The West devotes vast amounts of money and effort to keeping immigrants out. Sheer stupidity, argues Nigel Harris, because this developed and ageing world depends on an influx of energetic young migrants for its wealth.

How long can we stomach the injustices inflicted on people who want to come to Britain? The worst cases - refugees left starving on the streets of London - are one thing, but a host of innocent visitors find themselves interned and expelled, treated as criminals, bullied and cross-examined. And, in the name of rooting out illegal immigrants, there are random police checks or workplace raids to accost anyone who looks like a foreigner. The world has come to take for granted the disasters - those recently drowned in the Mediterranean, the Mexicans suffocated in containers, dehydrated or starved in the deserts of Arizona or New Mexico.

It would be a barely tolerable story even if there were some real point of substance at stake, but there is none. The great myth of the threat of immigration is founded on a lie, and policies founded on this lie are to the detriment of the citizens of each country that practises them.

Common sense tells us that without controls, millions of poor people would swamp the country, driving down wages, forcing up unemployment, causing severe social conflict and - in the fantasy once offered by Enoch Powell - civil war. The nightmare scenario is the stock-in-trade of popular newspaper editorials and backbench speeches.

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Yet there is growing evidence that immigration benefits the receiving country, and that preventing immigration is economically damaging. But there is not much evidence that it is on the increase.

There has been freedom of movement in Europe since 1992, but little rise in the number of workers moving from the poorer south (Greece, southern Italy, Portugal, Spain - with unemployment rates officially over 20 per cent) to the richer north. Most people are very disinclined to face the hazards of leaving their homeland, and it is certainly not the poor who can raise the money to meet the fares. Contrary to the popular myth, it is not poverty that drives people out but job vacancies in the destination countries that attract the better-off. The tiny minority who do move, do so reluctantly and often for a specific purpose (for example, to raise the money to marry or put a child through school), and display what seems to an outsider an irrational eagerness to return home as soon as possible.

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Do immigrants increase unemployment and lower wages? There are now a host of studies - especially in the United States - that have been unable to detect any change in either respect. The reason is that, in the unskilled field, migrants rarely compete with nonmigrants for the same job - the immigrants do the jobs the natives have abandoned. On the other hand, there are many examples of the availability of immigrant labour expanding the demand for native workers. A 1980s study in Los Angeles shows how the supply of illegal Mexican workers for the garment industry vastly expanded it, thus increasing the need for Americans as designers, managers, technicians and so on. Miami, a run-down decaying city, was turned into a boom city by the arrival of a million Cubans, and southern France was lifted by the arrival of the pied noires after Algerian independence.

If immigrants are not available to do the jobs the natives have abandoned, the vacancies are not filled - and everyone suffers. This explains how, with tight immigration controls, one can have both high unemployment and a high level of unfilled vacancies -as, for example, in the kitchens of fast-food restaurants in big cities, in the New York and Paris garment trades, in North London school-cleaning departments. Indeed, the lack of one sort of labour can make impossible the employment of the skilled. Consider the 1989 case of a computer programmer in Singapore. When the government led a campaign to expel illegal immigrants, it took away her long-trusted nanny, so she was obliged to stay at home to look after her children. Everybody lost: the nanny and her family at home, the programmer and her children, and the Singapore government.

People forget that immigrants mean workers in the most energetic age groups, high-level skills and even capital. For example, a third of first-generation immigrants to Britain have a degree (compared with 12 per cent of the British-born). Immigrants start more businesses and hire more locally born workers than do the British-born. Here, 16 per cent of immigrants are self-employed, compared with 12 per cent of the British. And some do it rather well, creating Marks and Spencers, Tescos, Courtaulds ....

The reality makes a nonsense of the third anti-immigration argument: that they sponge off the welfare state. Welfare spending is concentrated on the very young and the old, so in general those in the active age groups, where immigrants are heavily concentrated, contribute more than they draw out. Of course, insofar as they have families and aged parents, they will draw on welfare, but still most studies show they contribute in taxes more to the welfare services than they draw out. And in the case of illegal immigrants, contrary to the fantasies of the citizens of California, they are usually so frightened of being apprehended, they draw least from the social security system (while continuing to be obliged to contribute taxes).

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But ought we to tolerate the bad conditions in the jobs immigrants take? Of course not, but it is the worst kind of hypocrisy to respond to bad conditions, not by trying to improve them, but by preventing immigrants having the opportunity to take them. This reduces the flow of remittances to developing countries, now very much larger than official aid flows, which immigrants send home.

And what of the social argument, that populations cannot absorb foreigners? Again some scepticism is in order, given the immense mixing of populations that has taken place over the centuries. Of course there have been riots, but remarkably few.

More astonishing is the absorptive capacity of populations - Pakistan or Iran, for example, taking in three million Afghan refugees each. Provided the government does not have a vested interest in pursuing scapegoats, the problems of adjustment do not seem in practice insuperable.

If the official economy is an ass, the unofficial economy (in this case, illegal migration) will expand. A global economy with free movement of goods, capital, finance and information cannot indefinitely tolerate the high cost of locking up its labour force in little ghettoes. Furthermore, the populations of Europe, North America and Japan are ageing. Not only are the total sizes of national population projected to fall, the active age groups will fall even further. But ageing leads to an increase in the demand for labour-intensive "caring" services. Where will the workers come from? Sooner or later, the developed countries will have to confront the reality that the welfare of their aged is set to decline sharply - unless immigration controls are relaxed.

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Nigel Harris is a professor at the development planning unit, University College London. On February 19 at 7.30pm he will present a BBC2 programme, Don't Fence Me In.