The Migration Britain Makes

You can change the rules, but you can’t stop the systemic flow of the Rentier Black Hole

Every few weeks Britain has the same argument. One side says there are too many migrants. The other says migrants are blamed for problems they did not create. The argument fills newspapers, television studios, Parliament and most of the internet. Governments promise to bring the numbers down. Campaigners argue for treating people more humanely. Everyone has a preferred fix.

Both sides quietly share an assumption. They treat migration as something that happens to Britain, a force arriving from elsewhere whose causes sit beyond our shores. One side wants less of it and the other wants to manage it more fairly, but very few people stop to ask the prior question: why is the pressure there at all?

Why does it survive governments of every colour? Why does it survive crackdowns, targets, reforms and headlines? Why does it return no matter what anyone does?

The answer I want to put forward is uncomfortable, because it moves the problem away from the border entirely. Britain does not simply receive migration pressure. Britain helps produce it. The same economic structure that has given us expensive housing, weak productivity, stagnant wages and falling birth rates also generates a durable incentive for people elsewhere to come here. Migration, on this reading, is not an external shock landing on the British economy. It is one of the things the British economy makes.

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To see why, we have to start a long way from the border.

Picture a developing country trying to make the transition every rich economy once made: from subsistence farming and raw exports into higher-productivity industry. In the standard story, capital gradually moves into manufacturing, productivity rises, wages follow, and poor countries become middle-income countries on their way to becoming rich ones.

That transition depends entirely on where investment chooses to go. Capital does not move according to a country’s aspirations. It moves toward the highest available return.

Now place a wealthy economy like Britain into the picture. Britain imports enormous quantities of food and other basic goods. Because these are necessities, demand for them barely flinches. People eat in good times and bad. For a large, diversified economy this external demand changes nothing. The Netherlands and Germany are not knocked off course by what Britain buys. For a smaller, poorer trading partner it is another matter. A large and permanent source of foreign demand can hold up the returns in farming and raw exports, and hold them up year after year.

Here is the part that matters. Inside that poorer country, capital faces a choice between two sectors. One is the export sector, where returns are propped up by a rich foreign buyer who never stops buying. The other is manufacturing, the sector that would actually raise the country’s productivity and wages. The gap between the returns on offer in the two sectors does not close. It widens, and it stays wide. Capital does the rational thing and flows to the export sector. The factories that were supposed to appear struggle to attract the investment they need. The industrial transition that development textbooks treat as a passing phase does not arrive, because the foreign demand holding the export sector up shows no sign of ever going away.

Nobody has to be exploiting anyone for this to happen. No villain is required. Capital is simply doing what capital always does, moving toward the better return. But the result is a country that becomes very good at supplying a rich one and finds it strangely hard to build the industries that made other countries rich. The development gap does not close. It is held open.

That held-open gap is where migration begins.

Imagine two people on opposite sides of a hill. One lives in Britain. The other lives in the arrested country. The British worker does not feel wealthy. He may be renting, watching his pay stand still, finding ownership drifting out of reach. Yet next to the opportunities available where the other person lives, the difference is still large. A cleaner, a driver, a labourer or a care worker in Britain can earn several times what the same work pays there.

Economists used to expect gaps like this to close on their own. If a poor country offers low wages but high returns on investment, capital should pour in, lift productivity, lift wages, and bring the two sides together. The mechanism is real. The problem is that the capital meant to do the closing already has somewhere to be. Some of it is pinned to British land and property, where the returns are reliable and rising. The rest, abroad, is pinned to the export sector we just described. The force that was supposed to flatten the hill has been quietly redirected into the very things that keep it steep. The hill is not waiting to be levelled. It is being maintained, from both ends, by the same structure.

And while the hill stands, people try to climb it.

A young woman in the arrested country does not need to follow capital flows or exchange rates. She needs to answer one question: would my life be better if I left? Home, family, language and belonging weigh heavily, and most people never go. But if enough people look at the same gap and reach the same answer, a pressure builds.

That pressure is not the same thing as migration. Migration is the number who actually arrive. Pressure is the number who would come if they could. The distinction is the whole game, because a border can act on one without touching the other.

A government can make migration more expensive. It can tighten visas, raise enforcement, deport more people, narrow the routes. It can cut the number who get through. What it cannot do is touch the gap that made people want to come. The border acts on the climb. It does not act on the hill.

So long as the hill stands, some people keep climbing. Some make it, some are turned back, some try again. The visible flow rises and falls with each new policy, while the pressure underneath holds steady, because nothing any Home Secretary controls reaches its source. This is why a government can tighten the rules, announce victory, and face the identical problem three years later. The debate fixes on the symptom, because the symptom is what shows up at the border. The cause sits upstream, in the structure of the importing economy.

