BOOK REVIEW: “Borderless Economics” by Robert Guest (2011)

Key words
Immigration, international trade, migration, medical tourism, economics, China, USA, India, international exchange programmes.

Summary of book

If you are interested in international trade, you should read this book. If you would like to travel or to work abroad, you should read this book. If you think the solution to the current economic crisis is for countries to close their borders and stop trading with each other (it isn’t), you should read this book. If you sometimes get annoyed by people from other countries (we all do, sometimes) you should read this book. And if your job is to send students to study in a foreign country to study (!!) and you would like to understand the economic, rather than the philosophical, rationale behind what you are doing, you should read this book.

Carol Atkinson: “exchange students return home with a more positive view of the country in which they had studied and the people with whom they have interacted

The central message is that individuals should be given more freedom to decide where they want to live and work. By doing encouraging immigration, countries will make themselves richer and not poorer as it commonly believed. Mr. Guest illustrates this perfectly by giving the example of North and South Korea. At the time of the partition, the northern part was actually richer than the south. Today South Koreans are 17 times richer than their Northern cousins and are a staggering 15 cms taller. This is a direct result of one country opening itself to the world and the other becoming a hermitic prison.

From this example Mr. Guest goes through the relative merits of migration policies in different countries. He deals in particular depth with India, China and the USA. He is quite pro American, is perhaps overly optimistic about the Indian economy and is a very harsh critic of the Chinese Communist Party.

This is a very readable book with a good mixture of economic data and personal stories that show just how these statistics affect peoples’ lives. This gives a rich tapestry of international anecdotes with the facts to back them up. It also has some interesting data about students travelling abroad and the impact this has on bringing new ideas to political systems.

Some keys facts:

An American construction laborer works less than four minutes to earn enough to buy a kilogram of flour, it takes a Mexican worker more than one hour and an Indian just under two hours. (Source: Lant Pritchett, a Harvard economist.)
When AT&T’s first transatlantic phone service opened in 1927, only one person could use it at a time, and it cost $75 for a three minute call. That was about a month’s wages for a typical worker at the time.
Pankaj Ghemawat, calculates that two otherwise identical countries will trade with each other 42 percent more, if they share a common language and 188 percent more if they have a common colonial past.
130,000 Chinese citizens studied abroad each year between 2007 and 2009.
According to Vivek Wadhwa, (Duke University) between 1995 and 2005 more than 15 percent of the start-ups in Silicon Valley had at least one Indian cofounder.

Interesting quotes from the book:

As of 2009, some 215 million people were living outside the country in which they were born. That is 3 percent of the world’s population- and not just any 3 percent. Migrants tend to be more driven and dynamic than the people they leave behind.
According to the China Youth Daily, a communist paper, China spends five times more on entertaining local government officials than it does on educating children up to the age of 16.
History provides many examples of returnees swaying politics. Vladimir Lenin plotted the Russian revolution while exiled in Munich, London and Geneva….A regime that ceases to believe in itself is weakened, sometimes fatally.
In poor countries people seldom trust strangers. They seldom trust institutions, either. When they see a policeman approaching, they do not feel safer; in many countries, they expect to be robbed.
Even among the 44 million Americans officially classified as poor, only 6 percent live in homes with more occupants than rooms.
China, which thanks to the one-child policy, will be the first country ever to grow old before it gets rich.
In 1990 the “old” rich countries- North America, Europe, Japan – accounted for more than 95 percent of the world’s scientific research, according to the United Nations. By 2007 that had fallen to 76 percent. China probably has more scientists than America now – both had about 1.5 million that same year. American scientists, however, are more productive. They wrote 28 percent of the published scientific papers in the world in 2007, against China’s 10 percent, though the Chinese share had doubled since 2002.
Many world leaders were educated in the United States. By one recent count, 46 current heads of government and 165 former heads of government attended American Universities.

As of 2009, some 215 million people were living outside the country in which they were born

Carol Atkinson, of Vanderbilt University, concurs. “Research has consistently shown that exchange students return home with a more positive view of the country in which they had studied and the people with whom they have interacted. Frequently after returning home, they try to use the knowledge gained during their time abroad to improve the situation in their home country,” she observes.
All told, the United States hosts 20 percent of the world’s overseas students, more than any other country. Its lead is slipping (the figure was 28 percent in 2001).
The central message of this book is that individuals should be allowed more freedom to choose where they live and work. When we make our own choices, we have a better shot at happiness. Such freedom is about far more than economics.
Individuals should be allowed more freedom to choose where they live and work
Americans are routinely refused permission to work in Europe and vice versa. This serves no purpose.

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The Wall Street Journal: “Borderless Economics, a clear, witty and relatively short book, doesn’t consider in much depth the passionate debates concerning the costs and benefits of immigration for developed nations. Its snappy pace allows for Mr. Guest to do little more than point to a couple of studies showing that immigrants in America (unlike their European counterparts) probably contribute more in taxes than they consume in benefits.“