Few issues in American political life have generated so intense a debate as immigration. The US Congress this year failed--twice--to pass an immigration reform bill. With no consensus on a political path forward, the issue remains very much alive.

The British author and economist Philippe Legrain has published a timely new book: Immigrants: Your Country Needs Them. In it he makes a powerful case for what is at the moment an unpopular cause. He recently sat for an interview with TCS editor Nick Schulz.

Schulz: Lots of folks in the US say something to the effect of "I have no problem with legal immigrants, it's illegal immigrants that are the problem." What do you make of that argument?

Legrain: I think the argument is back to front. Illegal immigrants are not the problem, they are the symptom of the real problem: immigration restrictions that are economically stupid, politically unsustainable and morally wrong. Far from protecting society, immigration controls undermine law and order, just as Prohibition did more damage to America than drinking ever has.

That immigrants are in the US illegally is a sign not of moral turpitude but of misguided government intervention in the labor market: since employers cannot obtain visas for foreigners to come work legally, immigrants have no choice but to come illegally instead. These generally hard-working and enterprising people's only crime is wanting to work hard to earn a better life for themselves and their children--the epitome of the American Dream. Without them, America would grind to a halt. Who would do construction work, clean dishes, hospitals and hotel rooms, and look after Americans' young kids and elderly parents?

In any case, even if you think the federal government should be banning immigration from poorer countries, it cannot enforce the law without turning the land of the free into a police state. That is something which no true American patriot would want. If only for pragmatic reasons, then, opponents of immigration should accept the case for looser controls and regularizing the status of the 12 million or so illegal immigrants.

Schulz: Advocates of firmer restrictions on immigration in the United States say that past historical experience with large waves of migration is not a useful guide. When Europeans came to the US, for example, they had an ocean separating them from their homeland. This helped foster assimilation. But with Mexican immigration, things are different since the homeland is only a river away. What do you make of this distinction?

Legrain: It is certainly conceivable that geographical proximity could be significant, but in practice I don't think it's decisive. The fact that Mexico is next door does not necessarily make it easier for Mexican immigrants to stay in touch with their country of origin: those who are in the US illegally, for instance, cannot readily travel back and forth to Mexico. And thanks to ethnic TV and radio, the internet, cheap telephone calls and low-cost travel, it is just as easy for Vietnamese or Russian immigrants to keep up links to their country of origin if they want to. Conversely, the Amish have been in the US for centuries with little contact with their Swiss-German origins and yet have remained isolated from mainstream society. So I think it's more a question of whether people want to fit in, and whether others are willing to accept them.

I devote a whole chapter of the book to considering Samuel Huntington's argument that Latino immigrants are splitting America in two and find little evidence to substantiate his thesis. To quote just a few facts, census figures show that only 4.2 million of those born in the US--a mere 1.8%--speak Spanish at home and English less than very well, while only 1.2 million of the 232 million people born in the US--one in 200--speaks Spanish at home and has poor or no English.

Huntington inveighs against Latinos trying to maintain their cultural heritage, but what's wrong with that? Being American does not require giving up your roots--and if there is no problem with Irish Americans celebrating St Patrick's Day, indeed with American presidents of non-Irish origin officially celebrating it too, what is wrong with Mexican Americans celebrating Mexico's national holiday on the 5th of May?

Huntington also warns of "the creation of a large, distinct, Spanish-speaking community with economic and political resources sufficient to sustain its Hispanic identity apart from the national identity of other Americans and also able to influence US politics, government, and society." But even in areas where Latinos predominate, America's defining institutions remain intact. The US Constitution remains in place. Democracy and other aspects of the American political system remain intact. Capitalism is thriving. People are still free, the media uncensored, private property protected, the courts uncorrupted. Nothing like Mexico, in fact.

Huntington also claims that "Many Mexican immigrants and their offspring simply do not appear to identify primarily with the United States." But while only one in three foreign-born Latinos describe themselves as American, this rises to 85 percent among their US-born children--and 97 percent among the US-born kids of US-born Latino parents.

Of course, Latino immigrants will change America, as well as being changed by it. But this is neither exceptional, nor need it fracture America's forever changing national identity.

Schulz: Lots of Americans wish we would pursue a skills-based immigration policy, to attract more talent and keep low-skilled immigrants out. This seems sensible on the surface. But you think it's more complicated. Explain.

