Cafe Hayek

Benedict and Lou

Today's Wall Street Journal reports that CNN's Lou Dobbs is angry at the Pope for speaking out in favor of immigration during the recent Papal visit to America.  According to the WSJ, Mr. Dobbs fulminated that "I really don't appreciate the bad manners of a guest telling me in this country and my fellow citizens what to do."

Memo to Mr. Dobbs: I really don't appreciate your bad-mannered habit of incessantly telling me, my family, and my friends what to do.  If we want to hire - or to befriend, or to live with, or simply to enjoy as neighbors - non-Americans in our own hometowns, you rudely tell us that we should not be allowed to do so. You insult us with myth-laden bombast and uninformed accusations.  The Pope, in this case, spoke out for greater freedom of association; you continue to champion obnoxious restrictions on this important freedom.

Higgs of Louisiana (via Washington State via PA via Maryland via ....) on Immigration

Patrons of the Cafe know of my great admiration for Robert Higgs, as both a scholar and a person.  Bob edits -- with much creativity, energy, and scholarly wisdom -- the Independent Institute's splendid quarterly journal The Independent Review, and has a long corpus of work, chiefly in economic history.  Here's Bob's most recent essay.  In it, he eloquently defends immigration -- and, in the process, challenges many of the most fundamental myths of modern politics.  Here's a paragraph to whet your appetite:

Lest you wonder about the point of this mundane little narrative, I hasten to emphasize that my father had done something quite remarkable: he had left the sovereign state of Oklahoma, crossed the sovereign states of Texas, New Mexico, and Arizona, and entered into and established permanent residence in the sovereign state of California, all without the permission of any of the rulers of these states. Imagine that!

The Benefits of Immigration

I'm pleased to find that this ten-year-old short article that I'd written on immigration (for the Foundation for Economic Education) is today posted at a website for immigration lawyers.  It's here.

Here's an early paragraph:

Each immigrant comes to America to make himself better off. Suppose government no longer redistributes income to immigrants. Would immigrants still relocate here? You bet! A handful will come because some Americans are willing to use their own resources to care for them. Most immigrants will come because each has sufficient skill and ambition to profit in the market.

Illicit Use of "Illegal"?

Law -- what it is, where it comes from, how it changes -- is not as simple a concept as many believe it to be.  The modern popular myth is that law is created by government, so that in democratic countries, law is created by The People exclusively through their representatives.  Statutes and regulations duly enacted by the state are, under this view, "the law."

This account of the law is grossly incomplete.  Much law (I would argue most law) emerges spontaneously in the course of multitudes of human interactions and is never -- or only after the fact -- written down in a statute book.  In addition, much "law" that is written in statute books truly isn't law in any operational sense.  (Is it really unlawful to jaywalk?  Or to drive at 60 mph on a highway whose posted speed limit is 55 mph?)

Greater recognition that promulgation by the state is neither a necessary nor a sufficient condition for a rule to become law would make the current debate over immigration much more fruitful and much less shrill.  (So, too, would the recognition that violation of some laws are more serious than are violation of other laws.)

This essay by Lawrence Downes appearing in Sunday's New York Times makes an important point.  Here are the opening paragraphs:

I am a human pileup of illegality. I am an illegal driver and an illegal parker and even an illegal walker, having at various times stretched or broken various laws and regulations that govern those parts of life. The offenses were trivial, and I feel sure I could endure the punishments — penalties and fines — and get on with my life. Nobody would deny me the chance to rehabilitate myself. Look at Martha Stewart, illegal stock trader, and George Steinbrenner, illegal campaign donor, to name two illegals whose crimes exceeded mine.      

Good thing I am not an illegal immigrant. There is no way out of that trap. It’s the crime you can’t make amends for. Nothing short of deportation will free you from it, such is the mood of the country today. And that is a problem.

America has a big problem with illegal immigration, but a big part of it stems from the word “illegal.” It pollutes the debate. It blocks solutions. Used dispassionately and technically, there is nothing wrong with it. Used as an irreducible modifier for a large and largely decent group of people, it is badly damaging. And as a code word for racial and ethnic hatred, it is detestable.

A Note On My Anti-Anti-Immigration Argument

Since the appearance of this column of mine, on immigration, several friends (as well as non-friends) have accused me of ignoring the fact that Milton Friedman, Thomas Sowell, and some other free-market advocates oppose more-open immigration.

Fact is, I mentioned no names in my column.

I have long been aware that that Friedman, Sowell, and others whose positions I generally respect have spoken out against immigration.

But let's be clear.  In the case of Milton Friedman, his only reason for opposing more-open borders was the existence in the U.S. of a welfare state.  Friedman emphatically did not make the anti-immigration argument that I criticize in my column.  (And he would not have made that argument.   Just before he died, I asked him by e-mail if he'd favor a return to  the pre-1920s immigration regime if the U.S. abolished its welfare state.  He wrote back saying yes.)

Nor is Thomas Sowell's opposition to more-open immigration based upon the argument that I take issue with in my column.

There are, of course, many different possible reasons for opposing immigration, some more plausible than others.  The alleged reason that I challenged in my column is just one such reason -- a reason that I continue to find illogical and downright bizarre.

A Libertarian Case for Restricting Immigration?

My latest column in the Pittsburgh Tribune-Review will bring me plenty of hate mail; one cannot endorse more open immigration today without causing unjustified fury.

Tom Palmer's related post from several years ago is especially worth reading.

Grateful for Immigrants

Do you think that immigrants working today on the countless efforts to rebuild my hometown of New Orleans are "stealing" jobs from Americans?  Are a scourge?  Are welfare bums?  Think again -- as this op-ed in today's Wall Street Journal will cause you to do.

