Good question. Here's my attempt at a 'free market' answer: When you import capital, the cost of that capital is borne by a single individual. When you impor

Good question. Here's my attempt at a 'free market' answer: When you import capital, the cost of that capital is borne by a single individual. When you import labour, the cost is spread amongst society. Consider a US farmer who sells part of his farm for UK pounds. The price is paid by the farmer and no-one else. But now imagine the farmer wants to import a rural Indian laborer to work on his farm. The farmer pays wages but other US citizens must either (a) provide hospitals, schools, and roads for the labourer; or (b) bear the costs of letting the laborer live in abject poverty (eg. slums, higher crime rates, environmental damage). In true 'free market' fashion US citizens may decide that those costs outweigh the benefit of slightly cheaper farm produce, and so the labourer is denied entry into the US. This is not a restriction on free trade but simply the result of supply not matching demand. Perhaps a purely free market approach would be to charge an 'immigrant fee' which equals the present value of (a) the expected cost of providing social services and infrastructure to the immigrant; less (b) the total expected tax receipts from the immigrant. An Indian labourer might not be able to pay the fee, but a computer programmer from the UK probably could. In fact, if the expected tax receipts were larger than the expected costs to society, the US might pay the programmer to immigrate!