None of this is the whole story of why any one person moves. People migrate to escape war, to rejoin family, to flee persecution and weather, and those reasons sit on top of everything here, not inside it. The claim is narrower, and I think harder to dodge: strip all of that away, and the bare economic gap, the one Britain helps hold open, is on its own enough to produce a pressure that does not fade.

The story does not end when people arrive, because they do not arrive into a neutral economy. They arrive into Britain’s.

Britain already has a housing problem with a long history. For decades demand has outrun supply, and the result is familiar to anyone under forty: high rents, high prices, family formation pushed later and later, ownership receding. In the framework I have been building across these essays, this is not one problem among many. It is the organising problem, the thing the rest of the economy arranges itself around.

Migration arrives into that, rather than causing it. Every new arrival needs somewhere to live. In a market where supply barely responds to demand, more people do not summon more houses. They intensify the competition for the houses that exist. Affordability slips further. The line dividing those who own from those who never will moves up another notch through the income distribution.

This produces a loop with an ugly logic. High housing costs push family formation later and hold birth rates down. Lower birth rates are read as a labour shortage. The labour shortage is met with migration. Migration adds to housing demand. Housing gets less affordable. Family formation gets harder still. The problem that started the loop is now deeper than when it began.

Migration is not the cause of that loop, and it is not separate from it either. It has become one of the ways the loop keeps itself going. Britain is increasingly using the consequences of the rentier economy to paper over the consequences of the rentier economy.

There is a second movement most of the argument misses, because it runs the other way. While Britain draws in workers at the bottom, it sends its own young people out. The mobile, educated cohort who are not going to inherit, the people who can see the hill from the inside and have done the arithmetic on never clearing it, increasingly leave for peer economies where the same dynamic is a decade or two less advanced. Britain exports its own frustrated professionals and imports labour into the floor of its service economy, and both flows run off the same structure. It is a single churn with both legs driven by the one thing.

Now the part the whole argument has been circling.

The people arriving tend to land in the same parts of the labour market as Britain’s own lower-paid workers: care, hospitality, cleaning, delivery, the basic services. These are jobs where pay was already weak and where rent already eats more of the wage each year. The migrant arrives. Wages stay low. Rent stays high.

The three things appear together, and it becomes almost irresistible to conclude that the first caused the other two.

The framework makes an unusual claim here, and it is worth stating plainly, because it is the part most easily lost. It does not merely say that blaming migrants is unfair. It says this exact misreading was predictable in advance, and it predicted it: that at a particular stage of the dynamic, the falling wages at the bottom of the service economy would be blamed on immigration rather than on the structure producing both, and that the blame would arrive roughly on schedule. The wages in those jobs are held down by the same structure that holds housing costs up and that held the migrant’s home country down. Immigration moves alongside that wage compression, at the same time, in the same jobs. So it collects the blame that belongs to the structure standing behind both.

I want to be careful with this, because it is easy to hear it as a charge against ordinary people for worrying about their wages or their town. It is not. The worry is real, and the experience underneath it is real. The claim is only about the direction of the arrow.

The thing depressing those wages and the thing that sent the migrant toward Britain are not two problems that happen to meet by accident in a care home or a warehouse. They are one structure, observed at two of its ends.

Which is why the migrant and the struggling British worker are not on opposite sides of anything. They are standing in almost the same place inside the same machine. One met its effects abroad and the other met them at home, but both are downstream of the same arrangement.

The migrant, in fact, is positioned by it twice. First he is held in the arrested economy the gap was opened in, the country that could not build the industry that would have kept him home. Then he is received into the bottom tier of the service economy here, the tier whose wages this structure pushes down, and is handed the blame for pushing them down. He is moved by the structure, and then charged with the damage the structure does. The British worker beside him, priced out of ownership and watching his pay stand still, is the domestic version of the same sentence. The reading that sets the two of them against each other is the one thing that lets the structure behind both of them go unnamed.

For decades Britain has argued about the fence. Taller or shorter. A gate or no gate. A lock or no lock. The arguments are not trivial. But they all take the hill as a fixed feature of the landscape, a fact of nature that policy works around.

The argument of this essay is that the hill is the thing to look at.

As long as Britain runs an economy that holds open a large and permanent gap between itself and poorer countries, some level of migration pressure will exist. It can be reduced. The flow can be slowed. The crossing can be made harder and more frightening. But the incentive remains, because the structure that generates it is never the thing under discussion.

A fence can change how many people reach the top.

It cannot flatten the hill.

And the hill, in no small part, is something Britain built, and goes on building, every time it decides not to look at it.

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