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by dkural
3854 days ago
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Removing artificial restrictions on a free market system will increase overall productivity. It will certainly increase global GDP to remove barriers to free movement of people. Imagine that people could NOT move between various states in the United States. Do you think this would improve the GDP of the US? Hey, the SF programmers would no longer need to put up with those pesky developers immigrating from the midwest and reducing their 300K salaries to 140K. However this'd be true for the guy working in the grocery store as well for 120K a year - since he'd also not compete with anyone else and gladly take his share of your 300K salary. People hate monopolies until they are the monopoly. Then they defend it tooth and nail. Native-born citizens, due to the chance event of where they're born, extract monopoly rents to the detriment of the global GDP. |
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The global economy isn't a free market system, it's not even close enough to a free market system to make modeling it that way useful. The entire argument that treating what isn't remotely a free market system, slightly more like a free market system will necessarily produce some result is completely misguided.
But let's assume that we can actually model it this way and that completely opening borders will eventually increase overall global productivity.
Even in this case, there is still an enormous problem here, the increase in productivity will take time. The market can stay irrational longer than you can stay solvent.
Imagine 2 countries Richland and Pooria. Richland has a GDP per capita of $50,000, Pooria's is $500. Richland has a population of 10 million people, Pooria 50 million. Richland has expansive public services, good schools, and a fantastic infrastructure. Pooria has none of that.
Now lets say that we open the borders between the 2 countries, and 10 million people from Pooria decide to live in Richland. Now eventually in this hypothetical situation, Richland and Pooria may reach an equilibrium where the average GDP of both was higher than it was before.
However, this could take decades and during that time Richlands resources will be strained to the breaking point. During those decades the people of Richland would be much worse off, and the people of Pooria might not be any better off in a failing Richland than they were in Pooria.
And what if Richlands entire system of government breaks down under the weight. In that case the complex sytem that allowed Richland to produce so much could collapse completely and there is no guarantee that it would ever recover.