisted her ankle. As the pain persisted we went to see a doctor. In the waiting room at the local clinic I took note of the fact that seven of the ten doctors in the corridor had foreign names, three of which were Muslim. I have seen doctors from Iraq, Romania and Syria at this clinic, which was no coincidence given that Iraqi and Romanian doctors make up two of the largest groups within the cohort of foreign-born doctors in Sweden. More than 30 per cent of all doctors in Sweden are born abroad (OECD 2019), and in the case of Iraqi doctors most of them arrived as refugees in the noughties. My daughter was examined by a doctor from Germany who swiftly referred her to the main hospital for an X-ray.

We took a taxi to the hospital, and here as well the person servicing us was foreign-born, maybe from Syria. Around a half of Sweden’s taxi drivers are foreign-born and the great majority have come as refugees (Statistics Sweden 2019; 2020). The driver dropped us off at the emergency room entrance, and from there we had to ask for directions to the X-ray department. We were helped by a doctor and nurse who came walking our way. Judging from their ID badges it seemed as if the doctor was from an African country and the nurse from a Middle Eastern country. In all likelihood, the nurse who took care of my daughter in the X-ray department was also from a country in the Middle East. Close to 15 percent of the nurses working in Sweden come from other countries (OECD 2019).

Luckily, the X-ray indicated no fracture, and so we headed for the bus stop to go home. There was a bus sitting at the kerb, but the driver told us that it would take a while before it would depart. With my daughter in some pain we decided to take a taxi again. This time our driver might have been from Somalia; the same probably applied to the bus driver. Over a half of those working as bus and tram drivers in Sweden are born in another country, and, needless to say, almost all of them have come as refugees. I think I have made my point. But I should mention too that we also passed by a team of cleaners in the hospital. The pattern repeated itself, and no coincidence in this case either. Sixty per cent of the cleaners in Sweden are foreign-born, and, yes, the majority have refugee background (Statistics Sweden 2019; 2020). They clean Sweden for very low pay, and they have continued to fulfil this absolutely essential public function during the Covid-19 pandemic.

My daughter and I had an excursion into the Swedish reality. In this reality people who have come as refugees carry out absolutely vital work without which the Swedish society and economy would cease to function. Close to 30 percent nationally, and about 55 percent in the Stockholm region, of those working in the Swedish elderly care are foreign-born – practically all of them have refugee background (Socialstyrelsen 2019: 47). Although it refuses to acknowledge this fact in the public debate, in a report from 2018 even the Swedish government (2018: 16) concedes as much: “Without the foreign-born women and men, the elderly care would face significant problems in fulfilling its task.”

“Without the foreign-born women and men, the elderly care would face significant problems in fulfilling its task.”

Again, this is the reality and the numbers are there for everybody to see. Yet this reality persistently fails to register in national and European debates on asylum and migration. The seriousness of this deliberate omission cannot be overemphasized, and it is one of the main reasons why I decided to write a book about it.

Instead of broadcasting the real benefits that refugees and labour migrants bring to EU countries and, from there, enact policy to improve migrants’ often precarious situation, the political establishment has done the opposite. It has made sure to soak and trap the European Union in a toxic debate over an alleged plethora of negative effects of migration – though “highly skilled” migration is sometimes spared.

The Cost Perspective on Migration

Integral to this is the ubiquitous cost perspective on migration, which makes up one of the most powerful shields against the EU’s migration reality. This perspective, or narrative, is the main focus of my book. As I describe in great detail, not only politicians but also researchers today agree that refugees admitted to the European Union constitute a net cost and fiscal burden for the receiving societies. Whereas researchers draw this conclusion from a seemingly neutral accounting exercise – refugees are said to contribute less in taxes than they receive in welfare assistance – politicians and the media eagerly use this “economic science” to justify and explain restrictive asylum policies. To be sure, politicians and researchers may judge low-earning and low-skilled labour migrants to be both necessary and affordable, but only on the condition that their access to welfare provisions is restricted. This does not apply to refugees, however. Since refugees cannot work and pay taxes from day one and since they may have children, refugees will initially always depend on welfare assistance. By definition, therefore, they are deemed fiscal burdens.

From the perspective of research this is just a scientific fact, and so research cannot be held accountable for being complicit in stoking the sentiment that refugee reception and low-earning migrants jeopardize the welfare state and that, consequently, refugee prevention constitutes a prerequisite for the fiscal viability of the welfare state. As one expert in the field puts it: “The lower the skills and earnings of migrants in the host country, the greater will be the strictly economic case for restricting some of their welfare rights in order to minimize the fiscal costs for existing residents” (Ruhs 2013: 46).

The “strictly economic” serves to indicate that the issue at hand is neither grounded nor decided within the realm of political choice. Rather, economic laws of fiscal sustainability are said to constrain what is politically feasible.

According to world-renowned economist Branko Milanovic, “[t]he arrival of migrants threatens to diminish or dilute the premium enjoyed by citizens of rich countries, which includes not only financial aspects, but also good health and education services.” Yes, you read right, migrants working in the health services are supposedly diluting “the premium enjoyed by citizens of rich countries”. Admitting low-earning migrants therefore “requires withholding some civic rights”, Milanovic asserts. “We can debate the sharpness of the trade-off, but cannot deny its existence.” (Milanovic 2016a: 152) In Milanovic’s (2016a: 152) quest to figure out ways to “pay for increased migration”, such withholding of rights to migrants – or “discriminatory treatment”, as he terms it – are both necessary and beneficial to all (2016b). Migrants, Milanovic (2016b) suggests, “could also be made to pay higher taxes since they are the largest net beneficiaries of migration”.

Finally, here’s another representative scholarly view, published in a recent issue of the International Organization of Migration’s (IOM) journal International Migration: “The refugees represent a fiscal burden for the host countries at least short and medium term. Under these conditions refugee migration is unable to help to alleviate the aging related fiscal burden of the host societies, on the contrary, it contributes to its worsening. Thus, when the majority thinks that refugees represent a fiscal burden (they “take out more from the public purse than they pay in”), they are not wrong this time. It is not possible to argue against this with solid empirical evidence. Naturally, the moral (and legal) obligation argument for accepting the refugees is still valid but it couldn’t be underpinned with further economic reasoning. The moral obligations and the economic benefit are in conflict here (Gál 2019: 352).

As communicated in the quote, “the majority [is] not wrong this time”, implying that, though majorities may be wrong most of the time, on the issue of refugees they are not. Here, the majority opinion is in agreement with science. The political parties on the extreme right have always had this piece of “economic science” tattooed into their party programmes and flagship slogans. Here is an instance when Europe’s extreme right cannot be dismissed as populists or as being guilty of simplifying complex issues. As asserted in the quote, the factuality of refugees constituting a “fiscal burden” “is not possible to argue against […] with solid empirical evidence”. And since a fiscal burden, per definition, is synonymous with something very negative in the public debate, we should not be surprised if politicians and the public take those making up the burden – i.e. the refugees – to be undesirable too.

It is like starting a discussion about equal pay by insisting that we acknowledge that women are a fiscal burden on men because women pay less in taxes – and that trying to diminish or hide this “fact” only plays into the hands of the sexists.

In response to this, the proponents of the cost perspective simply say that to mask or hide the truth about refugee migration – or any other migration deemed costly – goes against the scientific ethos and that it would make for an even worse place to begin integration. Many would add that tampering with the truth will only aid the anti-immigration populists – a particularly common retort from mainstream politicians and scholars who want to mark their distance from the extreme right. Since so few challenge the basic principles and maths of the cost perspective, it has gained an air of unassailable truth. But those who claim that they side with accuracy in order to avoid playing into the hands of the anti-immigration right do something even worse than allowing the cost assumption to stand unchallenged. They give it new life and credibility by insisting it be acknowledged in advance. It is like starting a discussion about equal pay by insisting that we acknowledge that women are a fiscal burden on men because women pay less in taxes – and that trying to diminish or hide this “fact” only plays into the hands of the sexists.

A Modern Migration Theory

My book is not just an argument to debunk the cost perspective’s detrimental impact on migrants’ integration and inclusion. Employing the descriptive macroeconomic framework provided by the scholars within Modern Monetary Theory (MMT), it also demonstrates that the cost perspective builds on a flawed economic conception (see e.g. Ehnts 2017; Mitchell, Wray & Watts 2019). Much of this is attributable to the heavy imprint of the orthodox “sound finance” doctrine on migration research and policy – the assumption that governments face a budget constraint much in same way as households, municipalities and businesses. This orthodox “sound finance” economics and its household accounting thus mistakes state spending for being precisely that: analogous to household spending. Here, therefore, spending amounts to little more than a cost, in the same way that a household looks at its outlays – i.e. as something that subtracts from the household’s income, savings or borrowed money. As a consequence, the money spent on refugees would have to be made up for through tax hikes or “risky” borrowing or by removing funds from other areas, such as welfare benefits intended for needy citizens.

For countries that issue their own currencies, however, none of this applies. Since the central government is the monopoly issuer of the currency, it follows, both in logical and in concrete terms, that it necessarily has to spend or lend the currency (via the banking system) into existence before it can collect it back in taxes. If this was not the case, there would be no money to pay taxes with. Such governments are thus the exact opposite of municipalities, business and households, all of which have to collect, earn or borrow the money before they can spend it; they are mere users of money, not issuers. Hence, and as MMT explains, currency-issuing governments are not revenue-constrained. This means that taxes collected by the central government are not used to fund government spending as they are when collected by currency-using bodies such as municipalities or constituent states in federations (or as in the eurozone prior to ECB’s adoption of the Pandemic Emergency Purchase Program, see Ehnts 2020).

