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Author: Ryan Mitton, The London Globalist Frequent Contributor

Denmark has recently made headlines by approving policy to confiscate the non-personal valuables and assets worth over 10,000 Kroner from refugees upon their arrival in Denmark. Reaction to the news has been split, with opponents likening the move to stripping jewellery from Jews during the Holocaust. Having also called for the end of the 1951 UN Refugee Convention, the right-leaning Danish government has staunchly defended the move, stating that the policy is modeled on the treatment that Danish welfare recipients would receive. In doing so, the Danish government is attempting to recover the costs related to taking on refugees.

So how legitimate is the idea of recuperating the refugees’ costs upon their arrival?

Entry fees for naturalization is no new idea. On the matter of immigration,
libertarian economist Gary Becker has notably proposed doing away with immigration restrictions in the US by instead instituting an immigration fee – one he prices at $50,000. Naturally, these fees would go towards salvaging the costs of immigration. As to the massive price tag, Becker envisions that immigration loans would make this affordable, just as student loans allow us to attend expensive universities. Without immigration restrictions, the market sorts everything out in an equitable manner. Economists such as Becker label this an equitable solution.

The fairness of charging an entry fee to immigrants (or refugees) depends on the existence of choice under market conditions. This requires consumer sovereignty, clarity of information, and competition, among other things. These factors are not evident in the matter of immigration, and it is impossible to have them for refugees. refugeesFor some, freedom of movement within the Schengen Area could approximate a market for choosing a life within its respective member European countries. This is certainly captured by cynical attitudes accompanying “economic migrant” terminology. For refugees, choice is not an option, information on safe harbour is limited, and there is only a begrudging obligation aid them from a slowly crumbling alliance of Schengen-Area nations. Policies such as Denmark’s precipitate from false assumptions of market-based decisions by refugees entering the Schengen Area. There is little that is fair in that.

Let’s turn now to the welfare argument.

While it is true that those making use of Denmark’s welfare system must first give up what likely little savings they have left, this does not include valuables and tangible items as it does with refugees. Beyond this differential treatment, two further problems undermine the policy. The first is its enforceability. Police officers cannot function as appraisers barring significant training. This means that is feasible for the 10,000 Kroner threshold to be under or over-applied upon the search of refugees. Furthermore, it is possible that the transaction costs from organizing officers to adequately identify, evaluate, and liquidate assets over this threshold could minimize or even surpass the actual monetary benefit of assets seized. This search and seizure approach to recuperating refugee costs will also drive resistance underground and likely engender defiance. This would make integration efforts with other government programs and Danish society rather difficult.

Secondly, the necessity of seizing assets over a particular threshold upon arrival signals that not only should refugees have little to offer, but that they shouldn’t have more than the threshold – as though that is somehow wrong. Are you more likely to require initial assistance when you have had to flee your war-torn home country? No doubt. But this policy normalizes perceptions of refugees as impoverished burdens on society. A majority of economists agree today that immigration influxes have a net-positive impact for nations in the long-term, overtaking the cost of initial capacity stress on existing social welfare structures (even then generally held to be near zero). New arrivals to nations often take up complementary work to the existing population, instead of competing for jobs. Everyone wants to be successful, and the long-term tax benefits far outweigh the initial costs.

However, in a subconscious act of discounting, it appears the Danish government would rather have its money now than later. It makes little fiscal sense to create additional obstacles to refugees investing in Denmark once they have fully settled. Money that would otherwise go directly to communities is instead confiscated for government use – an illiberal consequence from what is otherwise being sold as fiscal prudence.

The ultimate rationale for Denmark’s refugee asset forfeiture laws has little basis in sound economic policy. Instead, it is founded on an uncomfortable preconception of refugees as burdens without agency. The duality of the refugee as both a drain on the welfare society, whom, upon taking up a productive role as a worker, suddenly is taking away a job opportunity leads to oppositional policy such as Denmark’s recent legislation. In reality, seizing refugee assets is just another informal border creating cracks in the Schengen Area.

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