Politics & Policy

The Open-Borders ‘Liberaltarianism’ of the New Urban Elite

(Dreamstime image: Blvdone)
Does the ideology of America’s biggest cities threaten our national unity?

Brexit, Trump, the rise of national populism in the United States and Europe, and the crack-up of the old center-left and center-right — all of these are manifestations of larger trends in what might be called local geopolitics: the politics of place within countries rather than among them.

Until recently, partisan divisions in the U.S. and many other Western democracies& tended to track geographic and longtime ethnic cleavages: North versus South in America, a similar north–south divide in Italy, the Anglo-Saxon southeast versus the Celtic periphery in the U.K. These older divisions are fading in importance compared with new partisan maps on both sides of the Atlantic, in which the most important divide is between large, stratified, multi-ethnic cities and the less diverse, less economically stratified territories that surround them. The county map of national elections in the U.S., with its blue urban dots in a sea of red, looks remarkably like maps of the Brexit vote in the English portion of the U.K., with the Leave vote dominant almost everywhere outside of London.

Driving the tectonic shifts that are creating the new political map have been recent economic and demographic trends. The liberalization of international trade and investment following the Cold War and the abandonment of Communist and Third World import-substitution polices led rapidly to the development of genuine transnational firms — most of them headquartered in North America, Europe, and littoral East Asia — which coordinate regional or global supply chains.

At the same time that national capitalism was giving way in part to transnational capitalism, European countries became, for the first time, countries of mass inward migration. Meanwhile, following a legislated cessation of large-scale immigration from the 1920s to the 1960s, the U.S. was transformed by a new wave, dominated by Latin Americans who qualified for family-reunification quotas or who took up residence in the U.S. illegally. The combination of low native fertility and high fertility on the part of some, though not all, immigrant diasporas has led to dramatic ethnic and cultural change on both sides of the Atlantic.

The combined trends of globalization and mass immigration have reshaped both economic geography and partisan politics in the Atlantic democracies. In an article titled “The Coming Realignment,” published in The Breakthrough Journal in 2014, I described the division of developed nation-states such as the U.S. into two regions, urban “Densitaria” and exurban “Posturbia.” Onto this admittedly crude but useful map can be laid an equally crude but useful division of four economic sectors: producer services; goods production; luxury services; and mass services.

Producer services and luxury services are concentrated in what Saskia Sassen has called “global cities,” such as New York and London. Producer services include finance, insurance, accounting, marketing, consulting, and other services whose clients tend to be corporations, including global corporations. Continental and global markets enrich the most successful individuals and firms in these fields beyond the avaricious dreams of the old national producer-service elites. Much of that wealth in the Densitarian cities is spent on luxury services — the Four Seasons, as opposed to Outback Steakhouse. The social liberalism of these high-end service meccas cannot disguise caste systems reminiscent of Central American republics, with extreme wealth and income stratification and a largely immigrant, impoverished menial-service class whose complexions differ from those of the free-spending oligarchs. The gap between richest and poorest in New York City is comparable to that of Swaziland; Los Angeles and Chicago are slightly more egalitarian, comparable to the Dominican Republic and El Salvador.

In the vast, low-density, low-rise areas between the hierarchical service-headquarters cities, a radically different society has formed. In the U.S. and Europe, the population of Posturbia is much more native-born and white, though it is becoming more diverse as immigrants and members of racial minorities move up economically and out of overpriced cities. There are fewer working poor and fewer super-rich.

Here are found almost all of the goods-producing industries — factories, farms, mines, and wells. In addition to being the realm of goods production, Posturbia is the land of what might be called “mass services.” In the somewhat idealized era of Fordism, the workers in mass-production industries earned enough to buy the products they made, such as cars, radios, and television sets. In the 21st century, the workers in mass-provision service industries — say, waiters at chain restaurants such as Outback Steakhouse, unlike those at the Four Seasons — often can afford to purchase the services they provide.

To date, the public conversation on both sides of the Atlantic has been dominated almost entirely by the elite inhabitants of Densitaria, interrupted only by occasional populist revolts such as the Trump phenomenon or the Brexit vote. In a relatively short period of time, a new elite ideology has emerged that contrasts the dynamic, multicultural, libertarian city-state with the allegedly anachronistic and immoral nation-state. This ascendant worldview unites the open-borders economics and cosmopolitan, utilitarian morality of old-fashioned libertarianism with an idealization of the largest cities and their denizens.

In the 1970s and 1980s, libertarians made all of the major arguments heard from globalists since the 1990s: Favoring citizens over foreign nationals is the equivalent of racism; national borders impeding the free flow of labor and goods are both immoral and inefficient; the goal of trade and immigration policy should not be the relative security or relative wealth of particular countries, but the absolute economic well-being of all human beings.

