I will be resuming today my own series of posts on aspects of the New Zealand Initiative’s report on immigration.    However, some readers might also be interested in a new 29 page paper reviewing the New Zealand Initiative’s report by my former colleague Ian Harrison, now of Tail Risk Economics.

Ian focuses his comments on some of more formal research papers the New Zealand Initiative authors cite in support of their case.  There is some overlap with the material I’ll be presenting here, but in some areas Ian takes a more specifically technical approach to his critique.   On the other hand, sometimes his approach is a little more “in your face” than one I might typically adopt.

Here is some of the Introduction to his paper

Recently the New Zealand Initiative has released a report ‘The New Zealanders’ on the immigration issue.  The stated purpose is ‘To give the most up-to-date information to the public. To stack up these social, economic and nationhood fears against the available data and research.  It is claimed that the evidence on the economics is positive and fairly conclusive.

By and large, economists favour immigration as migrants benefit the countries they move to through knowledge spill-overs and global connectedness. Growing the population through immigration also produces ‘economies of agglomeration’ (i.e. the abilities of larger, denser populations to support more commerce and knowledge exchange).
All this is presented as a solid, objective assessment “While we could deduce the objective economic effects ….’

We disagree.  The economic ‘facts’ had a distinct ‘alternative’ whiff to them.  The arguments were at best thin, and the paper did not seriously engage with some of the key issues. It is easy to cherry-pick the (mostly) foreign literature to find an article that supports an assertion. It is much harder to convey a fair overall sense of the state of the economics of immigration, and critically, its relevance to New Zealand. The report does not do this, and the reader is left with the impression that nearly all economists support high levels of immigration, and that there is compelling support for this in the literature.

This paper presents an alternative view. But first let us define the scope of the debate. First, It is not about stopping all immigration or reversing what has happened. Most people are relaxed about genuinely high skilled immigration.  And we can continue to enjoy the ‘soft benefits’ of diversity from the existing stock of migrants.  The debate is about whether we continue the policy of large-scale medium/low skilled immigration. Second, it is not about whether immigration will generate a bigger economy. It will.  The issue is whether it will make current New Zealanders better off. The ‘New Zealanders’ is somewhat ambivalent on this point, but it is the broadly accepted test.

Our alterative economic narrative addresses the major shortcoming in the paper. It did not seriously engage with the critical structural features of the New Zealand economy.   That is, New Zealand economy is, more than any other advanced economy, land based and isolated. Other things being equal we would expect a large influx of immigrant labour to drive down average incomes as a larger labour force has to seek out more labour intensive low income jobs.  Thus the foreign literature, even if robust, may not be a good guide to New Zealand outcomes

And, on the other hand, this from his conclusion

To be fair, we found much in the report that was very useful, in particular the taxonomy of beliefs about migration. The report certainly challenged some of our preconceptions and it provides a good starting point for a debate that has to include what people really feel and believe about some sensitive issues.

The taxonomy of possible beliefs about immigration appears quite late in the report.  I agree that it provides a useful framework for helping to think carefully about the issues, and will be discussing it later in my series.

Chapter 2 of the New Zealand Initiative’s immigration advocacy report is headed “The New Zealand Way”.  It was a big part of why I’ve been procrastinating in writing about the report.  My focus has tended to be on economic issues –  and thus to be largely indifferent on that count whether the migrants came from Brighton, Bangalore, Beijing, Brisbane or Bogota.  Almost all of my concerns about the economic impact of New Zealand’s immigration programme would remain equally valid if all, or almost all, our immigrants were coming from the United Kingdom –  as was the case for many decades.  Relatively calm and rational debate can, and often does, occur on those sorts of dimensions.  Issues around “national identity”, “national security” etc, the sorts of issues the Initiative tackle in this chapter, are trickier.   I could have chosen to simply ignore this chapter, but they chose to deal with the issues directly, even if (in my view) unsatisfactorily, so it would be a bit wimpish of me to avoid doing so.    But in attempting, perhaps not successfully, to step through some of the minefields, without upsetting too many people unncessarily, this post gets long and discursive.

The Initiative begin their chapter

While many of the concerns New Zealanders have about immigration can be assessed empirically, other concerns strike a deeper chord which evidence cannot prove or disprove – the concern that a large inflow of people from abroad could threaten our national identity.

