April 12, 2013 3 Comments
Post by Nathan Smith (regular blogger for the site, joined April 2012). See:
I suppose it’s great news that Mark Zuckerberg is organizing a lobbying group to support immigration reform, as he announces here (see also our past coverage). But at the end of the day, I don’t think there’s actually a good economic rationale for the “high skill only” approach that the tech sector seems to prefer, and I’m ambivalent about its getting more money and a high-profile endorsement. Let’s take a look at the case Zuckerberg makes:
Earlier this year I started teaching a class on entrepreneurship at an after-school program in my community… One day I asked my students what they thought about going to college. One of my top aspiring entrepreneurs told me he wasn’t sure that he’d be able to go to college because he’s undocumented. His family is from Mexico, and they moved here when he was a baby. Many students in my community are in the same situation; they moved to the United States so early in their lives that they have no memories of living anywhere else.
These students are smart and hardworking, and they should be part of our future.
Fair enough. But why should only the “smart and hardworking” students be part of our future? The principles of comparative advantage imply that there are gains from trade with all sorts of people, not just “smart and hardworking” ones. Immigrants who are sort of dumb and/or a bit lazy can also gain by coming here, and we can gain by hiring them, renting them accommodations, selling goods to them, maybe even marrying them (e.g., if we have no other marital options, or if in addition to being sort of dumb and/or a bit lazy, they’re beautiful and nice). Meritocracy has its place, but is there really a good reason for the mere right to reside in the US to be allocated in a meritocratic fashion? And even if you want to discriminate in favor of the “smart and hardworking,” how?
This is, after all, the American story. My great-grandparents came through Ellis Island. My grandfathers were a mailman and a police officer. My parents are doctors. I started a company. None of this could have happened without a welcoming immigration policy, a great education system and the world’s leading scientific community that created the Internet.
Today’s students should have the same opportunities — but our current system blocks them.
Good. But remember that Ellis Island accepted almost everyone, not just the “smart and hardworking.”
We have a strange immigration policy for a nation of immigrants. And it’s a policy unfit for today’s world.
The economy of the last century was primarily based on natural resources, industrial machines and manual labor. Many of these resources were zero-sum and controlled by companies. If someone else had an oil field, then you did not. There were only so many oil fields, and only so much wealth could be created from them.
Today’s economy is very different. It is based primarily on knowledge and ideas — resources that are renewable and available to everyone. Unlike oil fields, someone else knowing something doesn’t prevent you from knowing it, too. In fact, the more people who know something, the better educated and trained we all are, the more productive we become, and the better off everyone in our nation can be.
This can change everything. In a knowledge economy, the most important resources are the talented people we educate and attract to our country. A knowledge economy can scale further, create better jobs and provide a higher quality of living for everyone in our nation.
One could say that our immigration policy is unfit for any age, or rather that it’s just immoral in itself, and the particular historical epoch we live in has nothing to do with it. Zuckerberg doesn’t say that. Instead, he says that our immigration policy is unfit for today’s world. What does he mean by that? I think he’s partly alluding to the absurdity of a person who has lived in no other country being kicked out, as he highlighted a few paragraphs before. We think of our age as more civilized, as advancing in the recognition of human rights. Such cruel and arbitrary behavior on the part of the state is more intolerable because it is odder than in the past. But he’s also, apparently, arguing that the nature of the economy has changed in such a way as to render… migration restrictions?… migration restrictions on “smart and hardworking” people?… less suitable than they were in the past.
I fail to grasp the argument. Yes, knowledge has public goods properties that oil fields, or for that matter factories, don’t. That’s a difference. If high-skilled immigrants allow Silicon Valley to create better software quicker, the zero marginal cost of reproducing that software can make the benefits from the better software especially widespread and unambiguous. On the other hand, software invented in one place can be moved around the world instantly. Why is it important that the high-skill workers be here? In fact, it does seem to be important, and Zuckerberg probably has unique insights as to why that is. (I wonder if he’d let Michael Clemens interview him? That might be a cheap way to help the cause…) But location isn’t not important for workers in the oil sector. On the contrary, if the oil sector couldn’t recruit the workers they need to exploit an oil field, it would seem even more essential to their productivity for those workers to be able to immigrate than it is for the sector. At a more basic level, the principles of comparative advantage are quite independent of the special properties of the knowledge economy.
Perhaps the difference Zuckerberg sees is between a “diminishing returns to each factor” and “everyone earns their marginal product” economy, where an influx of workers will reduce wages even if it raises natives’ incomes overall, and an economy where the creation of public knowledge goods is more important, and there are large economies of scale. Possibly, though the economics of this proposition are not clear to me, the knowledge economy somehow eliminates the usual negative impact of immigration on returns to specific factors. And I suppose we can’t expect Zuckerberg to understand how auctions, tariffs and taxes, or more specifically the DRITI plan, could hold natives (roughly) harmless.
To lead the world in this new economy, we need the most talented and hardest-working people. We need to train and attract the best. We need those middle-school students to be tomorrow’s leaders.
