Why welcoming immigrants makes us all wealthier
Scrolling through the stories on any news site these days one could be forgiven for thinking that we are living in an increasingly divided and unequal world. It is heartening to hear of millionaires, such as Warren Buffett and the Gateses and Canadian CEO Jim Estill, who want to share their wealth to improve the lives of others. But while a millionaire who thinks tax evasion is ‘smart’ is in control of the largest economy on Earth it still seems to many that a fairer world is more out of reach than it has ever been.
The irony is that, while the President of the USA (as well as Brexiteers, Marine Le Pen, et al.) believes that the solution to his country’s perceived financial and social woes is to keep out immigrants – either by building a wall or by stopping them at immigration control – a policy of inclusion could generate greater wealth for all.
In their book Nine visions of capitalism, Charles Hampden-Turner and Fons Trompenaars explore the secrets of wealth creation and conclude that cultural inclusiveness is the key to success. Interestingly both diversity and inclusion are required – diversity on its own can lead to the problems we see in America and Europe today as well as many conflicts of the past (such as those between Protestants and Catholics in seventeenth Century Europe or between Hutus and Tutsis in Rwanda). The authors say:
Contrasting values must be joined and reconciled to make them virtuous. Polarized values are vicious in their mutual hatred. Yet our discredited politicians aid this polarization with their sterile jousting between ideologies. The irony is that those we reject could potentially make us whole, providing the missing pieces of the puzzles.
They go on to explain why immigrants are often more successful than those born in a particular country. In America, they note, those immigrants who find themselves more included, such as Jews, Chinese, Japanese and Indians, do better than those who are excluded such as blacks and Latinos. A study from 2000 found that one third of Silicon Valley’s wealth was created by Chinese and Indian immigrants entering the US after 1970. The success, say Hampden-Turner and Trompenaars may even be due to difference: ‘they are different perforce, a condition they cannot change. They therefore decide to make a difference.’
The book also proposes that the current Anglo-American model of capitalism is failing and needs to learn from models in other cultures if Western economies want to continue to grow. Part of the problem is our perception of wealth:
A community is only better off when it creates wealth, that is, when it generates more money among its members than they began with. If money has simply moved from one pocket to another then X may have outsmarted Y but no wealth has been created by that relationship. Competition is important but if this leads to a zero-sum game – wherein gains and losses total zero – then there is no gain for the society or the economy.
What creates wealth, say the authors, is ‘an inclusive relationship between diverse parties’, employees and owners, producers and consumers, lenders from borrowers, and so on. The book explores nine very different forms of capitalism, including analyses of China’s spectacular growth, Singapore’s hybridisation of East and West, and the Conscious Capitalism movement, and examines how our economies can benefit from their example. The authors see a positive future if we can learn to appreciate and incorporate difference. ‘Reconcile values,’ they say, ‘and you help to create wealth for everyone involved.’
Nine visions of capitalism, by Charles Hampden-Turner and Fons Trompenaars is available in the Infinite Ideas store for £10 (rrp £25), with free postage in the UK (shipping rates to other parts of the world vary).