I’m not sure why they think evidence can’t “prove or disprove” these other concerns, unless they have a particularly narrow conception of what is allowable as “evidence”.

As they rightly point out, there is no single definition of what it means to be a New Zealander.  There are people who are legally New Zealand citizens who may never have visited the country (people born offshore to New Zealand citizens).  And there might some people brought here by their parents as children, who have lived here for decades and never been naturalised.  And although the legal status of someone naturalised yesterday and someone who has never left the country might be formally equal, in practice people in those two groups are likely to be thinking of different things when they label themselves “New Zealanders”.  Gabs Makhlouf and Peter Thiel –  two recipients of pieces of paper labelling them New Zealand citizens, not having met the conventional requirements for citizenship –  are New Zealanders for some purposes, but not for others.

But the fact that there is no single definition of a New Zealander does not mean that there is no New Zealand identity.  And the same could be said of almost any country in the world – representative Dutch people are different from Britons who are different from Italians who are different from Poles.  Of course, there is overlap –  plenty in some cases –  but senses of “how we do things here”, “what we value” etc differ from place to place, often in quite material ways.  And those differences aren’t just incidental (though some may well be); they go to how effectively societies function together –  to, for example, the trust and tacit knowledge that enables people to work effectively together, and feel secure.   There are economic dimensions to this –  trust is an integral part of a well-functioning market economy, and business cultures differ from place to place –  but it isn’t only a matter of economics.  We see the same thing with families –  within the bounds of trust that typically come to exist within well-functioning families, mutually-beneficial or sacrificial actions and transactions will occur that simply wouldn’t occur voluntarily for outsiders.

The Initiative largely skates over all these sorts of considerations.  Instead they pose the issue this way.

The public quite rightly wants reassurance that the kinds of migrants entering New Zealand are going to fit into our society and way of life. From the perspective of the authors (or at least as we aspire it to be), this way of life is characterised by
meritocracy, freedom of association and speech, and equality before law. Within New Zealand, people are free to pursue their beliefs, be they spiritual or corporeal, provided these do not impose on other people’s pursuit of the same.

The authors appear to define New Zealandness by “meritocracy, freedom of association and speech, and equality before the law”.  Perhaps those things do matter to most New Zealanders, but they wouldn’t mark New Zealand out from most other advanced countries.  And yet New Zealanders aren’t Dutch or Norwegian or French or Czech or even Irish or British.  All of those seem like good and prosperous countries, inhabited mostly by good and decent people.  And yet if a million French people moved to New Zealand, or 10 million Britons and French people swapped countries, the recipient countries would be distinctly different as a result.

The New Zealand Initiative just hasn’t come grips with the idea that countries differ from each other in many, perhaps individually small but cumulatively important ways, and that people in those countries value those features.  Not difference for difference’s sake, but simply that the society that has evolved here is different to that in, say, Norway, and that both we and the Norwegians probably rather like it that way –  even with a shared commitment to equality before the law, freedom of speech etc.

I’ve been loath to make the point, but in this context surely the backgrounds of the New Zealand Initiative people must be somewhat relevant.    The Initiative has eight policy/research/analysis staff.  At least five appear to have been adult migrants to New Zealand.  The ones I know are good and able people.  But most people –  even in New Zealand –  aren’t migrants.  And the tendency of someone who has left their own country (temporarily or permanently) and voluntarily migrated, in at least two cases (including the Initiative’s director, and one of the authors of this report) in just the current decade, must be to see things differently than people who are natives of a country.  It isn’t that those perspectives are invalid –  indeed, often they will add something ofconsiderable value – but that they make it difficult to see what is distinctive or tenaciously clung onto about New Zealand (or any other country), which the natives might wish to preserve.  You can’t easily share, or perhaps even identify, a national identity when it isn’t your nation.  The difficulty is compounded when you are based in downtown Wellington (or Auckland), probably interacting mostly with senior bureaucrats, politicians and business leaders.

The Initiative isn’t open slather.

