In the U.S. and Europe—where over 40% of the world’s migrants currently reside—mounting job losses and financial volatility are sparking [...]]]> Last month I blogged about the bright side of modern-day global “nomadism”; that is, some of the ways that new technologies are reshaping individuals’ connectivity and mobility, and ultimately enhancing opportunities (for law professors, at least). But the current economic crisis has also highlighted the darker side of the new global nomadism—while we live in an age where “rich and uprooted elites” may jet around the world in search of fun and opportunity, the same forces which increasingly allow people to tap into global networks and traverse territorial barriers are also pushing “poor but equally uprooted workers [to] migrate in search of a living.”

In the U.S. and Europe—where over 40% of the world’s migrants currently reside—mounting job losses and financial volatility are sparking debates over the extent to which migration and migration policies are, or should be, linked to economic cycles. In both regions, migrants (whether classified as legal or illegal) have been viewed as part of a flexible labor pool, providing a ready supply of workers who can be tapped during times of economic growth and discarded during downturns. Historical data appears to support this relationship; in the U.S., the flow of migrants has waxed and waned at least to some degree along with periods of economic growth and recession. And while both economic and political forces played important roles, immigration plummeted during the depressions of the 1890s and 1930s.

It’s not surprising, then, that in recent years workers flocked to the countries which spawned the biggest bubbles—in the U.S., the U.K., Ireland, and Spain, which all enjoyed housing and finance booms, immigration surged in recent years. But there are signs that the impact of the current downturn on migration flows may be different from the past, and that the U.S. is following a markedly different path than some of the European countries which joined it during the boom.

First, it’s not clear where migrants will go if they leave the U.S. and Europe. Unlike a regional downturn, a global downturn by definition means that there are also fewer jobs available in migrants’ countries of origin. Moreover, remittances to home countries—which formed a significant part of the transnational capital flows of recent years—appear to be dropping rapidly, which will further stifle economic prospects outside the U.S. and Europe.

Second, the U.S. appears to be seeking to reduce the flexibility of its migrant labor pool, while many European countries, such as the UK and Ireland, are attempting to increase the flexibility of their migrant labor pool.

For migrants to form a flexible labor pool, they must have the ability to come and go; in other words, circularity of mobility is important. While the current data on the extent to which immigration in the U.S. may be declining is mixed, it appears that recent U.S. immigration policies are interrupting the circularity of migration.

First, the U.S. is deporting immigrants at record levels. However, the penalties for immigration violations are also rising, making it increasingly difficult, or even impossible, for people kicked out of the U.S. to legally return. This may have a further unanticipated impact on mobility; studies suggest that people are less likely to voluntarily leave, or risk leaving, a country if they know they cannot come back. Finally, immigrants in the U.S. have traditionally been more geographically mobile within the U.S. than native-born residents. However, the recent rise of state involvement in immigration enforcement—as states and localities are increasingly passing laws targeting immigrants—means that immigrants’ abilities to move across state lines in search of jobs has also been restricted. (Danielle Citron recently posted a fascinating blog about the troubling implications of recent national, state and local laws targeting immigrants’ privacy).

In other words, the U.S. appears to be interfering with the mobility of its migrant labor force by preventing immigrants from entering or returning to the U.S. (via increasingly stringent immigration and deportation rules); preventing people from moving within the U.S. (via state and local laws increasingly targeting immigrants); and discouraging people from voluntarily leaving the U.S. (by limiting their ability to ever return).

A different story appears to be playing out in Europe, according to the Economist and the Migration Policy Institute. The European Union has been dismantling barriers to mobility between its member states, allowing workers to migrate to where the jobs are throughout the continent. Moreover, some countries, such as the UK, have been offering migrants who leave in certain circumstances a guaranteed right to return (there is some evidence that the flow of migration to the UK appears to have reversed, with increasing numbers leaving). Both of these trends should increase labor market flexibility, and it has been suggested that such policies may increase prospects for recovery. Interestingly, one country that has limited the right of return—Spain—has been unable to persuade migrants to leave despite offering people thousands of dollars in incentives to leave.

As we search for solutions to the current crisis, it will be interesting to see how these various approaches correlate to greater economic growth. Despite the difficulty of untangling the effects of economic and political forces on migration, we shouldn’t lose sight of new lessons we may be able to learn about the links between migration and economic growth.

