As the economy in Spain sputters along at a fraction of its potential, some of the enlightened in its political class have taken to explaining the light growth as an effect of the country’s “wasted generation.” It seems youngish individuals of Spanish descent are thriving, only not in Spain.
“Wasted generation” is a euphemism for “talent goes elsewhere.”
Thanks to the suffocation of production by the country’s legislators, many of its best and brightest have taken their talents elsewhere. A visit to London confirms the latter, and not just about Spain. Notable about England’s capital city is that French presidential candidates routinely campaign there on account of London being one of the largest French cities in the world.
Money goes where it’s treated well at a click of a mouse, and so does human capital (the most important growth input of all) migrate to where opportunity is greatest. “Wasted generation” in Spain is merely a euphemism for “talent goes elsewhere” to the country’s economic detriment.
Moving farther East, Dubai is the largest and most heavily populated city within the United Arab Emirates (UAE), and a visit there confirms that it’s also easily one of the most prosperous cities in the UAE, or anywhere else in the world for that matter. Everywhere one looks there are cranes that signal feverish construction of new skyscrapers to accompany the countless others that already exist.
There are no retirees there. Individuals who quit working or retire generally have 30 days to exit.
Some would say this frenzied economic activity is due to oil wealth, but then the price of oil, while still high relative to the end of the 20th century, is well off of record levels (in dollars) reached between 2008 and 2014. Despite oil’s decline, rampant economic activity in Dubai is easy to spot by virtue of traveling the city by car, as this writer did in concert with a speech given there at last week’s Annual Investment Meeting. A dinner while in Dubai with a luxury hotel executive, and who is also a Spanish expat, similarly revealed something unfortunate about human capital flows as it applies to the United States.
My wife and I, along with a former work colleague of my wife’s, were taken to dinner by this expat at one of the top hotels in Dubai. Our host, despite having earned two graduate degrees in the United States, ultimately chose to express her operational and marketing talents in Dubai’s burgeoning restaurant/hotel scene. She told us that Dubai is thick with fellow Spaniards, along with strivers from countries around the world.
It turns out this booming city is very open to outsiders eager to work, regardless of country origin. Indeed, it is truly a working city. By this, there are no retirees there. Individuals who quit working or retire generally have 30 days to exit. If you live in Dubai, you work. It’s that simple. What’s also simple is attaining a work visa. Unless you have a worrisome disease, your work there is legal. Citizenship is not part of the bargain and is really not the point. People once again migrate to Dubai to work, and the opportunities are endless.
Hearing all this, the proud American in me asked our Spanish host why not the U.S. for her and other members of Spain’s “wasted generation.” The answer received was rather blunt: it’s only paraphrasing the Spaniard slightly for me to say that the reply was, “the U.S. is too difficult to attain legal working status in, and it’s not worth the hassle.”
Entrants aren’t ‘taking’ jobs from locals as much as their arrival has proven a magnet for the capital that is the source of all jobs.
By hassle, it’s useful to explain that foreigners must first “win” a lottery just to have U.S. immigration officials open their files. From there, attaining an H1-B sponsorship visa generally requires nine months of approvals, thousands in legal expenses, followed by proof that the job being sought can’t be done by an actual American. Hearing all this was sick-inducing, and it made me wonder whom the U.S. has lost over the decades beyond the clearly talented Spanish expat sitting at our table.
That the U.S. aggressively goes out of its way to repel the world’s skilled plainly accrues to booming locales like Dubai. And let’s be clear, the U.S.’s difficult stance toward the world’s strivers exists very much to the detriment of the U.S. economy, along with every individual working within the U.S.
That’s the case simply because, with “companies” and “jobs,” neither is finite. Both are a function of investment. Money once again goes where it’s treated well, as does human capital, and thanks to ridiculous barriers to human capital, the still prosperous U.S. is logically the recipient of less in the way of the investment capital that powers all opportunity. For clues about where at least some of this investment is going, readers need only do some reading about pro-worker city-states like Dubai, or better yet, visit this soaring city.
Greater than Great
Dinner with our Spanish host was instructive in regard to all of the above. A work colleague of hers sat down to eat with us, only for the three Americans at the table to hear that he was from Belgium and his wife from Austria.
Dubai is littered with workers from around the world attracted to its endless economic opportunity in concert with ease of entry solely for those who want to work. These entrants aren’t ‘taking’ jobs from the locals as much as their arrival has proven a magnet for the capital that is the source of all jobs.
Economic growth is the natural state for free humans.
Thinking about the U.S., one can only wonder. While it’s still great by any reasonable economic standard, we must consider the unseen; as in how much greater the U.S. economy would be, and how much greater opportunity (for immigrants and natives alike) would be, were the U.S. open to the world’s human plenty in the way that it presently is (and properly so) for globally produced goods and services.
Sadly, significant barriers to human capital can only make it possible for us to imagine how much more prosperous the U.S. would be if its politics were evolved in such a way that work were legal for all arrivals, regardless of country origin.
To the above, skeptics may reply that a good solution would be to open the United States up solely to the “educated” who “share our values.” The view here is that only the “right” people should have access to the United States simply because the “wrong” will weaken our economy and our culture. What a central planning fallacy the latter is.
Implicit in such a view is that, when it comes to humans, their sometimes depressed and downtrodden present predicts their future. But that’s not always so. To see why 21st-century immigration skeptics need only contemplate what will read as a rhetorically familiar quote from 19th-century British politician Benjamin Disraeli about the Irish. Disraeli said:
…[The Irish] hate our free and fertile isle. They hate our order, our civilization, our enterprising industry, our sustained courage, our decorous liberty, our pure religion. This wild, reckless, indolent, uncertain and superstitious race have no sympathy with the English character. Their fair ideal of human felicity is an alternation of clannish broils and coarse idolatry. Their history describes an unbroken circle of bigotry and blood…My lords, shall the delegates of these tribes, under the direction of the Roman priesthood, ride roughshod over our country – over England – haughty and still imperial England?”
Fast forward to the 21st century, and the “reckless” Irish have prospered around the world, not to mention, what a rich country Ireland itself has become thanks to increasing amounts of economic freedom. So, well-to-do is Ireland that when Frank McCourt’s bestselling book Angela’s Ashes was turned into a movie in the late 90s, the producers found it difficult to find depressed areas in the formerly impoverished country that would reliably reflect its destitute past.
Spain’s ‘wasted generation’ is but one of many global migrations, driven by a lack of economic freedom.
What all of this tells us that is that when left free to produce, that’s what humans generally do. Economic growth is the natural state for free humans. The Irish of the 19th century were viewed much as Mexicans of the 21stcentury are by some politicians, but as their freedom-driven advance hopefully tells us, the present doesn’t predict the future for a people if the future includes economic freedom.
Spain’s ‘wasted generation’ is but one of many global migrations, much of it driven by a lack of economic freedom. How sad then that the United States, historically viewed as the country where poverty is cured and effort abundantly rewarded, is no longer open to the world’s ambitious in the way that it used to be.
Thankfully, Dubai and other locales are open to what America isn’t, but with the U.S. we must once again always consider the unseen. If so, and with “Make American Great Again” very much in mind, we might consider how much more realistic the slogan would be were the U.S. not presently so Neanderthal in its stance toward the very people around the world so eager to make what is already great truly spectacular.
Reprinted from Forbes.
John Tamny is a Forbes contributor, editor of RealClearMarkets, a senior fellow in economics at Reason, and a senior economic adviser to Toreador Research & Trading. He’s the author of the 2016 book Who Needs the Fed? (Encounter), along with Popular Economics (Regnery Publishing, 2015).
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