Bryan Caplan  

My Enthusiastic Support for Open Borders

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Delighted to see Noah Smith introduce Bloomberg readers to the case for open borders.  Two reactions:

1. When Noah describes the economic benefits of immigration, he makes it sound redistributive: Our GDP goes up because we gained people, which presumably means the sending countries' GDP goes down by the same amount because they lost people.  At least that's the natural way to read this passage:

The way to get 4 percent growth is open-borders immigration policy.

Gross domestic product is simply the product of output per person and the number of people. The more people in your country, the higher the output. That's why China, whose output per person is only about a quarter of the U.S.'s, is now the largest economy on the planet. It just has more bodies. 

The growth numbers you usually hear about in the news are total GDP growth numbers, not per capita figures. To boost those numbers, get more population. For example, when Great Britain conquered India, the GDP of the British Empire went way up. If the U.S. really wanted to supercharge its GDP numbers, it has a much better option than military conquest -- it could simply invite tons of immigrants to move here.

The point I'm confident Noah grasps, but fails to communicate: Due to vastly higher labor productivity in the U.S., U.S. GDP would rise more than sending countries' GDPs would fall.*  Any chance you can write a followup explaining this, Noah?  Please please please.

2. Noah generously hands me some free publicity, but what he says isn't quite right.
Exactly this sort of open borders immigration policy has received enthusiastic support from a dedicated core of libertarian economists, notably Bryan Caplan of George Mason University. These economists believe in relaxed immigration rules not because they want higher GDP growth, but because of principle -- they view national borders themselves as an unacceptable form of government intervention in the economy.
Actually, I believe in open borders for both reasons, and many others.  Yes, I have a moral presumption against regulation in general.  But regulations that impoverish billions are much worse than regulations slightly harm hundreds.

Noah continues:
The open borders crusaders are so zealous that moderate supporters of increased immigration, such as tech entrepreneur Vivek Wadhwa, are often the targets of their ire. University of Chicago economist John Cochrane has also voiced support for the open borders idea.
Here's what I previously said about Vivek:
I'm glad the world has moderately pro-immigration thinkers like Vivek.  I don't think the heretic is worse than the infidel.  Even baby steps towards open borders are steps in the right direction.
That's zeal?  That's ire?

* This is true even though U.S. per-capita GDP would go down!  Under open borders, both current residents and new arrivals would be richer.  The composition of the population would however heavily shift toward low-skilled workers. 

Example: Suppose initially, a country has 100% high-skilled natives earning $40,000 a year.  Low-skilled foreigners earn $1000 a year in their home countries.  After open borders, the U.S. population shifts to 50% high-skilled natives earning $50,000 a year, 50% low-skilled foreigners earning $10,000 a year.  All individuals are richer.  But U.S. per-capita GDP just fell from $40,000 (1*$40,000) to $30,000 (.5*$50,000 + .5*$10,000).




COMMENTS (29 to date)
James Hanley writes:

I always enjoy your arguments for open borders. Few things shock my friends as much as my support for open immigration. Or, being a pragmatic political scientist, as much immigration as possible without creating a violent backlash, given what seems to be inevitable nativism in humans.

Bosque writes:

Can't believe Noah Smith mischaracterized something.

ThomasH writes:

I did not read Noah to imply that immigration was a zero sum game.

Heck, even a policy of allowing open immigration of only high-skilled people would be a huge fillip to growth.

Free trade in medical care (reimbursing care provided abroad) that is subsidized by taxpayers could also be a pretty bid deal.

Massimo writes:

If you classify immigration limits as "regulations that impoverish billions" then you must also categorize private property laws in the same way. Why can some individuals raise their biological children in these happy family houses, while other children are raised in abuse or neglect? Clearly, denying the children raised in abuse full rights to transfer at will into the nicer family households irregardless of the wishes of the recipient family is precisely analogous to open border style immigration.

Harvard University denies admission to ~95% of applicants. Their right to deny admission is arguably also a "regulation that impoverishes billions." Employers deny employment to most job seekers. The legal structure that enables this is also a "regulation that impoverishes billions."

These are somewhat daft examples, but I also think it is daft to tell a ethnic tribal nation like Japan or Israel or the nations of Europe that they are obligated to embrace all foreigners and facilitate their own permanent extinction.

