Economic Impact of Migration In Both Emigrant and Immigrant Countries

steerage-1907

Economic Impact of Migration 

In Both Emigrant and Immigrant Countries

 

 

Contents

 

A) Foreword

 

B) Premises

 

1 – Etymology and Semantics of the Term

 

2. – Historical and Geographical Overview of Migration

(Westward Migration, Eastward Migration, Southward Migration, Northward Migration)

 

3. – Definition of Emigrant and Immigrant Countries

 

4. – Definition of Economic Impact

4.1 – Economics as a Science

4.2 – Cost/Benefit Analysis, and Profit Maximization Theories

4.3 – Definition of Impact as in Physics and Economics

 

5. – The Analysis of Migration through Determinism, and Game Theory

5.1 – The Neoclassical Economic Theory

5.2 – The Game Theory

 

6. – Conclusions through Determinism and Game Theory

6.1 – The Genetic Advantage

6.2 – The Cultural Advantage

6.3 – The Social Change

6.4 – The Political Disadvantage

6.5 – The Economic Advantage

6.5 – The contradiction of different doctrines

 

7. – Nonlinear Dynamics. The Chaos Theory Analysis

 

8. – Introduction to the Ecosophic Set

 

 

9) Conclusions Through Ecosophy and Nonlinear Dynamics.

 

 

A) Foreword

 

In the proceeding of this work we will use logic.

Following the definition given by Professor Douglas Dowing from the School of Business and Economics at Seattle Pacific University in his Dictionary of Mathematics Terms:

‘Logic is the study of sound reasoning. The study of logic focuses on the study of arguments. An argument is a sequence of sentences (called premises) that lead to a resulting sentence (called the conclusions). An argument is a valid argument if the conclusion does follow from the premises.

In other words, if an argument is valid and all its premises are true, then the conclusion must be true.

Logic can be used to determine whether an argument is valid; however, logic alone cannot determine whether the premises are true or false. Once an argument has been shown to be valid, then all other arguments of the same general form will also be valid, even if their premises are different.

Arguments are composed of sentences.

Sentences are said to have the truth value T (corresponding to what we normally think of as ‘true’), or the truth value F (corresponding to ‘false’). In studying the general logical properties of sentences, it is customary to represent a sentence by a lower-case letter such as p, q, or r, called a sentence variable or a Boolean variable. Sentences either can be simple sentences or can consist of simple sentences joined by connectives and called compound sentences. For example, ‘Spot is a dog’ is a simple sentence. ‘Spot is a dog and likes to bury bones’ is a compound sentence.

 

 

 

B) Premises

 

 

 

 

 

1. – Etymology and Semantics of Terms

 

a) Migration as Change, Exchange.

From the Dictionary of Word Origins, by John Ayto, the term ‘migrate’ is referred to the term ‘mutate’ from which we can quote:’ Semantically mutate is probably the most direct English descendent of the Indo-European base *moi, *mei- ‘change, exchange,’ which has also given English mad, mean ‘unworthy, ignoble,’ municipal, mutual [15] (from Latin mutuus ‘exchanged, reciprocal’), the final syllable of common, and probably migrate [17]. Mutate itself comes from Latin mutare ‘change’ (source also of English mews and moult), and was preceded into English by some centuries by the derivatives mutable [14] and mutation [14]’ Unquote.

 

b) Migration as Convoy, Transport.

In Physics ions migration is a transport (through a convoy of ions) of parts of an element into another.

 

 

2. – Historical and Geographical Overview of Migration

 

In history Culture has always migrated westward. Indo-European people came from East. American civilization came from East.

Eastward migration is rarer, and principally connected with military actions.

Southward migration is over since, and has involved only Latin America..

Northward migration is nowadays the major problem for Europe and the States.

 

 

3. – Definition of Emigrant and Immigrant Countries

 

We have generally defined migration in its two basic aspects: emigration and immigration.

Emigration is to leave a place (as a country) to settle elsewhere. In politics immigration is to come into a foreign country and take up permanent residence there. In botanic immigrant is a plant or animal that becomes established where it was previously unknown.