Until the 1990s, this was an eccentric minority perspective in the U.S. and other democracies, encountered only in small-circulation libertarian journals or in the work of the occasional unworldly academic theorist of cosmopolitan ethics. But in the 2000s, as affluent whites from the professional class and their Latino, immigrant, and black allies displaced working-class whites as the base of the Democratic party, the traditional labor-liberal opposition to low-wage immigration and offshoring of industry was replaced by a new open-borders progressivism distinguishable from traditional libertarianism only by its unworkable combination of support for unrestricted immigration with a generous national welfare state. Journalists associated with the website Vox have played a key role in rebranding old-fashioned libertarian arguments for free-market immigration and trade policies as “progressive.”

During an interview with Bernie Sanders, the founding editor of Vox, Ezra Klein, proposed “sharply raising the level of immigration we permit, even up to a level of open borders.” The democratic socialist Sanders, speaking for traditional labor-liberals and nationalist conservatives as well, replied: “Open borders? . . . That’s a right-wing [libertarian] proposal, which says essentially there is no United States. . . . I think from a moral responsibility we’ve got to work with the rest of the world to address the problems of international poverty, but you don’t do that by making people in this country even poorer.”

A new elite ideology has emerged that contrasts the dynamic, multicultural, libertarian city-state with the allegedly anachronistic and immoral nation-state.

Klein’s Vox colleague Dylan Matthews wrote a piece titled “Bernie Sanders’s Fear of Immigrant Labor Is Ugly — and Wrongheaded.” Matthews began by praising the late Wall Street Journal editorial-page editor Robert Bartley’s proposed one-sentence amendment to the Constitution, “There shall be open borders,” and then endorsed a well-worn libertarian moral argument: “I think Bernie Sanders is obligated to weigh the interests of a poor potential Nigerian immigrant equally to those of a much richer native-born American.”

The libertarian-inspired demonization of the nation-state as a sort of racist gated community is accompanied among the new globalists by hype about big cities. According to “U.S. Metro Economies,” a publication by Global Insight sponsored by the United States Conference of Mayors and the Council on Metro Economies and the New American City, “metropolitan areas are the engines of the U.S. economy. . . . Indeed, our metro economies are drivers of the world economy as U.S. economic growth is leading most of the rest of the world.” These metrics give a misleading picture of the importance of urban economies. The statistics are based on job creation, most of it in the labor-intensive, low-tech, non-traded domestic-service sector, and minimize the vast physical output of high-tech, capital-intensive, goods-producing sectors such as manufacturing, mining, and farming, which are mostly located in low-density Posturbia. Notwithstanding statistical conventions, insurance offices and hair salons in Manhattan are not more productive, in any meaningful sense, than Texas oil and gas fields, southern car-parts factories, or midwestern farms.

What is more, global centers of finance and other important business-to-business producer services are almost always embedded in the most populous industrial nation-states. Not coincidentally, populous nation-states are also the homes of the largest consumer markets and the birthplaces of most globally successful corporations. Measured by market exchange rates, the most relevant measure in this case, the largest economies in the world in 2015 were those of the U.S., China, Japan, Germany, and the U.K. It is no accident that New York, Hong Kong, Tokyo, Frankfurt, and London are leading centers of global finance. In contrast, the Cayman Islands and Jersey are mere tax havens.

Influenced by “Why Do Cities Matter?” — a 2015 study by the economists Chang-Tai Hsieh and Enrico Moretti — many business journalists and pundits have argued that the U.S. could be more productive if land-use restrictions allowed more workers to move to cities such as San Francisco, San Jose, New York, Boston, and Seattle. The grain of truth in this notion is that agglomeration effects help certain cities dominate particular industries and professions. Lost in the hype, however, has been the important qualification of Hsieh and Moretti: “The assumption of inter-industry mobility is clearly false in the short run.” In other words, neither personal nor national productivity will necessarily be raised if a roboticist moves to Wall Street or a stockbroker moves to Silicon Valley, while a janitor who moves from a small town to either may be worse off because of the higher cost of living.

The combination of open-borders “liberaltarianism” and trendy urbanist hype might lead one to wonder whether leagues of dynamic city-states should replace moribund modern nation-states. Benjamin Barber has published a book titled If Mayors Ruled the World: Dysfunctional Nations, Rising Cities. Barber is one of the founders of the Global Parliament of Mayors, which, according to his website, can help “fill the void left by nation states who [sic] are increasingly dysfunctional.” The economist Paul Romer has proposed boosting Third World development by means of semi-autonomous “charter cities,” which to his critics look remarkably like Western colonial enclaves.

Not even Barber and Romer propose actual urban independence. While cities may teach one another best practices, there is not the slightest chance that leading American cities will secede from the United States, link up with other city-states around the world, and form a new, global version of the Hanseatic League or the Delian League.

Indeed, framing the issue as nationalism versus globalism is misleading. Apart from a few peripatetic academics and billionaires with multiple passports and homes in several countries, most members of the would-be global elite are actually deeply rooted in their own nation-states, in which they belong to the dominant local establishments. Few if any of America’s would-be globalists really would move to Canada if Trump were elected. Few if any of the Remainers in the U.K. are likely to renounce their British citizenship after the Brexit vote. The number of expatriate tycoons in Belize remains quite small.