The corollary of this expectation is the system should stop ‘undesirable’ people from moving to New Zealand. Undesirable is a broad term but in this context it means views and actions antithetical [emphasis added] to New Zealand culture. While broad, this definition would not exclude a law abiding person from settling in New Zealand simply because their race, creed or religious views differ from the majority. Our definition focuses instead on extremists who seek to impose their views on society by illegal or forceful means. An undesirable person in this context might be a white supremacist or a Muslim fundamentalist who wanted to move to New Zealand to break the law or incite others to do so.

So long as we vote our culture out of existence the Initiative apparently has no problem.  Process appears to trump substance.  For me, I wouldn’t have wanted a million Afrikaners in the 1980s, even if they were only going to vote for an apartheid system, not breaking the law to do so.  I wouldn’t have wanted a million white US Southerners in the 1960s, even if they were only going to vote for an apartheid system, and not break the law to do so.  And there are plenty of other obvious examples elsewhere –  not necessarily about people bringing an agenda, but bringing a culture and a set of cultural preferences that are different than those that have prevailed here (not even necessarily antithetical, but perhaps orthogonal, or just not that well-aligned).

When governments facilitate the inward migration of large numbers of people –  as ours is every year –  they are changing the local culture in the process.  Now, cultures and sense of national identity are not fixed and immutable things, but cultures also embed the things that the people of that country have come to value and which have produced value.  Those people (“natives”) typically aren’t seeking change for its own sake: the culture is in some sense the code “how we do things here”, that built what people value about the society in which they live.  Whether it is comfortable or not to say so, in the last few centuries, Anglo cultures have tended to be among the most stable, prosperous and free.  So it is far from obvious why should embrace change so enthusiastically, or why we would want to adopt the Initiative’s stance, and only want to exclude those whose views and actions are “antithetical” to our own, or who might want to topple our society illegally.

Perhaps if there were really substantial economic gains to New Zealanders from bringing the huge numbers of non-citizens to live in New Zealand it might be different. At very least, we might face the choice –  give up on some of our culture and sense of national identity in exchange for the economic gains.  In some respects, that was the choice Maori faced when the Europeans came –  a clearly more economically productive set of institutions etc, but on the other hand the progressive marginalisation of their own culture. Through some mix of consent and coercion –  increasingly the latter as the 19th century went on –  the choice was made, and then became effectively irrevocable.   But if there are such large economic gains on the table now, from the sorts of immigration programmes the Initiative has supported, and continues to support, they simply haven’t yet been demonstrated.

There is also a degree of naivete about the Initiative’s take on culture and/or religion (and the two overlap to a considerable extent).  Back in one of the earlier quotes, the Initiative argued that it was fine with people of whatever belief coming, and

Within New Zealand, people are free to pursue their beliefs, be they spiritual or corporeal, provided these do not impose on other people’s pursuit of the same.

They don’t seem to recognise that most people hold to beliefs that they think should influence how society is organised.  Even libertarians do. This is particularly obvious in Islam, which has never had a very strong distinction between ‘state’ and “church’, but it is no less true of Christianity.  Both are evangelistic religions, proclaiming what they believe to be true – and seeing truth as an absolute concept.  Both can, and have, survived at times and in places as minority faiths, but neither has ever been content to believe that its truths are just for its people, and not for export. I’m not so sure it is really much different either for today’s “social justice warriors”, or for libertarians –  whose proposed rule is, essentially, that we should all just leave each other alone (even though this has never been, and never seems likely to be, how human beings have chosen to organise themselves).

I’m not convinced that stable democratic societies can survive that long without a common culture and/or common religion (the two aren’t the same, but they overlap considerably, and necessarily).  It is hard to know.  We don’t have a long track record of democratic states –  a few hundred years at most (even if one doesn’t use universal suffrage as the standard), and then only for a handful of countries.  And the great mass migrations of the pre WW1 era were among countries the shared substantial elements of cultures (at least once the indigenous minorities had been more or less suppressed or numerically overwhelmed).  In the New Zealand or Australia (or Argentina, Uruguay, Chile) cases it was clear cut.  In the United States and Canada less so –  but the immigration was all from predominantly Christian countries, and severe immigration restrictions ended up being imposed when the foreign-born share of the US population was well below the foreign-born share of New Zealand’s population today.