Given all this, why do we kick out the more than 40 percent of math and science graduate students who are not U.S. citizens after educating them? Why do we offer so few H-1B visas for talented specialists that the supply runs out within days of becoming available each year, even though we know each of these jobs will create two or three more American jobs in return? Why don’t we let entrepreneurs move here when they have what it takes to start companies that will create even more jobs?
Why do we need to “lead the world in this new economy?” There’s a citizenist twist in the argument here, which runs counter to economic good sense. Now Zuckerberg is the one who thinks we’re in a zero-sum game, competing with other countries to attract talent. But if knowledge is a public good, as he seemed to be arguing before, we shouldn’t really care where the high-skilled workers are doing their technologizing. Once created, the ideas spread worldwide. We actually shouldn’t want them to be here, per se; we should want them to be wherever they are most productive. Now, Zuckerberg could argue, and probably would if challenged, that high-skilled workers would be more productive in the United States– after all, that’s why they want to come, or (for the math and science graduates) stay. Fine. But I find the nationalistic framing of this point to be off-putting and fallacious. It might also lead Zuckerberg to misallocate his lobbying resources. If it’s the common good of mankind he’s after, and perhaps even if he’s just trying to help Americans, he ought to try to open the world’s borders generally, not to help America win some competition for talent. (And if he’s just pursuing the interests of Facebook in recruiting good staff, well, can’t Facebook outsource coding/software design/whatever?)
Also, while the claim that it’s particularly stupid to kick out math and science graduates after educating them is plausible, to automatically give visas to math and science graduates from US universities but not to everyone creates strange incentives. In effect, it allows universities to print visas, which will have a high economic value, even if the universities don’t really do any educating. Professors as consular officials. It might be better than the status quo, but it’s a strange and surely inefficient way of doing things.
We need a new approach, including:
●Comprehensive immigration reform that begins with effective border security…
Sigh. I hate it how immigration reformers who are generally on the right side always feel the need to insert disclaimers of this sort. I don’t think it’s just that I disagree with the disclaimer, or even that it gives hostages to the other side, since “effective border security” can be defined as stringently as you please and made unattainable. What offends me is the epistemological irresponsibility of it. How does Mark Zuckerberg know, or why does he think he knows, that we need “effective border security?” What harm is done by a few thousand, or a few hundred thousand, people slipping across the border without documents every year? Does Zuckerberg think he has an answer to that question, or is he just being an unreflective normal American with unreflected normal prejudices in favor of absolutist sovereign state power? If only he would have said, “whether we need more effective border security, 0r for that matter whether we need to secure the border at all, is beyond the scope of this article, though doubtless there are plausible arguments that we do”! The honesty of such a statement would be so refreshing, in contrast with the usual humbug about securing the borders.
… allows a path to citizenship and lets us attract the most talented and hardest-working people, no matter where they were born…
[More investment in basic science and STEM education are also advocated.]
That’s why I am proud to announce FWD.us, a new organization founded by leaders of our nation’s technology community to focus on these issues and advocate a bipartisan policy agenda to build the knowledge economy the United States needs to ensure more jobs, innovation and investment.
My overall reaction is that Zuckerberg is unsurprisingly, but still in a way disappointingly, focused on the narrow interests of the tech sector, and doesn’t appreciate the broader logic of the immigration issue, still less the vast benefits that freedom of migration can yield for mankind. But the charge of self-interest must be qualified in two ways.
First, if more high-skill immigration is in the perceived interests of the tech sector, I don’t think this is because they foresee greater profits so much as because they can do more. Some time back, Vipul asked “Why are academia and Silicon Valley pro-immigration?” My rough-and-ready guess, slightly different from Vipul’s, is simply that academics and Silicon Valley types aren’t thinking about their own self-interest, but instead have internalized the goals of their professions, the pursuit of truth and the advancement of technology, respectively, and that they support immigration because they think the pursuit of truth and the advancement of technology would be served thereby. As a boss in the tech sector, Zuckerberg might have an interest in recruitment that diverges from the interests of his employees, but I doubt that’s important here. And the tech sector generates such marvelous positive spillovers for the economy and society that Zuckerberg may, plausibly though exaggeratedly, identify the interests of his sector with those of the entire economy. He wants to do more of what he does best, and he thinks it will benefit the whole world, and he’s more or less right, and now he’s lobbying to be able to recruit immigrants to help him do that, which is all well and good except that it doesn’t necessarily lead to the wisest immigration policy.
Second, inasmuch as Zuckerberg and other tech entrepreneurs, and even rank-and-file programmers and software developers and whatnot, tend to range from upper-class to super-wealthy, it might be in their interest to advocate the importation, not (only) of fellow programmers and tech wizards, but of numerous personal servants and drivers and the like to serve their daily needs. That– but I’m speculating here– probably never occurred to them. They’re not greedy enough to perceive that aspect of their self-interest. They’re too egalitarian, too democratic, too much normal Americans.