Central government taxes fulfil other indispensable functions and purposes. By constantly removing a large chunk of money – and thus spending power – from the private sector, taxes work as a powerful anti-inflationary measure while at the same time moving resources from the private to the public sector. Taxes also work as an instrument regulating income and wealth distribution and they are used to promote or discourage certain industries, professions and behaviours. And there are, of course, other purposes that central government taxes can be made to fulfil – but revenue for spending and saving for future spending do not form part of them. Again, as the monopoly issuer of the currency, the government can always spend its own currency.

Had it been seriously pondered, I suspect the whole notion of the potential unsustainability of refugee spending would have had to be reconsidered. In other words, what is so bad or dangerous about households, businesses and municipalities receiving net incomes?

As MMT also demonstrates – and as the historical pandemic-spending corroborates – money spent never disappears, and this, of course, applies to all monetary systems everywhere. This is so because all central government spending, by definition, must end up somewhere and hence be collected by someone. Spending by the central government is thus synonymous with income in the non-central government sector – as such, spending always equals income. In the scholarly literature on the fiscal impact of migration as well as in fiscal policy-making, this irrefutable fact is never considered, which, when one comes to think about it, is strange indeed. Had it been seriously pondered, I suspect the whole notion of the potential unsustainability of refugee spending would have had to be reconsidered. In other words, what is so bad or dangerous about households, businesses and municipalities receiving net incomes?

Real Resources, Financial Resources

What may be even more serious is that scholars and policy-makers also fail to understand why we need to distinguish between real resources, such as labour, and financial resources. Reflecting this failure, researchers cannot grasp the value and indispensability of the labour performed by those 60 per cent of cleaners in Sweden who are born abroad. Instead, they conceive of these workers as fiscal burdens. Their tax contributions fall below average and so they are said to receive more in government welfare spending than they pay in. By always being in the red, so to speak, these workers will neither be able to redeem the costs for their initial stay in the country during which they did not work and pay taxes at all. Of course, if refugees work as doctors they will be able to offset such alleged costs, and they may also be able to offset additional costs, such as their children’s schooling. But, if they work as cleaners, they remain perpetual net costs. According to this logic, then, Sweden would have been better off without the cleaners who came as refugees.

This is silly and absurd reasoning. To deem people as fiscal assets or fiscal burdens depending on which side of the average for tax payments they fall is to misunderstand society. Not everyone can earn above-average incomes, as, by definition, some will be above whereas some will be below. What purpose does it serve to consign those who earn below “average” to the status of costs and burdens when, as everyone ought to know too, society is impossible without them? What would society be like if no one worked in food production, if no one cleaned​, cared for children and the elderly, drove the buses or worked as assistant nurses?

To deem people as fiscal assets or fiscal burdens depending on which side of the average for tax payments they fall is to misunderstand society.

As I explain in my book, the real resource contribution from the foreign-born nationals to the Swedish society has been nothing less than astounding. With fewer Swedish-born workers joining the labour force than leaving it, the entire addition of working age people in Sweden has, since 2008, consisted of the foreign born. Between 2010 and 2017 the number of working age (16–64) Swedish-born people dropped by over 150,000 while the number of working age foreign-born grew by some 360,000 people (SPES 2018). In this period, Sweden was thus able to increase its working age population by more than 200,000. This growth will pick up even more until 2025, when the foreign-born share of the working age is set to hit 27 percent, as compared to 18 percent in 2010. Because of this, Sweden is the only country in the EU (and beyond) that has not seen an increase in the median age over the last decade. The figures for 2017 illustrate this well. Here, the labour market added 94,000 jobs, of which 75,000, or 80 percent, went to foreign-born workers (SPES 2018: 26). According to the Swedish Public Employment Service (SPES 2018), this pattern is likely to continue.

Crucial too is that refugees in Sweden have disproportionately ended up in smaller, rural municipalities. Many of these municipalities appreciate refugees as vital in making local communities liveable again, helping to reverse a decades-long vicious spiral of depopulation, declining local tax revenue and welfare service retrenchment. Thanks to refugee reception, municipalities that were closing schools are now opening them and building new ones instead.

Thanks to refugee reception, municipalities that were closing schools are now opening them and building new ones instead.

Concerning the financial aspects, during the three years 2015–2017, as I detail in the book, the Swedish central government increased spending massively to manage the reception of 163,000 refugees. In 2015, and for many years prior to that, Sweden had been the largest recipient, proportionally speaking, of asylum seekers in the EU. Most of the funds went to the municipalities that received the refugees. But the government made sure to inform the public that the spending was a necessary evil that would impact negatively on the Swedish economy and welfare state – this was the message that was repeated by the government over and over again. In addition, practically all economic expertise warned in unison of economic and financial damage, urging the government to trim spending and introduce austerity measures to avoid deficits and debt accumulation.

But while Sweden’s central government, its economic experts and the media were busy worrying about the expenditure column and the future fiscal balance, many rural and de-populating municipalities away from Stockholm were busy welcoming this expenditure as income. Thanks to the refugee spending by the central government, 2016 ended up being one of the best fiscal year ever for Swedish local governments, with practically all of the country’s 290 municipalities running surpluses.

The central government spending to the municipalities financed the reception of refugees and their initial integration. In and of itself this increased public consumption enormously; and it stimulated investment and employment, which greatly boosted overall economic growth. But since much more money was transferred than was needed for the immediate refugee concerns, municipalities were able to attend to other things too, such as welfare needs, schools and infrastructure. Besides impacting positively on the health of welfare services, in many municipalities state refugee funds also enabled municipalities to invest, save and pay down debt.

The admission of refugees – that is, real resources – together with the generous addition of financial resources from the central government thus proved to be a hugely virtuous combination for scores of depopulating municipalities in Sweden. With this we also see the nullification of what scholars and centrally located politicians claim to be an inescapable and indisputable trade-off between refugee spending and welfare spending – between the reception of refugees and strengthened welfare for all. Right before our eyes, then, Sweden had built a real-world model – however reluctantly – that was capable of receiving large numbers of refuges while at the same time investing in welfare. Instead of the misconceived trade-off between migration and welfare, or the alleged choice that has to be made between welfare spending and refugee reception, the Swedish case demonstrated that it is exactly the other way around. Spending on the refugees, the non-citizen newcomers, became a way of rediscovering the viability of welfare for all.

Human Rights Are Not a Sacrifice

When politicians sound the alarm over refugee costs, claiming that these threaten the fiscal sustainability of the welfare state, they do so from the comfortable place of being able to cite research. No accusations of populist fakery here. But most of the time they do not have to cite research. The notion that there is a trade-off between refugee migration and the welfare state is simply common sense in the public debate. The debate is not whether this is actually accurate; everybody agrees that refugees involve costs for taxpayers. The debate is, rather, whether these costs are deemed affordable or not. It is clear who is winning this debate in terms of policy outcomes; asylum policy is becoming increasingly restrictive and the residence and social rights for those refugees who still manage to enter the European Union are being curtailed. No EU member state wants to share the “refugee burden”.

But it is a strange debate, because the losing side, or those defending refugee rights, almost always contend that human rights never should be allowed to be subjected to cost–benefit analyses. Given that no one is questioning the assumption that refugee reception indeed constitutes a cost, this position is understandable. Under these circumstances, human rights proponents will always lose a cost–benefit debate over refugee reception. But what if the assumption is inaccurate? This is another main reason for writing this book: to show that it is the other way round. As I explain, refugee reception is not costly. Rather, it amounts to a beneficial addition of real resources, as illustrated in the snapshot of the Swedish reality above. The government spending on refugees, for its part, will do what government spending always does: it will end up as income in other sectors of the economy – that is, as income for municipalities, businesses and others involved and employed in the management of refugee reception and integration. Those advocating human rights, therefore, do not have to concede the mistaken orthodox assumption that refugees are costly. Nor do they have to think of “the economy” as the enemy. Receiving refugees in the EU is not an economic or fiscal sacrifice. The book aims to correct this prevailing misunderstanding.

But let me be clear: I am not saying that Sweden or the EU as a whole should admit refugees because it benefits Sweden and the EU. Sweden and the EU should admit refugees to honour their human rights obligations and commitments. On the economics of it all, there is no argument. In admitting and investing in refugees – that is, real resources – societies in Sweden and the EU cannot but benefit.

Peo Hansen is Professor of Political Science at the Institute for Research on Migration, Ethnicity and Society (REMESO), Linkoping University, Sweden. He has written extensively on questions of migration, citizenship and identity and how they relate to the political economy of European integration. His books include The Politics of European Citzenship (with Sandy Brian Hager) and Eurafrica: The Untold History of European Integration and Colonialism (with Stefan Jonsson).

Header Image Credit: Deborah

References:

Ehnts, D. (2017) Modern Monetary Theory and European Macroeconomics. Abingdon: Routledge. Ehnts, D. (2020) “Dirk Ehnts – The Eurozone is Fully Committed to Modern Monetary Theory (MMT)”, 4 AprilGál, Z. (2019) “Fiscal Consequences of the Refugee Crisis”, International Migration, Vol. 57, No. 5, pp. 341–54. , B. (2016a) Global Inequality: A New Approach for the Age of Globalization, Cambridge, MA: Harvard University Press.Milanovic, B. (2016b) “There is a trade-off between citizenship and migration”, Financial Times, 20 April.Mitchell, W., R. Wray & M. Watts (2019) Macroeconomics: A Modern Money Theory Approach, London: Red Globe Press.OECD (2019) Recent Trends in International Migration of Doctors, Nurses, and Medical Students, OECD Publishing, Paris.Ruhs, M. (2013) The Price of Rights: Regulating International Labour Migration, Princeton, NJ: Princeton University Press.Socialstyrelsen (2019) “Vård och omsorg om äldre: Lägesrapport 2019”SPES (Swedish Public Employment Service/Arbetsförmedlingen)2018. Arbetsmarknadsutsikterna hösten 2018: Prognos för arbetsmarknaden 2018–2020 [Labour Market Outlook Autumn 2018: Forecast for the Labour Market 2018–2020]. Stockholm: SPES.Statistics Sweden (2019) “Pizza makers have largest share of foreign born persons”, Statistical news from Statistics Sweden, 7 MarchStatistics Sweden (2020) Yrkesregistret med yrkesstatistik 2018, Yrkesstrukturen i Sverige, The Swedish Occupational Register with statistics 2018, MarchSwedish Government (2018) “Framtidens äldreomsorg – en nationell kvalitetsplan”, Regeringens skrivelse, 2017/18: 280, 20 June 2018.