Initially, Chimerica—accounting for a quarter of the world’s population and over half of global economic growth over the past eight years—seemed like a “marriage made in heaven.” China exported cheap goods to the United States which were rapidly snapped up by American consumers, fueling strong growth in China and leaving Chinese savers flush with cash. This [...]]]> British financial historian Niall Ferguson recently coined the term “Chimerica” to describe the growing economic interdependence between the United States and China, a relationship that he calls the key to understanding the world economy over the past decade. His vision of Chimerica is drawing increasing attention as the growing financial turmoil in both nations exposes both how deeply intertwined their economies are and how dysfunctional this relationship has become.

Initially, Chimerica—accounting for a quarter of the world’s population and over half of global economic growth over the past eight years—seemed like a “marriage made in heaven.” China exported cheap goods to the United States which were rapidly snapped up by American consumers, fueling strong growth in China and leaving Chinese savers flush with cash. This cash was then invested in the U.S., which kept interest rates in the U.S. low and provided easy credit, fueling spending binges which thereby increased demand for Chinese products. In Ferguson’s view, the cycle was both complementary and self-reinforcing:

Put simply, one half did the saving, the other half the spending. Comparing net national savings as a proportion of Gross National Income, American savings declined from above 5 percent in the mid 1990s to virtually zero by 2005, while Chinese savings surged from below 30 percent to nearly 45 percent. This divergence in saving patterns allowed a tremendous explosion of debt in the United States, for one effect of the Asian “savings glut” was to make it much cheaper for households to borrow money than would otherwise have been the case. Meanwhile, low-cost Chinese labor helped hold down inflation.

Both countries appeared to have figured out how to have it both ways; while “China’s leaders could enjoy double-digit growth without political reform,” Americans could enjoy rising wealth and consumption without increasing incomes or taxes.

As we now know, much of these gains, like the mythical chimera, were merely illusory, built upon American excesses and Chinese suppression. China kept its currency at artificially low levels in search of higher growth rates (and kept a lid on political dissent). The U.S. spent and lent recklessly, aided by an era of lax regulation. As described in this New York Times article, both countries made half-hearted attempts to address the unhealthy imbalances but the lure of easy money and growth always won out.

Until, of course, our current crisis punctured this illusion, ushering in a mutual blame game. The U.S. has been accusing China of currency manipulation and wage depression while the Chinese have been taking Americans to task for breeding corruption and failing to appreciate the virtues of financial prudence. The once-symbiotic relationship is now characterized as dangerously addictive; as Sen. Lindsay Graham recently put it, “[t]heir drug was an endless line of customers for made-in-China products. Our drug was the Chinese products and cash.”

To Ferguson, this relationship is not merely wobbling but has reached a critical crisis point: “The big question today,” in his view, “is whether Chimerica stays together or comes apart because of this crisis. If it stays together, you can see a path out of the woods. If it splits up, say goodbye to globalization.”

Naturally, whether this cycle of interdependence ever was (or can be) a truly sustainable and mutually beneficial one is hotly debated. The current consensus is that both countries need to spend their way out of the crisis, but fear—and desperation—are riding high. The U.S. needs further infusions of cash from China to finance its stimulus plans as it fears that it may run out of other options, while China needs to push its cautious savers to spend in an atmosphere of extreme uncertainty and avert social unrest. Both countries fear that each will turn to a solution that favors its own citizens at the expense of the other’s, triggering a mutually destructive race to the bottom.

While I don’t have a solution for this crisis, I’d like to propose another, hopefully more optimistic, metaphor for the rise and demise of Chimerica, one that fits with New Year’s themes of destruction, redemption, and reinvention.

To me, the whole scenario evokes The Hollow Men, T.S. Eliot’s poem of modern alienation, depicting “a modern world in which men live only for themselves, failing to choose between good and evil.” Like Eliot’s modern men, we (the U.S. and China) are the hollow men/We are the stuffed men/Leaning together/Headpiece filled with straw…Behaving as the wind behaves.

Like these hollow men stuffed with straw, the U.S. and China built up a bubble of growth that ultimately proved to be founded on not much more than straw. Straw men cannot stand alone but must lean together to stay upright, and lack the strength to withstand the winds of market or other fluctuations. Ultimately, without a solid core to bolster them amidst the storms, hollow men are doomed to collapse upon themselves: This is the way the world ends/Not with a bang but a whimper.

But Eliot’s poem also offers a path for redemption. His hollow men can escape the shadowy emptiness, the realm of paralysis caused by the refusal to face difficult choices, not by avoiding but by directly confronting their guilt and shame. In facing the truth, they become heroic—no longer formless and twisting in the wind but founded on strength and power, thereby joining Those who have crossed/With direct eyes, to death’s other Kingdom.

