Tuesday, March 29, 2005

Natural continental migration

By the end of the 19th century millions of European migrants had made their way to the New World. All were in search of opportunity and a better life. The great migratory patterns of the age created tremendous wealth, and the North American heritage was shaped by the human capital that flowed to this vast land. Indeed, the economies of Canada and the United States are still highly dependent on immigrant flows. Without immigrants our economies would be stagnant.

But in a world where increasing globalization is being fed by relatively unrestricted capital flows, our population is being handicapped by restrictions on labour mobility. Indeed, the national borders that cross the North American continent will be increasingly seen for what they are: fences that prevent human capital from maximizing value. The end result of is that North American economic development is being hindered and the human capital - that is in real terms our lives - is being misallocated and at times squandered.

The capacity for individuals to seek new or better opportuities is limited by the east-west flows enabled by the current national borders. But these flows are not the natural flows that would be the economic and cultural basis of a strong North America. Confederation, as our history tells us, is a construct of political will and engineering. It is a history of overcoming vast natural barriers to link disparate regions across a Dominion. It is a history of the CPR and commercial design on regional development. It is the history of creating an east-west axis across a continental divide.

But for those that know the regions of North America, those that know the sisterhood of the Maritimes and the Eastern seaboard, those that have traveled to the American midwest and seen the Canadian prairie too, and those that live in the Pacific Northwest, North America is a community the follows the geographic boundaries of the north-south barriers that sculpt the continent. As surely as Canada is divided by the the Precambrian Shield, the Great Plain, and the Rockies, the the pull of the communities along these divides is great. That is the nature of our shared continental history.

But what of our population now? What capacity have we to migrate as opportunity and self-interest allow? Unfortunately, only high value labour like Hollywood entertainers, rock stars, and professional athletes have true mobility in the North American divide. However, what of average Joe Canadian or average Joe American? Why cannot they enjoy the same labour mobility that allows Jim Carrey, Celine Dion, or Wayne Gretzky to maximize their human capital? It is ultimately the individual who suffers from the restrictions on labour movement but the drag on economic development in all regions commands a large, unseen opportunity cost. In what ways would our society benefit from increased labour mobility? In the most dynamic sense regional economies would be rejuvenated by inflows of human capital. Entrpreneurship and an efficient allocation of resources would enable even stagnant economies to renew economic development.

The United States faces a deep challenge in dealing with its relationship with Mexico, the border struggle representing a very real conflict of the issues spoken of here. But the resistance to migrant flows there, although charged by extreme fears in border states, is not so different from the fears and resistance that would develop when any two communities tear down walls between freedom and servitude. This would also be the case at the border of Canada and the United States. Fear of change, fear of the influx of new people has always made immigration a difficult policy for governments - despite the evidence that immigration is an extremely positive economic and cultural process. Nevertheless, Arizona fears the Mexican horde. The cultural protectionism at work in the nation state is anti-productive and violates the tenets of a free market economy. Better we embrace the community we live in, a community that should include all North Americans.

Why should we consider North American labour integration as an important and increasingly urgent policy? In a word: globalization. The net effects of globalization is a reallocation of resources to their most productive use. In our continental community we can facilitate a more fluid reallocation of labour if borders that prevented productive movement were eliminated. Labour mobility is the great missing component in our free market economies. We need to recreate the spirit of mobility that brought our parents and ancestors to the New World. This spirit will unleash new potential in the face of unfolding economic challenges. Canada would benefit from a more open border with migrants from the United States and Mexico just as surely as the United States would benefit from the same exchange. We need not depend on immigration from other continents to feed our economies. A reallocation of the current North American population would allow for greater optimization of the human capital already available.

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