Out-Migration – Who is leaving the USA?

Correspondent Kevin M. submitted this thought-provoking response to yesterday’s entry on the “return of Big Government”

http://www.oftwominds.com/blog.html

 

Read from afar, The Return of Big Government and the (de facto) Welfare State (March 17, 2009) describes the onset of conditions here in the U.S which are decidedly third world in nature. Should that be a reality in our future, a reinforcing trend would likely develop complicating everything you and other correspondents describe.

For centuries we’ve been accustomed to the one way flow of migration into the United States; should conditions deteriorate to the levels indicated in your essay–which is hardly beyond reasonable imagination–the flow would most likely shift in the other direction. We’re already getting reports of a reverse population shift back into Mexico as recent arrivals from that country return home after encountering poor economic conditions north of the border. Mistakenly, many people think this is a positive development, and one which ultimately will improve our situation.

But the out-migration I’m referring to would be that of an exodus of the productive class, a population shift that will have a far more profound affect on conditions than most of us can imagine. So if the government does move to a system of semi-permanent/permanent welfare for the masses, the environment will become less hospitable for those who are successful tradesman, entrepreneurs, professionals or well monied investors.

We’re more vulnerable to this than we can imagine, not the least of which since an increasing percentage of the American productive class do in fact have roots in Mexico, China, India, the Middle East and other developing countries, or are no more than a generation removed, and would have less reservation about heading back should conditions here get really ugly. Eventually, self described “real Americans” may follow suit; Jim Rogers (moved to Singapore with his wife and three daughters) is a prominent example of this.

There’s a double-edged motivation for the productive class to leave the country too. Not only will they be expected to largely foot the bill for expanded mega systems here at home, but they are also the very people who would be most welcome in foreign countries, as well as most likely to survive and thrive as new (or reverse) immigrants. Punish-the-rich platforms, which are highly popular in economic downturns, would only hasten and expand the departure.

In the end, it may be far easier for a prosperous person to resettle in a traditionally poor country–which over the generations and through social norms has also found a way to cope with it’s diminished prospects in a peaceful way–than to try to wait out an ongoing and increasingly violent devolution in a traditionally richer location.

The potential for an exodus of the prosperous would not only exacerbate our problems, but also reduce options for workable solutions. The result of such an outflow would be a permanently poorer country. 16th century Spain, then the richest country in the world, is a perfect example of this.

The outflow of U.S. productive capacity to developing countries under the banner of globalization is an indication that the trend is already underway. As businesses leave, their most productive and creative employees will eventually choose to go with them. That hasn’t happened yet because the money is still in the U.S., but eventually it will always flow to the places where real production is taking place.

Few are aware that England retained it’s status as the global financial leader for several generations after America surpassed it as the most productive economy, but eventually the money did follow production–into the United States. Our situation today is looking like a perfect reversal!

There’s a saying, “capital is the greatest of all cowards”; what’s also overlooked is the fact that a huge, unheralded component of what we call capital, is human capital. What ever ideological repulsion anyone may have toward the concept, the fact is that wealth–capital represented in the form of both money and productive people–follows production. Why anyone in power thinks we can improve our lot simply by propping up the banks should remove any confidence we might have in the leadership.

Regrettably, I have to agree with your projections with a pronounced shift into a full blown welfare state since it is the most expedient course of action from a political standpoint. However we will not succeed in solving any of our problems until we initiate a serious move toward returning this country to that of a producer nation, what ever the short term costs.

The geniuses in Washington had better invest some intellectual and political capital into figuring out how they plan to make this happen. To date however, we have no indication what ever that such a course is even being considered.

Tags: Exodus, Leaving the USA, Migration, Out Migration, Outflow, Productive class, Welfare state