THE LOBBYiST : More Than Just Views: Population and globalization Population and globalization ================================================================================ Nonoy Oplas on 25 June, 2009 06:58:00 In a hypothetical situation where government immigration regulations are absent, State-welfare programs are very few and limited to, say, emergency health care and to persons with disabilities, and governments focus their resources in protecting the people’s basic rights – right to life, right to private property, right to liberty – people will be criss-crossing between islands, countries and continents in full economic freedom. Not to commit crime as they will be hounded and intimidated by a strong State that will monitor and arrest all criminals. Not to seek and depend on welfare as there is very little to expect, but to find the best economic and social opportunities for them and their family. This would mean that the bulk of raising families and developing peaceful and clean communities will fall on individual and parental responsibilities, and corporate and voluntary organizations. Each voluntary association – village or homeowners’ associations, professional organizations, student councils, labor unions, employers’ confederations, sports clubs, civic clubs, religious and faith-based organizations, etc. – will act as “local governments”. Since these are voluntary associations and not rigid bureaucracies like government bodies and agencies that do not die, such voluntary organizations have the prospect of dying anytime, anywhere, when their members will stop supporting them. Which means that only really useful organizations will survive, the badly-run and corrupt organizations will become bankrupt, like any private enterprise. Many rich and developed countries are experiencing slowing or declining population growth since the 90s. But even if population growth rate will touch the negative territory, say -0.2 percent per year, absolute population does not automatically fall because of longer lifespan of people there. Birth rates fall but death rates also fall as instead of dying at age 75, people die at 80+ on average. The only problem here is that many of those 70+ years old people are retirees and are depending on pension from the State. Since the pension system there is quite generous and expensive, the weight of paying the taxes and pension insurance to finance the monthly needs of the retirees will fall on the shoulders of the current batch of workers. And since the ratio of the economically-active population to the retired population is declining, there is a big danger to the generous welfare and pension system if many of the currently active population will migrate and work elsewhere, as the latter are threatened with longer mandatory retirement age, from the previous 65 to 75 years or older. The current breed of workers is being forced to work longer in order to maintain the expensive welfare system. There are three important policy options to address this long-term problem. One, encourage (and subsidize) couples to have more children, and those children will become future workers to finance the pension and welfare needs of their parents, grandparents and other older people. But then there is also a possibility that those future workers will work and live elsewhere, not in their home countries. Two, have more machines and robots to do the work of some people. This means more efficient washing machines, cooking sets, house cleaners, robot welders, assemblers, manufacturers, etc. This will drastically increase productivity per worker, no doubt about it. But then this is still not the equivalent of seeing plenty of children playing and running in the parks, playing with their grandparents. Instead, the oldies are adopting dogs, cats and other pets as their companions and occasional playmates. Three, allow more foreign workers to work and migrate into their home countries. This seems to be a combination of the first two options: more people who would sometimes work tirelessly like robots as the salary and benefits are a lot better compared to those available in their own countries, thus these foreign workers do not want to lose their current jobs. The problem though is the cultural and economic insecurity posed by these foreign-born workers to the locals of the rich countries. They came from countries with different religion, different work ethics, different lifestyle, different language. For many rich countries, all 3 options above are being done, except that they are stricter and more bureaucratic in adopting the last option. That is where immigration problems never cease to die. The welfare system is very expensive to maintain, that is why taxes and local labor costs are very high. So some employers want to hire foreign workers who are willing to work at lower pay, but protectionist labor interests are opposing this. In an environment of free and full mobility of labor, capital and technology across countries and continents, there should be “equalization” of the prices of labor (wages) and capital (interest) over the long-term. This is because the labor-abundant countries will experience migration of their excess workers, while labor-deficient countries (a result of low population growth and/or fast economic growth) will receive the excess labor from elsewhere. The less-skilled workers from poorer countries will soon become high-skilled as they get more education and training in their newly-adopted countries. The lazy and irresponsible people in rich countries do not like this situation. They are envious to see people born from poor and God-forsaken countries but have high ambitions and high individual responsibility, soon have economic standings equivalent to them, if not higher. And this illustrates the beauty and fairness of globalization, of people mobility across the globe, of free trade and free market, of personal responsibility and individual liberty. The system of reward and punishment is very clear and very quick. The industrious will prosper; the lazy and complacent will become poor. Big governments attempt to force equality among people by subsidizing the lazy and irresponsible and penalizing the industrious, through confiscatory high taxes.