Notes on the economic theory of expulsion and expropriation

The paper is designed to provoke discussion of the circumstances under which expulsion of aliens from an economy can increase the total income of the remaining residents. The presumption, based on a first approximation assuming competitive equilibrium and convex constant-returns-to-scale production technology, is that expulsion cannot increase total citizen income and may diminish it, unless it is accompanied by expropriation. How this presumption might be modified or reversed by failure of its assumptions is discussed. The most important possibility is that aliens held monopolies in high marginal product occupations from which qualified or potentially qualified citizens were excluded. Readers are invited to speculate about other possibilities, including dynamic effects and changes of social psychology, which cannot be analyzed with the techniques of static economic theory used here.