The Expat: the savior of America
The Expat: the savior of America
Immigration gets a lot of attention… But I think there is another equally interesting phenomenon: emigration. Expats.
Millions of Americans are choosing to sail away from Ellis Island, becoming part of the growing American ex-patriot community. Photo by Alessandro Zanini.
I: Who is the American expat? What do they want?
I spent the summer in Germany, surrounded by several shocking intercultural differences. But these German eccentricities were not the most surprising thing I experienced. I was shocked, instead, by how non-unique I was: there were young American expats everywhere — a young mother on my plane, engineering students, a young female manager, and so many more.
Not only was the quantity surprising, but the reasons for moving were also not what I expected. I thought that most expats had some connection to Germany — a parent, a grandparent, or some familial connection. But this was not at all the case. Many people I met had no connection to Germany. Instead, there was something else that was continually mentioned: “quality of life.”
Now, “quality of life” is a somewhat amorphous term. It can mean anything from less crime to better coffee. Let’s dig deeper for a bit.
America and Germany have comparable GDPs and employment rates: these expats were not moving out of economic necessity. Unlike German immigrants from Spain or Italy, with dire working prospects for young educated professionals, the US émigrés did not move due to a lack of opportunities in their home country.
It was something else: the émigrés I talked to raved about the subsidized opera, free university education, better public transport, free health care, maternity care, lack of police shootings, and a variety of other government-provided amenities.
In short: they moved for the public goods. (Basically, goods the government provides).
II: Recent trend
Bloomberg recently published a piece about Americans moving to London from NY in search of cheaper housing prices, after years of failed NY zoning laws killed hope. A quick google search shows thousands of recent articles advising NYC residents on how to make the move (See: here, here, here, and here as some examples).
A CNBC and the Washington Times report on Californians’ exodus to Mexico to virtually work or commute, due to high prices of health care and lack of functional leadership in California.
There is a growing presence of online expats documenting the quality of life increases to millions of eager and jealous viewers.
As a whole, the expatriations from the US have spiked at an unprecedented rate in recent years (with a recent blip for the COVID-19 shutdown). And there are nearly 9 million Americans abroad (AARO). Excluding North America, the largest group, 2,027,914 are in Europe and Eurasia.
Notably, the two main groups are wealthy older retirees and educated young people. In other words: they are either rich in capital or potential… thus are important to the US economy (CMS — Expat Insider Survey 2021).
III: Tiebout model: local politics
Exiting as a powerful means of political voice is well established on the local level.
In the 1950’s, Charles Tiebout began his work with a fundamental economic issue: public goods. Public goods are, essentially, goods that benefit everyone in a society (like parks, schools, or clean air). Because these services benefit the whole community, the entire community (the government) pays for them (through means like taxes).
But, there is an issue: How does our society determine what public goods to provide? Some may want to fund parks and schools, while others may want fewer taxes. So which is it — what do towns fund?
The outdated answer is that democracy decides, but Charles Tiebout proposed an update to this model.
He explains that people basically “vote with their feet.” In other words, people move to towns that match their ideal public goods spending. If a town is failing to fund schools, then all the people who want better-funded schools will simply move.
This is an incredibly elegant model for a few reasons.
Firstly, this model means that people are overall more satisfied: people with different preferences can all have societies that match their ideals.
Secondly, this holds local governments accountable! Towns want to keep people — they want a high demand for living in their town (so that property values remain high). Thus, Tiebout explains towns will try their best to efficiently use funds and spend money on goods that people desire.
It sounds great, in theory. But there are a few practical issues. The major is that people are not perfectly mobile (See Tiebout, Charles M. “A Pure Theory of Local Expenditures” for more detail on assumptions and limitations of this model). Family, jobs, weather preferences, and more all tie people down. As people become more tied down to a specific area, they are less able and willing to move to areas that use public funds more efficiently.