With migration both the emigrant and immigrant places can have huge problems. The country left looses the best part of its population (that is, the young, and all those people who can actively work).

The receiving country can mutate in several aspects such culture, social security, economy, etc. Mutation is an aspect that affects overall bureaucracy and privileges, for bureaucracy is based on acquired rights that tend to become privileges.

 

 

4. – Definition of Economic Impact

 

4.1 – Economics as Science 

Economics is a Science. That is, it is not a religion, not a faith, not an ideology, but a way of knowing the matter.

Economics is a language too. As any language it has logic.

At least Economics is a method. As a method it has its capacity of assessing products and processes.

As Science, Economics is based on a few scientific premises, which can be considered as theorems. (A theorem can be defined as a statement that has been proved, such as the Pythagorean Theorem).

 

4.2 – Cost/Benefit Analysis, and Profit Maximization Theory

The two basic theorems of Economics are:

 

The Cost/Benefit Analysis:

C – B = < 0

 

The Profit Maximization Theorem

B – C = Max

 

Whereas

C = Cost;

B = Benefit.

In effect, if we assume:

 

PRODUCER   CONSUMER
                                Unit Cost – Unit Price = Profit
                                                   Unit Cost                        – Utility = Profit

 

a) The difference between Unit Cost and Unit Price gives producer’s profit.

b) Unit Price is equal to producers’ Benefit.

c) Unit Price is equal to consumer’s Unit Cost.

c) Consumer’s Benefit is equal to product’s Utility.

 

Therefore, in order to increase Benefits:

 

a) Producers can reduce Unit Cost, or increase Unit Price;

b) Consumers can reduce Unit Price, or increase product’s Utility.

 

If both parties do not follow such a strict logic, they give an extra-benefit to the counterpart. That is not rational (logic), because they do not maximize their own profit, but counterpart’s profit.

The only possible conflict point in this statement is, therefore, Unit Price.

 

The aforementioned theorems define the rationality of any economic behaviour.

 

 

4.3 – Definition of Impact as in Physics and Economics

In the New Merriam-Webster Dictionary, the term ‘Impact’ is defined as follows:

1. ‘A forceful contact, collision, or onset; also: the impetus communicated in or as if in a collision.’

2. ‘Effect’.

In Physics the ‘impetus’ communicated in a collision is called momentum, which is the force that a moving body has because of its weight and motion. Furthermore, in Physics any impact (collision) has a certain level of elasticity, which is the capacity of transferring the force of a moving body to a standing body.

Therefore, economic impact can be defined as the forceful contact/contrast of costs and benefits of both immigrants and local population. The immigrant, which is the moving body, has an impetus, a force, which as in physics can/cannot be transferred to the standing body. This force transferability is what we can call in Economics ‘Profit Maximization.’

 

 

5. – The Analysis of Migration through 

Determinism, Game Theory, and Nonlinear Dynamics

 

5.1 – The Neoclassical Economic Theory

In neoclassical economic theory, to choose rationally is to maximize one’s rewards.

Determinism is a doctrine, which states that acts of the will, natural events, or social changes are determined by preceding causes. Such a doctrine uses mathematics to find out the limits, dimensions, derivatives, and scopes of any function (e.g., determine a position at sea).

In neoclassical economic theory, to choose rationality is to maximize one’s rewards. From one point of view this is a problem in mathematics: choose the activity that maximizes rewards in given circumstances.

 

5.2 – The Game Theory

In game theory, the case is more complex, since the outcome depends not only on our own strategies and the “market conditions,” but also directly on the strategies chosen by others, but we may still think of the rational choice of strategies as a mathematical problem – maximize the rewards of a group of interacting decision makers – and so we again speak of the rational outcome as the “solution” to the game.

Furthermore, the weakness of determinism probably lies in the lack of forecasting the ‘butterfly effect’ in technological changes. That is, there is no way of understanding new logics by means of old logics. In fact, determinism can understand and predict economic behaviour only under well known elements of a function.

Game Theory can be used for better understanding economics under uncertainty.

