Borderless Economics: Chinese Sea Turtles, Indian Fridges and the New Fruits of Global Capitalism, Robert Guest.

Palgrave Macmillan, 2011

There are many reasons why the United States remains the world’s strongest economy, chief among them its large market and its (somewhat) lower tax base. In his well-written and provocative new book, Robert Guest offers a third reason: America’s openness to immigrants.

Guest, business editor of The Economist, argues that countries that welcome immigrants start a virtuous circle. “When rich countries allow migrants from poor countries to work and live within their borders,” he argues, “those migrants experience firsthand how a rich country works. When they taste the fruits of tolerance, pluralism, and the rule of law, they often find them delicious. And often they take the seeds back home.”

Borderless Economics includes reporting from all over the world, but Guest’s primary emphasis is on the US. His book is about “circular migration”, the idea that immigrants don’t necessarily stay in the country they settle in, but may move to another country or back home, depending on professional and personal circumstances.

Kathleen Newland of the Migration Policy Institute, an American think tank, told Guest, “I’ve stopped talking about migration. I’ve started talking about mobility instead. People move, but they don’t have to choose between countries. They can keep a foot in two or more.”

Immigrants, Guest writes, bring three things to the country to which they emigrate. Some bring capital for investment. More of them bring connections to people or products back home. Quite a few, because of their status as immigrants, can see profitable niches that entrepreneurs can exploit.

Take the career of Chinese-American entrepreneur Cheung Yan, who emigrated to the US in 1990. She saw that container ships came loaded with goods to the US but returned empty. She also saw that America overflowed with waste paper that glutted existing recycling plants. Cheung Yan, her husband, and some relatives set up Nine Dragons Paper to buy used paper in the US, ship it to China, and reuse it in factories her company created. The result: Forbes in 2011 estimated her net worth at $1.6 billion. Cheung Yan, Guest observes, “came to the United States with an outsider’s eye, and both countries benefited from what she saw.”

Immigrants, Guest argues, come to the US for several reasons. First, middle and lower-class Americans live better than in other countries. The costs of goods, thanks to America’s vast market and somewhat lower taxes (including no value added tax) makes products more affordable than in comparable first-world countries, allowing people to live in larger homes than they would back home.

Moreover, there are more foreign-born residents in America than in other countries. Statistics compiled by the United Nations in 2009 show the US with 13.5 per cent of its 300 million citizens having been born in other countries. That’s three percentage points higher than any other rich country, and means that there are 43 million American citizens who were born outside the US. That’s far more than any other nation.

The result is that immigrants who come to America can find communities where they can keep many of the foods, customs, and traditions from back home. Guest profiles Joshua Lee, who emigrated to the US from South Korea in 1990. Living in the Virginia suburbs of Washington, Lee works for a Korean newspaper writing about Korean- American issues. He eats some Korean food every day and goes to a Baptist church where the services are in Korean. But he is much happier in the US than in South Korea because he can dress as he pleases without anyone complaining and can listen to the shows he likes without being blackballed for having unusual tastes (in his case, conservative talk radio).

American popular culture still dominates the planet. “Foreigners devour American cultural offerings from the Harvard Business Review to Kung Fu Panda,” Guest writes. “Hollywood movies and television programs are powerful shapers of global opinion about America precisely because they are not trying to convince anyone of anything.” Moreover, American entertainment companies, in order to sell their products globally, are often open to the ideas and talents of people from other countries. America’s two greatest superheroes, for example, are currently played by a Welshman (Christian Bale) and an Englishman (Henry Cavill).

America’s universities, in Guest’s view, also aid the US’s economic strength. Harvard’s Kennedy School, for example, has among its alumni the United Nations Secretary General, the World Bank President, the Prime Minister of Singapore, and the presidents of Mexico, Mongolia, Liberia, and Colombia. The result is that Harvard has an international network second to none.

Twenty per cent of the exchange students in the world choose American schools. That figure is declining (it was 28 per cent in 2001) but America remains the world leader. Guest cites research by Kauffman Foundation fellow Ben Wildavsky, who notes that 65 per cent of the doctoral candidates in computing in American schools are foreign born, as are 56 per cent of the physicists and 55 per cent of the mathematicians.

But America’s immigration policy has problems. Only around 85,000 H1-B visas, given to highly skilled immigrants, are awarded each year, and America’s immigration rules are so byzantine that many immigrants with resident permits (or “green cards”) face inexplicable denials by immigration officials when they leave the US and try to return. Far too many graduate students are forced to leave the US as soon as they have completed their doctorates.

The Department of Homeland Security has decided to treat all foreigners equally rudely. “An immigration official lives in fear of admitting the next Muhammad Atta,” Guest writes, “but there is no penalty for excluding the next Einstein or humiliating a tourist who subsequently summers in France.”

New York City Mayor Michael Bloomberg has described this policy of arbitrary exclusion of talented and wealthy immigrants as “national suicide”. Guest agrees and calls for several reforms, including reducing or eliminating barriers that prohibit First World citizens from working in other countries, allowing all graduates with science degrees to work in the country in which they earned their degree, and allowing some increase in immigration for unskilled workers, while severely limiting the welfare benefits these immigrants receive.

Borderless Economics is a well-written, well-reported book that sheds a great deal of light on the strengths—and weaknesses—of American immigration policy.