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Originally posted by Aeson
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The hypothesis that poor people, in general, contribute to greater velocity of money than rich people do, though, is probably untrue in most cases. Rich people, who have no need to "spend" the money, will instead give it to companies, such that the companies can spend it on new capital. This is the means by which both savers and consumers create demand for goods, and this is why cash doesn't actually accumulate in the hands of the rich. Bonds, equities, real estate? Yes, the rich own that. But the dollars bounce around the economy just fine.
The left has long taken up elaborate, pseudoscientific arguments in economics that nobody at a decent econ department (like the one I graduated from) would ever take seriously. All of them are centered around the idea that the economy's livelihood depends on kludgy attempts at redistribution to the poor. None of them is accurate. The economy can reach full employment building basically whatever it wants. Pharaoh probably had Egypt close to full employment.
Instead of doing this, the left should be the hedgehog, who knows only one very good trick - and that is to argue that a dollar's worth of consumption matters much more to the have-nots than it does to the haves. You intuited this somewhere in one of your posts; it's obvious, since people buy things roughly in order of importance - starting with clean water and clothing, and ending with those ridiculous things in Skymall magazine. This argument is ironclad. The left should hammer away at its one excellent argument, rather than devising ones that are, frankly, anti-scientific and anti-intellectual.
It's no secret how to help those who consume the least. You don't make them pay taxes. You implement progressive consumption taxes, or at least progressive income taxes. Maybe you even give them an earned income tax credit. You also give them some money earmarked for essentials like food. Incidentally, this is more or less what we already do for the US poor.
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The main thrust of my argument is we don't necessarily even have to wait for politicians to get rid of stupid immigration laws to see much of the potential benefits. We don't have to actually move someone across a line to give them an opportunity to be more productive. The benefits of having workers in more productive jobs (nominally) can be had anywhere in the world, and at least in some cases to better effect than if we imported them to the US to do the same work for the same pay.
This is where your definition on "productivity" goes awry. Obviously an American manual laborer, if anything, does less work than a manual laborer in South Asia, and yet he is paid much more. You're right to see this as unnatural, and you're right to see it as a consequence of borders.
But economic productivity isn't how hard you work, or whether you're a man of good character. It's how valuable the service you provide is to the people who pay for it. Americans can do manual labor in a safe, prosperous country with a reasonably non-corrupt rule of law. As Jon mentioned, South Africa is not safe. Around the world, governments can be appallingly corrupt. The best service that South African laborers can provide, sadly, is manual labor in an unsafe, average-prosperity country with some serious corruption problems (which Jon also mentioned.)
That is legitimately a less valuable service - through no fault of the workers. People should find the best ways to employ South Africans. They should bid against each other, raising the market wage. If you care about South Africans, you shouldn't be concerned about the few employers who are hiring in South Africa, you should be more concerned about the many who aren't.
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