Free Trade as a Cause of Racism

As I was pondering the effects of allowing free trade to, as Stiglitz would want, be both "fair" and "free," I came upon a problem. As we discussed in class, the free movement of people is a sticky subject. It becomes very emotional, security issues are created, and just about everyone can agree it is not feasible at the current time even though it would prove beneficial for society as a whole according to pure economic theory. As I said, while thinking this problem through, I saw another issue that has been arising throughout the world due to the movement of people, although not free, becoming easier than ever. Racism against incoming people is rising incredibly in the countries that acutally have a need for cheap labor to do the jobs they do not want themselves. For specific examples, I will cite Denmark and Holland. In Denmark, there is a strict divide between Turkish immigrants and ethnic Danes. Separate living areas, distinct differences in education and income levels, as well as very separate cultures is creating a hatred that is reminicent of the United States during the days of Martin Luther King Jr. With such a homogenous society as Denmark has, full of blond haired and blue eyed children living in what the UN would describe as the happiest possible country in the modern world, it becomes easy to spot someone who doesn't belong. Is it simply these physical differences that are creating problems? Or is it the open nature of the Danes, with their newspaper cartoons making fun of Allah that is antagonizing the Muslim communities that have come to Denmark?
In Holland the problem is similar. Moroccan immigrants are being discriminated against in every aspect of life. However, there is also a crime wave whose proportion has never been seen in the Netherlands. Moroccan loverboys are kidnapping Dutch girls and selling them into slavery, women's bikes are being stolen from their back yards, and areas with only a single police officer are having their stores robbed on a monthly basis. The prime minister has admitted that Holland simply does not have enough police officers to combat this new level of crime. Their jail cells are empty, in fact they are even considering leasing their jails to Belgium for it to hold its criminals in. However, crime continues to spread. Amsterdam is no longer a city where people can go for a fun night on the town. Now Dutch teens must be constantly aware, looking for where the attack could possibly come. With Rotterdam being one of the first major cities in the Western World with a Muslim leader, is this an example of democracy showing the two conflicting cultures can actually live together in harmony, or is it an attack from the outsiders whose steadily growing numbers allow them to seize power at their own wills? Could democracy's very ideals be its Achille's heel? If a nation created around democratic ideals becomes dominated by a group of people who prefer a more extreme form of government, in this case perhaps Muslim rule, can those who created the ideals do anything to stop the demise of their culture?
Racism is an ugly thing. It is not beneficial to anyone. It slow economies, splits cultures, creates violence, and is generally harmful for everyone involved in it. However, when immigrants refuse to assimilate into an existing culture, what is to be done if they become hostile? How can two cultures with such different ideas about the world come together in a single harmonious society? If the answers to these questions come to you, feel free to share because there may be a Nobel Prize awaiting you.