Is Income from Immigration the Best Hope for Developing Nations?

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Introduction by Colin Greer, president of the New World Foundation in New York:

A Farewell to Alms is a convention-challenging book. Author Gregory Clark gives us a history of the world through a study of how the industrial revolution came to be. Where did come from he asks and what can we learn from its emergence and zenith in the UK by the 19th century. The following are some of the conventions and misconceptions Clark challenges.

Three misconceptions about income:

1. People don't need ever-increasing financial incentive to keep working. Those big salaries for corporate execs are not required for economic growth.

2. Higher income does not even come close to brining happiness. Global studies show virtually no correlation between high income and success in the pursuit of happiness.

3. Even though there has been low fertility in the West since World War II, prior to that and increasingly more so now, rich people have more kids than poor people. In countries that have industrialized throughout the last few hundred years, it has not been unusual for as many as sixty percent of poor people to be without children. For rich people, children are beloved extensions of their spending capacity.

Three misconceptions about economic development:

1. It's a mistake to try to make pre-industrial societies look like us quickly; the World Bank and Jeffrey Sachs, not withstanding. It's counterproductive to bring on the medical technology unless you're investing in the technological foundations of economic growth. Greater longevity without greater financial resources will lead to overpopulation which will make poor people poorer. Fact is, it took the West from the years 1200 to1800 to go from the early conditions of industrial readiness to full-fledged industrial revolution.

Shock therapy won't do it quickly. World Bank equations for progress and industrial growth are a bit like an SAT test for non-readers. Micro-lending is a better step but it needs to be rooted in and generative of resilient local economy.

2. There may be no endless future of income security for western workers no matter what level their education. The Clinton promise of an educated workface protecting American incomes from global cheap labor is a false one. Other countries on an economic growth track will eventually challenge educated American workers and, Clarke argues, technological advances may in fact lead to segments of the work force having no work to do. A challenge to our public responsibility and to democracy.

3. Public spending for museums or public housing is not a drain on economic growth. We can spend money on the public good without shooting ourselves in the foot. It's just not true that taxes are bad for the economy.

A final convention breaker:

Clark examines outcome data to show that the impact of immigrant remittances from the U.S to their home countries has a far greater beneficial effect than all the humanitarian aid dollars.

This is because the scale is so much greater and because it goes directly to people and local economies, avoiding the impediments of corrupt and incompetent governments.

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