I have repeated these points as a mere commenter. Normally I don't like to do that, but the open borders proponents evade these points and hammer their elevator pitch points. Even comment replies offer half thought out replies and then cease to answer any follow up.

The statistics on immigration are wildly manipulated to promote the agenda. I know regular theoretical statistics well, but I'm not a professional credentialed academic or a skilled crafty debater type and I don't have formal pull, but it's obvious that the open borders crowd is wildly manipulating stats and evidence to advance their side.

David R. Henderson writes:

Nice, and needed, corrections, Bryan. It’s important to congratulate Noah while still making clear that he was sloppy.

Jameson writes:

Massimo, your arguments just aren't that strong. There is a long history of arguments showing that individual property rights have numerous benefits to everyone--they spur innovation, they lead to a rational distribution of resources, they are morally intuitive to each individual, and so on. But none of these are true of immigration restrictions. Indeed, innovation and better economic distribution are spurred by freer immigration, not by restrictions. And as for morality, consider that immigration laws impose restrictions not only on would-be immigrants but on people who would like to hire those immigrants. So in fact private property and immigration restrictions are in tension--I don't really have full rights to my private capital if I'm not allowed to hire whomever I wish.

As for "ethnic tribal nations," I think there are good moral reasons why there should be no such thing. Perhaps that is presently a radical notion, but as civilization progresses we have tended to erase or blur ethnic distinctions anyway, so one day there may be no ethnic nations left to argue about.

And as for no one replying to your comments, honestly, not every blog is a forum for comment threads. This blog typically gets lots of comments that do not turn into discussions. Bryan Caplan, as far as I know, never comments himself, which is perfectly within his rights. So, that's life.

MikeP writes:
These economists believe in relaxed immigration rules not because they want higher GDP growth, but because of principle -- they view national borders themselves as an unacceptable form of government intervention in the economy.

This needs to be called out for correction as well, as it is very mistaken.

The borders themselves are not an unacceptable form of government intervention in the economy. It's only the prevention of goods, services, capital, and individuals crossing the border that is an unacceptable form of government intervention in the economy.

National borders, being frontiers of sovereignty, serve the vitally important economic role of preventing other nations' laws and enforcement from crossing the border. Even an anarchy's borders are vitally important, as that's the point where government intrusion begins.

Carl writes:

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Massimo writes:

@Jameson,

Thanks for responding. People generally have rights to ignore whatever they want. And, sure ignoring individuals such as myself is generally excusable. But when a cause ignores major evidence and strongly counter points it develops a bad reputation and justifiably so.

"as civilization progresses we have tended to erase or blur ethnic distinctions anyway" Do you really believe that race has become less and less relevant in society and politics? Surely by 2015 you would never read or hear about race in housing or education or law enforcement or employment? This point seems absurd.

"I don't really have full rights to my private capital if I'm not allowed to hire whomever I wish." This logic goes for almost any law. Every law by definition inhibits the right to defy the law.

Conscience of a Citizen writes:
Example: Suppose initially, a country has 100% high-skilled natives earning $40,000 a year. Low-skilled foreigners earn $1000 a year in their home countries. After open borders, the U.S. population shifts to 50% high-skilled natives earning $50,000 a year, 50% low-skilled foreigners earning $10,000 a year. All individuals are richer. But U.S. per-capita GDP just fell from $40,000 (1*$40,000) to $30,000 (.5*$50,000 + .5*$10,000).

In that hypothetical example, what magical force gives the natives a 20% income boost?

Here is a much more reasonable hypothetical:

Suppose initially a country has 300 million citizens and 300 trillion dollars of industrial capital, so the capital-to-labor ratio is $1 million to 1. The average citizen earns $50,000 per year (overall return on capital of 5%).

Then 300 million immigrants arrive. The country's industrial-capital-to-labor ratio falls by half to $500,000 to 1. The average resident of the country (citizens plus immigrants) now earns $25,000 per year, because the overall return on capital is still 5%. Citizens are not pleased. (If the immigrants get only $10,000 each, the citizens get $40,000-- still a major reduction for them.)