It is by Mario Villarreal and Dan Rothschild.  (Dan is a friend of mine who works with my wife at the Mercatus Center at George Mason University.)  Here are some key passages:

Shortly after Katrina hit, while the majority of the city's residents were still in exile and despite inhospitable conditions, a stream of Latino workers and entrepreneurs poured into New Orleans. They were followed by friends and family. There are now perhaps 100,000 Latinos in the New Orleans area, although nobody knows for sure.

Pundits began to speculate on what the influx would mean. Just weeks after Katrina, New Orleans Mayor Ray Nagin asked, "How do I ensure that New Orleans is not overrun by Mexican workers?"

Critics generally fall into two camps. The first believes that the immigrant Latinos in New Orleans are ignorant, helpless and in need of protection. The second maintains that they are stealing jobs, sponging off of welfare and crippling the city's fragile infrastructure. Neither claim is true. Out of our surveys and interviews with Latino workers in the post-Katrina New Orleans area, we see a microcosm of immigration and immigrants generally: self-sufficient, hard-working, entrepreneurial, law-abiding people simply trying to make a better life for themselves and their families.

.....

There is little evidence that these immigrants are the scroungers or welfare cheats their detractors claim. They came here for one reason: jobs. As one said to us, "I do not need help. I need a job, that's all I need." And they plan to stay, as many people told us, "as long as there is work to do."

Nor is there evidence that they are taking jobs from native New Orleanians. As of April, the last month for which data are available, unemployment in Orleans Parish was 4.0%, compared with 4.5% nationwide. By comparison, in July 2005, the Orleans Parish unemployment rate was 7%, two percentage points above the national figure.

Moreover, the Latino immigrants in New Orleans are not merely doing construction. They're also opening stores and restaurants, breathing economic vitality into a city still badly in need of a boost.

St. Claude Avenue, one of the two main drags through the Lower Ninth Ward, remains close to deserted, with only perhaps a half-dozen businesses open. But with its spray-painted sign and impressive selection of Latino groceries, soft drinks, phone cards and compact discs, Tienda Latina (essentially, "Latin Store") is bringing commerce back into the most devastated neighborhood in New Orleans. Its customers, as might be expected, are mostly Latino, although a handful of Anglos come through as well. It was the first store between the Industrial Canal and St. Bernard Parish to reopen.

.....

Whether doing temporary construction work or settling into the community and opening businesses, Latinos are playing a critical role in rebuilding New Orleans. The days are long, the work is hard, and the living conditions are frequently trying. But the work is getting done. People are moving back. Businesses are reopening.

The most striking thing is that in New Orleans, the opportunities for immigrants to add to the local economy are obvious: There are roofs to repair, drywall to be hung, trees to be planted. But less apparent opportunities exist in every city, from opening new stores and restaurants to building new homes and offices.

Immigrants, a versatile and entrepreneurial group, remain an integral part of the American enterprise. It's unfortunate that it takes a disaster to remind us of that.

King George "Lou Dobbs" III

Today, the Washington Times appropriately reprints the Declaration of Independence.  It is truly a beautiful document.

I sent the following letter in response:

Thank you for reprinting the Declaration of Independence (July 4).  I encourage especially you, with your hostility to immigration, to read it carefully, noting that Jefferson explicitly condemned King George III's restrictive immigration policy: "He has endeavoured to prevent the population of these states; for that purpose obstructing the laws for naturalization of foreigners; refusing to pass others to encourage their migrations hither."

Back then when America covered vastly fewer square miles than it covers today, when each parcel of land fed many fewer mouths than land feeds today, when the amount of capital per worker was a tiny fraction of what it is now, and when Americans' standard of living was far lower than today's standard, America's wise founders nevertheless wanted more open immigration.

Why is it that today, the wealthiest time in our history, so many Americans fear immigration?  Why do so few Americans today share Jefferson's understanding that more free people in America mean an even more prosperous America?

Sincerely,
Donald J. Boudreaux

It is worth pointing out, again and again, that America has never been better able than it is today to absorb immigrants.

They're So Lazy We Must Use Force to Stop Them from Working

James D. Miller is not alone in arguing that the existence of the U.S. welfare state means that more open immigration -- particularly of unskilled foreign workers -- is unwise policy.  My reasons for rejecting this argument are several, but at the top of the list is this reason: If immigrants come to America to suckle on the tits of American taxpayers, why does Uncle Sam spend so much effort trying to prevent these immigrants from working?

As long as the U.S. government persists in making the employment of immigrants artificially difficult, I can have little sympathy for the argument that "we" must reject immigrants because they will become unproductive drains on our economy.

Illegal Immigrants

Opponents of immigration keep mentioning the illegality of some immigrants as if that issue were decisive. They cheated, goes the argument—they jumped the line and we can't reward cheaters. Jeff Jacoby explains why the line-jumping argument is irrelevant:

Illegal immigrants don't steal across the Mexican border because they lack the patience to wait their turn in line. They do it because there is no line for them to wait in. The great majority of immigrants who enter the United States lawfully qualify for visas because of family ties: They are lucky enough to be related to a US citizen.

For them, there is indeed a line -- the waiting time for a family-based visa can take upward of 10 years. A smaller number of legal immigrants are granted visas because they have advanced degrees or specialized skills and a job is waiting for them.

For most illegal immigrants, a legal option simply doesn't exist. Under current law, a young Mexican or Salvadoran who wants to improve his life by moving to America and working hard at a useful job generally has just two options: (a) Enter illegally, or (b) stay out forever. Several hundred thousand a year choose option (a).

Read the rest of it. It's superb.

For me, an illegal immigrant who comes here to work is like a father speeding to the hospital to get his son medical care. When he arrives, the hospital could say:

I'm sorry, I wish we could take care of your kid, but you broke the law on the way over here. You were speeding. So we can't give you medical care. That would reward criminals--people who break the law by speeding.

