Here's an excerpt from New Politics for the Next Economy - a work in progress.
Immigration Through the Lens of the Five Economies
The United States is huge. Only Russia, Canada and China have
more land. So, the question of immigration has never been about how many people
the land can hold. It has always been about what the economy most needs at a
given time. Immigration policy has consistently mirrored the limiting factor of
progress in each era, reflecting the nation’s evolving economy and the politics
of who is welcomed as a contributor and who is rejected as a threat. At each
stage, immigration policy and practice has largely addressed the economic
bottleneck of its time.
The Land Economy: Immigrants as Settlers
In the 19th century, when land was the limiting factor, immigration was largely
a matter of numbers. More people meant more farms, more fields, more
production. The Homestead Act of 1862 practically begged Europeans to claim 160
acres and make it productive. The Norwegians who tried farming in North Dakota
before fleeing the winters for California (my great grandparents) were part of
this wave: immigrants as settlers, not yet screened for skill, but for
willingness to work, to develop land.
America in this period did not so much regulate immigration
as simply count it. At Ellis Island, officials recorded names, looked for
visible disease, and waved people through. Immigrants did not meet a
bureaucracy; they met opportunity. Land was abundant, labor was scarce, and
farming families were the raw material of progress, turning empty land into
productive farms.
The Industrial Economy: Immigrants as Threats
By the early 20th century, the economy’s limit had shifted from land to
capital. Factories, railroads, and mines needed labor — and immigrants provided
it in abundance. But the dynamic had changed: immigrants were no longer needed
to settle empty land. They were crowding into cities, competing for wages on
the factory floor. The politics of immigration shifted accordingly. (And in
imagining that we can again create millions of jobs in factories as a return to
this time, Trump has echoed the politics of this time, a strange ode to the America
of one century earlier.)
The Immigration Act of 1924, also known as the Johnson–Reed
Act, imposed national origin quotas designed to preserve the ethnic balance of
the country as it had been in 1890. It heavily favored immigrants from northern
and western Europe, sharply restricted southern and eastern Europeans, and
barred almost all Asians. The underlying anxiety was not hard to trace.
Industrial labor markets were glutted, and waves of immigrants were seen not as
settlers expanding America’s frontier but as rivals depressing factory wages
and challenging cultural norms.
The backlash was not confined to legislation. In 1925, the
Ku Klux Klan staged what the Washington Post called the largest
political demonstration in the city’s history. Tens of thousands of hooded
marchers paraded down Pennsylvania Avenue to protest immigrants and imports
alike. Just a year earlier, Congress passed the 1924 Immigration Act, which
imposed strict quotas favoring northern Europeans and sharply limiting arrivals
from southern and eastern Europe, Asia, and Africa.
The message was clear: in an industrial economy, where labor
was plentiful, immigrants could be recast as a threat rather than an asset.
Mixed economy: The Great Depression revealed a
different bottleneck: employment itself. With unemployment at 25%, the focus
shifted inward. Franklin Roosevelt’s New Deal aimed less at drawing new workers
from abroad and more at putting existing ones back to work. Immigration slowed
dramatically. The government built institutions to stabilize labor: Social
Security, unemployment insurance, child labor laws, and education that moved
children off farms and out of factories. Progress was measured by whether the
nation could keep its own citizens employed and secure and then increasingly
shifted towards policies that would drive wage growth, which led to the
emergence of a new, defining sector.
The Information Economy: Immigrants as Knowledge Workers
The bottleneck shifted again in the mid-20th century. After World War II, the
U.S. economy leaned increasingly on education, science, and information, on knowledge
workers.
By the 1960s, the constraint was no longer land or factories
but knowledge. Immigration was increasingly framed as a way to expand the
nation’s intellectual capital.
The turning point was the Immigration and Nationality Act of
1965, also known as the Hart–Celler Act. Signed by Lyndon Johnson at the foot
of the Statue of Liberty, the law abolished national origin quotas and replaced
them with a preference system. Family reunification remained important, but
skills were now explicitly prioritized. The legislation marked a quiet
revolution: the bottleneck was no longer land or even labor, but brains.
The families who entered under this system helped shape the
America we know today. Kamala Harris’s mother, Shyamala Gopalan, emigrated from
India to study endocrinology at Berkeley. Her father, Donald Harris, came from
Jamaica to study economics. Their paths were made possible by Johnson’s reforms
— a direct reflection of an economy that needed researchers and professionals
more than it needed field hands or assembly-line labor.
The visa system evolved to support this reality. The H-1B
visa, created in 1990, became a channel for employers to sponsor highly skilled
workers in technology, finance, medicine, and academia. If the Homestead Act
represented immigration for the land economy, and Ellis Island represented
immigration for the industrial economy, the H-1B visa became the gateway for
the information economy.
Immigration as a Mirror of Economic Limits
The evolution is striking when viewed as a sequence:
·
Agricultural economy: immigrants as settlers;
open borders and homesteads.
- Industrial
economy: immigrants as wage competitors, emergence of quotas and
restrictions by early 1900s.
- Mixed
economy: focus less on bringing in new workers than on developing labor
within the nation, shifting more children from farms, factories and mines
into school, and giving unions greater political power.
- Information
economy: immigrants as knowledge workers; preference for education and
expertise.
At each stage, the politics of immigration followed the
economics. When more people meant more production, immigration was welcomed.
When more people meant lower wages, immigration was restricted. When more
people meant more brains, immigration was re-engineered to favor scientists,
doctors, and engineers.
Beyond the Information Economy
Immigration policy has not only reflected economic limits; it has also shaped
national identity. In the land economy, immigrants were folded into the myth of
the frontier. In the industrial economy, they were cast as cultural outsiders.
In the information economy, they became symbols of global talent and
competitiveness.
The United States and Canada became unusual in world history
because they pioneered a national identity based not on common ancestry but on
shared ideals. Rome had conquered peoples and given them citizenship, but
citizenship came to you with the empire’s expansion. In North America, people
came voluntarily to become Americans or Canadians. “Becoming American” was not
about bloodline but about shared allegiance to institutions and aspirations.
That model has had its tensions. Racism and xenophobia have
repeatedly pushed the nation back toward a more genetic reading of identity.
But the long arc of American immigration law reveals a deeper truth: who counts
as “us” has always been tied to what the economy needs.
Toward the Entrepreneurial Economy
If the next economy is entrepreneurial, immigration will again shift. The
bottleneck will not be knowledge alone but the capacity to create institutions
and enterprises that solve problems. In that world, the most valuable
immigrants will not just be skilled workers but entrepreneurial builders:
people who create schools, startups, community organizations, and technologies
that expand collective capacity. More creatively, people who shown potential
for public sector entrepreneurship, a domain we’ve largely ignored in spite of
the fact that private-sector entrepreneurship has never been more highly valued
or valuable. Immigration policy could evolve to favor not only diplomas but
demonstrated creativity and institution-building.
The throughline is simple but profound: immigration has
always been economic policy in disguise. From homesteaders to factory hands to
graduate students, the criteria for admission have tracked the bottleneck of
production. And as those bottlenecks shifted, so too did the nation’s story
about who belongs, and who we need now to make us great anew.