A great example of this is San Fransico, LA, or NYC: despite corruption, misuse of public funds, high taxes, and crumbling infrastructure, people still live here. They do not choose to live in these areas because of the public goods or efficient governments, but rather because they appreciate the weather, have a job there, or have a family.
IV: Why does this matter?
As moving is blocked, power is stripped from individuals, and societies become less responsive to complaints.
In his notable 1970’s book Exit, Voice, and Loyalty, Albert Hirschman postulates that individuals have options when faced with deteriorating quality of goods. They can either exit (breaking the relationship altogether). Or they can voice (attempt to repair the relationship). This theory is true for jobs (quit or ask for a raise), customer relationships (talk to the manager or stop shopping there), and government structures (protest or emigrate).
If it is easier to voice than exit, people stay. But if it is easier to exit than make a change, people leave. Thus, there are two main ways that reduce exit: 1) Providing better opportunities for feedback and change to make voicing concerns easier. 2) The more loyalty and the fewer options people have, the harder exit becomes.
In short, to maintain a population either the government can improve or maintain large barriers to exit.
This leads to an inverse relationship between exit barriers and government responsiveness: the higher the barriers to exit, the less the government will have to care about people’s complaints.
At this point, you may still be skeptical. After all, it sounds counter-intuitive that loyal members of a community have voices that matter less in politics than those prepared to leave. To understand this further, let’s look at a thought experiment.
You are running a group project: if the people in your group are dissatisfied with their treatment, they have two options. They can either exit the group project or voice their concerns to try and change the project. As the leader, you do not want your group members to leave, so you will try to accommodate their requests.
Let’s suppose two situations. In one situation, it is relatively easy for your group members to leave. In the other situation, they are mandated to stay by a professor or manager (it is exceptionally difficult for them to leave). In the second circumstance, you must be hyper-aware of what the members of your group want; if you don’t keep them satisfied, they will leave and subsequently cause the group to fail. In the first circumstance, because the group members can not leave, you might feel less pressure to keep them satisfied (perhaps, you will push more ambitious deadlines or expect more from individual members).
The more important someone is and the easier it is for them to leave the group, the more seriously you will take their complaints.
V: US’s political and mobility crisis.
When viewed from this perspective, we can start drawing some connections. Perhaps the US’s lack of mobility is the root of our political disfunction?
Americans are notoriously immobile. Over 3 times as many Europeans move abroad to America than Americans to Europe, and mobility seems less of an option to many Americans (MisesInstitute). In economically struggling countries like, Italy, have over 15% of its population living abroad. While Germany and France have almost double the number of emigrants as the US (Congressional Budget Office). The message is clear: Americans don’t move.
For most of American history, movement was simply not a relevant factor: people were trapped in their nation of birth. People could not simply move in search of better public goods; rather they had to rely on their voice.
This, in part, is the reason for the massive amounts of time and money that Americans invest in political activism (people spend thousands of hours lobbying for better health care or better schools). Simply put, if exit is not an option, Americans must give politics all they have.
Yet, at the same time, our government resists improvement. The US’s political system has recently been classified as a “flawed democracy.” Infrastructure and schooling projects are corrupt, and it is difficult for civilians to make changes to the current system (The Economist).
This fits neatly into the aforementioned theories: because Americans are so non-mobile, the government fails to take their complaints seriously. The government does not feel the threat of exit as viscerally as other countries, who know that if they mess up their policy, they will have a mass brain-draining exodus on their hands (like the Italian diaspora).
In short, Americans’ refusal to move, has enabled the US government to ignore their requests.
VI: Cause of immobility.
This begs the question, why for so long, has the US population refused to move? No one knows the answer to this question, but I have a few theories.
1: Americans have been more isolated, geographically and culturally.
While Europe is very physically close to other culturally similar and economically successful countries, the US has an ocean separating us from many of these viable living alternatives. Italians have their choice of a vast array of other countries to possibly move to, all within easy range. While, the US does not have this same luxury.