What does this suggest for the U.S. and China? They can choose to focus only on themselves, avoiding rather than confronting the dilemmas they face, and thereby create the disaster they fear. Iceland’s recent experiences suggest one path to a modern-day version of the tariff wars of the Great Depression, if it does turn out that Britain’s seizure of Icelandic bank assets, an attempt to protect its citizens’ deposits in these banks, was the final trigger for its financial collapse. (See this Wall Street Journal article describing Iceland’s claims that Gordon Brown’s seizure of Icelandic bank assets precipitated the collapse of Kaupthing Bank). Thus, each nation could turn inward out of fear, choosing to protect its own citizens at the expense of others.

Or each nation could confront the hollowness, set fire to the straw, and try to rebuild from a more solid footing. China appears reluctant to take the steps many economists suggest would do the most to persuade its savers to spend. It could improve farmer’s rights over their land, and directly address the reasons many are pressed to save so much, for example by providing a social safety net that includes health care and support for the elderly.

The U.S. could also repair its eroding infrastructure, addressing health care and other costs that are eating away at incomes. While many fear that China has the upper hand in its relationship with the U.S. because of its high savings rates, Ferguson himself is more optimistic, pointing to America’s economic and political resilience, stemming partly from its creation of “the world’s most benign environment for technological innovation and entrepreneurship” and its economic depth.

In other words, through various means, both countries could begin spending from a position of strength, not weakness—replacing dependency with mutual benefit and sustainability. And if that happens, perhaps Eliot’s poem could also provide a fitting farewell to the age of rapacious bankers:

We are the hollow men

But as I began my visiting position in Beijing, my Bedouin hopes were dashed by an unexpected drag – the pile of textbooks I needed for the [...]]]> The advent of wireless, social networking, and shrinking electronics is, to my delight, moving us ever closer to the day when anyone can be a modern-day “urban nomad.” According to this Economist article, urban nomads, like “their antecedents in the desert, [] are defined not by what they carry but by what they leave behind, knowing that the environment will provide it. Thus, Bedouins do not carry their own water, because they know where the oases are. Modern nomads carry almost no paper because they access their documents on their laptop computers, mobile phones or online.”

But as I began my visiting position in Beijing, my Bedouin hopes were dashed by an unexpected drag – the pile of textbooks I needed for the classes I was wrapping up in Maryland and the ones I was to teach in China. Thus, my need for books and paper rendered me not a nomad but an “astronaut.” Textbook-laden law professors are much like the astronauts who “must bring what they need, including oxygen, because they cannot rely on their environment to provide it,” leaving them “both defined and limited by their gear and supplies.” Books are my oxygen, and to me, symbolize the intellectual freedom of academia. But now, during this trip, they began to limit me as well, adding to the practical, linguistic, social and cultural obstacles between me and my students in both Maryland and China. Ultimately, the heavy book-filled bag I had to check in forced me think about the deeper implications of urban nomadism, and of course, what this could mean to law professors.

The key to urban nomadism is not, as I initially thought, about travel and a zero-drag lifestyle. It is both

different from, and involves much more than, merely making journeys. A modern nomad is as likely to be a teenager in Oslo, Tokyo or suburban America as a jet-setting chief executive. He or she may have never left his or her city, stepped into an aeroplane or changed address. Indeed, how far he moves is completely irrelevant. Even if an urban nomad confines himself to a small perimeter, he nonetheless has a new and surprisingly different relationship to time, to place and to other people.

The nomads now emerging around the world are different from those of the past because of their constant connectivity, not motion, and the implications of this are still unfolding.

So naturally my next thought was: could I, as a law professor, shed the gear that sustains yet limits me? And what would this feel like?

I decided (and was partly compelled by circumstance) to limit my reliance on textbooks and paper in search of challenge, freedom, and a different type of interaction with my students. And, given the exigencies of life in Beijing, I thought it best to do so quickly and cleanly, like a Band-Aid that’s outlived its purpose. Printers, copiers, faxes and other relics from the age of landlines can be difficult to find (and good luck finding ones that actually work at the moment you need them). Luckily, wireless abounds in Beijing (though generally for those who can pay for it). Like many rapidly developing cities I’ve seen, it maintains a dichotomous relationship with technology; only a slice of the population is connected, but whether because of practicalities or adventurousness of spirit, that slice has embraced wireless and other technology far more passionately and thoroughly than its American counterpart.