The Prisoners’ Dilemma has clearly shown as individually rational actions result in both persons being made worse off in terms of their own self-interested purposes. This remarkable result is what has made the wide impact in modern social science, for there are many interactions in the modern world that seem very much like that, from arms races through road congestion and pollution to the depletion of fisheries, the overexploitation of some subsurface water resources, and more recently, migration. These are all quite different interactions in detail, but are interactions in which (we suppose) individually rational action leads to inferior results for each person, and the Prisoners’ Dilemma suggests something of what is going on in each of them.

Therefore, as far as migration is concerned, we strongly believe that Game Theory provides a promising approach to understanding strategic problems of all sorts, and the simplicity and power of the Prisoners’ Dilemma and similar examples make them a natural starting point.

From Game Theory we derive also the analysis of zero-sum games, and non-zero sum games.

A game is zero-sum when the worth of the winner is tantamount to the worth of the looser. In such a game there is only a wealth transfer from one player to another. Any lottery is a practical example of a zero-sum gave; in fact, the winner wins the amount lost by the looser. Speculation in s Stock Exchange is a zero-sum game.

In a nonzero-sum game all players have a benefit (even or uneven) from the game. A business contract is a non-zero sum game.

Economics logic is ever based on non-zero sum games, for it works through the logic of Cost and Benefit Analysis, where any deal can be concluded only when both parties are convinced they have maximized their profit. Here both parties make a profit, because they generate new wealth.

Politics, on the contrary, is based on zero-sum games. It works for power acquisition, i.e., to get more power anyone has to subtract it to someone. Here the worth of the winner is tantamount to the worth (negative) of the looser.

 

Chaos is the doctrine that studies systems with the property that a small change in the initial conditions can lead to very large changes in the subsequent evolution of the system. Chaotic systems are inherently unpredictable. The weather is an example; small changes in the temperature and pressure over the ocean can lead to large variations in the future development of a storm system. However, chaotic systems can exhibit certain kinds of regularities.

Economic Determinism cannot study migration problems because it is strictly connected with the analysis of closed economies, therefore it does not take into consideration the ‘weather condition of the ocean’, that is, technology change and globalization.

For further information, please refer to (exhibit 1)

 

 

6. – Conclusions through Determinism and Game Theory

 

6.1 – The Genetic Advantage

The genetic advantage is the first profit that the country of immigration certainly can get from the momentum of the emigrated people.

Many closed communities in history have been extinguished even for a lack of genetic exchange.

Anyway, this advantage is invisible, so options are under uncertainty. Therefore, neoclassical economics has no instruments for determine such an advantage. To assess it we need to use game theory.

 

6.2 – The Cultural Advantage

Migration can have a dramatic change with culture too. The term ‘Culture’ in Latin has no positive or negative quality: it’s neutral as, for instance, Fortuna ‘chance’ (someone can have good or bad chance). Therefore one can have good or bad (positive or negative) culture.

Anyway, whilst to improve genes can be very easy and pleasant, to improve culture is certainly hard and uncomfortable.

Change is understood as threaten in culture, while in business it’s understood as opportunity.

An open and positive culture is essential for any business; in any contrary case there is no way of generating new wealth.

Cultural advantages are even more difficult to be understood than genetic advantages, for they are invisible and immaterial.

In migration cultural advantages are given by the exchange of different skills and knowledge between resident and immigrant people.

 

6.3 – The Social Change

The social change is a direct consequence of the cultural change. Any community is the mirror image of its culture. Economy is strictly constrained by cultural attitude of markets. Business ethics in a free market is oriented to satisfy demand, whatever it is, not to censor it, or to steer it through a correct moral way. That is, moral is not producers’ responsibility, but consumer’s ethics.

Social advantage cannot be identified through determinism, but through game theory.

 

6.4 – The Political Disadvantage

Migration has ever been a disadvantage for Politics because its innovative potential.

Most Governments’ policy is based on bureaucracy, which is extremely contrary to any innovation.

Innovation in politics can jeopardize any power, any chair, and any privilege.

Political disadvantage has the same sin that neoclassical economics disadvantage has. It is based on a wrong individual reward concept.

Neither determinism nor game theory can demonstrate the falsity of these statements.