Legrain: I certainly agree that the US immigration system is absurdly restrictive in granting visas to highly skilled foreigners, and that US companies suffer, or shift operations overseas, as a result. If you think that Google, Yahoo!, eBay were all co-founded by immigrants, and that nearly half of America's venture-capital-funded start-ups were founded by immigrants, keeping out foreign brainpower is a remarkably stupid policy.

But I disagree with the notion that the US only needs highly skilled immigrants, still less that they can be selected through a points system, as proposed in the immigration reform bill earlier this year. Bureaucrats cannot possibly second-guess the requirements of millions of US businesses, let alone how the fast-changing economy's employment needs will evolve over time. In effect, the points system amounts to government officials picking winners--a notion that is rightly criticized in industrial policy and elsewhere. And it allows nothing for serendipity: that people end up contributing to society in unexpected ways. Who would have guessed, when they arrived in the US as children, that Jerry Yang would one day co-found Yahoo! and Sergey Brin Google?

In any case, the US does not just need highly skilled workers, it still relies on low-skilled ones too. In fact, they account for over a quarter of US jobs. Every hotel requires not just managers and marketing people, but also receptionists, chambermaids and waiters. Every hospital requires not just doctors and nurses, but also many more cleaners, cooks, laundry workers and security staff. Many low-skilled jobs cannot readily be mechanized or imported: the elderly cannot be cared for by a robot or from abroad. And as people get richer, they increasingly pay others to do arduous tasks, such as home improvements, that they once did themselves, freeing up time for more productive work or more enjoyable leisure. Thus as advanced economies create high-skilled jobs, they inevitably create low-skilled ones too.

Critics argue that low-skilled immigration is harmful because the newcomers are poorer and less-educated than Americans. But that is precisely why they are willing to do low-paid, low-skilled jobs that Americans shun. In 1960, over half of American workers older than 25 were high-skill dropouts; now, only one in ten are. Understandably, high-school graduates aspire to better things, while even those with no qualifications don't want to do certain dirty, difficult and dangerous jobs. The only way to reconcile aspirations to opportunity for all with the reality of drudgery for some is through immigration.

Schulz: You argue that there are economic benefits to diversity. What are they?

Legrain: The economic benefits to diversity are two-fold. First, a greater variety of products and experiences for consumers, such as ethnic restaurants, fusion food, R&B music, or new holistic therapies that blend Eastern and Western influences. Second, and perhaps most importantly, diversity stimulates innovation.

As John Stuart Mill rightly said: "It is hardly possible to overrate the value, for the improvement of human beings, of things which bring them into contact with persons dissimilar to themselves, and with modes of thought and action unlike those with which they are familiar... it is indispensable to be perpetually comparing [one's] own notions and customs with the experience and example of persons in different circumstances... there is no nation which does not need to borrow from others."

It is astonishing how often the exceptional individuals who come up with brilliant new ideas happen to be immigrants. Twenty-one of Britain's Nobel-prize winners arrived in the country as refugees; nearly half of America's venture-capital-backed start-ups have immigrant founders. Perhaps this is because immigrants tend to see things differently rather than following the conventional wisdom, perhaps because as outsiders they are more determined to succeed.

Yet most innovation nowadays comes not from individuals, but from groups of talented people sparking off each other--and foreigners with different ideas, perspectives and experiences add something extra to the mix. If there are ten people sitting around a table trying to come up with a solution to a problem and they all think alike, then they are no better than one. But if they all think differently, then by bouncing ideas off each other they can solve problems better and faster. An ever-increasing share of our prosperity comes from companies that solve problems--be they developing new drugs, video games or pollution-reducing technologies, or providing management advice--and research shows that a diverse group of talented individuals can perform better than a like-minded group of geniuses.

The value of diversity comes into its own in societies at the forefront of rapid change. When countries are technologically backward, they can make huge leaps forward simply by copying what more advanced economies are doing. They may benefit from being culturally uniform, since this makes it easier for everyone to move forward in unison. Likewise, in periods when economic change is slow, more homogeneous companies and countries may find it easier to organize themselves efficiently than more diverse and fissiparous ones. But in advanced economies in periods of rapid economic change such as now, the value of diversity and the creativity it spurs comes into its own. That's why, as China catches up, America needs to open up further to foreigners in order to stay ahead.