Additionally, the US has always been resistant to learning other languages and cultures. Our local competition hegemony and general America-centric attitude leads to Americans having low second language proficiency and willingness to engage in intercultural communication. This obviously makes it vastly more difficult to move.
2: Tax law.
While in most other countries in the world, if you do not live in that country, you do not need to pay taxes, American citizens must pay US federal taxes no matter what. Thus there is an extra layer of financial burden placed on US émigrés.
3: Loyalty.
Americans tend to have persistent loyalty to their nation. American media and culture often paint America as the best. It is often shocking for Americans to learn about the material quality of life differences between America and other nations. Hollywood and the media paint other parts of the world as regressive or war-torn. This inhibits many Americans’ ability to look at quality of life metrics objectively.
But, now this is changing.
VII: Emerging national Tibout model?
Let’s look back at the graphs we used at the beginning of this discussion.
Clearly, emigration (exit) is increasing. So, what is causing this drastic increase and will it continue into the future?
Again, there is no clear answer, but here are some ideas:
1: Increases in technological ability. As technology improves, mobility becomes easier. Airfare and transportation technology make traveling less expensive. Mobile phones and widely available WIFI have made communication easier. It is much easier to live in another country while maintaining virtual relationships with those at home.
2: Information.
Going hand in hand with the rise of technology, global connection and knowledge have rapidly advanced. It is much easier for me now to communicate with people from other countries. With readily accessible international news, I can easily research the quality of life in other countries. A global pop culture (movies and TV shows) and globalized brands (clothing stores and restraint chains) lead to a more hegemonic culture than ever before. Additionally, global companies and projects lead to better intercultural communication; for this reason, other countries mandate that students learn English in schools, making life abroad significantly easier. Furthermore, social media and constant information make other countries, thousands of miles away, feel more tangible.
3: Work.
Recently, there has been a global work culture emerging. International cooperation and global economic interdependence created a homogenous corporate work culture. Working in Germany, the US, England, and Amsterdam are more similar than ever before. Codes of conduct, language, training standards, and tools have all been standardized. One can do essentially the same job across country, even stay in the same company.
Now with virtual work this will only continue to become easier. Economics and social scientists theories that the new push to virtual work, will create a much more global mobile world (Research Gate).
Moving to another country has fewer hurdles than ever before. Virtual work, technological advances, and globalization are only increasing. And the recent shift to virtual work over COVID-19 has shown the world what is possible. 2019 to 2022 marked the largest increase in emigration from the US ever. Furthermore, currently, emigration is at an all-time high.
People are becoming less tied down. And increasingly, exit is becoming an option.
VIII: Looking into the future.
Americans are now able to look at moving more objectively. Like the dozens of expats I talked to in Germany, Americans are looking at the material differences between the quality of life in the US vs. other countries and making an educated policy-focused decision accordingly. The US’s political failures can no longer be masked by immobility.
Political activism and lobbying have largely failed to make a material difference. Voices of individuals are silenced in so many ways on so many levels (from party politics to corruption to general incompetence). The result is that America has infrastructure stuck in the 60s, no viable healthcare system, absurdly expensive education, high taxes, a mound of debt, growing inequality, swelling working hours, and an education system lagging behind the rest of the world.
When faced with America’s dysfunctional political system and general misuse of public funds, Americans are seeing a new option emerge: leave. Rather than spend thousands of hours seeking to get our voices heard only to have corruption and horrendous policy-making continue, leaving seems increasingly appealing to many Americans.
America needs to start paying attention. Those leaving are educated and wealthy — the very people America wants and needs to keep. No longer can America keep people trapped within its borders. America is finally feeling the effect of financial misuse and failure to provide a good quality of life. Similarly to how the Tiebout model keeps towns on their toes, hopefully, America will see these emigration graphs as a warning and a wake-up call.
And, as the current means of civilian political action fail, increasingly, it seems an ultimatum is the only way to make meaningful change: fix your government, or we will leave, taking your economy with us. Now that voices have failed to make the necessary change, the hope is that the growing threat of exit will.