About halfway through my trip, I largely abandoned textbooks and paper in favor of freely available online sources, and increasingly began communicating with my students in both Beijing and Maryland via email and Blackboard (and even attempted to conduct an extra review session entirely through email). As a true nomad would have predicted, the real revelation of this transition was not enhanced mobility, but rather, enhanced connectivity and the corresponding impact this had on my teaching and experience abroad.

Perhaps none of this is a surprise to my students (or the already tech-savvy), but I found that in many ways I was able to connect with my students more easily and substantively electronically as opposed to in the classroom. Class participation became broader and deeper; nearly all of my Maryland students started (and kept) emailing me, including some who rarely, if ever, came to office hours or spoke up in class. And their questions and comments grew increasingly more detailed and thoughtful; in fact, many of their finely crafted questions and hypotheticals would have made great exam questions. In China, email helped me and my students leap over language and social issues—students who were hesitant to engage in relatively unfamiliar Socratic-style dialogue in class jumped at the chance to do so over email, and many were more comfortable typing out their questions or comments. I also (generally) enjoyed and tried to constructively apply the instant feedback I received. And both sets of students helped enhance my cultural connections by emailing me tips on places to visit or things to try in China, as well as keeping me up-to-date on everything from study-group progress to blow-by-blow bailout news and reactions in the U.S. My only regret is that I didn’t connect my students in Baltimore and Beijing more directly, instead of using myself as a filter and conduit for their questions and comments for each other. Blogging, too, has proved to be a terrific way to connect with fascinating people (some, it turns out, in the same city) whom I’d never have met otherwise.

Despite this fascinating experience, I can’t yet teach an entire course without books or even paper, so as a law professor I’m still largely an astronaut abroad or at home. But now I long for the day, hopefully not too far away, when I can load up all my textbooks onto my ipod and move from intellectual oasis to oasis. Or even better, simply place all the texts I need online where I can include all the links and comments I want, and watch and join into the dialogue developing between my students, and perhaps some of the wider world, too.

In China, the government can wield a fair amount of power in this area – government ministries can issue, and apparently have [...]]]> Many of the Chinese government’s recent attempts to address the financial crisis involve what has now become familiar territory for many countries. For example, the government recently announced that it would implement a four trillion renminbi ($585 billion) stimulus package, and the state has also repeatedly cut interest rates and sought to prop up consumer spending. But with reports suggesting that China’s unemployment rate could soon approach 12%, rumor has it that the Chinese government is beginning to pursue a slightly more unusual stimulus plan: nudging students to stay in school, or pursue advanced degrees, in lieu of entering a rough job market.

In China, the government can wield a fair amount of power in this area – government ministries can issue, and apparently have been issuing, directives to universities asking them to increase their student populations. Increasing access to higher education, especially for rural students, is also a key part of the government’s development strategy; in fact, according to a recent Vox column, the number of undergraduate and graduate students in China has been increasing by approximately 30% per year since 1999. The column notes that the government’s emphasis on higher education does not appear to be motivated by labor market demand, but rather seems to stem from the government’s desire to increase the sophistication and global competitiveness of China’s products and people.

It will be interesting to see how the financial crisis affects these trends, particularly in legal field. Anecdotally, I can report that my students in China seem just as apprehensive and concerned about their job prospects as my students in the U.S. Many of my Chinese students—both graduate and undergraduate students—are indeed seriously considering pursuing additional degrees or other educational options for at least the next year or two.

In the U.S., the financial crisis seems to be intensifying the debate over whether the opportunity costs of law school outweigh the benefits, especially as loans or other funding sources dry up. The crisis is also fanning the larger debate about the soaring costs of higher education in the U.S.; last week, for example, the National Center for Higher Education and Public Policy released a report stating that college education costs in the U.S. have increased by 439% over the last 25 years, and warned that American global competitiveness could be affected if U.S. education rates continue to fall behind those of other nations.

As Obama considers expanding his stimulus plan, I’d like to see more of an emphasis on investing in educational opportunities and reducing the financial burdens and opportunity costs of higher education. (I’m obviously biased—I loved school so much that I decided to go to grad school twice during the hiring boom of the dot-com era and chose the next significant uptick in the job market to return to academia. And I’ve often thought about where I’d be now if my grandparents and parents had not received extraordinary educational opportunities that led them out of their rural farming villages).

Ultimately, law school is not for everyone, and the U.S. is not a developing country trying to transform a largely rural population into participants in the global marketplace. But we obviously do need to prepare our population for global competition that will likely only intensify in the wake of the current financial crisis, and to look for creative ways to do so.