Thursday, June 13, 2013

Charter Cities and Costs of Emigration

It was in doubt for some time; translated story here. I will be visiting but not living. But I wonder how many libertarian types will even put their money where their mouth is to that degree. Here is an article which points out that even though we now have annual indices of economic freedom by country, at which New Zealand* and Hong Kong frequently beat the U.S., American libertarians do not respond by moving en masse to Auckland (and an economist writes about this here as a revealed preference); further discussion here. Another way to ask this (if you're libertarian) is: when Peter Thiel et al get their seasteading proposal off the ground or at least in the water, would you move? If not, why not?

Charitably, you might say that this hesitance results from there always being a nonzero transaction cost to emigrating. Practically speaking, you are familiar with the customs of your country (not to mention the language), you have a social and professional network, not even mentioning the inescapably human, irrational connection to the land that programmed you in childhood into the adult you became and the utility cost that losing that imposes. There is clearly a Coasian local optimum type-solution operating here.

For that matter, American states differ considerably in their economic freedom too, but again it's still rare for people to in-migrate for abstract economic freedom - I know of exactly one, and that's likely one more than you - even with the cost of migration dramatically lowered. When people in-migrate it's almost always for a concrete opportunity, i.e. a transfer or new job waiting for them.

Rather than highlighting the insincerity of people's convictions about socioeconomic justice, to my mind this only emphasizes the importance of internal self-correction mechanisms. Freedom of movement - "love it or leave it" - will only eliminate severe polity-inflicted-suffering (that tramples on libertarian economic freedom or any other values) that goes above and beyond that considerable barrier. Consider large-scale emigrations in history, and they generally have not been people trying to improve their lives a little. They were escaping wars and famines and genocides and dictatorships, not marginally improving their local economic freedom index.

*RE New Zealand, a young friend just moved there on a whim and within a week he was working (legally) for the government and had met the mayor of Auckland in the course of his job. So I asked him if he'd had to set this all up ahead of time, and his answer was "No. They offer a visa called a working holiday visa to U.S. citizens under 30 years old to come travel and work for up to a year. It is an incredibly easy visa to apply for and get with practically no red tape. We got our visas like nine months ago, and when we got here we didn't have anything set up. You have to apply for your IRD number (SSN equivalent) once you're here and it takes about two weeks to come and then I just signed up for a temp agency and lucked out by finding work really quickly." Now that's a country serious about economic freedom and attracting the right immigrants.

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