“If you don’t have borders, you don’t have a country.” President Trump and his many acolytes have asserted some version of this axiom countless times.

Coming from them, of course, it’s a defense of the White House’s vicious treatment of people coming into the U.S. simply to find a better life. But human beings aren’t the only things that cross borders: goods, services, and financial capital do it all the time as well. A better response to Trump might not be to debate whether borders should be enforced, but rather enforced against what?

Specifically, the left-progressive position on borders should be something like: maximum enforcement against the movement of financial capital, moderate enforcement against goods and services, and minimal enforcement against people.

Let’s start with financial capital, since its movement is arguably the most consequential and the least politically contested. Indeed, financial capital’s freedom to move as it wishes in the modern global order is taken as a given: That business owners can liquefy a factory in Mississippi, for example, lay off the workers there, then plunk the money back down to open another factory halfway around the world in Vietnam, is treated as a sort of reality of nature — as inevitable as gravity. But it’s not; it’s a policy choice.

Capital controls, for instance, are taxes and regulations, meant to prevent — or at least slow down — people moving money either into or out of a country. For much of the 20th century, capital controls were commonplace across the globe. They were mostly used by poorer and developing nations, which can get yanked around by flows of private investment in and out of their borders. But they can also be used by wealthier and more developed countries to keep financial capital constrained and forced into investments within their own borders. China, for instance, still makes regular use of capital controls as part of its broader macroeconomic planning.

Starting in the 1980s, U.S.-backed international institutions pushed for and got the deconstruction of capital controls across most of the globe. In fact, the explicit ideological justification for this was that individual nations and communities should live in fear that wealthy capital owners could pull up stakes at any moment; it would make them more productive. But if the purpose of borders is to protect the cohesion and health of the social fabric, then arguably the most important thing borders should …read more

Source:: The Week – Politics


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Let’s have open borders for people and closed borders for capital

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