Diversity also acts as a magnet for talent. People are drawn to places such as New York, Silicon Valley or London because they are exciting, cosmopolitan places. It's not just the huge range of ethnic restaurants and cultural experiences on offer, it's the opportunity to lead a richer life by meeting people from different backgrounds: friends, colleagues and even a life partner. Work by Richard Florida and others shows that knowledge workers prefer to work in culturally diverse places, and that is a big reason those places prosper.

Schulz: Let's stipulate there are economic benefits to diversity. Immigration critics worry about too much diversity putting pressures on the social order. Why shouldn't we heed their concerns?

Legrain: Well it depends what you mean by the social order. As an outsider, one of the things I find most attractive about the US is the fluidity of the social order, in the sense that you can arrive in the US penniless and end up a millionaire, and that more Americans tend to embrace change as a virtue than in most societies. At the same time, because, contrary to what Samuel Huntington claims, American national identity is based on civic values rather than ethnicity, the US is able to admit people from around the world and make them feel like they belong without losing a sense of what it stands for. More broadly, every society throughout history has had to strike a balance between individual freedom and social order, and I would say that individual freedom should be paramount, except where there are very strong reasons for restricting it. To be less abstract, if American society is broad enough to encompass Marxists and libertarians, Catholic nuns and transsexuals, eco-fundamentalists and Texan oilmen, surely it can find a place for immigrants too?

Schulz: Can we know what the right level of immigration is? How do we know?

Legrain: I don't think that "we", whoever that "we" might be, can determine the "right" level of immigration, any more than we can know the right level of international tourism, the right number of foreign business trips that should be taken or the right number of children people should have. What we can say is that because immigration controls restrict people's ability to move freely and companies' and workers' ability to reach mutually advantageous employment contracts, the current level and composition of migration is "wrong", in the sense that arbitrary controls stop some people from moving, cause others to migrate illegally, result in many people staying in the US longer than they would otherwise choose to do, and prevent the labor market operating efficiently and fairly.

Schulz: Many libertarians argue that you can't have free migration and a welfare state? Was Milton Friedman wrong and if so why/how?

Legrain: Milton Friedman was right on many things, but I think he was wrong to claim that you can't have free migration and a welfare state.

Admittedly, if people from poor countries are better off on welfare in rich countries than working in their country of origin, this could conceivably motivate them to migrate, and if enough poor people did this, a welfare state could become economically and politically unsustainable. But even in such cases, immigrants would still be even better off working than on welfare. So immigrants would have to be both enterprising enough to migrate in the first place but then suddenly sapped of enterprise once they arrive in a rich country. This is highly improbable--and there is no evidence, as even migration critic George Borjas concedes, that the US actually does act as a "welfare magnet" for people in poor countries.

Besides, even legal migrants' access to social benefits is increasingly restricted in most rich countries. In the US, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996, commonly known as the welfare reform act, cut off immigrants' access to federal public benefits.

If rich countries allowed free migration from poor countries, they could at the same time further restrict the availability of welfare so that only citizens or long-term residents could claim them. For instance, the British government has allowed workers from Poland and the other ex-communist countries that joined the European Union in 2004 to come and work freely in the UK, but barred them from claiming social benefits for two years. Likewise, although New Zealanders are free to move to Australia, since 2001 they no longer have access to social benefits until they become permanent residents.

Free immigration is compatible with a welfare state, not only because few migrants are likely to move to claim social benefits when they could be earning much more working, but because they can be--and are--denied benefits that are available to citizens and long-term residents.

Schulz: Another argument against immigration is that it is the most ambitious and driven members of poor societies migrate and thus leave their home countries unable to develop -- thus exacerbating the problems that drive larger migrations of people. Isn't there merit to this argument?

Legrain: Imagine you were born in a part of rural America where farming was no longer productive, or in a rust-belt town where the local factories had closed. How would you react if the local mayor said: "no, you can't leave and try to find a job elsewhere. You have to stay put in the interests of your town."? You'd think it was a shocking and unfair restriction on your freedom.