TO CITE THIS ARTICLE:

Hansen, Peo 2021. ‘The True Economics of Migration’ Discover Society: New Series 1 (1)

Lucy Mayblin

March 2021 saw the announcement of the UK’s new post-Brexit asylum policy. This plan centres ‘criminal smuggling gangs’ who facilitate the cross border movement of people seeking asylum, particularly in this case, across the English Channel. It therefore distinguishes between two groups of people seeking asylum: those who travel themselves to places of potential sanctuary, and those who wait in a refugee camp near the place that they fled for the lottery ticket of UNHCR resettlement. Those who arrive ‘spontaneously’ will never be granted permanent leave to remain in the UK. Those in the privileged group of resettled refugees will gain indefinite leave to remain.

People who find themselves in a situation of persecution or displacement very rarely have knowledge of any particular national asylum system.

Resettlement represents a tiny proportion of refugee reception globally. Of the 80 million displaced people globally at the end of 2019, 22,800 were resettled in 2020 and only 3,560 were resettled to the UK. Under the new plans, forms of resettlement are set to increase, which can only be welcomed. But of course, the expansion of resettlement will make no difference to people who are here, and arriving, every year. People who find themselves in a situation of persecution or displacement very rarely have knowledge of any particular national asylum system. Most learn the arbitrary details of access to work, welfare, and asylum itself upon arrival.

In making smugglers the focus of asylum policy, the UK is inaugurating what Alison Mountz calls the death of asylum. There is of course little difference between people fleeing persecution who make the journey themselves to the UK, or those who wait in a camp with a small chance of resettlement. The two are often, in fact, connected, as men are more likely to go ahead in advance, making perilous journeys, in the hope that safe and legal options will then be opened up for vulnerable family members. And what makes these perilous journeys so dangerous? The lack of safe and legal routes.

Britain, and other countries across Europe, North America and Australasia, have gone to huge efforts and massive expense in recent decades to close down access to the right to asylum. Examples of this include paying foreign powers to quarantine refugees outside of Europe, criminalising those who help refugees, and carrier sanctions. Carrier sanctions are fines for airlines or ferry companies if someone boards an aeroplane without appropriate travel documents. So you get the airlines to stop people boarding a plane to your country to claim asylum. In this way you don’t break international law, but you are certainly violating the spirit of it. If you’ve ever wondered why people pay 10 times the cost of a plane ticket to cross the Mediterranean or the Channel in a tiny boat, carrier sanctions are the reason.

… government policy creates the crisis which it then claims to solve

So government policy closes down safe and legal routes, forcing people to take more perilous journeys. These are not illegal journeys because under international law one cannot travel illegally if one is seeking asylum. Their only option becomes to pay smugglers for help in crossing borders. At this point criminalising smuggling becomes the focus of asylum policy. In this way, government policy creates the crisis which it then claims to solve. And this extends to people who are seeking asylum themselves.

Arcane maritime laws have been deployed by the UK in order to criminalise irregular Channel crossers who breach sea defences, and therefore deny them sanctuary. Specifically, if one of the people aboard a given boat touches the tiller, oars, or steering device, they become liable to be arrested under anti-smuggling laws. In 2020, eight people were jailed on such grounds, facing sentences of up to two and a half years, as well as the subsequent threat of deportation. For these people, there are no safe and legal routes left.

We know from extensive research on the subject, that poverty in a country does not lead to an increase in asylum applications elsewhere from that country. Things like wars, genocide and human rights abuses need to be present in order for nationals of a country to start seeking asylum abroad in any meaningful number. Why then, one might ask, is the UK so obsessed with preventing people who are fleeing wars, genocide and human rights abuses from gaining asylum here? On their own terms there is one central reason: their belief that most people seeking asylum today are not actually refugees, but economic migrants seeking to cheat the asylum system.

… when people started to seek asylum from formerly colonised countries in the ‘Third World’ they began to be construed as ‘new asylum seekers’ and were assumed to be illegitimate.

This idea that people who seek asylum are largely ‘bogus’ began in the early 2000s. It came in response to a shift in the nationalities of people seeking asylum. During the Cold War there was little concern with the mix of motivations in relation to fleeing persecution or seeking a ‘better life’. But when people started to seek asylum from formerly colonised countries in the ‘Third World’ they began to be construed as ‘new asylum seekers’ and were assumed to be illegitimate. From David Blunkett’s time in the Home Office onwards, these ‘new asylum seekers’, primarily black and brown people fleeing countries in which refugee producing situations are occurring, asylum has been increasingly closed down.

The UK government has tended to justify its highly restrictive asylum policies on the basis that it is open to abuse from bogus, cheating, young men. It then makes the lives of people who are awaiting a decision on their asylum application as difficult as possible on the basis that this will deter others. Forcing people who are here to live below the poverty line, then, is imagined to sever ‘pull factors’ for others who have not yet arrived. There is no evidence to support the idea that deterrence strategies work, they simply costs lives. 

Over the past two decades, as we have witnessed the slow death of asylum, it has become increasingly difficult to imagine alternatives. Organisations advocating for people seeking asylum have, with diminishing funds since 2010, tended to focus on challenging specific aspects of the system on legal grounds, such as how asylum support rates are calculated or whether indefinite detention is lawful.

This is not a utopian proposal of open borders, this is the real experience of Sweden, a natural experiment with proven success.

Scholars of migration studies, myself included, have written countless papers and books debunking the spurious claims made by the government to justify their policies, and criticising the underlying logics of the system. What we have failed to do is offer convincing alternatives. But with his new book, A Modern Migration Theory, Professor of Migration Studies Peo Hansen offers us an example of an alternative strategy. This is not a utopian proposal of open borders, this is the real experience of Sweden, a natural experiment with proven success.

During 2015, large numbers of people were displaced as the Syrian civil war escalated. Most stayed within the region, with millions of people being hosted in Turkey, Jordan and Lebanon. A smaller proportion decided to travel onwards from these places to Europe. Because of the fortress like policies adopted by European countries, there were no safe and legal routes aboard aeroplanes or ferries. Horrified by the spontaneous arrival of people seeking sanctuary, most European countries refused to take part in burden sharing and so it fell to Germany and Sweden, the only countries that opened their doors in any meaningful way, to host the new arrivals.

Hansen documents what happened next in Sweden. First, the Swedish state ended austerity in an emergency response to the challenge of hosting so many refugees. As part of this, and as a country that produces its own currency, the Swedish state distributed funds across the local authorities of the country to help them in receiving the refugees. And third, this money was spent not just on refugees, but on the infrastructure needed to support an increased population in a given area – on schools, hospitals, and housing. This is in the context of Sweden also having a welfare system which is extremely generous compared to Britain’s stripped back welfare regime.

As in Britain, the Swedish government had up to this point spent some years fetishizing the ‘budget deficit’ and there was an assumption that spending so much money would worsen the fiscal position – that it would lead both to inflation, and a massive national deficit which must later be repaid. That this spending on refugees would cause deficits and hence necessitate borrowing, tax hikes and budget cuts was presented by politicians and the media in Sweden as a foregone conclusion. This foregone conclusion was then used as part of a narrative about refugees’ negative impact on the economy and welfare, and as the basis for closing Sweden’s doors to people seeking asylum in the future.

And yet, the budget deficit never materialised: ‘Just as the finance minister had buried any hope of surpluses in the near future and repeated the mantra of the need to borrow to “finance” the refugees, a veritable tidal wave of tax revenue had already started to engulf Sweden’ (p.152). The economy grew and tax revenue surged in 2016 and 2017, so much that successive surpluses were created. In 2016 public consumption increased 3.6%, a figure not seen since the 1970s. Growth rates were 4% in 2016 and 2017. Refugees were filling labour shortages in understaffed sectors such as social care, where Sweden’s ageing population is in need of demographic renewal. 

Rather than responding with hostility, then, municipalities rightly saw the refugee influx as potentially solving … spiralling challenges.

Refugees disproportionately ended up in smaller, poorer, depopulating, rural municipalities who also received a disproportionately large cash injections from the central government. The arrival of refugees thus addressed the triple challenges of depopulation and population ageing; a continuous loss of local tax revenues, which forced cuts in services; and severe staff shortages and recruitment problems (e.g. in the care sector). Rather than responding with hostility, then, municipalities rightly saw the refugee influx as potentially solving these spiralling challenges.

For two decades now we have been witnessing the slow death of asylum in the UK. Basing policy on prejudice rather than evidence, suspicion rather than generosity, burden rather than opportunity. Every change in the asylum system heralds new and innovative ways of circumventing human rights, detaining, deporting, impoverishing, and excluding. And none of this is cheap – it is not done for the economic benefit of the British population. It costs £15,000 to forcibly deport someone, it costs £95 per day to detain them, with £90 million spent each year on immigration detention. Vast sums of money are given to private companies every year to help in the work of denying people who are seeking sanctuary access to their right to asylum.