What of today?  Perhaps the New Zealand and Australian stories are reasonably positive.  But the European situation seems rather less so, and that with Muslim minority populations that are typically not as high as 10 per cent of the population.  Sometimes federalism seems to help –  as in Quebec, or in Belgium, or Switzerland.

Democracy involves agreeing to live by a set of common rules, agreed by some sort of majoritarian process.  In almost any state, those rules include procedures for handling those least able to support themselves (whether it was Old Testament gleaning rules, the Poor Law, or the modern welfare system).  In a democracy, the willingness to help and support others is likely to be limited, to a considerable extent, to those with whom one feels a sense of shared identity.  The boundaries aren’t absolute, but revealed preference –  and introspection –  suggests that almost all of us are willing to do much more for our own families, and then perhaps for friends or members of other close communities of interest (neighbourhoods, church groups etc), and then for others in one’s own country, and only then for citizens of the world.  Is it a desirable model? I’m not sure. But it is human one, one that seems fairly ineradicable at a practical level.   Speaking personally, I don’t feel a strong sense of obligation to support someone down on their luck just because they became a New Zealander yesterday.  And I don’t feel a strong sense of obligation to support someone who won’t work to support themselves.  But I’m much more willing to vote my taxes to support those people than I am to support those down on their luck in Birmingham or Bangalore.  It is partly in that sense that “being a New Zealander” matters.  Mostly, humans will sacrifice for those with whom they sense a shared identity –  and generally that isn’t just the Initiative’s line about a shared belief in equality before the law, free speech etc etc (important to me as those things are).

Of course, what unites and divides a “country” or community changes over time.  In the wake of the Reformation, divisions between Protestants and Catholics were sufficiently important to each to make it practically impossible for both groups to co-exist for long in any numbers in the same territory/polity.  And, sure, multi-national multi-faith empires have existed for prolonged periods –  the Ottomans and Habsburgs were two examples – but not as democracies. Prudent repression can maintain stability for a long time.  But it isn’t the sort of regime that Anglo countries (and many others) have wanted to live under.

But the New Zealand Initiative report doesn’t seem to take seriously any of these issues, not even to rebut them.  They take too lightly what it means to maintain a stable democratic society, or even to preserve the interests and values of those who had already formed a commuity here.    I don’t want stoning for adultery, even if it was adopted by democratic preference.  And I don’t want a political system as flawed as Italy’s,even if evolved by law and practice.   We have something very good in New Zealand, and we should nurture and cherish it.  It mightn’t be –  it isn’t –  perfect, but it is ours, and has evolved through our own choices and beliefs.  For me, as a Christian, I’m not even sure how hospitable the country/community any longer is to my sorts of beliefs – the prevalent “religion” here is now secularism, with all its beliefs and priorities and taboos – but we should deal with those challenges as New Zealanders – not having politicians and bureaucrats imposing their preferences on future population composition/structure.

But the New Zealand Initiative report seems to concerned about nothing much more than the risk of terrorism.

A commonly cited concern in the immigration debate is of extremism. The fear of importing extremism through the migration channel is not unreasonable. The bombing of the Brussels Airport in 2016, in which 32 people were killed, or the Bataclan theatre attack in Paris where 90 people were murdered, shows just how real the risk is.

The report devotes several pages to attempting to argue that (a) the risk is small in New Zealand because we do such a good job of integrating immigrants, and (b) that the immigration system isn’t very relevant to this risk anyway.

The point they simply never mention is that in many respects New Zealand has been fortunate.  For all the huge number of migrants we’ve taken over the years, only a rather small proportion have been Muslim.    There is, no doubt, a good reason for failing to mention that, as on the Initiative’s own criteria outlined above, they would not object to large-scale Muslim immigration.

Of course, there is something in what the Initiative says about integration, and it tends to help that although our immigration programme doesn’t bring in very many highly-skilled people, it hasn’t involved a mass migration of unskilled people either (who often find it harder to integrate etc).  But it is an overdone point.  They highlight Germany –  perhaps reflecting the Director’s background –  where integration of Turkish migrants hasn’t worked particularly well over the decades, while barely mentioning the United Kingdom which is generally regarding as having done a much better job, and yet where middle class second generation terrorists and ISIS fighters have been a real and serious threat.  Here is the Guardian’s report on comments just the other day from a leading UK official –  the independent reviewer of terrorism legislation –  that the UK now faces a level of threat not seen since the IRA in the 1970s.  Four Lions was hilarious, but it only made sense in a context where the issue –  the terror threat –  is real.