But what hospital would say that? Everyone speeds on the way to the hospital. Everyone understands that speeding, while always illegal, is only immoral when it endangers. And we pardon speeding under circumstances such as a sick child on the way to the hospital. Why do people want to keep out those who come here to work, legally or illegally? What does the legality have to do with it?

One listener to my commentary on immigration asked me if I locked my house. A prudent person, he argued, keeps out some types of people (criminals) while welcoming others (friends and painters, say). My co-blogger Don pointed out that the real analogy is that the anti-immigrant people want to put a lock on my house letting OTHERS control who comes in and out. I want to let in the house painter from Guatemala but the anti-immigrant people don't want me to hire him.

Merit-based immigration

Here is my commentary on immigration that was on NPR's All Things Considered, yesterday. Listen to it here. Here's the opening:

According to the White House, the new immigration bill will "Help Keep The U.S. Competitive In The Global Economy By Establishing A New Merit-Based System For Immigration That Is Similar To Those Used By Other Countries."

And how is it going to do that?

There's going to be a point system to determine who gets one of the precious 380,000 visas that are up for grabs. Highly educated people get points. People with skills that are in high demand, whatever that means, get points. Young but not too young? Points. Speak English well? More points for you. Speak it badly, fewer points. Don't speak it at all? No points.

People with the highest point totals get the visas.

Some people complain that the Bush Administration is too free market. But the idea that Washington bureaucrats can figure out which skills are in high demand is an idea straight out of the old Soviet Union. It would be great if we could get some old communists from the politburo to administer it, but we won't be able to. They won't score high enough on the point system to get a visa.

                                                                                                   

The idea that we should base our immigration policy on "keeping the U.S. competitive" is bizarre to me. First, it implies that there are right and wrong kinds of immigrants, bureaucrats can figure out which kind is which and that the goal of immigration is to help maximize GDP. I don' t think any of those things are true.

Take Note: Irish Immigrants Never Led a Papal Invasion of these United States

Linda Chavez, writing in today's Wall Street Journal, explains that Hispanics assimilate quite thoroughly into American society and the American economy.  Here's her concluding paragraph, which makes an especially interesting point:

Finally, consider that ultimate indicator of assimilation, intermarriage. One in four Hispanics marries a non-Hispanic white spouse, but nearly one-third of all U.S.-born Hispanics who are married have non-Hispanic spouses; and the percentage is slightly higher among college-educated Hispanic women (35%). There is a curious, and provocative fact buried in all this. The Population Reference Bureau notes in its 2005 study of intermarriage that, because most children of intermarriages are reported as Hispanic on Census data, "Hispanic intermarriage may have been a factor in the phenomenal growth of the U.S. Hispanic population in recent years, and it has important implications for future growth and characteristics of the Hispanic population." In other words, the widely cited prediction that by mid-century Hispanics will represent fully one third of the U.S. population fails to take into account that increasing numbers of these so-called Hispanics will have only one grandparent or great-grandparent of Hispanic heritage. At which point Hispanic ethnicity will mean little more than German, Italian or Irish ethnicity does today.

Her entire article is worth reading (but, unfortunately, a paid subscription to the WSJ is required to do so).  This article inspired me to send the following letter to the editors of that newspaper:

It's inspiring to read Linda Chavez's report on how well Hispanics assimilate into America's society and economy ("The Great Assimilation Machine," June 5).  This achievement is especially remarkable given that the employment in America of several million Hispanics - the "illegals" - is formally prohibited.  Imagine how much higher still their earnings and their rates of employment, homeownership, and education would be if no employer had to fear prosecution for the "crime" of hiring any willing worker.

Sincerely,
Donald J. Boudreaux

Jobs in a Market Economy

Here's a letter that I sent today to USA Today:

To the Editor:

Dale Powers argues that the hiring of foreign skilled workers "wastes" the brainpower of Americans ("Don't waste U.S. brainpower by hiring foreign workers for coveted jobs," June 4).  Mr. Powers' brainpower as an aerospace engineer might be awesome, but it's weak in economics.

The number and kinds of jobs in a market economy aren't fixed.  They expand and change as entrepreneurs seek to use all available talent as productively as possible.  Consider the microchip - which, after all, is a substitute for lots of human brainpower.  If Mr. Powers' argument were correct, the advent of this device would have cast millions of smart, educated Americans into low-skilled jobs.  Instead, of course, the microchip has created for talented Americans countless high-wage jobs whose existence was inconceivable thirty years ago.

Sincerely,
Donald J. Boudreaux

Actions Speak Louder than Boos

Here's a letter that I sent today to the Washington Times:

Michelle Malkin is hot'n'bothered by the booing of Miss USA at the Miss Universe pageant in Mexico City ("Hostility...and hypocrisy," June 1).  She even wants President Bush to "speak out against" this dissing of America.

But actions speak louder than boos.  The actions of millions of Mexicans who come to America seeking opportunity demonstrate a profound affection for American civilization - a civilization rooted in an openness and optimism that Ms. Malkin and her xenophobic comrades want to replace with a nativist nationalism rooted in ignorance and fear.

Sincerely,
Donald J. Boudreaux

Some Economics of Homeland Security

In refreshing contrast to the jingoistic and anecdotes-masquerading-as-analyses offerings of Lou Dobbs, Michelle Malkin, and other xenophobes, the Washington Post's Sebastian Mallaby today talks much good sense:

Of the many infuriating assertions in the immigration debate, perhaps this one takes top prize: that we have to keep illegal immigrants out for the sake of our security. This notion is wrong, not just because undocumented workers are statistically less likely than native-born Americans to commit crimes or because they are serenely indifferent to al-Qaeda's teachings. It is wrong because it misses the most basic rule of smart homeland security.