The uncontroverted fact is that the overall ratio of industrial capital to labor strongly determines the per-capita GDP of a country (click to see). By definition, the total GDP is just the per-capita GDP times the population, so it is impossible to greatly increase either per-capita GDP or total GDP by adding masses of people without expanding industrial capital. Capital accumulates slowly.

You might offer a standard argument from theory that a drop in wages due to immigrant competition will increase return on capital. A 20% boost in return on capital could allow the 300 million immigrants to earn $10,000 yearly while citizens retain their $50,000 yearly (though they would lose their geographic amenities like parks and beaches).

Sadly, the immigration-boosts-productivity argument lacks empirical support. Globally, with minor variations due to innate human capital and/or luck like concentrated mineral resources, the relationship between industrial capital, labor, and income is linear. You simply cannot increase productivity very much by adding lots of people. (Even if lower wages boost the productivity of some capital assets, the impaired complementarity of low-human-capital labor reduces the productivity of other capital assets.)

Moreover, other evidence shows that you specifically cannot increase productivity by adding low-human-capital labor, which is what mass migration from poor countries to rich ones amounts to.* (The "demographic transition" still playing out around the world diminished the fertility of high-innate-human-capital populations earlier than low-innate-human-capital populations. The "rich countries" of today mostly have slowly-growing-or-shrinking populations of people with high innate human capital. The "poor countries" have populations of people with low innate human capital. Mass migration of from today's poor countries to today's rich ones will not increase productivity in the destination countries.)

The only way to boost overall incomes is to accumulate industrial capital. The only way to increase per-capita income is to accumulate capital. Moving people around simply will not do either. Yes, in the short run, the situation is zero-sum. It is positive-sum in the long run but not because of migration, only because of capital accumulation.

(Sometimes open-borders advocates tell citizens that immigration will boost their incomes because the availability of immigrant labor will "free" citizens to take higher-valued jobs. The open-borders advocates do not explain why, if there are higher-valued jobs to be done, citizens do not start doing them before immigrants arrive.)

*Adding a few unusually-productive people might slightly increase GDP with a given capital base, but the mass of people are not, by definition, unusually-productive. By the same token, adding some unusually-UN-productive people can decrease GDP on a given capital base.

_NL writes:

Maybe instead of focusing on the supposed weirdness of the open borders viewpoint, we should focus on the bizarre authoritarianism inherent in closed or semi-closed borders.

It's currently considered acceptable policy to chase down poor people and send them back to places they don't want to live, with higher levels of mortality, corruption, and repression, simply for the sake of rich people who are uncomfortable with relatively moderate cultural infusions that force them to press "1" for English.

The mainstream center-left position is that a small percentage of the descendants of foreign poor people, called "DREAMers," should be allowed to stay in this country. This is considered reasonable mostly because these people are so culturally assimilated that they are functionally native anyway.

The mainstream anti-immigration position is that we need to establish a nationwide monitoring system of employers and businesses that will further drive foreign poor people out of jobs, housing, banking, and education, then use military technology and tactics to keep poor people from crossing the borderland. This is considered "hardline" but not "fascist nightmare," mainly because it's considered unreasonable to label as fascist anything that 30% of Americans claim to want.

The mainstream, center-right, pro-immigration position is that it needs to be easier for foreign people to get special permission to come here, but only if they keep working or are rich enough to already have post-secondary degrees. This is often considered "an intolerable amnesty for law-breakers" instead of "still less than the bare minimum decency that all humans owe each other."

The politicians already agree that people who decide to re-domicile in the US have no human rights to live and work, so their arguments with each other are constrained to a small range of debate. They are arguing over how many human beings each year should be excluded, arrested, detained and deported. They argue over the procedural rules for rounding up the millions of people, and whether we should spend billions or merely hundreds of millions on our efforts to hunt down these rogue humans. They argue over whether it would be feasible to entirely exclude these people from all commercial services or only from certain civil privileges like driving and voting. Yet somehow, the few people who are against this war on re-domiciling are the ones considered to hold strange beliefs.

_NL writes:

I'll up the anarchist ante around here and say that, not only am I in favor of open borders, but I think migrants should as a general rule be allowed to vote in their place of residence. At the very least, for local and state elections.

Some brief grace period might not be so bad, like a period of residence of say 60 days or 6 months or whatever before you can vote. And maybe it'd be okay to have some limit against changing registrations to different jurisdictions too many times (i.e. so you can't repeatedly alternate between multiple jurisdictions purely to time elections).

