One of the best jokes circulating on social media today is a bogus announcement that Donald Trump is warning Americans about ‘Schrödinger’s immigrant’: a foreigner who lazes around on benefits while simultaneously stealing your job. A UK version of the gag circulated during the recent general election, also playing on the famous quantum physics paradox, in which a single particle that exists simultaneously in two opposite states theoretically causes a cat in a sealed box to be both dead and alive at the same time.
The joke is that both immigrant stereotypes can’t possibly be true at once. The serious point is that neither stereotype finds strong support in rigorous migration research. Unemployment rates among immigrants quickly settle to similar or lower levels than the rate among non-immigrants, and immigrants as a group typically contribute more in taxes than they consume in benefits. Meanwhile, the effect of immigration on native wages and unemployment, if any, is vanishingly small because immigrants tend to do different jobs, often the essential but unglamorous ones that native workers won’t do.
As well as stoking hostility among nations, unreasonable anti-immigrant attitudes are poisoning the global refugee system. When states shut their borders against refugees, they leave countries closest to conflicts to carry massive influxes. If these states buckle, conflicts can spread. Today, Lebanon, Jordan, and Turkey bear immense burdens while immigrant nations like the United States (and others) have accepted token quotas, despite their role in conflicts – and their wealth, built partly by previous refugees. In short, for both security and humanitarian reasons we need to distribute an increasing number of refugees globally, but we can’t because countries are obsessed with tragi-comical fears of Schrödinger’s immigrant.
Is there a way to defeat this false paradox? Here’s a new thought experiment. Imagine a mechanism allowing immigrants to support themselves economically and create jobs and infrastructure for others too. Imagine an institutional investment vehicle, like a pension fund or a sovereign wealth fund, pooled from the fees and investments of immigrants and refugees, and dedicated to public good projects in immigrants’ adopted countries, such as investing in job-creating business startups and sponsoring infrastructure improvements needed to accommodate newcomers. Such a fund could prove false both sides of the Schrödinger’s immigrant paradox – simultaneously.
Intriguingly, such funds have a precedent. Katy Long highlights the so-called ‘Nansen Stamp Fund’, seeded by the visa fees of refugees after the 1917 Russian Revolution. Instead of languishing in camps and queuing for meager quotas, refugees simply bought ‘Nansen Passports‘ – essentially visas -much like those advocated both by Katy and fellow Migration Studies founder Alex Betts- holders of which could access both foreign territories (to save themselves immediately), and foreign labor markets (to help themselves over the longer term.) They went where their labor was needed, and the fund from their visa fees made them self-supporting.
Could a modern version of the Nansen Fund get rid of Schrödinger’s Immigrant fallacy? It’s a question worth asking, not least because governments are experimenting with vehicles that resemble the Nansen Fund, albeit for reasons other than alleviating anti-immigrant sentiment or solving the refugee crisis.
The experimental vehicles in question are Immigrant Investment Funds: institutional investment funds seeded by Immigrant Investor Programs, through which governments monetize the charm and allure of their country by exchanging national membership rights in return for investment capital. We have found 60 different Immigrant Investor Programs (IIPs) in 57 countries, most established in the last 20 years.
However, few governments have yet found the right recipe for a successful IIP. Most have failed to set, let alone monitor, meaningful program objectives, and instead just dissolving immigrant investments either into the private economy or into the government treasury. Either way, they lose any distinctive identity or capacity to be channeled toward a specific public good. Meanwhile, many argue that selling citizenship is both inherently corrupt, and a magnet for bad people and bad money: if you’re reduced to selling off your good name, you’re probably headed for a crash. With such intangible economic benefits alongside such obvious political downsides, IIPs often struggle to survive.
Still, we see the seed of a good idea in today’s Immigrant Investor Programs. To defeat unfounded anti-immigrant sentiments, the benefits of immigration need to be presented clearly. In a climate of sharply falling government budgets for urgent public investments, the benefits of using IIPs to import capital and engaged investor immigrants should not be too hard to demonstrate. However, it would be much easier if the proceeds from IIPs were pooled and managed separately to deliver both clear financial returns and clear public benefits. In other words, we think Immigrant Investor Programs stand the best chances of success when paired with some form of dedicated fund-management vehicle: an Immigrant Investment Fund.
Surprisingly few countries follow this approach, and those that do could draw more upon the body of principles and best practices emerging around Sovereign Development Funds – a successful species of institutional investment vehicle that also pursues a double bottom-line of commercial profit and public benefits. Sovereign Development Funds are funded by traditional sovereign wealth (e.g. oil or mineral reserves, or foreign exchange holdings.) Immigrant Investment Funds are funded by sovereign wealth of an alternative kind: the country’s destination charm and allure. Otherwise, they are much the same.
IIPs may impact tens of thousands of migrants and billions of dollars of cross-border capital movements each year – and the lion’s share of these programs are in Europe, where the refugee system is under the most pressure. Perhaps if more of these IIPs followed the model of Sovereign Development Funds, more could simultaneously attract foreign capital to stimulate growth, shore up the struggling global refugee system, and show up the Schrödinger’s Immigrant paradox as the joke it is.
Featured image credit: London city England by chafleks. Public domain via Pixabay.