Smart homeland security starts with the reality that you can't protect everything. The federal government alone spends more than $58 billion on homeland security per year -- a sum greater than the entire defense budget of Britain and about three times the estimated level of the pre-2001 homeland security budget. This spending has bought important gains: There are air marshals on planes, cockpits have been reinforced and so on. But the United States contains half a million bridges, 500 skyscrapers and 2,800 power plants, not to mention thousands of schools, shopping malls and subway stations. Even if you doubled spending and then doubled it again, there would be too many targets to protect. Total security is unattainable.

....

Which raises a few questions about the immigration bill in Congress. If Clinton and Obama are upset with the misallocation of homeland security funds, why aren't they yelling about the proposed crackdown on immigrants? As a Post editorial recently pointed out, the immigration bill would require that the Department of Homeland Security hire, train and deploy 5,000 to 6,000 new border agents; recruit and support several thousand civilian employees required to fingerprint and register immigrants; build 370 miles of border fence; and create a whiz-bang database that would allow businesses to check whether a prospective employee has entered the country illegally. In a world of limited homeland security dollars, how is any of this a priority?

Malum in se; malum prohibitum

Bruce Charlton sensibly asks (in a comment to this post):

Isn't  illegal immigration more equivalent to smuggling than to free trade?

I would favour easier, cheaper and quicker regulation of immigration, which would need to be coupled with general reforms to cut back on welfare and making it easy to work legally, repealing the minimum wage etc.

But I find it hard to see how mass scale law-breaking can be ignored without serious knock-on problems.

I respectfully disagree with Mr. Charlton -- or, rather, I submit that he (like so many other persons) is inappropriately distracted by immigrants' "legal" status.

A critical distinction in Anglo-American law is that between actions that are malum in se and actions that are malum prohibitum.  Some actions are malum in se -- wrong in themselves.  Examples are murder, rape, theft, and fraud.  These actions are now formally prohibited by legislation, but their wrongness -- indeed, their very illegality -- exists independently of legislative prohibition.  If, say, the Virginia legislature were to repeal its statutory prohibition on murder, murder would still be wrong and criminal in Virginia.  Murderers would still be wrongdoers and criminals.  If the State government refused to punish such criminals, people would do so privately.

Other actions are malum prohibitum -- "wrong" merely because the government proclaims these actions to be wrong.  One example is avoiding taxes.  If Uncle Sam tomorrow abolishes the federal income tax, failure of Americans to send money to Washington would be neither wrong nor criminal, and persons who send no money to Washington would not be regarded by their neighbors and co-workers as despicable louts whose company should be avoided.

To attach the label "criminal" both to persons who commit actions that are malum in se and to persons whose only wrongdoing is the commission of actions that are merely malum prohibitum is to use language confusingly.  It is to dilute the scorn and loathing that true criminals deserve.  After all, if someone whose only offense is to cross the U.S.-Mexico border in search of a job is a criminal, what is a shoplifter or a child-beater or a murderer?

Looked at differently, to call "criminal" those persons whose only offenses are merely malum prohibitum is unfairly and inappropriately to tar them with the scorn and wariness that is deserved only by persons who commit genuine offenses against others.

And such language clouds and confuses the political debate.  Because most persons understand the word "criminal" to indicate an individual who, to one degree or another, is harmfully anti-social, calling immigrants who are in the U.S. without official government permission "criminal" gives the impression that these people are all harmfully anti-social.  But that impression is emphatically false (unless you include in your definition of "anti-social" the desire for a better life and willingness to compete for jobs).

There is a legitimate debate over how open America's borders should be.  But that debate today is far too soiled by those persons who think that merely calling "illegal" immigrants "criminals" settles the matter.  It does not.  "Illegal" immigrants are "criminals" only because government policy declares them to be -- in the same way that persons openly practicing Christianity or Judaism in Soviet Russia were "criminals" only because government policy declared them to be.  The contours and specifics of this policy are precisely what is at issue in the debate over how widely open U.S. borders ought to be.  This debate should be on the economics and the national-security issues raised by immigration; it should not be confused by the confusing (and often self-serving) application of the term "criminal" to persons who come to America without Uncle Sam's permission -- permission that is very difficult to get.

On Immigration

His eyes and mind ever-sharp, here's my co-blogger at Market Correction Andy Morriss on immigration; this is a letter that he sent recently to the Wall Street Journal:

Sirs,

Your editorial on the proposed immigration bill does an excellent job of summarizing the policy issues at stake (“Immigration Opening,” May 19) but leaves out a crucial important dimension to the debate. The proper way to think about all immigration restrictions is as barriers to trade in what economists term “human capital,” the skills and education each brings to his new country. The proposed bill makes this explicit with its $5,000 “fine” for illegal immigrants wishing to regularize their status, which is more properly thought of as a tariff.

Tariffs on goods are bad because they reduce trade. Restrictions on importing capital are foolish because they reduce investment. So too are tariffs on human capital, for even unskilled immigrants bring an important human capital contribution to the United States: Immigrants are risk takers by definition. They leave homes and families and for a new land, where they are unfamiliar with the culture and often cannot speak the language. These are precisely the people who create economic growth because they are willing to take such a risk to gain a better life for themselves and their children. In short, every immigrant is a potential entrepreneur and every entrepreneur is a benefit for the rest of us.

Of course, just as every country has the right to inspect goods coming into its territory, every country has the right to regulate immigration to a limited extent. For example, nations are entitled to ensure that criminals do not immigrate just as they are entitled to inspect agricultural goods for hidden pests. But the fundamental principle underlying immigration should be the same as it is in all areas of trade: the presumption is free trade and the burden is on those proposing restrictions to show both that their restrictions are justified and that they are the minimum needed to accomplish their purpose. The proposed immigration bill flunks both these tests.