 

6.5 – The Economic Advantage

Migration, both in the form of emigration, or immigration is nowadays supported and fed by technology and globalization.

Technology allows operating quickly and cheaply all over the world.

Globalization has liberalized the movement of goods, services, and people. Globalization has been generated by technology, not by politics. Therefore, no government policy has the ability of manipulating or stopping globalization. Such a process is the most silent and relevant revolution that humankind has never had since the Neolithic revolution. As any silent change globalization will be fully perceived only when it will be completely performed.

In neoclassical economic theory, as well as in politics, migration is considered as a disadvantage, for those logics used the same concept of utility: individual profit. With the help of game theory we emphasises as individual profit, or individual advantage, can de correctly calculated in any deterministic situation (that is, when all economic operators well understand the behaviour of each other), while with migration we face a problem of uncertainty.

Therefore, why migration has to be considered as a positive cultural, economic, social and political change?

It is hard to give an answer to such a question, using past experience or skills. We are facing a problem made completely new and unknown by globalization, technology innovation, where outcomes depend on the strategies chosen by others, and information is incomplete.

While migration seems to be individually a non-rational phenomenon through the neoclassical economic theory and political theory point of view, on the contrary it can be rational through the game theory analysis.

Contrarily to the Prisoners’ Dilemma, migration is a cooperative game. That means that receiving countries must cooperate with sending countries in order to generate new wealth.

Some 8,000 Italian companies have migrated to Romania, whilst none has migrated to Yugoslavia, or former Yugoslavia. That’s for the cooperative game established between Italy and Romania.

 

6.6 – The contradiction of different doctrines 

At this point of our analysis, we might conclude that we cannot define any true or false conclusion, for different doctrines have different logics.

Before approaching any other hypothesis, we need to emphasize that humankind can no more be known through the application of different doctrines, for politics will ever be conflicting with economics, sociology with psychology, medicine with law, etc.

We thing we need to step back and to reinvent philosophy as a unique way of thinking.

Therefore, we need to introduce now other new concepts in order to overcome our impasse: the chaos theory, and the ecosophic philosophy.

 

 

 

7. – Nonlinear Dynamics. The Chaos Theory Analysis 

 

Chaos is a term, which indicates the global nature of complex systems.

Chaos Theory study constitutes an interdisciplinary activity for it concerns all scientific sectors, such as turbulence of fluids, population fluctuations, electric activity of hearth and brains, etc.

Therefore, Chaos Theory has to be consider more as a philosophy than as a theory.

For further information, please refer to Exhibit 2.

 

Vocabulary

 

Chaos: a kind of apparent randomness whose origins are entirely deterministic (Whether is chaotic).

Fractal: geometric shape that repeat its structure on ever-finer scales (Clouds are fractals. Snow flakes are fractals.)

The Butterfly Effect or Sensitivity to Initial Conditions (When a butterfly in Tokyo flaps its wings, the result may be a hurricane in Florida a month later.)

Phase Space: The plane of the system (The city of Gorizia can be a phase space of migration)

Phase Portrait: The set of swirling curves (i.e., the functions generated by an attractor).

Strange Attractor: Dynamics can be visualized in term of geometric shapes called attractors. (If you start a dynamical system from some initial point and watch what it does in the long run, you often find that it ends up wandering around on some well-defined shape in phase shape. A system that settles down to a steady state has an attractor that is just a point. A system that settle down to repeating the same behaviour periodically has an attractor that is a closed loop. That is, closed loops correspond to oscillators. The butterfly effect implies that the detailed motion on a strange attractor cannot be determined in advance. But this doesn’t alter the fact that it is an attractor.

 

 

 

8. Introduction to the Ecosophic Set

 

In order to conclude this argument we would like to anticipate to our kind readers the result of a research we were running during the last decade. A complete description of the theory will be issued on the Internet in the next months.

Therefore, in this work we would like to introduce in brief the relationship and common aspects we have identified with chaos theory.

With the introduction of the ecosophic set, we would like to report the result of our latest researches we reached.

An Ecosophic Set consists of elements (people with all their items of interest, encompassed in their environment.) Environment is both a geographical and cultural space.

