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There are nevertheless a number of modern policy lessons that can be learned from Allen's analysis. First and most obvious, trade is essential to rapid economic development. By allowing rapid arbitrage between high cost areas and low cost areas, it generates capital accumulation, which lubricates other economic activity. A world in which trade becomes bureaucratized and atomized lessens the possibilities of new wealth generation both directly through placing barriers to economic system optimization and indirectly through lessening the accumulation of capital.
While rapid arbitrage of goods through free trade is highly desirable, rapid arbitrage of labor through free migration is not. No society where unskilled labor is in excess supply has ever been able to use that labor to improve its wealth. Undifferentiated low-cost human labor has been in excess throughout the vast majority of humanity's experience; it is only labor scarcity and skill that have raised mankind's living standards above the Malthusian level. Low-skill, undifferentiated labor does not pull up its own living standards, though if its supply is limited, its living standards may be raised by the efforts of others.
While rapid arbitrage of goods through free trade is highly desirable, rapid arbitrage of labor through free migration is not. No society where unskilled labor is in excess supply has ever been able to use that labor to improve its wealth. Undifferentiated low-cost human labor has been in excess throughout the vast majority of humanity's experience; it is only labor scarcity and skill that have raised mankind's living standards above the Malthusian level. Low-skill, undifferentiated labor does not pull up its own living standards, though if its supply is limited, its living standards may be raised by the efforts of others.