Andrew P. Morris
H. Ross and Helen Workman Professor of Law
University of Illinois, College of Law

 

Immigrants, Work, & Welfare

Here's a letter that I sent earlier this week to the Washington Post.  It's in response to this column by the generally very thoughtful and sound Robert Samuelson.

Robert Samuelson misses an important point when he discusses immigration ("Seeking Sense on Immigration," May 2).

Anti-immigrationists who worry so raucously about immigrants using taxpayer-funded welfare should lead the charge to eliminate the countless restrictions aimed at preventing immigrants from working legally.  It's phony to insist that immigrants' employment options be severely restricted and then, in the next breath, to pontificate about the need to keep immigrants from using welfare.

Sincerely,
Donald J. Boudreaux

On Attitudes Toward Immigrants

From a review, by Jonathan Yardley, in today's Washington Post Book World of Peter Quinn's new book Looking for Jimmy:

Today the Irish are so thoroughly assimilated into the larger American society that it is difficult for anyone to remember how harshly and unforgivingly they were greeted as they arrived in the great wave that began in the mid-1840s and lasted for a decade, but white America equated them with blacks and stereotyped them accordingly as "childlike buffoons, lazy, superstitious, given to doubletalk, inflated rhetoric, and comic misuse of proper English.
....
White Anglo-Saxons who regarded themselves as "native Americans" gave the newcomers a frosty welcome. In Boston, employers famously posted signs that read: "No Irish Need Apply." Irish women, who outnumbered men, "worked in factories and mills. Irish maids became a fixture of bourgeois American life. Domestic service became so associated with the Irish that maids often were referred to generically as 'Kathleens' or 'Bridgets,' " just as black railroad porters were universally, and equally patronizingly, called "George."

Thus, often, are attitudes toward poor immigrants from poor countries.

In that age (mid-19th century) before the welfare state, how did these poor, poorly educated, and hated Irish immigrants survive and prosper in America?  Involvement in politics was certainly one way.  But hardly the only way.  According to Yardley, Quinn relates how this "immigrant group" "built its own far-flung network of charitable and educational institutions," and how the Catholic Church also played a major, positive role.

See this earlier post for references to some important scholarly research on the history of private means of providing charity and mutual aid.

Xenophobia is Poor Public Policy

My friend Ryan Young has this very nice letter published in today's edition of the Washington Post:

The Jan. 31 front-page article "Va. House Approves Bill on Illegal Immigration; Aim Is to Block Access to State, Local Funds" provided a real-world example of why government should not be in the business of funding charities: The money comes with strings attached.

In this case, charities that accept funds from the state would no longer be allowed to give aid to illegal immigrants.

Put another way, these charities would essentially be required by law to be xenophobic. They would also lose their right to decide for themselves whom they help. Certain state legislators would rather make that decision for them.

The only way for charities to avoid being bullied like this is to refuse state aid.

If this legislation makes it to the desk of Gov. Timothy M. Kaine (D), I hope he has the good sense to veto it.

RYAN YOUNG
Arlington

Friedman On Growth Measurements and Immigration

I thank Bob Higgs for drawing my attention to a short but insightful 1974 article, in the March/April 1974 issue of the Journal of Political Economy, by Milton Friedman.  (For those of you with access to JSTOR, here's the link.)  I'm giddy with pride that my most-recent column in the Pittsburgh Tribune-Review reminded Bob of this article, by Friedman, entitled "A Bias In Current Measures of Economic Growth."

Here's an excerpt:

It is common practice to measure the growth in economic welfare in a country over any considerable period by the rate of growth in real per capita income.  However, this measure can be seriously biased for a period during which the country experienced substantial immigration or emigration.

Consider the United States from, say, 1870 to 1914.  During that period, real per capita income as measured by Simon Kuznets grew at the annual rate of about 2 percent.  However, there was heavy immigration, reaching a peak rate of over 1 1/4 million persons a year in 1907.  By 1914, roughly one-third of the total population of the United States was foreign born or of foreign or mixed parentage, and one-fifth of the population over 14 years old was foreign born.  Their counterparts in 1870 -- for, of course, we want to measure the growth in economic welfare for a "representative" population, not for a collection of identical and aging individuals -- lived and worked in other countries, not in the United States.  We have every reason to believe that their 1870 counterparts had lower incomes than the then population of the United States -- presumably that is why the United States experienced heavy immigration, not emigration.

The foreign-born in 1914 probably also had lower incomes than the rest of the U.S. population, but again the fact of continued large-scale immigration, let alone a wide variety of historical evidence, suggests that their incomes in the United States were substantially above the incomes that they could have received in the countries from which they came.  In any event, the incomes of the 1914 foreign-born are included in the aggregate income underlying the 1914 per-capita income estimate, while the incomes of their counterparts in 1870 are completely excluded.  The result is to bias the estimated rate of growth downward.
......

One of the great economic achievements of the United States in the period from 1870 to 1914 was the absorption of millions of residents who came to the United States with little but their bare hands, were able to make a better life for themselves than in their countries of origin, and to lay the foundations for a still better life for their children.  Yet not only is this achievement not recorded positively in the common measure of economic growth, it actually enters as a negative factor, reducing the measured rate of growth.

Just so.

In Markets, People are the Ultimate Resource

This from an editorial in today's Wall Street Journal:

Everyone knows that Intel, Yahoo, Google, eBay and Sun Microsystems are wildly successful U.S. technology companies. Less well known is that immigrant entrepreneurs played a role in founding each one -- and a whole lot of others.

After an election season that featured an unfortunate amount of anti-immigration posturing, a new study from the National Venture Capital Association is a welcome reminder that foreign workers make their fair share of important contributions to our economy.