The Swedish case offers a window into what happens when a different approach is taken. The benefit is not simply to refugees, but to the population as a whole. With an economy to rebuild after Covid and huge holes in the health and social care workforce, could we imagine an alternative in which Sweden offered inspiration to do things differently?

Lucy Mayblin (@LucyMayblin) is Senior Lecturer in Sociology at the University of Sheffield. Her research focuses on asylum, human rights, policy-making, and the legacies of colonialism. She is the author of Asylum After Empire, Impoverishment and Asylum, and Migration Studies and Colonialism. She was recently awarded the Philip Leverhulme Prize for her research achievements in the area of asylum and migration.

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Fiona Williams

There are not many books on economic theory that I have found exciting to read. Peo Hansen’s meticulous development of A Modern Migration Theory is an exception and is exceptional. It is based on modern monetary theory which asserts the vital role that public debt can play in generating the economy. Hansen uses this theory to dismantle, brick by brick, a pernicious common-sense that has become the defence/attack of European national and supranational governments, academics and media of all political colours:  that labour migrants and refugees constitute a net cost and fiscal burden on the public purse.

Not only has this apparent logic legitimated dehumanizing restrictions to the social and mobility rights of migrants and refugees, but it is wrong, based, as it is, on a conception of the economy as system of balanced household accounts.

There is much to applaud in this refreshing analysis. The arguments deepen postcolonial and decolonial welfare state analyses and have the potential to move anti-racist and human rights politics from back to front foot. Here, I highlight those aspects that have resonance for my work on race, gender and class in the development of welfare states, particularly the British welfare state (Williams, 1989, 1995, 2021).

Hansen’s analysis of EU migration and refugee politics contributes a large and missing piece of the jigsaw which is about the power of ‘sound finance’ thinking to shift (or shape shift) social policy and migration regimes in its witting and unwitting complicity with xenophobic politics. He shows how, from the 1980s onwards, EU policies for asylum seekers, refugees, internal and external labour migrants became more complex and fragmented, with different rights and restrictions placed on differently placed groups.

… restrictions reduced the access of all groups to welfare, permanent residence, and family reunification and were accompanied by greater policing and securitization

These restrictions reduced the access of all groups to welfare, permanent residence, and family reunification and were accompanied by greater policing and securitization. Alongside this, policies reiterated the need for migrants to fill labour shortages and balance the ageing demographic deficit, while also claiming it necessary to reduce refugee numbers. Underpinning these contradictory developments, Hansen argues, is repeated capitulation to ‘sound finance’ – the argument no-one can or will refute – that migrants, but especially refugees, place a burden on welfare provision and create political instability. So let some of them in, but restrict their access to welfare and settlement.

These developments are mirrored in Britain in particular ways. My analysis links the increasing restrictions to migrants’ rights at the borders (the ‘racialized crisis of borders’ – Williams, 2021) to the dehumanizing restrictions to entitlements within those national borders. The 1999 Asylum Act, while part of the racist restrictive logic of immigration policy since the 1960s, began the erosion of economic and social rights of asylum seekers with the routine use of detention centres and the replacement of cash benefits with vouchers. What it set in train was a template for restrictive and conditional practices and technologies to degrade the welfare rights of different marginalized and minority groups within national borders in the service of an austerity welfare programme.

These ‘bordering practices’ (Guentner et al., 2016; Yuval-Davis et al, 2019; Williams, 2021) involve, among other things, bureaucratic constructions of complex and often changing categories of migrant and welfare subject statuses. These then serve as rationale and/or condition for removing a right or access to services such as housing or health care. The Welfare Reform Act of 2010 exemplifies how access to benefits became heavily conditionalized and penalized. Differentiated levels of conditionality and reductions in social rights to citizens and migrants created similarities between the two groups while increasing inequalities among and between them.

Margaret Thatcher famously represented her neoliberal welfare strategy of the 1980s as the exercise of the prudent housewife.

Austerity policies included cuts to public services and followed in the wake of the financial crisis. They found legitimation in part through a common-sense of ‘fiscal realism’ (or ‘sound finance’). David Cameron, Prime Minister of the Coalition government extended to everyone, in the spirit of ‘fairness’, the responsibility to help ‘deal with the debt’ and ‘turn the economy around’. Such fiscal realism has a long pedigree. Margaret Thatcher famously represented her neoliberal welfare strategy of the 1980s as the exercise of the prudent housewife.

In 2010 Cameron introduced a further twist. ‘The real issue’, he argued, ‘is this: migrants are filling gaps in the labour market left wide open by a welfare system that for years has paid British people not to work’ (cited in Williams, 2021: 87). Reducing the debt, he said, demanded a twin strategy: reducing ‘welfare dependency’ and reducing immigration were ‘two sides of the same coin’. Such doublespeak pursued its logic into the ethno-nationalist welfare populism of the Brexit campaign.

Part of Peo Hansen’s critique of sound finance is that its misconception of deficits precludes an appreciation of the beneficial social, demographic and economic contributions of migration. He exemplifies this brilliantly with a study of the economic dynamics that resulted from government financial support given to Swedish municipalities to develop infrastructure for the reception and settlement of refugees during 2015-17. More generally he points to the contribution of migrant labour to European health and social care systems without which they would collapse. This is an important argument, but I want to unsettle the notion of contribution.

My research focuses on the contradictory forms of dependence of welfare states upon migrant and minority ethnic labour, which, over changing colonial, post/neo-colonial formations, is demanded yet subjected to racist rhetoric and social controls. It finds that the contribution of this labour comes at significant social, economic and personal costs to those workers which result from deep racialized and gendered social, economic and geo-political inequalities; that while contributing to the sustainability of welfare provision, this labour is used to maintain lower social expenditure costs and white economic and social privileges; and that these issues need to be placed in the geo-political relationship between migrants’ countries of origin and destination. The contribution of female migrant workers to the post-war British welfare state and the welfare state in this century illustrates these points.

The introduction of the British welfare state in 1945 juggled with two problems: labour shortages and the ‘quantity and quality’ of the population. Granting citizenship to people from British colonies and former colonies eased the first, even though parliamentary committees wrung their hands at the consequences of ‘alien cultures’ such that Aneurin Bevan reassured Parliament in 1949 that he would ensure that the NHS was not subject to ‘abuse’ by foreigners. Population decline was met by measures that supported women’s contribution to the nation as housewives and mothers, but not as workers.

Population decline was met by measures that supported women’s contribution to the nation as housewives and mothers, but not as workers.

The new Commonwealth immigrants were recruited to work in the health service or build council housing yet their access to these services was routinely questioned or denied. Commonwealth women workers filled those jobs which otherwise would have had to be filled by British married women. They contributed not only to the construction of the welfare state but to the social reproduction of the white male breadwinner family at cost to their own family lives: they were seen to fail as mothers because of their contribution as workers.

Fast-forward fifty years and the new normative ideal/necessity in western welfare states is of a dual earner family. By the 1990s, domestic service for professional dual-earner families increasingly became the norm. Ageing societies, declining fertility, and relatively unchanged gendered care responsibilities have combined with political imperatives to keep care costs down and created a demand for low-cost care labour. It is migrant women from the poorer regions, often educated and skilled and under pressure as main breadwinners, who are meeting this demand in many, if not most, countries of the developed world (Williams, 2018). Once again, these workers provide cost effective solutions to securing the family norms and care needs in their countries of destination. But is this a solution for those migrant care workers?

There is not space to go into the reasons behind women’s migration, but I highlight three points. First, care and domestic work historically are undervalued as women’s work – temporary, part-time, precarious, low waged, insecure, flexible, and without collective organization (in spite of historic victories by transnational domestic worker organizations to improve working conditions). Restrictive migration policies for unskilled workers have exacerbated this precarity. Second, such work by migrant women plays into colonial and post-colonial tropes of racialized servitude and empirical work demonstrates how those social relations of power underpin much of the work today (Sahraoui, 2019). Third, while orthodox development economists claim that migrants’ remittances represent a ‘triple-win’ for countries of origin, destination, and the families of migrant workers, it is more complex. 

Remittances amounted in 2019 to three times the total of overseas aid. They are indeed a vital resource for migrant workers’ families to pay for education and housing. But for many countries of origin who encourage the emigration of health and care workers as a source of foreign currency, this is a strategy resulting from structural adjustment policies and IMF loans which have increased their foreign debt. There is no guarantee that remittances will be used to develop the social and economic infrastructure which might provide employment and encourage workers to stay. Destination countries are the winners: they receive trained workers and familial care at poorer countries’ expense (Withers, 2019). 

This example raises the question of how, in addition to having an alternative economic approach to migration, we need to connect this to strategies for both historical and contemporary geo-political reparation. (Some countries offer recompense for the recruitment of skilled health care workers, but no agreements exist for care work). More generally, migrant care work stands at the intersection of global failures in migration governance and a global care crisis in which the demands of contemporary capitalist productivism have undermined, devalued and depleted individuals’ and societies’ capacities to care.

Alternative economic strategies to address the care crisis, in common with those addressing the climate crisis, spell the end of homo economicus. Instead, they prioritize care, interdependence and human and planetary well-being over maximizing economic growth. The Covid-19 pandemic revealed how, in extremis, old economic models and deficit anxiety could be overcome. It exposed deep inequalities and the dependence of health and social care systems on migrant and minority ethnic workers, many of whom were also to lose their lives. It also provides the opportunity for both transformative thinking and transformative action in which Peo Hansen’s theory should be an essential element.

Fiona Williams is Emeritus Professor of Social Policy at the University of Leeds, Honorary Professor at the Social Policy Research Unit, University of New South Wales, Australia, and Research Affiliate at COMPAS (Centre on Migration, Policy and Society) at the University of Oxford. Many of these arguments are developed in her forthcoming book, Social Policy. A Critical and Intersectional Analysis, due out in July 2021.

