Hoppe begins Chapter 7 with the classical argument in favor of free immigration-an argument he thinks is irrefutable: "Other things being equal, businesses go to low-wage areas and labor moves to high-wage areas, thus affecting a tendency toward the equalization of wage rates (for the same kind of labor) as well as the optimal localization of capital." He acknowledges that an influx of immigrants may drive wages down, but counters that the local population is so benefited economically by the increased output that the economic benefits outweigh the lost wages.
He rejects the argument opposing free immigration due to the existence of the welfare state. There is an argument to be made against the welfare state, but that is separate and distinct from the one against immigration.
Instead he proposes two ideas:
(1) that "what constitutes 'wealth' and 'well-being' is subjective-this is the standard Austrian understanding of value. Material wealth is not the only thing that has value. Thus, even if real incomes rise due to immigration, it does not follow that immigration must be considered good, for one might prefer lower living standards and a greater distance to over people;" and
(2) that the classical argument does not address who, if anyone, owns (controls) the territory to which the immigrant moves. The classical case assumed that the territory was open frontier, not previously homesteaded by anyone. Since this is no longer the case in the Western world, free immigration must be rethought.
Hoppe begins by established a theoretical framework in which society is ordered as an anarcho-capitalist society. In such a society "[a]ll land is privately owned, including all streets, rivers [roads, etc. and the title thereto]....may be unrestricted, that is the owner is permitted to do with his property whatever he pleases;...[however, with] respect to other territories, the property title may be more or less severely restricted...." and the owner will be strictly curtailed in what uses he may put the property to and to whom he can convey it. In this "scenario no such thing as freedom of immigration exists....owners have the freedom to admit or exclude others from their own property in accordance with their own unrestricted or restricted property titles."
Hoppe posits that the restrictions can be as broad as the owners choose and address issues not only of use but of the ethnicity of the permitted ownership. Such restrictions, however, are not intended to limit the ability of owners to trade with others (an activity which Hoppe posits would be fostered), but are intended to end "forced integration."
"In an anarcho-capitalist society there is no government and, accordingly, no clear-cut distinction between "'inlanders' (domestic citizens) and foreigners." The government changes this dynamic by: (i) prohibiting the inlanders from excluding the government agents from the inlanders private property (access is necessary so that the government is able to enforce taxation); and (ii) increasing the number of roads (so that all taxable property can be reached). The consequence of the excessive road building is that localities are forced to accept those whom the residents of the territory would not otherwise invite onto their property (forced integration). Further, by issuing (or refusing to issue) passports, the government can enforce segregation when and on whom it chooses.
Parts V and VI
Hoppe returns now to the concept discussed in Chapter 3, the difference in private and a public government when dealing with immigration. The private government will be striving always to increase the value of his realm, i.e. the monarch will seek to keep the non-productive out and encourage the productive members to stay. A public government's self interest is to maximize "monetary and psychic income; money and power;" therefore, its focus on immediate gratification as opposed to long term goals will result in a quite difference policy.
The public government realizes that the unproductive as well as the productive have one vote and the unproductive ones are likely to be the biggest supporters of the public government's egalitarian policies. The result is a policy of forced integration of foreigners "onto domestic property owners who, if the decision were left to them, would have sharply discriminated and chosen very different neighbors for themselves." The policy of forced integration, of insisting that unlike peoples live in close proximity, predictably result in increased social tension and anomie, which serves only to empower the government as the arbiter of all disputes.
Hoppe concludes this Chapter by noting that the current policies of the US and Europe have nothing to do with "'free' immigration. It is forced integration, plain and simple and forced integration is the predictable outcome of democratic-one-man-one-vote rule. Abolishing forced integration requires the de-democratization of society and ultimately the abolition of democracy." In its place, he proposes reliance upon the principals of decentralization and secession to return power to localities, associations and individuals.