Titled "American Made: The Impact of Immigrant Entrepreneurs and Professionals on U.S. Competitiveness," the report found that "Over the past 15 years, immigrants have started 25 percent of U.S. public companies that were venture-backed." These businesses employ some 220,000 people in the U.S. and have a current market capitalization that "exceeds $500 billion, adding significant value to the American economy."

Here's a link to the study.

Comical Immigration

Don't miss this clear and insightful comic strip on immigration from Reason.com.

(HT: BoingBoing)

Illegal Immigrants and Emigrants

Marshall Fritz is the moving force behind the noble effort to separate school and state.  He recently sent me an e-mail, chiming in on the debate over whether or not immigrants who don't possess official government permission to be in the United States truly are wrong-doers worthy of our scorn and deserving punishment.

What percentage of the American public are opposed to illegal emigration?  You know, people who disregard the law and hop the Berlin wall or who disobey Castro and leave Cuba?

If an immigrant's failure to get government permission to come into America is sufficient to render him or her a criminal worthy of scorn and punishment, then the same arguably is true of emigrants who fail to get government permission to escape from a particular country.  Telling a Cuban, for example, to wait his "turn" -- telling him that law and order and decency and fairness require that he first get permission to leave from Castro's government -- would be a most absurd exercise of the myth that the state defines all that is right and wrong.

It's true that some governments are less evil than others (with Cuba's among the most heinous), but no government creates rights.  If no government -- not even Uncle Sam -- creates rights, then people have rights (as the American founders understood) independent of government.  And if people have rights independent of government, then the popular anti-immigrant tactic of pointing at "illegal" aliens in America and accusing them of wrong-doing simply because they are here without Uncle Sam's official blessing is illegitimate.

Too many magazine writers?

In this post, I asked Cafe Hayek readers to discuss this concern about the effects of competition from immigrants:

Individual native workers are less likely to be affected if the immigrants resemble the society they are joining — not physically but in the same mix of skills and educational backgrounds. For instance, if every immigrant were a doctor, the theory is, it would be bad for doctors already here. Or as Borjas asked pointedly of me, what if the U.S. created a special visa just for magazine writers? All those foreign-born writers would eat more meals, sure, but (once they mastered English, anyway), they would be supplying only one type of service — my type. Bye-bye fancy assignments.

There were a lot of interesting comments but no one mentioned what I thought was the most important missing point—if there were an influx of foreign magazine writers, it would encourage entrepreneurs not just to open restaurants for them to eat in but also magazines for them to work at. Why would you assume that the number of jobs writing interesting magazine stories is fixed? So it wouldn't be bye-bye fancy assignments; there probably would be more assignments to choose from.

But the wages would probably be lower. I say "probably" because the quoted paragraph implicitly makes the absurd assumption that foreign magazine writers are perfect substitutes for native-born writers. Ignoring the language problems, it's imaginable that foreign magazine writers would bring a fresh perspective to the magazines that employ them. So the number of magazine readers might expand as well without a decrease in the price of magazines.

The analysis is more likely to hold for people who work for a lawn service or who put up dry wall. An increase in close substitutes will lower your wages, though there's no reason to think it will make you unemployed. And how much wages will fall depends on the elasticity of demand--how many new lawn service or home improvement companies get started in response to the increase in supply of workers. That in turn depends on how the demand for those underlying services and how responsive they are to price.

The quoted paragraph assumes that all demand curves are vertical.

But as one commenter (Maxim) pointed out, immigration is much like trade in goods and services. Allowing steel to come to America is good for most Americans but makes life more challenging for steel companies and their workers. Do we want to make America poorer to insure that particular groups have a protected standard of living? Much better to improve education if we think immigrants make the lives of a particular group of Americans more challenging.

Too many magazine writers?

In this post, I asked Cafe Hayek readers to discuss this concern about the effects of competition from immigrants:

Individual native workers are less likely to be affected if the immigrants resemble the society they are joining — not physically but in the same mix of skills and educational backgrounds. For instance, if every immigrant were a doctor, the theory is, it would be bad for doctors already here. Or as Borjas asked pointedly of me, what if the U.S. created a special visa just for magazine writers? All those foreign-born writers would eat more meals, sure, but (once they mastered English, anyway), they would be supplying only one type of service — my type. Bye-bye fancy assignments.

There were a lot of interesting comments but no one mentioned what I thought was the most important missing point—if there were an influx of foreign magazine writers, it would encourage entrepreneurs not just to open restaurants for them to eat in but also magazines for them to work at. Why would you assume that the number of jobs writing interesting magazine stories is fixed? So it wouldn't be bye-bye fancy assignments; there probably would be more assignments to choose from.

But the wages would probably be lower. I say "probably" because the quoted paragraph implicitly makes the absurd assumption that foreign magazine writers are perfect substitutes for native-born writers. Ignoring the language problems, it's imaginable that foreign magazine writers would bring a fresh perspective to the magazines that employ them. So the number of magazine readers might expand as well without a decrease in the price of magazines.

The analysis is more likely to hold for people who work for a lawn service or who put up dry wall. An increase in close substitutes will lower your wages, though there's no reason to think it will make you unemployed. And how much wages will fall depends on the elasticity of demand--how many new lawn service or home improvement companies get started in response to the increase in supply of workers. That in turn depends on how the demand for those underlying services and how responsive they are to price.

The quoted paragraph assumes that all demand curves are vertical.

But as one commenter (Maxim) pointed out, immigration is much like trade in goods and services. Allowing steel to come to America is good for most Americans but makes life more challenging for steel companies and their workers. Do we want to make America poorer to insure that particular groups have a protected standard of living? Much better to improve education if we think immigrants make the lives of a particular group of Americans more challenging.