I've been a resident in five states plus DC and able to vote in all of them, even when I knew that I intended to be a non-resident in less than a year. The idea that a migrant who intends to stay in a state for decades has a lesser right to vote than somebody who intends to decamp for a totally different state is just silliness. I question the notion that citizenship is a more important criterion for voter eligibility than residency.

Given that states claim the power to tax people and regulate their behavior, I think migrants have as much right as anybody to register opinions on those laws and taxes.

However, I think it'd be much better to allow free migration with no chance of voting rights than to allow current migrants to vote but not allow free migration.

AS writes:

The most common criticism I hear of the open borders argument is that immigrants have negative externalities in the way of increased crime. Do we have statistics proving otherwise? Those seem to be the most critical piece in the debate. You would also have to correct any such statistics for unreported crimes, though I'm not sure how one would even do that.

Also important are voting externalities in supporting bigger government. During the 2012 election, I heard a Latino voter, explaining his preferences over candidates, say on the radio, "Where I come from, we like socialism." Does that not worry libertarians at all?

Dustin writes:

And why is GDP growth via immigration interesting? GDP per person is what we're after, and it isn't at all clear to me that increased immigration improves the quality of life for current residents.

Mr. Econotarian writes:

(Sometimes open-borders advocates tell citizens that immigration will boost their incomes because the availability of immigrant labor will "free" citizens to take higher-valued jobs. The open-borders advocates do not explain why, if there are higher-valued jobs to be done, citizens do not start doing them before immigrants arrive.)

This is a comparative advantage issue. Child care, for example, is not scalable with technology, and not highly dependent on higher education. Someone who goes to college is unlikely to be much better at child care than someone who is a high school graduate, and frankly even those without a high school education can do a good job at child care.

The economy will be better if college educated parents can work at jobs that require college than if they stay home doing child care. Immigrants that can free up college educated workers to do college educated work increase the income of those college educated workers.

We all know that Ricardo showed that productivity is enhanced when all economic actors are engaging in the activities which they have a comparative advantage at. This isn't a theory, it is a mathematical fact. Immigration laws keep foreign and domestic workers from engaging in the activities in which they have a comparative advantage at.

David Cushman writes:

Alex,

Regarding your asterisk that "This is true even though U.S. per-capita GDP would go down! ": GDP per capita does not necessarily go down.

Assume a one-good, two factor world. The two factors are low-skilled labor = L, and high-skilled labor (or capital) = S. Because of diminishing marginal product of low-skilled labor, when the immigration occurs,

dL/L > dGDP/GDP.

So, GDP per unskilled worker falls (relative to GDP per unskilled worker in the receiving country prior to immigration).

But per capital GDP involves dividing GDP by P ("population"). P = L + S. So, we wonder about (dGDP/GDP) / (dP/P). Call this x. Is x less than or greater than 1. I take your asterisk to mean that it is less than 1.

However, after noting that dP = dL, we find that

x = (dGDP/dL)(L/GDP + S/GDP).

Now, if S is small enough, then the effect on unskilled L dominates, and x is less than 1. But, as we consider larger and larger S values, x rises, as the derivative of x with respect to S in the preceding equation is always positive.

Therefore, GDP per capita could rise with immigration. The rise in the average gain to the skilled offsets the fall to the unskilled if there are enough skilled workers.

Alternatively, one could consider GDP per original person in the country, and compare this before and after immigration. This clearly rises after immigration, as the gain to the skilled exceeds the loss to the original unskilled (there is more income earned by the same number of original persons).

Of course, this model is incomplete, as it does not take into account any long-run response in the supply of skilled persons to the rise in their real return . . .

E. Harding writes:

"Under open borders, both current residents and new arrivals would be richer."
-I don't see how most current residents would end up richer. Not all immigrants are low-skilled. There are many in Eastern Europe and China with quite decent skills. Inevitably, the labor-to-capital ratio is going to rise under Open Borders.

Bedarz Iliaci writes:

MikeP,
What is the point of having a border if prevention of goods, services, capital, and individuals crossing the border that is an unacceptable form of government intervention in the economy.?

The libertarians simply ignore that man has a political nature whereby he lives as organized into particular, self-ruling morally authoritative entities we call nations.