If we can trace a parallel with chaos theory, we would say that in the case of population migrations, we can suppose several attractors, such as:

 

Survival

Reproduction

Socialisation, or Exchange

Knowledge

Freedom

 

In an Ecosophic Set the butterfly effect can be generated by the following phase portraits:

Culture (Education, Religion, Ideology, etc.)

Power (Political, Military, Family, Role, Function, etc.)

Freedom (Liberty, Security, Alienation, Exclusion)

Income (Income transform needs into economic demands).

 

Attractors are instinct (i.e., natural information that all human beings receive as general instructions for their life. As in a computer, these instructions work like a firmware, and as such they can be manipulated, but not destroyed. In such a case a living being shall loose its nature.

Attractors have been listed in a random order, and their strength and efficiency can vary in function with the efficiency of the single phase portraits.

Phase portraits in the economic set work as a software in a computer. They instruct all living beings on how to learn and how to appraise and worth the reality. They can compress and constrain the attractors up to the revolutionary or rebellion limit. Conditional power can constrain freedom up to slavery.

 

‘Chaos teaches us that systems obeying simple rules can behave in surprisingly complicated ways,’ says Ian Stewarts in Nature’s Numbers, (page 127), Ed.1995. Furthermore he argues ‘There are important lessons here for everybody-managers who imagine that tightly controlled companies will automatically run smoothly, politicians who think that legislating against a problem will automatically eliminate it, and scientists who imagine that once they have modelled a system their work is complete. But the world cannot be completely chaotic, otherwise we would not be able to survive in it. In fact, one of the reasons that chaos was not discovered sooner is that in many ways our world is simple. That simplicity tends to disappear when we look below the surface, but on the surface it is still there.’

 

We can add to Ian Stewart’s statement that we imagine as possible that simple systems can generate complicate systems. Reality, as a construction of human mind, does not pre-exist. It is individually generated by culture, and can vary in function with the individual and collective culture quality.

 

The authors invites the participants to discuss deeper those arguments in the workshop of the afternoon. In this lesson there is not enough room to do it.

 

 

9. Conclusion through Ecosophy and Nonlinear Dynamics

 

Through Ecosophy and nonlinear dynamics we can overpass the following contradiction generated by neoclassical economics and game theory in migration.

First of all, both ecosophy and nonlinear dynamics approach the problem of human behaviour as a whole. Therefore, we make no more distinction between disciplines such as economics, sociology, politics, etc., but we approach the problems we pose with a new philosophy, (the environment in which the problem is encompassed), a new concept of profit (  ), and a new concept of law and order (the law and order generated by attractors).

 

Genetic advantage can be demonstrated by means of game theory, even if we have given no proof to such a statement in this work.

 

Cultural advantage

 

Social change as an advantage

Is demonstrated by what we call anacracy, which corresponds to freedom, market transparency, market competition, and the substitution of zero sum games with non-zero-sum games.

Political disadvantage

We strongly believe that politics, intended as legislative, administrative and judicial power can no more be the leading activity of human societies. Its logic is completely extemporaneous, and no more valid. Therefore, we thing business logic shall substitute in the midterm the logic of politics.

 

Economic advantage

Fortunately, economics does not need to be supported by any further theory to understand the positive aspect of migrations. Nevertheless, we thing ecosophy and nonlinear dynamics can let economics understand that the butterfly effects we have identified in the ecosophic set must be fully understood when we want to appraise any human behaviour and rationality.

 

Dr.-Enrico-Furia

 

 

 

 

 

Enrico Furia
Enrico Furiahttps://www.aneddoticamagazine.com
Multilingual executive with experience in international finance, foreign investment, business development, negotiations, product planning, strategic planning, ICT, energy, academic and vocational teaching. Strategist with proven success in pinpointing profitable opportunities while realizing corporate objectives Established solid business relationship, maintaining a large network of international contacts. Motivational leader and team builder experienced in cross cultural teaching, management, and people development. Hands-on manager with sound technical skills and global perspective of potential markets Multifaceted financial advisor on information systems, project management, energy, banking, and investment analysis. Posts

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