Supply and demand and immigration

Do immigrants lower wages of native born Americans? Those who say yes, such as George Borjas in this New York Times Sunday Magazine piece by Roger Lowenstein, say it's just a matter of supply and demand—the supply shifts out and wages have to fall. But of course, that only holds if demand is constant as well as David Card points out:

As Card likes to say, "The demand curve also shifts out." It's jargon, but it's profound. New workers add to the supply of labor, but since they consume products and services, they add to the demand for it as well. "Just because Los Angeles is bigger than Bakersfield doesn't mean L.A. has more unemployed than Bakersfield," Card observes.

In theory, if you added 10 percent to the population — or even doubled it — nothing about the labor market would change. Of course, it would take a little while for the economy to adjust. People would have to invest money and start some new businesses to hire all those newcomers. The point is, they would do it. Somebody would realize that the immigrants needed to eat and would open a restaurant; someone else would think to build them housing. Pretty soon there would be new jobs available in kitchens and on construction sites. And that has been going on since the first boat docked at Ellis Island.

Seems pretty reasonable. But then Lowenstein gives the reader Borjas's retort:

But there's a catch. Individual native workers are less likely to be affected if the immigrants resemble the society they are joining — not physically but in the same mix of skills and educational backgrounds. For instance, if every immigrant were a doctor, the theory is, it would be bad for doctors already here. Or as Borjas asked pointedly of me, what if the U.S. created a special visa just for magazine writers? All those foreign-born writers would eat more meals, sure, but (once they mastered English, anyway), they would be supplying only one type of service — my type. Bye-bye fancy assignments.

Is Borjas right? Should Lowenstein be worried?  Give it a shot in the comments section and I'll weigh in later today or tomorrow.

Tabarrok on Chiswick

My colleague Alex Tabarrok, over at Marginal Revolution, neatly and importanly exposes many of the flaws in a surprisingly flaw-filled op-ed by Barry Chiswick that appeared in Sunday's New York Times.  In this op-ed, Chiswick seems to want to argue that restricting immigration will have no effect on the output of the American economy -- but he fails rather spectacularly.

Immigration and Assimilation

Jeff Jacoby at the Boston Globe has a lot of interesting things to say about immigration. And as always, he says them very well. The most interesting point and unfortunately he doesn't have room to explore it fully, is that assimilation and the melting pot aren't what they used to be. He's right. Legislation of various kinds has made it easier to stay unassimilated and encourages people to identify either culturally or politically with their own ethnic groups.

I think there's another point to be made as well about assimilation. Some argue that we need public schools so that all of us can have a common vision for America and to aid the process of assimilation. But the public schools common vision for America is that there is no common vision. Everything is sacrificed to the god of tolerance. The common education children receive in public schools is that there should be no common vision of America. Everyone is entitled to a unique vision and no one's vision is better or worse than anyone else's.

The other problem, and this is much more serious, is political. When government's power is limited and when there is respect for the Constitution, the political impact of the growth of this ethnic group or that one, or this religious group or that one, is unimportant. But when government is powerful and the Constitution is just a piece of paper, the growth of groups that are hostile to freedom and liberty is no longer unimportant. That is one reason why Europe is threatened by religious fundamentalism in a way that America is not. As of now, the ability of religious fundamentalists of any stripe to impose their views on others is highly limited in America. But that is only true because we remain something of a republic. As the Constitution becomes weaker, the threat of ethnic or religious political power is serious.

Some of the scaremongers on the immigration debate talk about the percentage of America that will be Hispanic by 2050 if we don't "do something." But why should I care if America is more Hispanic in the coming years? Or more Christian? Or more Islamic? The answer, tragically, is that I should care if our political system allows a group to channel money or power to its own group at the expense of others.

The answer to this challenge is not to close our borders. The answer is to strengthen the Constitution and reduce the power of government.

Legal Immigrants: Waiting Forever

Stuart Anderson of the National Foundation for American Policy just published this important study co-authored with David Miller.  Its title speaks volumes: "Legal Immigrants: Waiting Forever."  Here's the introduction to the Executive Summary:

Why don't people wait to immigrate legally to the United States?  The answer is that many people do come here legally but processing delays and the family and employment-based immigration quotas legislated by Congress result in significant wait times -- and much frustration -- for potential immigrants and U.S. employers.

This detailed review of immigration statistics from the U.S. Department of State, Department of Homeland Security, and U.S. Citizenship and Immigration Services reveals that those who "play by the rules" are likely to wait many years to become a lawful permanent resident, whether they are sponsored by an employer or a family member.  Moreover, those seeking to become citizens must also endure long processing delays in the quest for naturalization.

What kind of rules result in U.S. citizens having to wait, on average, between 11 and 12 years before their siblings can immigrate to America?  (This wait time is 22 years for citizens with siblings seeking to immigrate from the Philippines.)  What kind of rules result in U.S. citizens having to suffer a wait time of, on average, six years before their unmarried adult children can immigrate to America?  (For U.S. citizens with such children in Mexico the wait time is 13 years!)

Talking about "illegal" immigrants "cutting in line" and "not waiting their turn" and "not playing by the rules" makes it seem as if those who come to America without Uncle Sam's formal stamp of approval are selfish, irresponsible, anti-social, impatient, unfair cheats.  But rule-breakers hurt society only when the rules they break are ones that help society when these rules are followed.  It's not at all clear to me that the existing rules that limit immigration are helpful; they are, indeed, much more likely to be simply a species of economic protectionism, buoyed by ugly nativism -- rules that create and protect rents -- rules that are anti-social in the deepest sense. 

Are Immigrants to Blame for Inappropriate Government Activities?