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References

Guentner, S. et al. (2016) ‘Bordering practices in the UK welfare system’, Critical Social Policy, 36(3): 391–411. , P. (2021) A Modern Migration Theory. An Alternative Economic Approach to Failed EU Policy. Newcastle: Agenda Publishing.Sahraoui, N. (2019) From Care Labour to Care Ethics: Exploring Racialised Workers’ Experiences in European Older-Age Care. Basingstoke: PalgraveWilliams, F. (1989) Social Policy: A Critical Introduction: Issues of Race, Gender and Class. Cambridge: Polity.Williams, F. (1995) ‘Race, ethnicity, gender and class in welfare states: a framework for comparative analysis’, Social Politics: International Studies in Gender, State and Society, 2(1): 127–59. , F. (2018) ‘Care: intersections of scales, inequalities, and crises’, Current Sociology, 66(4): 547–61. , F. (2021) Social Policy. A Critical and Intersectional Analysis. Cambridge: Polity. (out in July 2021).Withers, M. (2019) ‘Temporary labour migration and underdevelopment in Sri Lanka: the limits of remittance capital’, Migration and Development, 8(3): 418–36. , N.et al. (2019) Bordering. Cambridge: Polity.

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Adrian Favell

Europe desperately needs new migration policies—and thinking. In the 1990s and early 2000s, mainstream policy makers and researchers alike were holding out for “managed migration” in the continent: a potential “win-win-win” scenario that might see demographic benefits of new migration within and to Europe, integration of new migrant groups, and positive development effects via remittances and global networks on sending countries. But, as captured by Hein de Haas’s pendulum mood swing in migration research (2012), the economic and political crises of recent years have seen thinking return to defensive concerns of border security and limiting numbers among the policy minded; and, among autonomous researchers, to an implacably critical stance on the ongoing devastation wrought by a colonial, racist West.

In his ambitious new book, A Modern Migration Theory: An Alternative Economic Approach to Failed EU Policy (2021), Peo Hansen offers a scathing assessment of how Europe’s politicians, policy makers, and applied researchers have come to a consensus on the alleged trade offs, between “protecting” European welfare states and stabilising “native” political hostility to immigration, versus the rights or mobility that may be offered to migrant populations. Yet this is a book willing to engage upfront in technical debate about an alternative economics to ground a constructive, but realist, approach to the reception of refugees, enabling the humanitarian obligations of European states to be squared with the potential benefits of new migrations.

Hansen draws his conclusions from a case study of the regenerative effects of the resettlement of refugees among depopulated and chronically ageing populations in remote regions of Sweden. From 2015 to 2017, as Sweden admitted, along with Germany, a very large proportion of asylum seekers in Europe, it abandoned fiscal prudence to invest in their settlement. Despite the success of this policy, which multiplied benefits for local governments, the private sector, and the migrants themselves, it was shut down, Hansen argues, by national politicians with false budget balancing ideas based on the household analogy of “sound finance”, as well as the wider austerity imposed by the EU.

Yet, it could have been viewed differently in other “functional finance” terms: if expenditure had been understood not as a money spent as a “loss” against tax revenue, but as new finance that a government can always create and which is never lost when it is invested in “real” actors and resources who are using it in the economy.

As has been found out in the UK amidst rampant post-Brexit and COVID expenditure by Boris Johnson’s Conservatives, governments can certainly raise resources out of nothing, run up debt, spend on public services, social protection and inclusion for vulnerable populations, and all kinds of actors and institutions at the local level can benefit from this “levelling up”—when the politics of this suits them. In other words, the magic money tree was and is magic. Hansen makes the same point about refugee reception in Sweden, and the game changing potentials of COVID: the economics of austerity were a lie.

We are rich and affluent, and can afford to be good to disadvantaged and suffering populations around the world, and we will be a better and richer society for it.

Here, the book brings in Modern Monetary Theory (“MMT”), to take what appears still to be an essentially Keynesian turn. The theory at the heart of the book echoes what others, including the iconic new generation Democrat politician, Alexandra Ocasio-Cortez, have been saying in the US. Yes. We are rich and affluent, and can afford to be good to disadvantaged and suffering populations around the world, and we will be a better and richer society for it.

This is an important message: certainly for Sweden, whose much-admired welfare state, education system and public services are in decline under neoliberal austerity, and which has reaped the consequences — as almost everywhere across advanced liberal democracies — in terms of rising racism and anti-immigrant populism. But it is neither a new political economy, nor is it a new migration theory. Economists will have to assess whether tying the basic critical message to a controversial approach in contemporary economics makes technical sense. Yet even among economists, it is overstated to say that there is a negative consensus on the costs of recent migration.

Many economists are often quite sanguine about the accumulative labour market and social effects of even low skilled migration: in terms of the lump of labour fallacy, ethnic entrepreneurship, complementarity, and social diversification, for instance (Fingleton et al 2019). Had Hansen considered the UK, there would be little disagreement: large scale intra-EU mobilities and ongoing international migration of all kinds was always an economic benefit; it was only unsustainable in a political sense (Portes 2019). And even the neoliberal George Borjas makes arguments about the cumulative positive selection effects of refugee migration, relative to what US immigration has always made easier—family reunification of dependents for low skilled workers (Borjas 1989).

More obvious targets are influential sociologists and political scientists who have bought into the trade-off argument: most prominently Martin Ruhs in The Price of Rights (2013), whose extensive work with the Swedish political scientist Joakim Palme has resonated very strongly in European policy circles (see their REMINDER project). Hansen also singles out variously positioned scholars such as Gary Freeman, Christian Joppke, Virginie Guiraudon, and Joseph Carens, who advocated this dominant agenda accepting the “progressive’s dilemma” (see Parker 2017) in the liberal political theory of migration. Yet it is odd that Hansen accepts the assignation of refugee population to an automatically low skill, low productivity categorisation.

A plausible economist’s view of recent asylum seeking would say there are also selection effects at work among humanitarian population flows: asylum seekers can be younger, more educated, more internationalised, more “middle class”, than some migrants (these are also reasons why they might face political persecution). They often no longer fit the strict criteria of international refugee law, but they do bring personal resources (Crawley and Skleparis 2017). At least, nowhere in this book does Hansen attempt an empirical analysis of the asylum seeker population in Sweden in these terms (economists refer to this in terms of “unobserved skills” or “capabilities”). That is, to see whether these attributes might account for the positive growth effects, say, relative to other populations that populists identify (stereotypically) as an unwanted “burden” in European societies: such as homeless Roma populations, or family dependents from rural origins in Asia or Africa who arrived through marriage migration.

There is also an uncomfortable truth here: for the privileged few who make it to a citizenship ceremony in the West, there are very many more who are left behind.

There is also an uncomfortable truth here: for the privileged few who make it to a citizenship ceremony in the West, there are very many more who are left behind. Globally speaking, to echo at once, Gayatri Spivak, Giorgio Agamben and Pierre Bourdieu, the truly abject and subaltern can neither speak nor move. It invariably requires some capital—human, economic, or social—to be able to get very far from the political and climate catastrophes pushing these new international migrations. This is why so many displaced populations never make it to Europe and are never recognised as having legitimate asylum claims. I will return to the implications of this point.

Other questions might be raised over Hansen’s insistence that the bottom-line failure of migration policy in Europe, lies with the European Union. The chapters on representative “EU policy” mostly discuss EU directives. Sometimes, “Europe” is, then, the European Commission: in historical terms a moderately progressive organisation, which along with the Parliament, tries to set bureaucratic and legal norms for European societies, that spell out constitutional obligations and policy goals. Hansen rightly charts how the Commission has slid from trying, for instance, to level up the rights of Third Country Nationals with free moving intra-EU citizens in the early 2000s, to the nadir of a right-wing Commission President, Ursula von der Leyen, crowing over a “European shield” on the Greek border holding back unarmed women, men and children in February 2020.

This is indeed now “EU policy” but, as is well know, the Commission and Parliament are relatively toothless organs, whose directives are at best political wish lists at the national level. Sometimes, Europe for Hansen is the more hard-nosed and consequential, Council of Ministers, which does indeed modify “EU policy” from the Commission into often reactionary lowest common denominator laws and treaties. Yet more often than not, in Hansen’s account, the “EU policy” he is critiquing is something being articulated and driven by national leaders—Merkel or Macron—whose prime audience is always a national media and a national electorate. European democracy in the end is the big problem.

… the overwhelming determinant factor in all these developments has been public opinion at the national level, cultivated and courted by populist national politicians.

So, when Hansen refers to “Brussels” as the central actor, it can sound like a rather Eurosceptic simplication of the EU as a multi-levelled political system. It is certainly right to be disappointed in the combined effects of the lawyers, bureaucrats, NGOs and other lobbyists, who for years have tried to extend EU policy and law on human, minority, or gender rights, or antidiscrimination, to make migration policy more humane.  EU institutions have certainly played a big part in helping member states coordinate a common European border and policing regime. And, it is true, that maintaining the Eurozone tied the hands of national governments within the Eurozone against printing money as a way of getting out of austerity (although not Sweden, with its own “sovereign” currency).  But a fully grounded political analysis of European migration policy would conclude that the overwhelming determinant factor in all these developments has been public opinion at the national level, cultivated and courted by populist national politicians. This is an absent dimension in a book offering a comprehensive political economy for a better Europe.