But the Initiative argues that few terrorists are first generation immigrants, and some come on tourist or student visas (eg the 9/11 attackers) and so the immigration system isn’t to blame, or the source of a solution.  I’d largely agree when it comes to tourists, and perhaps even to students –  although why our government continues to pursue students from Saudi Arabia, at least one of whom subsequently went rogue having become apparently become radicalised in New Zealand, is another question.   But there are no second generation people if there is no first generation immigration of people from countries/religions with backgrounds that create a possibility of that risk.  Of course the numbers are small, and most people –  Islamic or not –  are horrified at the prospect of terrorism, or of their children taking their path.  But no non-citizens have a right to settle in New Zealand, and we can reduce one risk  –  avoiding problems that even Australia faces – by continuing to avoid material Muslim migration.

Having said that, I remain unconvinced that terrorism is the biggest issue.  Terrorists don’t pose a national security risk.  Whatever their cause, they typically kill a modest number of people, in attacks that are shocking at the time, and devastating to those killed.  But they simply don’t threaten the state –  be it France, Belgium, Netherlands, the US, or Europe.  Perhaps what they do is indirectly threaten our freedoms –  the surveillance state has become ever more pervasive, even here in New Zealand, supposedly (and perhaps even practically) in our own interests.

The bigger issue is simply that people from different cultures don’t leave those cultures (and the embedded priors) behind when they move to another country –  even if, in principle, they are moving because of what appeals about the new country.  In small numbers, none of it matters much.  Assimilation typically absorbs the new arrivals.  In large numbers, from quite different cultures, it is something quite different.  A million French people here might offer some good and some bad features.  Same goes for a million Chinese or Filipinos.  But the culture –  the code of how things are done here, here they work here –  is changed in the process.  There is no necessary reason to suppose that those changes are in the interests of the native population.  Perhaps some are, some times.  At one level, I’m still convinced most Maori are economically better off as a result of large scale immigration here in the 19th century.  But others won’t be.  We don’t have a million French people here, or a million Chinese, but we do have 25 per cent or more of the population born abroad, increasingly from a range of countries with whom we have not historically shared a culture.

Is it a problem?  Views will differ, but the Initiative simply doesn’t confront what the large scale immigration they support might mean for the New Zealand of native New Zealanders.  The real issues aren’t about ethnic cuisine, or even buttressing the All Blacks, but about the values and priorities of the new arrivals, and just the ability of a common culture to facilitate life –  economic and otherwise –  together.   There are plenty of advocates of cultural “diversity” and “superdiversity”, but little evidence that such diversity makes countries better for the ordinary native resident.

On which note, I was interested in this piece the other day from the generally pro-immigration Tyler Cowen

The assimilation problem in fact comes from the longstanding native-born Americans, often of more traditional stock.  The country around them has changed rapidly, and they do not assimilate so well to the new realities.  And since they are not self-selected migrants who know they will face hardship, they are not always so inclined to internalize a “suck it up” kind of attitude.  Many complain, others settle into niches of failure or mediocre careers.

In this regard, encouraging the actual arriving immigrants to assimilate better or faster can make the actual assimilation problem worse, because it will change the home culture more rapidly too.

Often, the real impact of immigration is not on wages or electoral outcomes, but it is the assimilation burdens placed on some of the longer-standing traditional natives of the home country.  And the more productive and successful the immigrants are, the more serious these problems may become.

Something to think about.  Especially, perhaps, when as in New Zealand the key advocates of large scale immigration –  be it politicians of both stripes, officials or the New Zealand Initiative –  can’t actually show, whether by formal empirical studies or well-reasoned narrative economic history, that New Zealanders have benefited much, if at all, from the continuing large scale immigration programme.

And for anyone interested, I wrote a short piece on diversity, immigration etc for a forum the Goethe Institute ran in Wellington in 2015.  My text is here.

And now I can get back to the economics –  arguments that apply (or perhaps don’t) whether the immigrants are from Birmingham, Buenos Aires or Beijing.