Bedarz Iliaci writes:

Massimo,
The argument made by Jameson is seriously incomplete since he fails to appreciate that private property only exists and can only exist in a state of law that is provided by a stable political entity.
This lack of recognition of political nature of man blinds libertarians to the role of nation-states.

The matter can be approached for various angles. To give just one instance, the economists' model of initial property acquisition depends on an individual mixing his labor with a previously unowned thing. But who decides how much labor needs to be mixed with a particular thing so that an ownership relation may exist between a person and a thing? Such a matter can only be socially determined. Some societies do not allow land to be privately owned, others may have other conditions on ownership. Thus, a social consensus i.e. tribal rule is necessary for private property to come into being.

MikeP writes:

Bedarz Iliaci,

The point of having a border is to keep other nations' laws and enforcement out of your nation.

Nations by definition separate territories of sovereignty, where the borders mark the boundaries of law and enforcement. There is nothing in that definition that precludes the borders being completely transparent to goods, services, capital, and people.

Borders between states in the US have a point too. And it isn't to prevent people crossing them.

David Cushman writes:

My demonstration above is incomplete. I showed that x, a value that shows whether a rise in L increases or decreases per capita GDP, rises as S rises relative to L. But I did not show that it ever actually exceeds 1.0, required to make my case. Here is a simple example to show x can exceed 1.0.

Assume the constant returns to scale production function

GDP = (S*L)^1/2.

Let L = 10 and S = 40. Then GDP = 20 and GDP per capital = 20/(10 + 40) = 0.40. The value of x in this case is 2.50.

Now suppose L rises to 11 from immigration. GDP rises to 20.98 and per capita GDP rises to 20.98/(11 + 40) = 0.41.The rise in the return to S has more than offset the fall in the return to L.

RPLong writes:

@ Massimo, you write:

Thanks for responding. People generally have rights to ignore whatever they want. And, sure ignoring individuals such as myself is generally excusable. But when a cause ignores major evidence and strongly counter points it develops a bad reputation and justifiably so.

If you are aiming this criticism at advocates of Open Borders generally, then I think you might be very unfamiliar with the website at OpenBorders.info. That website addresses virtually every argument made both in favor of and opposed to open borders.

I'll include some links relevant to the arguments you made in your original comment:

1) "If you classify immigration limits as "regulations that impoverish billions" then you must also categorize private property laws in the same way."
Open Borders advocates have responded to this argument here: http://openborders.info/collective-property-rights/

2) I also think it is daft to tell a ethnic tribal nation like Japan or Israel or the nations of Europe that they are obligated to embrace all foreigners and facilitate their own permanent extinction.
Open Borders advocates have responded to this argument here: http://openborders.info/culture-clash/

Please note that the above links are mere introductions to the Open Borders response. Searching the OpenBorders.info website for those specific claims will yield multiple blog article responses to each, as well as to many other objections you may raise.

My point is not that your opinion is wrong, but merely that it would not be fair to suggest that advocates of open borders are ignoring the countervailing arguments.

I can think of no other movement that has done as much work to respond to counter-arguments (and to document counter-arguments) than the open borders movement. Could you, after exploring that website a bit, disagree with me on that point in earnest?

Ryan writes:

Open Borders folks should probably develop a position on issues like this one in the United States:

http://articles.latimes.com/2013/jan/25/local/la-me-0126-compton-20130126

Or this one in Sweden:

http://swedenreport.org/2015/05/18/police-yes-there-are-no-go-zones-in-sweden/

Surely you all cannot believe every nation has a moral duty to allow itself to be conquered. I suppose just take the MikeP route and say ah but that's not within the definition of conquest?

Bedarz Iliaci writes:

MikeP,
Borders between states in the US have a point too. And it isn't to prevent people crossing them.
Naturally, since they are not national borders.. The states have not been sovereign since 1865.

Libertarians regard nations as, at best, administrative (in)convenience. The nations are not just parcels of separate law and enforcement agencies. They have differing laws because different people live there.

Your idea is of fungible people. But the political view of man divides mankind into (A) neighbors and (B) strangers. The neighbors share a certain cast of mind that includes loyalty to their nation. This primary loyalty generates
A) the law
B) the enforcement agencies that may be expected to obey law i,e. are not bandits themselves.
c) Mutual loyalty of the citizens. A certain minimum is needed to form a functioning society.