The strongest economic argument against immigration is the claim that immigrants free-ride on government-provided goods.  There's a lot to say about this claim; here I limit myself to one point.

The goods and services that people complain immigrants cause to be overused are either government-supplied goods and services (for example, government schools) or goods and services that are heavily subsidized by government (for example, medical care).  No one complains that immigrants are over-using supermarkets, movie theaters, auto dealerships, or clothing stores.  That is, private enterprise seems quite able to 'absorb' immigrants and prevent overcrowding and free-riding.  Problems arise almost exclusively with goods and services supplied or subsidized by government.

I understand that on pure utilitarian grounds it's too simplistic to say "Oh, the solution is for government to stop supplying these things."  Given that government is supplying or heavily subsidizing X, Y, and Z, and given that immigrants can use X, Y, and Z, problems are indeed created.

The narrow cost-benefit solution might well be further restrictions on immigration -- I say "might," not "is" -- even if, in my opinion, such restrictions are unethical because they violate the basic human rights of Americans and foreigners alike.

But even if we conclude that, on pure cost-benefit grounds, the best course of action is to restrict immigration further because immigrants overuse public-supplied and subsidized goods and services, why blame immigrants?  Why point accusing fingers at immigrants?  Why not blame government for supplying and subsidizing things that it ought not supply and subsidize?

The root problem is not immigration; it is government provision and subsidization of goods and services that should be supplied by the market.

Queuing Up for a Bad Analogy II

Robert Cote, commenting on the first installment in this series of blog-posts, says:

I suggest you test your theory at Disneyland.  Ignore the parking regs, jump the lines, sneak past the security checks, don't pay at the gate and when you get inside avail yourself of the attractions and services. If as you predict the theme park becomes a better place for your actions and indeed those waiting in line applaud your actions and eventually approve of your brave actions as being in their best interests I shall withdraw my clam.

This response is appropriate and sensible; it gets us to the heart of the matter.  The heart of the matter is not queue-jumping; it is, rather, the belief that the object sought by those waiting in the queue – and by those jumping the queue – is scarce.

The Disneyland analogy works better the more the following is true:

- the U.S. is crowded

-- the number of jobs and amount of capital per worker are more or less fixed in quantity

- people, once here, frequently free-ride on goods and services provided by government

Disneyland, after all, is a small space, and privately created, maintained, and owned. Frequently it is on the verge of being over-crowded, so that each new entrant into that amusement park reduces other people’s ability to enjoy the park.  Disney has a strong incentive to keep the park from becoming too crowded; it achieves this goal largely by charging high prices.  (I’ll note that Disney doesn’t deny large swaths of people any real chance of entering its park. An aspiring customer doesn’t have to be related to an existing customer, for example.)

Also, Disney has an incentive to keep the length of its queues as short as possible.  I’ve been to DisneyWorld three times, most recently in April 2005; never have I had a significant wait to enter the park.  (I did wait in several queues for a variety of rides and attractions within the park.  But for these queues, the standard queue-jumping analysis that I explained in my previous post fits perfectly.)

Moreover, Disney’s customers are not producers.  Disneyland is a consumption experience. People pay to get in to consume scarce experiences and things. The rides are there for customers to consume; likewise for the food, drinks, and mouse ears and other trinkets.

But immigrants who come to the United States are not just consumers; most are also producers. (Incidentally, even if they were exclusively consumers, if they – like Disney’s customers – paid for all that they consume, there would be no problem.  Problems arise when immigrants – and citizens – free-ride on goods and services supplied by others.)

It’s here that I believe the analogy with Disneyland breaks down irreparably.  Not only are immigrants not coming to America to crowd us Americans out of ‘our’ spaces and jobs, most come to produce.  I support more open immigration because I am quite confident that

     - the U.S. is not crowded

- the number of jobs and amount of capital per worker are emphatically not fixed in quantity

- while people, once here, free-ride on goods and services provided by government, the first step in solving this problem is to enable more foreigners to work in America legally; that way, immigrants’ contributions to the economy in general, and to the provision of public goods, will be even greater than it already is;

AND

- people, being the ultimate resource, help deepen and widen the division of labor -- which is the chief source of human prosperity.

Queuing Up for a Bad Analogy

People who jump the queue – who “cut in line” – are annoying because they directly harm others. Their selfishness reduces other peoples’ range of opportunities. At best, they play zero-sum games: what queue-jumpers gain in reduced waiting time and increased chances of securing the scarce object is lost by those who patiently wait their turn. Clearly, queue-jumping is undesirable. 

This waiting-in-line, and queue-jumping, analogy is used in the current immigration debate to condemn 'illegal' immigration.  Immigrants here without Uncle Sam's permission are said to have jumped the queue, not waited their turn for opportunities to enter legally.  But I believe that this analogy is misplaced and, hence, misleading.

Many of the Latin American immigrants who are in the United States without Uncle Sam’s stamp of approval likely have little or no chance of getting in legally. Therefore, for these people – for those whose chances of entering the U.S. legally are practically zero – there is no line for them to wait in.  To tell them to wait their turn implies that they, in fact, will have a turn.  But no chance at any real turn to enter the USA exists for many foreigners.  So it’s incorrect to portray such foreigners who then enter 'illegally' as selfish scoundrels who jump the queue merely to speed up their arrival in the U.S. 

Now ask: does coming to the United States without Uncle Sam’s stamp of approval hurt those who are waiting in line to get this approval as a condition of entering the land of the free and the home of the brave? I don’t see how. The number of legal immigration slots isn’t reduced by the number of ‘illegal’ immigrants entering the USA. 

Indeed, to the extent that those who enter the USA 'illegally’ would be eligible for legal-immigration status, their entering ‘illegally’ actually helps aspiring immigrants who are waiting in the queue. Those who enter the USA '