A month or so ago, the business (and Wellington City Council) funded think tank, the New Zealand Initiative released their report on immigration.    They called the report The New New Zealanders: Why Migrants Make Good Kiwis, which seemed to –  perhaps deliberately –  miss the point.  I’m sure most migrants –  or at least they who stay longer-term  – do become “good kiwis”, in some sense or other, and even when they don’t –   adjustment to a new country can be hard –  their children and grandchildren typically do.  But New Zealand government policy is, or should be, primarily about pursuing the best interests of New Zealanders.  Those “best interests” involve assessing the economic impact of immigration, as well as the non-economic dimensions.   But the central question for New Zealand policymakers should be focused on is do we, New Zealanders, benefit from immigration, and particularly do we benefit from one of the largest planned non-citizen immigration programmes run anywhere in the world?  Or perhaps we would benefit more from even more immigration: if this extract from their report is to be taken seriously, the New Zealand Initiative certainly seems to think so.

Free movement of labour is a fundamental driver of the creative destruction process, just like free movement of goods and capital.

I’ve been a bit slow to getting round to commenting on the Initiative report.  A few weeks ago I wrote about the possible implications of continued large scale immigration for the relative place of Maori in New Zealand –  something the Initiative had touched on in their report, apparently found awkward, and then largely passed over in their enthusiasm for continuing, and perhaps even extending, our immigration programme.   But since then I’ve been procrastinating.

Over the next couple of weeks I want to comment on the rest of the report.  I’ll work through it more or less section by section.  My own interests have tended to be predominantly in the economic arguments –  best encapsulated (but not exclusively so) in the question “has our immigration policy been adding, over the medium term, to the level of GDP per capita, and/or GDP per hour worked, of the native population”.     But reflecting the structure of the Initiative’s report, today’s comments are on points in the first couple of chapters, Introduction and Fictions and Facts.

Overall, I was quite disappointed in the report.  When I first heard that the Initiative was going to do something on immigration, I was quite encouraged.  I didn’t really expect that we would end up in agreement, but the Initiative is very well-funded by New Zealand standards, and in the past some Initiative reports (and, more often, those of the predecessor Business Roundtable) had shed fresh light on important public policy issues.   I looked forward to seeing the strongest case that the pro-immigration people could mount.  After all, there is little value in engaging with straw men, or with the weakest arguments of one’s opponents.

Sadly, the finished report wasn’t what I expected.  There wasn’t any fresh research –  except perhaps for some insights on public opinion –  and even on the economics there wasn’t much sign that they had thought hard,  and specifically, about New Zealand’s economic performance, and the way in which large scale, not overly-highly-skilled, immigration had affected, and is affecting, New Zealand medium-term economic performance.  Some time ago, in an exchange on this blog, the Initiative chairman conceded that there were no New Zealand specific studies demonstrating the economic gains to New Zealanders from large-scale non-citizen immigration.  There still aren’t.

I suspect that the Initiative allowed the approach of the election to shape their timetable to too great an extent.  As a result, they ended up delivering something longer on rhetoric than on New Zealand specific evidence.  Indeed, in the Introduction there is a telling comment.  On the one hand while noting that “this report cannot definitively say whether immigration is in and of itself good for New Zealand”, they claim that they “could deduce [emphasis added] the objective economic effects”.     These apparently “objective” effects can’t be demonstrated empirically, rather they are simply “deduced” from some model or set of first principles the authors have in their tool bag.  I’m not averse to models –  we all use them –   but when a large scale immigration programme, that the authors are relatively happy with, has been run for more than 25 years, you really should be able to do better, in making the case for the defence, than deductions from first principles, or some libertarian playsheet.  In this report, they haven’t done so.  That is a shame.

There is evidence of this rather rushed politics-focused approach.  In the Initiative’s 3 February newslettter, one of the two authors of the immigration report, Jason Krupp wrote as follows:

Six months ago, when we started scoping the Initiative’s immigration report, we had a very specific audience in mind: Winston Peters. Our aim was to assemble all the available research and have a fact-based conversation with New Zealand’s most prominent immigration sceptic.

