Philosophers, wonks and entrepreneurs

November 18, 2014 Vipul Naik 2 Comments

I’ve talked about open borders and migration-related issues with people coming from a range of different perspectives (including a wide range of open borders supporters at different levels), and I’ve often found that people are talking past each other. This is partly because of fundamental differences in the mindset that people bring to thinking about the current state of the world and how to change it. In this post, I describe three main (plus some additional) perspectives on the world, and their meaning in the context of open borders.

Philosophers, specifically moral philosophers and ethicists

The moral philosopher or ethicist is interested in figuring out the right course of action, but in a very abstract sense. The moral philosopher may consider questions such as whether we have a duty to vote, whether we are obliged to obey and respect governments’ authority, whether we should eat meat, or whether we have an obligation to make large donations to end poverty. Some of the questions considered refer to the moral choices that individuals face, while others refer to moral choices faced by collectives, represented through intermediaries such as governments, businesses, or other organizations.

Some moral philosophies are deontological, so practical considerations, including the costs and consequences of the relevant alternatives, are not that important. Other moral philosophies are consequentialist, so practical considerations matter in answering moral questions (the most salient example is utilitarianism, where different choices are compared in terms of utility). However, although a consequentialist perspective might seem to be more practical, it is still a philosophical perspective: practical considerations matter only insofar as they shed light on what is right.

Examples of open borders philosophers include Michael Huemer, Jason Brennan, Joseph Carens, and Bryan Caplan. One interesting example to illustrate how the philosopher perspective uses practical considerations merely as a tool of philosophical argumentation is offered by the way people such as Huemer (e.g., here) and Caplan (e.g., here) typically deploy keyhole solutions. When Caplan brings up keyhole solutions, he’s not actually advocating them, let alone offering a specific keyhole solution that he is fully getting behind. In fact, as he’s clarified, he thinks pure open borders is preferable to keyhole solutions, or what I call the (1) > (2) > (3) preference ordering in this post. Rather, he’s using keyhole solutions to win the debate on whether it’s feasible to move in the direction of open borders.

As I noted in my post on Bryan Caplan’s open borders advocacy:

Although Caplan has proposed keyhole solutions, he doesn’t spend enough effort developing these or explaining why and how they may actually be made practical and palatable. Commenters on his posts may get the impression that he is using “keyhole solutions” as a way to deflect restrictionist arguments rather than looking at the reality on the ground regarding what’s actually politically feasible.

Commenter BK agreed and went further:

So generalized pro-immigration ideological pushes strengthen the opponents of keyhole solutions more than they support keyhole solutions. And in practice Bryan and folk at this site do seem to use keyhole solutions primarily as a rhetorical fig-leaf to deflect opposition and shut down conversations.

But from the philosopher perspective, establishing the existence of keyhole solutions can be sufficient to make a case even if one doesn’t feel the onus of developing or recommending them (in Bryan’s case, the logic is analogous to the logic of his views on desert: if one could come up with some way that a person could avoid a bad situation, then they do not deserve sympathy for that bad situation; similarly, if one could come up with keyhole solutions that could in principle allow for open borders, then one has no excuse to maintain the closed border status quo).

When Open Borders: The Case began, it had a fairly heavy philosophical bent. This made sense, because philosophy seems to offer a good place to start an investigation into a change as big and complex as open borders. I feel that this site (and the “open borders movement” at large) has exhausted the philosophical perspective more than the other perspectives. There’s still work to be done with respect to outreach and refinement, but the most important new ground to break on the question won’t come from a purely philosophical angle.

To the extent that work remains on the philosophical side, I believe it will be something of the sort where we apply philosophical reasoning to concrete, specific problems that exist in the world today. Thus, rather than writing another generic post about the right to migrate, we could argue that open borders is the only ethically consistent way of dealing with refugees and DREAMers.

UPDATE: In the comments of an Open Borders Action Group post by Joel Newman linking to an interview in the New York Times of philosopher Joseph Carens, John Lee excerpts a part of the interview that describes the philosopher perspective:

G.G.: So, why argue for open borders if it is not a feasible policy?

J.C.: Because philosophers should tell the truth as they see it (even when that makes some people mad). And it can be important to gain a critical perspective on existing arrangements, even if we cannot do much to change them at the moment. The feudal system was once deeply entrenched. So was the institution of slavery. For a long time, there was no real hope of changing those social systems. Yet criticism was still appropriate. If we don’t ask fundamental questions about the justice or injustice of our social arrangements, we wind up legitimating what should only be endured.

Wonks and policy catalysts

The wonkish perspective to open borders focuses on finding practical solutions or paths in a public policy context. Wonks are interested in the philosophy and ethics insofar as it tells them what subjects to focus on, and insofar as it provides some moral boundaries within which they can explore alternatives, but they’re more interested in working out the details of proposals that are, or might soon become, practical proposals for serious considerations.