Early on, Hansen identifies three claims about refugee migration: that they are fiscal burden, that there is therefore a trade off against the sustainability of the welfare state, and that these two factors have poisoned European politics against all immigration. Yet even if the first two points are defeated by the “real” “facts” (to echo Hansen’s curiously positivistic rhetoric), the third is not affected: these rhetorical constructions are nevertheless determining political outcomes. A more systematic reference to the comparative political science of public opinion and electoral competition on how “immigration” has driven the European project as a whole into the arms of neoliberal neonationalism would be useful (see de Vries 2018; Vachudova 2021)

A comparative focus on the UK here would also be instructive. That is, how “EU immigration” was indeed conceived and successfully framed, by Farage, Johnson, and a barrage of respectable academics, as a political spectre and sliding signifier, that could be associated with images of asylum seekers in central Eastern Europe, Kurdish minorities in Turkey, British Muslims in Northern towns, Windrush-origin Black British, temporary CEE mobile workers, and even eventually West European professionals, none of which should have been seen, legally or geographically, as “immigrants” in the UK (Favell 2020).

Politically, Hansen suggests that a multi-party consensus could be imagined on the MMT driven, levelling up type policies in Sweden and Germany to “integrate” the new waves of asylum seekers, and this could be scaled up for Europe as a whole: even to the extent that the world’s 26 million refugees could all be received. This would be a better world; although a much better one would be a world in which there were no asylum seekers, and where one way immigration from poorer countries was much less common than free movement back and forth.

Even a cursory contrast here with the migration and development literature of the 1900s and early 2000s, reveals that Hansen draws a disappointingly conservative conclusion, arguably locked in a methodologically nationalist logic. Not once in the book does he mention transnationalism, or pose questions of what happened to the societies the asylum seekers left behind: surely the most important question in any migration theory.

In the preface, Hansen recounts a hospital visit with his daughter, and meeting doctors, nurses, cleaners, and taxi drivers who were all friendly, under-appreciated, “immigrants”. This is all great for Sweden, but how exactly is this good for Eritrea or Afghanistan, Syria or the Palestine? Every one of these successfully “integrated” workers is a net loss for their sending country, until and only if the social resources that have been invested in them, in fact seep back out of the rich and golden Swedish state, and start to have benefits in the countries at the bottom of the development index, and outside the circle of US-led military-industrial domination. That is, when we do start to see real redistributive costs for the rich Western nation-state, and its dis-integrative effects on the hegemony of Western nationhood (on this, see Favell 2022)?

In the 1990s and early 2000s, a lot of scholarship tried to focus this potential change on diasporic homeland politics, on clandestine transnational family and business structures, and on financial and social remittances flowing out and back. Solidarity with asylum seekers, and pan-working class politics is now often cited as the precursor of a new international politics (Penchaszadeh and Sferco 2019; Milkman 2020)—but, as these examples suggest, it should be solidarity with migrants who aim to change the regimes that oppress and dominate them, and who oppose the North Atlantic perpetuation of colonial dependency/extraction, and invidious puppet regimes around the world; and not only “solidarity” as the image of “intercultural integration” scholarship, which pictures happy asylum seekers in Glasgow, Malmö, or a small village somewhere outside of Umeå, successfully building new lives in the West (see, for example, Home Office 2019).

A truly radical migration theory might document and support how desperate but smart “migrants”, find means to have it both ways like the “free movers” of the Global North (see, for example, Schapendonk 2020); to, in fact, turn benefits hand outs into cunning “tourism”, to funnel “integration” resources out of the nation back to the family and friends in sending countries, and ultimately to instrumentalise and demystify the “citizenship” and “rights” being offered to them in the West—whose exclusivity and privileges so devalue their own, and which cements passports as the most important currency of “global inequalities” (Kochenov 2019).

In other words, how mobile populations continue to bend, poke holes in, and find ways back and forth, across the carceral border regime that is built on linear, state-centred, and complacent ideas of “immigration”, “integration” and “citizenship”—a payback analogous to the kind of “reparations” from the West to the Rest, starting to be imagined by decolonial scholars (and, as suggested by, i.e., De Genova et 2018). Perhaps what is needed is not so much a “modern” migration theory, as a revolutionary one.

Adrian Favell is Chair in Sociology and Social Theory, and Director of the Bauman Institute, at the University of Leeds. He is the author of Philosophies of Integration (1998), Eurostars and Eurocities (2008), a collection of essays, Immigration, Integration and Mobility (2015), and a forthcoming work in migration theory from Polity, The Integration Nation (2022). Website: .

Header Image Credit: Frankie Fouganthin

References:

Borjas, George. 1989. ‘Economic theory and international migration’. International Migration Review 23,3: 457-485. , Heaven and Skleparis, Dimitris. 2017. ‘Refugees, migrants, neither, both: categorical fetishism and the politics of bounding in Europe’s “migration crisis”’. Journal of Ethnic and Migration Studies. 44,1: 48-64. Genova, Nicholas, Garelli, Glenda and Tazzioli, Martina. 2018. ‘Autonomy of asylum? The autonomy of migration undoing the refugee crisis script’. The South Atlantic Quarterly 117,2: 239-265. Haas, Hein. 2012. ‘The migration and development pendulum: a critical view on research and policy’. International Migration 50,3: 8-25. Vries, Catherine. 2018. Euroscepticism and the Future of European Integration. Oxford University Press, Oxford.Favell, Adrian. 2020. ‘Crossing the race line: “No Polish, No Blacks, No Dogs” in Brexit Britain? or, the Great British Brexit swindle’, in sp. ed. ed. by Francesco Duina and Frédéric Mérand, ‘Europe’s Malaise: The Long View’, Research in Political Sociology, Vol.27, Oct, pp.103-130. , Adrian 2022, forthcoming (title TBC). The Integration Nation: Immigration, Diversity and Colonial Power in Liberal Democracies. Cambridge: Polity.Fingleton, Bernard, Olner, Daniel, Pryce, Gwilym. 2019. ‘Estimating the local employment impacts of immigration: a dynamic spatial panel model’. Urban Studies, 1-17. , Peo 2021. A Modern Migration Theory. An Alternative Economic Approach to Failed EU Policy. Newcastle: Agenda Publishing.Kochenov, Dimitry.  2019. Citizenship. Cambridge, MA: MIT Press.Milkman, Ruth. 2020. Immigrant Labor and the New Precariat. Cambridge: Polity.Parker, Owen. 2017. ‘Critical political economy, free movement and Brexit: beyond the progressive’s dilemma’. The British Journal of Politics and International Relations 19,3: 479-496. , Anna Paula y Sferco, Senda Inés. 2019. ‘Solidaridad y fraternidad: una nueva clava ético-política para las migraciones’. REMHU: Rev. Interdiscip. Mobil. Hum. 27,55 (abr.), 149-164. , Jonathan. 2019. Immigration. London: Sage.Ruhs, Martin. 2013. The Price of Rights: Regulating International Labour Migration. Princeton University Press, Princeton.Schapendonk, Joris. 2020. Finding Ways Through Eurospace: West African Movers Re-Viewing Europe from the Inside. Oxford: Berghahn.Vachudova, Milada. 2021. Populism, democracy and party system change in Europe, American Political Science Review 24, 1.

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Favell, Adrian 2021. ‘The Integrative versus Dis-integrative Effects of Asylum Seeker Migration’ Discover Society: New Series 1 (1)

Maya Goodfellow

‘I can’t even join up to the NHS 111 to give advice to people on the phone because they want someone who has got right to work.’ During the UK’s first lockdown, Anantha was explaining to me how he could have been helping during the pandemic. A doctor with a wealth of experience, he had been here for over a decade. But because of his immigration status he wasn’t allowed to work. ‘This is now officially my country, although the country might not acknowledge what I’m doing so therefore I feel very frustrated because I could do a lot more’ (Goodfellow 2020).

This cruelty is no accident; it’s how the UK’s immigration system is designed.

He wasn’t alone. I also spoke to Abanda who was once-upon-a-time a healthcare worker and who had trained extensively to do her job. But because she was in the process of trying to claim asylum in this country, she, too, was barred from working. As well as being denied the right to do their jobs, there were all kinds of state support that they were refused access to. This cruelty is no accident; it’s how the UK’s immigration system is designed.

During the pandemic the UK government applauded key workers – a significant proportion of whom are not born in the UK – and, at the same time, put together an even more restrictive immigration system that would make it near impossible for some of those same people to have come to this country. They refused to suspend the hostile environment in its entirety while they spoke endlessly of how important it was everyone ‘stayed safe’.

Then in the summer of 2020, once all of the clapping had died down and the apologies for Windrush were out of the way, they focused on the small number of people crossing the Channel in dinghies. Likely trying to settle in the UK for all kinds of reasons, they had no other viable routes into the country but there were repeated attempts to dismiss them as ‘illegal migrants’ (a stigmatising, misleading term). Many were then detained in a former army barracks, independently judged to be not fit for purpose.

Such anti-immigration policies have a long history. The ‘immigrant’ is at once the person who is desperately needed to staff the health service, taking up the trainee nurse spot that should be for a ‘British citizen’, and the ‘health tourist’ overburdening the NHS. The immigrant is a threat but at times a useful one, particularly when ‘they’ can be ‘controlled’ in certain ways. How might we make sense of these seemingly conflicting but overlapping positions?

Peo Hansen’s new book seeks to answer this. Focused primarily on the EU, he argues that even though wealthier countries in the bloc have an ageing population, labour market shortages, and rely heavily on workers from abroad, they won’t admit the reality of the situation. Instead, refugees and so-called low-skilled migrants are repeatedly and consistently treated as a drain on national economies.

Policy makers, academics and politicians are signed up to this thinking and, as Hansen explains, the consensus is almost rock solid. There is much research ‘proving’ this to be true, even some of the very people who advocate for refugee rights buy into it. Backed by ‘robust’ research, the fiercely anti-refugee politicians, along with the supposed centrists, bellow on repeat that an already overburdened country can’t possibly take any more people without hurting the ‘natives’, meanwhile the response from the refugee advocates is “give more people refuge, we can afford it”. The demands are polar opposites, but, Hansen argues, there’s a shared basis: that this will cost.

