People Are Not Bananas: How Immigration Differs from Trade

Abstract

Classical economists have long argued that trade and labor migration are functionally the same. Global wealth is maximized, they assert, when both goods and labor move freely across borders. There are indeed similarities between the movement of people and the movement of goods, but in many ways the disparities between the two are far more apparent. If labor migration and trade are so alike, why have many developed nations maintained high barriers to migration even as barriers to trade have fallen sharply? The contrast between the weak global patchwork governing the movement of people and the strong framework governing the movement of goods is another sign of those distinctions. Why has the United States aggressively pursued multilateral, regional, and bilateral agreements on trade while remaining stubbornly unilateral in its approach to labor migration? This essay contends that the consistent story of factor mobility told by economists misses three key differences. First, the flow of human beings has political, social, and economic impacts on developed nations that differ from the flow of goods. Second, trade is reciprocal while migration is generally a one-way flow. Both of these facts reduce the incentive of developed nations to accept increased migration. Finally, the benefits developed nations do receive through migration are, unlike the benefits of trade, almost always available through unilateral action rather than through negotiation with developing countries. The essay concludes by suggesting how we might better approach labor migration in order to maximize wealth and distributive justice on a global scale.