Immigration is a polarising issue. Its discourse can often turn into a noisy crossfire where legitimate grievances become misconstrued, and one side accuses the other of cruelty or ignorance.
Our political systems attempt to manage the movement of people through highly centralized, one-size-fits-all policies that force wildly different communities into the same framework. Such policies are incapable of meeting diverse local needs and inevitably invite both politicians and migrants to game the system with minimal accountability. Until we confront this structural flaw, our debates will keep going in circles.
Misguided Economic Anxieties
Before we address the core problem, we must clear away two persistent economic fallacies that poison the discussion.
The first is the nationalist/protectionist claim that immigrants “take our jobs.” This rests on what economists call the lump of labour fallacy—the false idea that there is a fixed number of jobs to go around. In reality, immigrants don’t just compete for work; they also create demand for goods and services, start businesses, and fill critical labour shortages, ultimately boosting productivity and overall prosperity.
This misguided notion has been upheld by sectors of the populist right in the US. Key figures inside the ‘MAGA’ movement, such as Steve Bannon, have opposed the easing of high-skilled visas like the H-1B, warning of the displacement of American tech workers.
The populist left has also criticized such proposals, decrying “cheap labour” exploitation. Here, the left proposes a “solution” of high minimum wages to protect immigrants from exploitation. But for newcomers still learning the language, building reputations, and adapting culturally, the ability to accept lower pay can be their only market entry point. Removing that option eliminates opportunity, not exploitation.
Legitimate Concerns
While economic fears are often misplaced, other concerns—like crime and welfare dependency—deserve serious attention.
In several countries across Europe, foreign nationals are overrepresented in crime statistics. Yet as Marie and Pinotti (2024) show, immigration itself is not inherently linked to higher crime rates; problems stem from specific subgroups, not the immigrant population as a whole. The real failure lies in inadequate screening and border control.
The welfare state faces a similar challenge. While immigrants can reduce fiscal pressure and become net contributors to public finances, generous benefits can also attract those with no intention of contributing.
Economist and jurist Jesús Huerta de Soto argues in A Libertarian Theory of Free Immigration (1998) that both scenarios—immigrants as net receivers or as net contributors—are reasons to deny them automatic access to welfare and to refrain from forcing them to pay into it. If they are net receivers, granting full access is unfair to native taxpayers, who have already funded the welfare system and rely on a certain standard of public services that mass immigration could strain. If they are net contributors, compelling them to pay into a system from which they receive disproportionately very little would amount to exploitation. In either case, De Soto proposes allowing immigrants, through a “contracting-out” system, to arrange their own private healthcare and pension coverage. This would not only prevent welfare-based migration incentives but also encourage the growth of savings-based private systems, where immigrants would become valued new clients.
Why Centralized Policy Fails
The aforementioned concerns are impossible to solve through centralized bureaucracy. The reasons for the inevitable failure of central planning of immigration (and any other kind of central planning) are twofold:
First is the knowledge problem. A central authority—no matter how well-funded or well-intentioned—can never possess the vast, dispersed, and often tacit information needed to make optimal decisions for an entire country or region. What kind of immigrant does a tech hub in Stockholm need? What about a farming community in Andalusia, or a small business in Naples? Billions of questions like these would need to be answered to design a policy truly representative of a population’s needs and preferences. The challenge is even greater because these needs are highly specific and constantly changing; by the time a bureaucracy gathers the necessary data, it is already outdated. More importantly, centralized control eliminates the dynamic, trial-and-error process through which communities discover what works, correct mistakes, and replicate successes. The knowledge problem becomes even more severe when policymakers are further away from the consequences of their decisions, particularly when immigration policy is shaped by supranational bodies, such as the EU, which offer financial incentives like credit facilities to governments that accept large immigration flows.
Second is the incentive problem. Politicians and bureaucrats do not spend their own money, nor do they spend daily life in the communities most affected by their decisions. This insulation spares them from the immediate costs of their policies, making the harm less apparent and the impulse to address it weaker. And, as with the knowledge problem, the greater the distance the policymaker has from the consequences of his decision, the fainter both the visibility of the problem and the motivation to solve it. Moreover, they can often push through policies that deliver large, concentrated benefits to a small, well-organized interest group—one with the motivation and resources to lobby aggressively—while dispersing the costs in small, almost invisible amounts across millions of citizens. Those citizens, each carrying only a fraction of the burden in the form of social friction, strained public services, or heightened crime, have little reason to mobilize with the same intensity as the group reaping the rewards. Worse still, voters can register their discontent only every few years, long after the damage has been done, making accountability weak and indirect. The end result is, inevitably, chaos.
Property, Responsibility, and True Openness
The solution, then, must be some sort of radical decentralization. At its heart, the immigration debate is really a dispute over property—specifically, government-controlled “public property” such as border crossings, streets, parks, and plazas, along with the public purse of the welfare state and the associated rights, obligations, and norms that come with access to these resources.
The Nobel laureate Milton Friedman famously pinpointed half of the solution in a 1999 interview, stating, “You cannot simultaneously have a welfare state and free immigration.” If immigrants are not eligible for taxpayer-funded benefits, the incentive to migrate for non-productive reasons vanishes. I say we must take Friedman’s insight one step further: you can have free and peaceful immigration when you have no welfare state and no government-owned property. Imagine a world where every piece of property—every road, park, and residential community—is owned by individuals or voluntary associations. In this framework:
Entry is a private decision. Property owners (individuals, corporations, or community associations) would decide who to invite onto their land. A business could sponsor a skilled engineer, a family could house a relative, and a residential community could set its own rules of entry and conduct.
Costs and benefits are internalized. The owner who makes a bad decision—inviting someone who is destructive or disruptive—bears the direct cost. The owner who makes a good decision—attracting a productive tenant or employee—reaps the direct reward. This creates the strongest possible incentive to screen newcomers effectively.
The “right kind” of immigration is discovered, not dictated. Different communities would experiment with different rules, and the most successful models for peaceful and prosperous integration would naturally be copied.
This approach dissolves the otherwise intractable conflicts. There is no longer a battle over a single, national or regional immigration policy, because no such policy exists. The debate shifts away from a political power struggle—where spurious and corrupt forces inevitably intrude—and becomes instead a matter of private, voluntary association and contract. Thus, I contend that until the broader public thoroughly understands this concept, we will always have to conform to standards and policies that recklessly aggregate communities and groups of individuals with heterogeneous needs and preferences for immigration, to the detriment of all.
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