Great piece in The Economist [subscription required], on the British government's new immigration plan, which explains concisely the problem I have with proponents of skills-based immigration restrictions:
Under the new rules, fewer low-skilled workers will be allowed in, while those with plenty of qualifications and experience will be welcomed, particularly if their skills fall into categories believed to be in short supply. A committee of experts will be assembled to determine exactly what those skills are.
This way of managing immigration has a respectable pedigree - sensible people such as the Australians and Canadians do it - but that does not mean it makes economic sense. Employers are better than governments at knowing what jobs are in short supply (as Australian employers discovered a while ago when the government got its sums wrong and left them with a critical shortage of doctors). If governments think that immigration is running at politically unacceptable levels, they should limit total numbers. Micro-managing the labour market is not the answer.
Until now, the government has been quietly and commendably liberal on economic migration, but now it is worried. It hasn't started building dykes, but is trying to channel the flow. That is a mistake: it risks ending up with a flood in one place, a drought in another and a policy up the spout.
Those who argue for such entry requirements simply assume it to be the case that such restrictions represent the most effective method of identifying the most suitable immigrants. It never seems to occur to them how this particular centrally planned system manages to get around the problem of information identified by Hayek. Such a system could no more predict the demand for, say, plumbers for the next year than it could the weather.