What both sides portray as a struggle between globalists and nationalists is actually a number of intra-national struggles taking place simultaneously within particular nation-states between national elites who are pseudo-globalist and fellow citizens whose nationalism and populism are genuine.

Pseudo-globalist rhetoric about a borderless, post-national world is intended mostly to justify policies undertaken by local national governments, not the United Nations or some other global agency. These policies include making it easier for corporations to offshore production or services; preserving the ability of some corporations and individuals to avoid paying taxes to the nation-states where most of them are rooted; and suppressing wages to the benefit of some employers and some consumers by increasing immigration, both skilled and unskilled.

Curtailing mass low-wage immigration would not harm, and might help, the working classes employed by the mass-service industries of Posturbian America. Few of them can afford nannies, maids, and gardeners. And thanks to “service-sector Fordism,” if tighter labor markets allow waiters at Outback Steakhouse to earn more, they can also spend more, not only on mass-provided services but also on mass-produced goods at the discount furniture outlet at the mall.

There are real dangers associated with the coalescing elite ideology of post-national globalism or, to be precise, national-elite pseudo-globalism.

In contrast, reducing the levels of unskilled, low-wage immigration would have harmful repercussions for elites in cities such as New York and London. Luxury industries, including tourist businesses, which depend on low-wage, low-skilled, foreign-born labor, would face higher costs in a tight labor market. Without a perpetual influx of immigrants to counteract domestic net emigration to other parts of the U.S., the populations of cities such as New York and San Francisco would probably shrink considerably, with consequences for urban markets and tax revenues. The exodus might accelerate if the cost of living for professionals rose with the wages of nannies, apartment doormen, dog-walkers, and the like.

Some defenders of low-wage, low-skilled immigration candidly admit that wage suppression keeps menial services affordable for professional-class employers and consumers, especially those who live in expensive cities. According to Dylan Matthews, “increased immigration reduces the prices of services provided by immigrants, such as gardening and housekeeping. There’s some evidence that immigration even gets more women into the workforce by making it cheaper to hire people to watch after children and elderly relatives, and perform other homemaking tasks.” In a favorable review of Jason L. Riley’s libertarian tract Let Them In: The Case for Open Borders, Ezra Klein pointed out that, without mass unskilled immigration, “you wouldn’t have many Chinese restaurants at all, and folks who like Chinese food would eat at home more often.” Matthew Yglesias, also of Vox, has worried that, “in a world without immigrant housecleaners, we wouldn’t have an equal number of much-higher-paid native-born maids. What we’d have is less housecleaning being done on a market basis and more being done as unpaid work at home. For many middle-class families that would be pure waste. Time spent cleaning the toilet could be spent on higher-value labor, on leisure, or on quality time with friends and family.”

What is remarkable about this is not so much the unapologetic defense of elite class privilege — imagine, cleaning your own toilet, cooking your own meals, or raising your own child! — as the absence of any attempt to argue that unskilled immigrants contribute to productive industry (as opposed to the productivity of middle-class journalists who can write more blog posts because servants will clean up the messes they make). To be sure, lobbyists for the agricultural industry often claim that crops will rot and Americans go hungry if American farmers are not guaranteed a large work force of low-wage immigrant farm workers. But as factories and even farms are increasingly automated, it is becoming harder to argue that American industry and agriculture depend on importing poorly paid, poorly educated workers from other countries.

What appears to be a debate among globalists and nationalists, then, is really a debate about the structure of the 21st-century nation-state. There are real dangers associated with the coalescing elite ideology of post-national globalism or, to be precise, national-elite pseudo-globalism.

One danger is groupthink resulting from the attempt by the new globalists to equate even enlightened and civic nationalism with racism. When the economist Larry Summers, nobody’s idea of a pitchfork-waving populist, tentatively called for “responsible nationalism,” he was criticized by The Economist, whose open-borders libertarianism, once eccentric, has become near-orthodoxy among the trans-Atlantic elite.

Another danger is that the new globalist ideology will allow scofflaw citizens to disregard national laws and norms with a good conscience. The rich, powerful, and post-national can comfort themselves with the thought that they are virtuous “citizens of the world” even as they use foreign tax havens to hide their taxes, profit from brutalized labor forces in tyrannical regimes, and pay illegal-immigrant servants off the books in violation of U.S. laws. These actions may be violations of the letter or spirit of national legislation, but the scofflaws can argue that from a global Benthamite utilitarian perspective they are actually promoting the greatest good of the greatest number.

The most significant threat is the possibility that the abandonment of national patriotism by many elite citizens of the nation-state for make-believe cosmopolitanism will weaken national unity, to the benefit of sub-national racism, ethnocentrism, and regionalism. The loyalties that succeed national solidarity are likely to be narrower, not broader. If history is any guide, the victims of tribalism and illiberal populism are likely to include would-be citizens of the world who despise the nation-states that make possible not only their wealth but also their security.

—​ Michael Lind is a fellow at New America and the author of Land of Promise: An Economic History of the United States. This article originally appeared in the September 26, 2016 issue of National Review.

Michael LindMr. Lind is a visiting professor at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin and the author of The American Way of Strategy.


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