The idea of an “economic engine” is related to the people and capital you have available. I think more fundamentally we have to realise that there are two factors going on:

1) There is a set number of “natural resources” whose per capita usefulness declines per person.
2) There are complementarities between peoples skills and abilities which inturn increases the additional produce from a unit of natural capital.

As a result, it isn’t clear whether adding another person makes us all wealthier or poorer.

With Gareth’s articles I think he was addressing different issues. Economists like the idea of “free movement of labour” in the same way that we like the “free movement of capital” – as it ensures that the worldwide economy will function in a way that maximises global happiness.

However, Gareth wanted to point out that the growth Labour was taking credit for was the result of rising migrant inflows – not a more efficient use of our current population.

ps I have been reading through the Infometrics Sites Gareth Morgan Articles and over a decade he seems to have tempered his views on the merits of migration. In earleir articles he is scathing of people opposed/wary.
“migration – 13 June 1996 –
The apprehension over immigration that Winston Peters has stirred may well be delivering a shift of political capital his way, but there is little evidence as yet that those who have rallied to his nationalist call to arms, have thought much beyond fear of the yellow peril and selling NZ out to foreign interests. ”

and later
Labour’s Third World Solution
migration – 13 November 2002 – 2174 views

“Ireland’s economic miracle was driven by Germany. Under Labour, ours is being gifted by Communist China. The Germans sent money, the Chinese are sending people. “

“Interesting article.
Well of course there is a trend for those can find a way to move to beautiful places with a good climate. Often even for reduced living standards.
This is so here on Vancouver island , has been for over 150 years. However the trend has increased dramatically over the
last two decades.
The economist Galbraith pondered this issue years ago, does a region need a basic economic engine or can it thrive on what he called the living industry.
It used to be noted that a given business here here would yield half the income of the same in Calgary , but many accepted that for the non material advantages. The richer of corse do make employment for the trades , golf courses Marinas etc. A sort of trickle I suppose. But many of the skilled are having to leave for other provinces.”
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It seems to me that there could be more migrants than real jobs as much employment is due to the need for new houses and infrastructure but not the “basic economic engine” I thought perhaps the difference is the “living industry”

Hi John,

Sorry I don’t know what you are talking about – who was talking about “living industry”

Yes – but New Zealand is not even close to that level.

“Does New Zealand really want to go there? And admitting more immigrants does the world no favors. By doing so, New Zealand would merely be acting as a relief valve for overpopulation in other nations, enabling even more destructive population growth.”

This only makes sense if we believe that letting migrants come here will increase population growth overseas SUBSTANTIALLY. I don’t buy it.

If you read my book, you might re-think that. A population density which rises beyond some “optimum” level, the point at which people are forced to crowd together, drives down per capita consumption. And as per capita consumption goes, so too goes per capita employment. Especially in the face of rising productivity, declining per capita consumption inescapably yields rising unemployment and poverty.

It’s this very effect that makes badly overpopulated nations like Japan, China, Korea, Germany and others utterly dependent on manufacturing for export in order to gainfully employ their bloated labor forces, essentially transforming them into parasitic economies, dependent upon the markets of less densely populated nations like the U.S., Canada, Australia and others (like New Zealand!) to provide them jobs.

Does New Zealand really want to go there? And admitting more immigrants does the world no favors. By doing so, New Zealand would merely be acting as a relief valve for overpopulation in other nations, enabling even more destructive population growth.

Pete Murphy
Author, “Five Short Blasts”

Good point, it could well be that! I took it to mean easing up on the throttle hence I saw it as the opposite 😛