… the much anticipated and predicted financial hit never materialised, instead the opposite happened. Investment ended up as income for the areas that had the most new arrivals, which was used not just for these people but for everyone.

The book dismantles this major myth entirely. Using Sweden as a case study, Hansen examines what happens when a country takes in refugees and invests accordingly. Rejecting the EU-wide consensus, the Swedish government increased refugee-related spending between 2015 and 2017. But the much anticipated and predicted financial hit never materialised, instead the opposite happened. Investment ended up as income for the areas that had the most new arrivals, which was used not just for these people but for everyone.

Sweden bucked what was supposedly a trend. But amid the ongoing cries of immigration-induced economic calamity, there has been little acknowledgement of this. Even within Sweden what had happened was essentially ignored. Instead, politicians reverted to type.

The problem, Hansen says, is that the ‘economic drain’ consensus is based on ‘sound finance’, which continues to shape almost all thinking and work on the question. Despite what this approach tells us, a country’s budget is not equivalent to that of a household. Anchoring the analysis in modern monetary theory (MMT), Hansen challenges this thinking: “a government deficit is merely another way of expressing net financial savings (or surpluses) in the non-government sector. What most people take to be a bad thing – i.e. the deficit with the central government – is actually equivalent to what most people take to be a good and prudent thing, namely net saving by, for instance, households and businesses” (2021: 59).

The problems don’t end there: sound finance “fails to distinguish between real resources, such as labour, and financial resources” and, as he points out, “the real constraints lie with the former” (2021: 43). With its ageing population and severe sectoral labour shortages, many of the people who moved to Sweden more recently have begun doing essential jobs, in a workforce already made up of those born abroad. Yet still these very people are framed as economic burdens. By using MMT to challenge this dogma, Hansen reminds us that when we’re talking about immigration, we’re not just speaking about people’s movement but the supposed truths that help give meaning – often negative meaning – to that movement.

Still, we have to tread carefully. To show that working class people who migrate and people who seek asylum are not economic drains does not automatically upend the operating logics of the immigration system.So rooted are the orthodox arguments against immigration that exploding the economic drain myth may be one of many necessary and important starting points, but it must not be a sufficient end. This is one important part of a bigger change that is needed. Only focusing on this would be both too straightforward a plan and too narrow. And Hansen is not suggesting that we do so.

It would be too straightforward because it risks reifying some of the same thinking that helps produces exploitative policy. The UK government’s aim, for instance, is not only and always to stop certain people from migrating, it is also to ‘control’ who migrates and under what terms.

‘Low skilled’ migrants might be admitted into countries, but this is usually under certain conditions – people are denied access to particular services, often given only threadbare rights and time limited stays (similar is true too for people seeking refuge). “Temporary labor migration is a crucial method of accumulation”, Harsha Walia argues in her recent book Border Rule, “helping to facilitate the holding of more than $9.1 trillion of global wealth by 2,200 billionaires, while the world’s poorest 3.8 billion people hold $1.4 trillion” (2021: 45). Categorisation and exploitation are central parts of the bordering regime.

Hansen focuses on exactly this: using the EU’s Blue Card Directive to explain how even those in more secure positions are presented as potential burdens and so showing how bordering negatively impacts most people, albeit to different degrees (2021: 100-105). Though part of the rationale might come from the ‘economic drain’ argument, this exploitative model isn’t necessarily undone by shifting the economic narrative because of how it sorts people.

“I am not saying that Sweden or the EU as a whole should admit refugees because it benefits Sweden and the EU” (2021: 200), Hansen writes. Indeed, peoples’ humanity and rights shouldn’t be contingent upon what they contribute. During the UK’s first lockdown there was a momentary shift: more and more people recognised that many of the key workers they relied on were immigrants. This was channelled into a successful campaign to end the NHS immigration surcharge – a policy that means migrants have to pay twice over for the health service – for health care workers. But the vast majority of migrants – including those who were not health-care workers, such as delivery drivers through to the supermarket staff – do have pay this charge. Pointing out that certain people contribute hasn’t meant a universal shift in rights and it certainly hasn’t changed for those who don’t ‘contribute’ in the right way or at all. Instead, it deepened the stratified system that Hansen rightly critiques.

And though Hansen shows us that there are clear similarities between the way refugees and ‘low-skilled migrant’ are talked about and treated, it’s crucial to see the important, context-dependent differences too. While advocates for refugee rights might often buy into the ‘cost’ myth, ‘immigrants contribute’ is a regular response from migrants’ rights groups when faced with an avalanche of misinformation about the deleterious impact immigration supposedly has on the economy. Perhaps this is a necessary response to this toxic, widely accepted myth, but it also plays into the commodification of people who are moving. Bringing more people into the category of ‘contributor’ – that is, including people classed now as ‘low-skilled’ as contributing through the important work they do – doesn’t necessarily end this thinking entirely.

These scenarios are limited. There hasn’t been any real attempt to go for the jugular when it comes to the economic theory that determines how immigration is understood; in neither instance has this orthodoxy been challenged in the way that Hansen suggests is necessary. Such a change could ultimately transform how we make sense of ‘the economy’ – the way people are ranked, divided and seen to contribute. The very idea of ‘low skilled migrants’ being a burden may change but there will still be a focus on the ‘national economy’ (however the ‘economy’ is understood) and who or what will benefit it. Overturning the ‘economic drain’ logic doesn’t necessarily end a system of stratified rights and racialised forms of exclusion.

That is why as well as being too straightforward, a plan that only focuses on this would be too narrow. Just as the arguments about immigration are never just about movement, neither are we only talking about the ‘economy’ in the strictest sense of how this term is often understood. As well as being classed and gendered, ‘the economy’ is raced. Capitalism is not just capitalism, as Cedric Robinson (2020) showed us, it is racial capitalism.

… racism doesn’t only and always announce itself loudly in the debate and it’s not only the preserve of the far-right

Contrary to what we often hear, racism doesn’t only and always announce itself loudly in the debate and it’s not only the preserve of the far-right. That some people are constructed as a cost, or as low-skilled, can be intertwined with how they are racialised; certain groups are made vulnerable and constructed as threatening at the same time. The specificity and complexity of these relationships needs further examination, work that many are doing. But the supposed ‘problem’ immigration poses, then, is manifold: entangled together are ‘economic’ arguments with the ‘cultural.’

You can see that the two aren’t separate in the debate. The argument goes: as well as being an ‘economic drain’, certain groups of migrants are a threat to the welfare state – their ‘cultural difference’ undermines the country’s shared values and in turn erodes the solidarity that’s necessary for a decent net of social security. When politicians claim there’s a limit on how many ‘genuine’ refugees a country can ‘take’ or bemoan the impact of migration on certain areas, they’re also concerned with supposed ‘cultural’ difference. “Biological racism and cultural differentialism […] constitute not two different systems, but racism’s two registers” wrote Stuart Hall when thinking about ‘race’ and ‘ethnicity’ “[…] it seems therefore more appropriate to speak, not of ‘racism’ vs. ’cultural difference’, but of racism’s ‘two logics’” (2000: 224).

Here too you’ll find parts of the left are complicit. Just like the people who say the country can afford to take in asylum seekers, there are those who say there is a cultural cost to certain groups moving. There’s an assumption that there are inalienable differences between people that can be fixed through reducing immigration or making people ‘integrate’.

And so, the different ways race is produced through bordering and economic processes needs more focus. Because race is not an epiphenomenon, but a central part of the thinking that underpins immigration systems.

What is the aim of unpicking wilful misconceptions around immigration? Perhaps we don’t spend enough time asking this question. One reason is that it’s a route to make less violent immigration regimes. But this is also a potential path to overhauling bordering in its many forms. Dismantling economic orthodoxies are important for this. It means thinking about not just migration, but the processes that force some to move and stop others from doing so. And so, this is not only about ensuring mobility: but as Asad Rehman from War on Want argues, everyone should have the right and means to stay as well as move.

Maya Goodfellow is a Leverhulme Early Career Research Fellow at the Sheffield Political Economy Research Institute. Maya’s research is concerned with thinking about the relationship between capitalism, racism, and bordering. She is also a Visiting Research Fellow at The UCL Sarah Parker Redmond Centre for the Study of Racism and Racialisation. She is the author of Hostile Environment: How Immigrants Became Scapegoats, published by Verso in 2020.

Header Image Credit: Stephen Gidley

References

Goodfellow, Maya 2020, Hostile Environment: How Immigrants Became Scapegoats, London: Verso.Hall, Stuart 2000. ‘Conclusion: the multi-cultural question’, in Barnor Hesse and S. Sayyid (eds.) Un/settled Multiculturalisms: Diasporas, Entanglements, Transruptions. London: Zed Books, pp. 209-241Hansen, Peo 2021, A Modern Migration Theory: An Alternative Economic Approach to Failed EU Policy, New York: Agenda PublishingRobinson, Cedric 2000, Black Marxism: The Making of the Black Tradition, 2nd ed., North Carolina: The University of North Carolina PressWalia, Harsha 2021, Border Rule: Global Migration, Capitalism and the Rise of Racist Nationalism, Chicago: Haymarket Books

TO CITE THIS ARTICLE:

Goodfellow, Maya 2021. ‘Dismantling the Myths of Migrants as Threats or Tourists’ Discover Society: New Series 1 (1)

Fadhel Kaboub

Most of my recent work has been on the subject of Modern Monetary Theory (MMT) and its implications for transformative climate policies in the Global North as well as the Global South. However, after reading Peo Hansen’s new book, I will also be writing about another important MMT: A Modern Migration Theory: An Alternative Economic Approach to Failed EU Policy (2021). Hansen makes a powerful case for more generous immigration policies in the EU not only because it is the right thing to do morally, but also because of the vast social, cultural, and economic benefits that immigrants bring to Europe. Building on the work of MMT economists, Hansen dismantles the economic foundations of the anti-immigration arguments about refugees adding an unsustainable financial burden on the Swedish economy, and argues that refugees have in fact contributed to an economic boom post-2015.  