Have you read Kipling's poem The Stranger. I wonder what would you make of it.

Ali Bertarian writes:

While those of you with green eyeshades are busily trying to compute how many more goodies can be generated within the borders of the US by allowing everyone on Earth to walk across the border, you ignore the political fact that we don't have a libertarian democracy, we have a communal democracy in which every citizen can vote on everyone else's property and person. We have no individual rights that can not be taken away by the voters under our Constitution. If the voters want to repeal your individual right to free speech, then they may do so by electing like-minded representatives who would repeal the First Amendment – so that the individual right to free speech will have the same respect as in most of the countries on Earth from which immigrants come.

Check Figures 1-4 at http://www.cato.org/publications/economic-development-bulletin/political-assimilation-immigrants-their-descendants to see that immigrants to the US are overwhelmingly Democrats. Will any of you claim that Democrats are the best defenders of individual rights to the exclusion of the "public good?" You may have more goodies for a few years, but how much individual freedom will your children and grandchildren be allowed by the people of the rest of the world, who are not so concerned about individual rights as we are?

Why would a real libertarian cede the only real power that he has to protect his individual rights by freely allowing more people to have the opportunity to take his property and control his person from the voting booth?

Conscience of a Citizen writes:

Basic physics has the "frictionless surface." Microeconomics has "perfect competition." And it seems that open-borders advocates have "unlimited industrial capital." All are ideal conditions (listed here in order of increasing unreality) under which some simple rule easily explains the behavior of a system.

Of course reality is more complicated, but either axe-grinding or the lost-keys/streetlight effect tempts people to substitute ideal models for less convenient ones, especially in advocacy writing.

David Cushman nicely demonstrates how adding labor to an economy with unlimited capital can increase GDP. However, his production function has constant returns to scale only because he omits to account for K.

Mr. Econotarian's views are similarly untethered from reality. Comparative advantage works on traders' opportunity costs. A simple immigrant-citizen-trade model which neglects capital constraints (and the fact that real-world national populations already include many underemployed people) offers no useful predictions.

The child-care example is rhetorically attractive because such labor seems to require no capital. However, demand for child care is tightly constrained (only about 11% of the US population is 5-13 years old) and most citizens have a very low opportunity cost of child care. To find gains from comparative advantage we must look beyond child care. If we look at people engaged in market labor now, their opportunity cost (of not searching for and taking another job) compared to the value of their current job is close to zero. Mass immigration can't improve that because less capital-per-worker means less productivity, which means lower pay for workers, which means citizens' opportunity costs (of staying in their present jobs) would decrease rather than increase.

("Comparative advantage" is not some magic elixir which can overcome capital constraints. If it were then it would eliminate domestic unemployment immediately with no help from immigration.)

(Of course mass immigration might create more jobs like police officer, prison guard, and welfare worker for citizens, but on a national-accounting level such jobs have negative productivity and their wages are properly subtracted-from, rather than added-to GDP.)

David Cushman writes:

Regarding the comment on my entries by Conscience of Citizen (CC):

My point was to provide a counter example to Bryan's idea that GDP per capita would fall with an influx of unskilled labor, which I did. Meanwhile, CC thinks I assumed unlimited capital, but there was actually zero capital in the model. (Not counting the human capital embodied in the skilled labor.) Nevertheless, CC apparently wants a production function that does have explicit capital as well as unskilled and skilled labor, and also has constant returns to scale. OK, here is one. L = unskilled labor, S = skilled labor, K = capital. GDP = (L*S*K)^(1/3). Population = L + S. Start with L = 2, S = 10, K = 10, GDP per capita = 0.49. Let L rise to 3. GDP per capita now = 0.52, an increase.

It does not mean everyone necessarily benefits. The original unskilled labor in the country experiences a fall in its wage rate. The skilled labor enjoys a rise in its wage, and the return to capital rises (the owners of capital are some mix of the skilled and unskilled labor). And incoming labor benefits, getting a higher wage than in their original country..

Frank Page writes:

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Federal Farmer writes:

So, as an advocate of open borders, are you also an advocate of the so-called North American Union?

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