Now, to be frank, I don’t believe them.  No one writes reports expecting to change the minds of their most vocal opponents –  very few humans change their minds that easily – instead, the aim to typically to influence those potentially wavering and perhaps those leaning towards support for the other side (and in other places Eric Crampton has expressed concern that officials might be losing faith).  But that is what the Initiative wrote about this report, and it certainly seems quite plausible that they were concerned about the apparently growing unease in New Zealand as to just what  large scale non-citizen immigration was doing for New Zealanders.

In the introduction to the report itself, the aspiration seemed to be more modest.

Although we hope this report will win over the doubters, the real success metric will be in elevating the tone of the immigration debate.

Which might indeed be a worthy goal, if the Initiative had set the example.  Well through the report, there is a suggestion that some of those who oppose large-scale immigration are really just equivalent to bad old eugenicists (a cause once favoured by many of policy and political elites around the Western world).  But one doesn’t even have to go that far.  In the same newsletter, Mr Krupp goes on.

Judging by Mr Peters’ comments on Facebook, which were re-published in the Indian News Link community newspaper, we have failed. Not only does it look as if the leader of NZ First failed to crack the cover of the report, but he also appears to be gathering his alternative facts from his local supermarket.

I’m not a big fan of Winston Peters, and have never voted for him or his party, but I thought the Initiative had reached a new low when Mr Krupp concluded his newsletter with this extract

Seen from this perspective, it is obvious why we called the report The New Zealanders: Why migrants make good Kiwis. Based on the widespread media coverage and messages of support we have received over the week, many people agree with this sentiment.

Mr Peters is clearly not a part of this group. But as Upton Sinclair said: “it is difficult to get a man to understand something when his salary depends upon his not understanding it.”

Agree with him or not, Winston Peters has been making his points around immigration in various ways for more than 20 years now (plenty of time for most politicians to have gone through several fresh stances on many issues).  Perhaps he is right in his views, or perhaps not, but I’ve never heard anyone before seriously argue that Peters holds his views on immigration because to do so pays his salary.  Of course, given that Mr Krupp appears to have been in New Zealand himself for only about six years perhaps it isn’t surprising that he doesn’t seem aware of the consistent stance adopted over decades by Mr Peters.  It is just offensive and unnecessary –  and I suspect Mr Krupp and his Initiative colleagues would be (rightly) offended if someone suggested that they held the views they did just because they got paid by a libertarian think-tank.  So much for their goal of elevating the tone of the immigration debate.

What about the report itself?

Mostly, I’m going skip over the Executive Summary now, perhaps to return to it at the end of this series of posts.  But as I was reading through the report again on Saturday, I was struck by one line in particular under a heading “forgotten benefits”.

Immigration can provide New Zealand consumers with a rich array of consumer products that would otherwise not be readily available.

I’ve been puzzling over it for a couple of days, but still have no idea what it is supposed to mean.   Trade in goods and services simply isn’t tied to movement of people.  We can, and do, import French cheese, Danish butter, Spanish olive oil, and Iranian dates with, or without, any material number of immigrants from those countries.  Same goes for clothes made in Bangladesh or Vietnam, electronics from Taiwan, or coffee from PNG or Brazil.

I can only assume this is simply a reference to ethnic restaurants –  a defence of those many hundreds of chefs we give residency approvals to each year.  Large-scale immigration from an increasingly diverse range of countries will increase the range of ethnic eating options.  It is a gain, no doubt about that, but a pretty small one for most people.  Most people, most of time, eat within their own culinary culture.  And people at the bottom, those whose interests policymakers should be particularly looking out for, are unlikely to be frequent consumers of the services of ethnic restaurants.

But moving on to the Introduction.

The authors note

Policymakers may repeatedly assure the public they have struck the balance right, and that the benefits of immigration exceed the costs. Judging by the popular discourse, many New Zealanders are beginning to doubt this rhetoric. They are questioning whether keeping the door open to migrants will threaten the very things that make New Zealand special.

This scepticism is understandable. Immigrants account for about a fifth of New Zealand’s population. What does it mean for the nation’s identity and Kiwi culture if foreigners outnumber locals?

Immigrants actually account for just over a quarter of New Zealand’s population –  one of the highest proportions anywhere in the advanced world, and far higher than in, say, the United Kingdom or the United States.  But it was the final sentence that really struck me.