Refugees brought Prosperity and MMT Insights to Sweden

Despite the fact that the Swedish government was fiscally conservative, it made an exception to the krona för krona fiscal rule between 2015-2017 to welcome 163,000 refugees. According to Hansen, government spending increased by 3.6% in 2016, a rate not seen since the 1970s. “The economy grew and tax revenue surged so much that successive surpluses were created, which is something that may happen, albeit not necessarily. But, as MMT explains, this is not important; what is important is not the fiscal balance at the end of the year but the overall balance and real health of the economy and society” (Hansen 2021, 153). 

What we learn from MMT and from Hansen’s book is that governments with high degrees of monetary sovereignty like Sweden have a much higher fiscal spending capacity than what mainstream economists claim. In fact, MMT argues that unlike households, firms and local municipalities (users of the national currency), the sovereign issuer of the national currency is not constrained by tax revenues and borrowing capacity. The government’s spending capacity is constrained by the risk of inflation, which may materialize when the economy runs out of productive capacity (skilled labor, technology, capital equipment, raw materials) and when aggressive price-setting behavior is allowed to dominate certain sectors of the economy. 

Sweden can actually expand that additional fiscal spending capacity even more via strategic investments to increase its productive capacity (including more immigrants)

What Sweden did in 2015-2017 was essentially tap into that additional spending capacity that was considered forbidden. I would argue that Sweden can actually expand that additional fiscal spending capacity even more via strategic investments to increase its productive capacity (including more immigrants) and appropriate taxation and regulation policies to prevent high concentration of market power (and oligarchical political influence). In other words, the so-called refugee crisis was in fact an enlightening opportunity for Sweden and other countries in the Global North to recognize the tremendous opportunities available to us to address serious socioeconomic and ecological problems worldwide. 

However, I must hasten to say that the Global South countries have a very limited degree of monetary sovereignty because they typically have a large external debt burden (debt denominated in foreign currencies). The larger the external debt, the more desperately a county tries to fix its exchange rate to global currencies like the US dollar or the euro. The roots of this problem are typically related to the lack of food sovereignty, energy sovereignty, and low value-added content exports. I have often described this as a trap, and I have also argued that the standard policy solutions offered to the Global South have in fact created a deeper quagmire that exacerbates colonial and neocolonial structures. 

The Global North’s Climate Debt

Let us consider the following observations with regard to the Global South:

It has limited technological capabilities, weak productive capacity, and no fiscal policy space.It has a weaker capacity to deal with corruption, regulate abusive market power, and protect democratic institutions. It has an unsustainable external debt.It suffers from brain drain.It has suffered substantial ecological damage due to extractive industries and global warming.It is on the frontlines of climate change.It has very limited capacity to build resilient infrastructure to mitigate the effects of climate change.It is a net-creditor to the Global North, sending $2 trillion annually to the richest countries on earth.It is home to millions of potential climate refugees who will relocate to the Global North.It is not responsible for most CO2 emissions since the industrial revolution.

The Global North owes a Climate Debt to the Global South, and the time to settle that debt has been long overdue.

The Global North, however, does not face any of the above-mentioned constraints, and has the technological, logistical, and financial capabilities to address climate change and the subsequent climate refugee exodus from the Global South. The Global North owes a Climate Debt to the Global South, and the time to settle that debt has been long overdue. According to the World Bank, if no climate action is taken, it is estimated that more than 140 million people will be displaced by climate change in the Global South.

Some of the Syrian refugees that arrived in Europe were actually climate refugees. Syria experienced its most severe drought (2006-2011), which affected 3 million people. Long before the conflict started in 2011, the drought forced 1.5 million people to move from rural areas, thus putting substantial pressure on housing, schools, and basic infrastructure in larger cities. During the drought, 85% of the cattle was lost. Agricultural yields dropped by 32% in irrigated areas, and by 80% in rain-fed areas. Poverty and unemployment increased, thus adding more social and political instability. Syria became a net wheat importer during a period when global food prices were skyrocketing. Inflation spiked and pushed 1 million Syrians into food insecurity. 

Similar climate-induced migration and conflicts are already happening around the world. Climate change is going to exacerbate water stress and food insecurity, which is likely to increase the likelihood of social unrest, political instability, and armed conflicts. Climate stress is going to be the major push factor in the upcoming climate refugee crisis in the second half of the 21st century. 

Climate Reparations; not Aid or Charity

The Green Climate Fund, which was established by the UNFCCC in 2010 was supposed to raise $100 billion by 2020 to help developing countries reduce emissions and mitigate climate risks. Today, the fund only has $8.4 billion, which reflects the level of political commitment in the Global North. Recall that the Global North nets $2 trillion annually from the Global South. This is adding insult to injury. That is why many people in the Global South are calling for climate reparations rather than aid or charity. 

The process of reparations starts with telling the truth about the harm that has been inflicted on communities all over the world (including in the Global North).

The process of reparations starts with telling the truth about the harm that has been inflicted on communities all over the world (including in the Global North). This can be done via a global network of Truth and Reconciliation Commissions that will document and hear the grievances of the public. It’s a restorative justice system that sets in motion a global solidarity and healing process. The second step in the reparations process involves offering public apologies to injured communities. 

The third and most important step in the process of repairing the damage involves both monetary compensation as well as in-kind reparations starting with substantial reductions in CO2 emissions in the Global North, relocation of displaced people from the Global South, transfer of technology, exemption from intellectual property rights for climate mitigation technologies, delivery of tools, equipment, technical training, and R&D collaborations in the Global South. 

Is the Global North prepared to welcome potentially more than 140 million people displaced by climate change? No. 

Can the Global North take action now to mitigate the climate risks, help build resilience in the Global South, and prepare the necessary infrastructure in the Global North? Absolutely, yes.

Does the Global North have any incentive to pay climate reparations to the Global South? Yes, for several reasons. First, we want a liveable plan for humanity. Second, we have the resources to achieve it. Third, we have the opportunity to produce a sustainable and prosperous future for all. And fourth, the financial costs of climate inaction are enormous, especially in the Global North. 

The Good News: The Carbon Bubble is Real and Wall Street is Panicking

Wall Street is finally (quietly) panicking about climate-induced financial risks that are currently on their books; a massive carbon bubble. Banks, hedge funds, pension funds, insurance companies, mortgage companies, family funds, and endowments have trillions of dollars worth of stranded assets currently on their balance sheets. Trillions of dollars worth of at-risk coastal properties (homes, hotels, resorts, casinos), oil and gas infrastructure that will be made obsolete thanks to more competitive and efficient renewables, unburnable “proven” oil reserves that are priced-in today’s market value, as well as other assets that will lose value when the carbon bubble bursts with the impact of climate change. Most of these stranded assets are held in the Global North, and at the end of the day, it is like a game of musical chairs; when the music stops, a whole lot of people will be left holding a bunch of worthless assets. 

Moody’s Analytics estimates economic losses to reach $100 trillion by the year 2100 if global temperatures increase by 2°C degrees (and $77 trillion if we stay below 1.5°C). BlackRock, the largest investment house in the world, is also taking this carbon bubble very seriously. The Federal Reserve Bank now has a Financial Stability Climate Committee, and a Supervision Climate Committee. The European Central Bank is establishing a Climate Change Center with a director reporting directly to the president. Both the Fed and the ECB joined the Network for Greening the Financial System (NGFS) this year. The Securities and Exchange Commission and the Commodity Futures Trading Commission are also bracing for the carbon bubble. The Federal Housing Finance Authority is knee deep in actual financial risks on the books right now. Uninsurable properties due to flood, fire, or hurricane risks are stranded assets that cannot be sold or mortgaged. 

… the financial industry in the Global North will be divesting from the carbon economy and will be applying its leverage to accelerate the energy transition.

In other words, the financial industry in the Global North will be divesting from the carbon economy and will be applying its leverage to accelerate the energy transition. Wall Street panicking about climate change means the politicians they bankroll are finally going to take climate change more seriously. However, don’t expect Wall Street to advocate for climate reparations or resettlement of climate refugees anytime soon. The climate justice movement must formulate its own vision, educate, empower, mobilize and organize for genuine global solidarity to prepare for the inevitable climate refugee crisis. Peo Hansen’s book, A Modern Migration Theory: An Alternative Economic Approach to Failed EU Policy (2021), and MMT provide the analytical framework for a coherent and transformative climate justice movement. The People’s Agreement of Cochabamba (2010) provides a solid foundation for climate reparations.  Now the real struggle begins.

Fadhel Kaboub is an associate professor of economics at Denison University, and the president of the Global Institute for Sustainable Prosperity. He has held research affiliations with the Levy Economics Institute, and the John F. Kennedy School of Government at Harvard University. He is an expert on Modern Monetary Theory, the Green New Deal, and the Job Guarantee. His work focuses on public policies to enhance monetary and economic sovereignty in the Global South, build resilience, and promote equitable and sustainable prosperity. You can follow him on Twitter @FadhelKaboub and @GISP_Tweets

Image Header Credit: John Englart

TO CITE THIS ARTICLE:

Kaboub, Fadhel 2021. ‘Preparing for a Climate Refugee Tsunami: The Case for Climate Reparations’ Discover Society: New Series 1 (1)