Now imagine you were born in a country where you are unable to make the most of your talents, where your freedom may be restricted and where you may fear for your life: dirt-poor Haiti, communist China, lawless Somalia or Mugabe's Zimbabwe, for instance. Would you really accept that you had an obligation to stay? I don't think so: nations do not have an automatic right to their citizens' labor; indeed, the Universal Declaration of Human Rights says that the right to leave one's country is a fundamental human right. So I would say that irrespective of the impact on their home countries, people should be free to seek work and a new life elsewhere, just as the residents of Mississippi are free to move to Minneapolis, irrespective of the impact on the economy of their home state.

But in any case, while it is true that the most ambitious and driven people tend to migrate, it is not necessarily, or even generally, true that this leaves their home countries unable to develop. Often, in fact, emigration acts as a spur to development: the departure of one in six Swedes for North America between 1870 and 1910, for instance, relieved pressure on the land, and drove up the productivity and wages of those who remained. It helped catapult Sweden from grinding rural poverty to prosperity within less than fifty years.

Nowadays, migrants from poor countries working in rich ones send home much more--$200 billion a year officially, perhaps twice that informally--than the $100 billion that Western governments give in aid. These remittances are not wasted on weapons or siphoned off into Swiss bank accounts; they go straight into the pockets of local people. They pay for food, clean water and medicines. They enable children to stay in school, fund small businesses, and benefit the local economy more broadly. What's more, when migrants return home, they bring new skills, new ideas and capital to start new businesses, boosting economic growth. Africa's first internet cafés were started by migrants returning from Europe

Even in the case of highly skilled immigrants, a "brain drain" need not be a bad thing. When Taiwanese engineers left to the US in droves in the 1980s, many worried that the nation would suffer. But now, many have returned home with new skills and contacts and set up businesses that trade with the US, while Taiwanese immigrants who have remained in the US also foster trade and technology transfer between the two countries, thus creating a virtuous circle of growth and enterprise in both countries.

Instead of lamenting the departure of their most talented citizens, developing countries should aim to make the most of their diaspora network. Even the breakaway republic of Somaliland, which is not officially recognized by most countries, has tapped the funds, expertise and contacts of its émigré network to set up the University of Hargeisa, the nation's first, enabling local students to obtain a college education without having to go abroad.

Schulz: If the US should emulate any other nation's immigration policy, which one would that be and why?

Legrain: I think the US would do well to emulate its own immigration policy of a century ago: its virtually open borders attracted the huddled masses whose efforts propelled the country from being a provincial backwater after the Civil War to the leading world power that it became after the First World War. More recently, the US's largely open border with Mexico until the 1960s attracted mainly temporary migrants, in contrast to the ineffective and counterproductive current efforts to keep out Latino migrants with ever more elaborate border defenses.

America should also take a leaf out of Europe's book: Britain's experience of opening its borders to the much poorer countries that joined the EU in 2004 has been overwhelmingly positive, so much so that most of the other rich EU countries have lifted their own restrictions on people from eastern Europe coming to work. All 75 million people there could conceivably have moved, but in fact only a small fraction have, and most of those have already left again. Many are, in effect, international commuters, splitting their time between Britain and Poland. Of course, some will end up settling, but most won't. Most migrants do not want to leave home forever: they want to go work abroad for a while to earn enough to buy a house or set up a business back home.

Studies show that most Mexican migrants have similar aspirations. If they could come and go freely, most would move only temporarily. But perversely, US border controls end up making many stay for good, because crossing the border is so risky and costly that once you have got across you tend to stay.

Schulz: What is your favorite immigrant story?

Legrain: There are so many that it's hard to pick one. Researching Immigrants: Your Country Needs Them involved traveling around the world and meeting lots of exceptional people. To mention just a few: Lasso Kourouma, who fled the civil war in Côte d'Ivoire and almost drowned trying to reach Spain on an overladen boat that sank, lived in the streets for two years because he wasn't allowed to work legally, but now has a job, a home, a wife and daughter and a new life; Inmer Rivera, whom I met in Ciudad Juárez, across the border from El Paso, Texas, who had made a perilous journey from Honduras in the hope of going to work in the US; Leonid Dinevich, a former general in the Soviet army who now uses his knowledge of radar technology to track and protect birds in Israel; or Elias Inbram, who trekked through the desert from Ethiopia to Sudan as a child to reach the Promised Land and has now made it through college to join the Israeli foreign ministry. They all have inspirational life stories--and I bet that many of the anonymous people we pass in the street without paying much attention to have equally inspiring stories to tell.

Nick Schulz is director of government relations at AEI.