I haven’t run the numbers, and haven’t seen anyone else do so either, but the overseas-born share of the New Zealand population has increased from an already-high 19.5 per cent at the 2001 census to 25.2 per cent in the 2013 census.  Perhaps by next year’s census, given that immigration policy in the last five years hasn’t changed much, that might be getting up towards around 28 per cent (our residence approvals programme is equal to around 1 per cent of the population per annum).    And in another 20 years if current policy continued would it be implausible that a third of our population might have been born abroad?  I’ve heard no one suggesting running immigration policy sufficiently aggressively that the foreign-born might outnumber the locals –  as has happened in various of the Gulf states.  I don’t think there would be much political/public support for such an approach here, but there is little or nothing in the Initiative report that suggests they would not welcome – or think beneficial – such an approach.   The actual list of policy recommendations that they conclude the report with is modest, but the tone of the document is suffused with the sort of open borders/creative destructions thinking, captured in the quote above.

Chapter One of the report is headed “Fictions and Facts”.  I didn’t have too much problem with most of it.  It is important to distinguish between flows of New Zealanders (in and out), which aren’t a matter of immigration policy at all and flows of non New Zealanders, and also to distinguish between short-term flows of non-citizens, and the rate at which non-citizens are approved for longer-term or permanent residence in New Zealand.  Headlines often don’t do that. The report cites what appears to be MBIE polling data that suggests that when the public is told the specifics of the scale of the residence approvals programme,  they are a bit keener on reducing migrant numbers than they are when not given those details.

But it was one of the “spillovers” that caught my eye.  Media commentary on the Initiative report made a bit of their use of a quick literature review done by a couple of pro-immigration academics, commissioned by MBIE (the ministry responsible to the –  increasingly under pressure – ministers for housing and for immigration), which concluded that immigration didn’t have much affect on house prices and housing affordability.  I’ll come back to to that paper in more detail in a later post, but for now I was interested in this comment

The spill-over effects of immigration can be seen in housing, particularly in Auckland. Residential property prices in New Zealand’s biggest city have risen in double digits since 2011, such that the average house price recently breached the $1 million mark. The median multiple, a measure of how many years of the median household income are needed to pay off the median house price, of Auckland shows how far affordability has declined. Economists consider housing to be affordable when the median multiple is 3 or lower. In 2013, Auckland’s median multiple was 6.4, and in 2016 Demographia put it at 9.7.  The Initiative’s housing research blames restrictive planning policy and resistance to urban development. However, against a policy-induced, near-fixed supply, additional demand for housing must contribute to rising prices.

I couldn’t disagree with any of that.  I’m as keen as they are on fixing the supply side, markedly reducing regulatory restrictions on land use.  But there has been little sign of that happening over the last 15 years, and little reason to be optimistic that is about to change, whover wins this year’s election.  And so

against a policy-induced, near-fixed supply, additional demand for housing must contribute to rising prices.

When immigration policy has delivered another 45000 to 50000 people to New Zealand each year, around half of them to Auckland –  a city which accounts for only about a third of the population –  immigration policy “must” be exacerbating the house price affordability problem.  In principle, the problem can be fixed at source –  land-use restrictions –  but if it isn’t, the massive redistributions of wealth and opportunity that result from persevering with large scale non-citizen immigration have to be set against the benefits of those ethnic restaurants.

In passing, I was also struck by this under the heading Exploitables

The immigration system is open to abuse by unscrupulous parties. For example, the government is revoking visas issued to a number of Indian students. These students had paid an India-based third party to arrange the process, who then used false information to obtain the visas. Judging by the reaction in the media, this abuse of process clearly offends New Zealanders’ sense of fairness,

Well, yes –  and especially as it now seems pretty clear that many of the students were using New Zealand student visas not to get a first rate education, but as a pathway to residence.   But the report talks –  like some anthropologists studying an alien tribe – of “judging by the reaction in the media, this abuse of process clearly offends New Zealanders’ sense of fairness”.   Did it not, one is left to wonder, bother the authors?

This post has got long enough already.  Tomorrow, I’ll offer some thoughts on their chapter “The New Zealand Way” –  a chapter which starts suggesting that it is all about issues of national identity, and ends stating that it has sought to answer “whether migration is making New Zealand less safe”.