Allocate talent more efficiently by hotfixing immigration policydiscussion economics
Some of my recent conversations touched on the subject of geographical leverage. It might be just a statistical outlier, but the topic intrigued me, so I cut off my commute podcasts to give the issue a little bit of thought. The result is what I call a Serendipity Visa: a peculiar way to imagine immigration, where the butterfly effect becomes an indispensable feature of society.
Although the discourse extends mostly to the US, the underpinning rationale can be extrapolated to any other capital-concentrated areas.
If we agree with Cowen’s Complacent Class and Huebner’s analysis, the rate of worldwide innovation is on a descending trajectory. More often than not, innovation requires capital, which can be a bottleneck when stars aren’t aligned.
It follows that the number of right persons at the right place and time moments might be plummeting. The outlooks seems distressing when we articulate that we live in a stupendously interconnected world. Shouldn’t we have a more vibrant economic and scientific ecosystem?
Here are two explanations (although there are definitely more and I don’t claim to have the full picture):
- We allocate capital and human resources so, so inefficiently.
- There’s a fractal boundary of complexity across many fields of research.
I admit that #2 is a compelling argument and it’s possible that we’re approaching a limit of science (as we currently fathom it). However, I do want to remind the countless generations of humans that thought they knew everything there is to know and then they discovered the Earth is not a flat surface. Thus, it’s more likely that we’ve just rolled up our sleeves.
Reason #1 is more tractable, because it implies we can do something about it. Social sciences are generally highly unpredictable beasts, but we can, and we should, make educated bets on systems that encompass at least some form of determinism. Thus, how can we allocate talent better? How can we get to a point where more and more people get involved in mutually beneficial contracts?
The approach in this article is manifold and doesn’t come without caveats. Put your seat belt on.
The Serendipity Visa (SV) is an immigration policy that endows carefully selected individuals with long-term stays in capital-abundant places. As a case analysis, let’s talk about the US, specifically San Francisco and its surrounding areas.
One might argue that there’s already a visa for exceptional aliens, but the SV is not for individuals who possess abnormally exceptional skills. In fact, it is for people who signal that they may become little aliens one day.
Think of it as “discounted human capital”. You bring a bunch of potential crème de la crème so that the odds for them to become the crème de la crème increase. The catch is to ensure there are good enough heuristics for determining who gets in and who not. Here’s a back-of-the-napkin criterion plan:
- Social capital
- Provable skills
- Influence level on Twitter & co
- Provable skills
- Financial capital
- Previously successful endeavours
- Non-inherited valuable assets, e.g. stake in a business
- Online courses
I would prioritise the first item over the last two, simply because money and credentials can be a red herring. (1) some start life with a bunch of inherited apartments in central London, while others have to mind their monthly bills; (2) university degrees are 80% about signalling. Overlooking these blurry filters would come at the cost of backlash, so they will be included for the time being.
The other important factor is the applicant’s determination. One should be clear about her motives to apply for a SV. What is the long-term plan? What does she want to get out of this lifelong overseas adventure? If the answer is “cheaper Netflix”, well, the application may be rejected, because we care about marginal value. However, we may smile upon hearing “researching the prospects of designing a legal system on Mars”.
The SV resembles a Hayekian model of knowledge distribution. It is the free, creative flow of ideas that made California the financial behemoth that is today. Getting more people in and allowing them to build businesses, architect protocols, write books and research papers can bring compound benefits to the world as a whole.
It can get a bit tricky to quantify the positive outcomes of immigration, but this is pretty suggestive:
And I’m sure the list can go on. In the UK, most rising fintech startups were built by immigrants dissatisfied by how financial products used to work across Europe.
The icing on the cake: there’s already a bunch of organisations that foreshadow a SV.
All these companies share a common denominator: the paranoid mission to provide leverage to underrated individuals. They raised like a phoenix after the 2008 financial crisis and have been fundamentally influencing the economy since then. I posit that a SV-like immigration policy would act as an effective corollary and bring even more fruitful outcomes in the long haul.
Glorifying San Francisco
The SV might strike you as yet-another-reverence towards Silicon Valley, except it’s really not. It just happens that I recently had the pleasure to visit it and roll through my eyeballs a “serendipity” ecosystem. Being born in Romania and living in the UK for 2 years, I found California a few orders of magnitude more dynamic, effective and future-driven.
We could expand the scope of SV to any other wealthy countries or cities where getting a visa is a non-trivial problem. A good example is East Asia and its diamond cities: Shanghai, Beijing, Hong Kong and Shenzhen. Getting a green-card for living in China is considered to be one of the most difficult tasks in the world.
On a different longitude, Brexit’s prepping up to become a bona fide political mayhem, hence I don’t see entrepreneurship an immediate priority on the agenda. This is societal debt that will eventually demand a remedy underpinning progressive views on business and scientific innovation.
One could argue that allowing more people to get access to capital in the same places where capital already exists fuels a vicious capitalistic cycle. Well, that might be true. I genuinely don’t know what’s the best way forward and I tend to shy away from political polarisation. Both decentralised technology and government regulation can do good.
Can SV make some rich areas even richer, turning them into totalitarian global leaders? Maybe yes, maybe not, but I argue that the Internet had already done a far better job at creating tech monopolies than an immigration policy could ever do.
Are current US visas satisfactory?
- EB-1A or the extraordinary aliens. I touched on this earlier, the goal of SV is to pave a way for a future with even more aliens.
- H1-B or the specialty workers. A great, much welcomed initiative, but it requires several loops to get to the end of the process. It also involves a bit of chance as the demand is higher than the supply.
- University: if you have the means, do it. Otherwise, a few hundred thousands in debt might not be economically rational.
Miscalculation of incentives can always thwart expected behaviour. At scale, people might start building artificial social capital just to get the visa. The problem could be solved by checking individuals from time to time, but this would mean higher overhead to the host country. I guess running a test programme is the best way to gauge economic behaviour.
There are probably tons of verticals I haven’t covered, but the Serendipity Visa is merely a quirky idea I conceptualised on my daily commute. Digest it as such!
Many thanks to Kerman Kohli, Razvan Apostu and Tom Waite for their feedback on this.