On internal migration restrictions

April 22, 2019 (1293 words) :: When China restricts rural-urban migration, it's bad. When the same sort of restrictions are created by capitalism, that's totally fine.
Tags: immigration, working-in-tech

This post is day 112 of a personal challenge to write every day in 2019. See the other fragments, or sign up for my weekly newsletter.

Something we usually take for granted when it comes to immigration restrictions is that although there are often harsh borders between countries, there are rarely borders within countries. Once you get into the US, for instance, you can hop between cities or states without so much as a checkpoint. Borders typically define the outline, as a means of enforcing the exterior, but have no say over the interior.

China is a bit of an exception to that. The hukou system, which has been in place for over 60 years, makes it harder for those born in rural areas to migrate to urban areas. In China, rural migrants to urban areas are basically treated the way that foreigners are treated in nations like the US: they can still move if they find work, but their status is more precarious (job discrimination, less able to access credit), and in general they have fewer rights.

Now, this system has its fair share of criticism from within China, and a few years ago the government announced that it would seek to reform the system. The criticism is usually rooted in moral qualms, in recognition that such a system for limiting the rights of migrants is deeply unjust. While it’s possible that the hukou system is legitimate in its aims of optimally balancing out the population between rural and urban areas, it doesn’t feel good that this rebalancing is accomplished through what is essentially a stick (fewer rights if you move to an urban area) instead of a carrot (incentives and aid if you move to, or remain in, a rural area). Deliberate deprivation just does not feel like good policy.

The criticism is valid, but something that annoys me is when people treat whatever bad thing is happening in China as if it’s singular to China. You see this with the social credit system, which some Westerners seem to take as proof of the Chinese government being controlling and totalitarian and generally awful. Which is weird on two counts: one is that, even if it’s not great, it doesn’t seem like it’s actually that bad; and two, hello, have you heard of credit scores? Or like, money? Why is it bad to have your access to certain jobs or commodities restricted due to your behaviour as determined by a centralised algorithm, but good when that access is highly dependent on how much money you (or your parents) have access to?

In this case, there’s this weird assumption that the market will result in the optimal outcome because it’s neutral. Because markets are seen as naturalised, rather than produced, there is never anyone to blame if anything goes wrong; under communism, the state always has ultimate responsibility. So when China implements any policy, and there are downsides, the fault always lies with the (communist) state.

But what about when a similar outcome occurs in a more capitalist country - when it’s enforced by the market, rather than by state policy? Markets can achieve the same (unjust) ends as state policies, it’s just that their workings are less obvious because their effects are dispersed, rather than being spelled out in a concise policy document. This isn’t the sign of a better system, just a less transparent one.

In the US, for example, there is no formal policy restricting rural migrants’ ability to relocate to urban areas. Theoretically, you can be born in Kansas and move to San Francisco if you so desire. In practice, however, how on earth are you going to afford to live in San Francisco? Your options are extremely limited, if you’re not either working in tech or married to someone who is (and working in a high-paying role in tech is not an accessible option for everyone, nor is it always desirable). If you want to spend time in the city without working in tech, you’ll most likely end up living somewhere on the outskirts where you’ll have to commute 1-2 hours a day to get to a job that doesn’t pay enough to keep up with the rising costs of living.

Capitalism has its own internal migration restrictions, it’s just that they’re mediated through the market, rather than codified in law. Lack of affordable housing, excessive gatekeeping for well-paying jobs, and labour laws that don’t do enough to prevent workers from being trapped in highly exploitative jobs in, e.g., the gig economy - these all function to keep certain people out of a city like San Francisco. These people may want to live there, and they may even work there, but they can’t afford to actually live in the city without major sacrifices in terms of quality of life.

I suspect the reason that market-mediated restrictions seem okay, even though the Chinese version seems bad, is the idea that people mostly deserve the amount of money they get. As a result, market-based gating is fine, because it’s a proxy for merit and/or hard work. Sure, you have some people who flat-out inherit their wealth or gain access to high-paying jobs through connections or family background rather than actual skill, and there are some people who work really hard while still struggling to get by, but maybe those are seen as exceptions. Your typical capitalist apologist can stomach a few exceptions if he believes that the system itself is mostly working - or at least, if it’s the best we can do.

I don’t know what it takes to convince someone who wholeheartedly believes in capitalism’s efficacy that the system is not, in fact, working very well at all: that the connection between merit (by any reasonable measure) and wealth is tenuous, and that many hard-working people are in low-paid jobs with no possibility of substantial career progression. Everyone has a different threshold for how much inefficiency can be tolerated, and I don’t know how to make someone cross the watershed line between “capitalism has flaws, but is mostly fine” to “capitalism is unacceptable”.

In the meantime, people in the good old US of A will continue to find themselves restricted from moving to where they want to live simply because they can’t afford it. That doesn’t sound like freedom to me. At the same time, people will continue to flock to cities like San Francisco not because they actually want to live in the city, but because it’s where the jobs are. But because this state of affairs was ordained by the market, rather than the state, there are no thinkpieces about how this is a human rights violation.

How could we solve this problem in a sustainable way? One: decouple work from the financial incentives, as I wrote about in yesterday’s fragment, which could be achieved by raising the floor (higher minimum wage, stronger labour laws, better safety net) as well as having the public sector create more jobs based on what would be useful, not just what would be profitable. And: stop entrusting the provision of basic things people need to live (housing, transport, healthcare, etc) to the market. Or at least, dramatically shrink the scope of how much power markets can have over people within these domains, by strengthening tenants’ rights, expanding public transit (and making it free), enacting a single-payer healthcare system.

Would this be easy? Probably not, and we’d also have to address the issue of land use (something I know very little about and won’t even bother trying to explain). But if we think China’s hukou system is chilling, then we should consider how to stop what is essentially the same thing from happening in putatively “free” nations like the US. China’s policies may be worthy of criticism, but then, so are the outcomes engineered by the free market.

« See the full list of fragments