Historically, there have been a lot of migration wonks (see for instance our list of migration information web resources and pro-immigration web resources), but few of them, even those whose recommendations push in the direction of freer migration, have identified with the cause of radically freer migration, let alone with “open borders” as a term. Partly, this could be because they are genuine moderates. Partly, this is because wonks, focused as they are on what’s immediately feasible, may lose sight of the ultimately desirable North Star. There are examples of wonks who, even as they propose moderate keyhole solutions, appreciate open borders as a potential end goal. Michael Clemens and Lant Pritchett come with a more distinctively academic pedigree, but are still focused on finding ways to get from here to there, and advocating for their particular keyhole solutions with governments, the public, and the intelligentsia. A particularly salient example is Clemens’ work on expanding the H-2 program in the United States to Haiti and trying to make it more easily accessibl to Haitians.

There are also a few wonks at libertarian think tanks who address migration-related issues, and at least in principle support radical open borders, even if the proposals they table for immediate consideration are more gradual. Examples include Alex Nowrasteh of the Cato Institute and Shikha Dalmia of the Reason Foundation. And then there are people like Matthew Yglesias who view open borders as a worthy end goal but offer far more moderate proposals for immediate consideration. Moreover, even those who are naturally philosophers can don a wonk’s hat and come up with practical proposals. Open Borders: The Case blogger Nathan Smith’s DRITI proposal (that he designed before this site came into existence) and co-blogger Michelangelo Landgrave’s suggestion of making use of NAFTA’s labor provision are examples.

Open Borders: The Case has represented the wonkish perspective to a fair degree, though somewhat less so than the philosopher perspective. My co-blogger Michelangelo Landgrave’s recent post suggesting next steps for the open borders movement basically argues that it’s time for the open borders movement to shift focus from the philosopher perspective to the wonk perspective.

But there’s a very important third perspective that is often ignored in this context, and may well be more promising than it looks.

Entrepreneurs

Entrepreneurs, like wonks, are focused on practical, immediate changes. However, unlike wonks, the practicality of entrepreneurs is not directed primarily at influencing policy. Entrepreneurs do not assume they have the ear of political decision-makers, or a special seat at the table in political negotiations. Rather, they’re attempting to find ways of attacking problems, starting off as ordinary people (albeit with some financial resources and personal connections).

Philosophers tend to be morally judgmental, telling people and institutions what they should believe and do. Wonks tend to be largely accepting of public opinion and belief systems, and tend to either move it at the margin or attempt to influence government policy holding public opinion fixed. Entrepreneurs try to directly sell stuff to the people, attempting to either change public opinion or ignore it and still provide value to the minority that defies the public. The entrepreneurial perspective hasn’t really been given much importance on Open Borders: The Case, or in policy discussions of migration in general. This makes prima facie sense: the main obstacles to open borders seem like policy obstacles, and policy change seems essential. Apolitical entrepreneurship doesn’t seem like a good fit.

But I’d like to argue that entrepreneurs are more important than that. Consider business like Uber and Airbnb. Both companies (and many others in recent years) began by operating in a legal gray area, but soldiered ahead, despite injunctions and threats from city governments. And at some point, their services had a sufficiently large loyal following from users that city governments couldn’t really shut them down (but at the same time, they got big enough that they couldn’t ignore government threats, so they reached compromise “keyhole solutions”). For concrete examples with Airbnb, see this and this. And Uber co-founder Travis Kalanick’s disregard for legal barriers is part of the reason for the company’s success.

What would the analogous situation be for migration? Illegal immigration similarly represents a challenge to the status quo. Just like Uber has done more to challenge the status quo of highly restrictive taxi medallions than numerous academic papers and think tank reports on the subject, continued illegal immigration has done a lot more to keep the issue of migration restrictions and their effect live than the economic or philosophical literature on the subject could alone. One of the main reasons politicians in the United States even consider passing immigration reform is the large number of illegal immigrants who make the issue salient and hard to sweep under the rug. As my co-blogger Nathan Smith says, “heightening the contradictions” through continued amnesty for illegal immigrants might ultimately be the most feasible path to increasing freedom of migration. There are close parallels between such amnesty and post-facto legalization of the gray area services provided by companies like Uber and Airbnb.

Thus, one could argue that those who facilitate illegal migration directly (as human smugglers or document forgers) or indirectly (by providing legal assistance or employment opportunities to illegal immigrants) are making entrepreneurial moves in the direction of open borders. Such entrepreneurs invoke mixed feelings even among open borders advocates, given that operating a successful business of smuggling people in and forging documents can require engaging in many unethical and even violent activities (partly to avoid border controls, partly because the underground nature of the activity makes legal or open means of recourse difficult). A recent post of mine on snakeheads (human smugglers from China), with a special focus on the recently deceased Sister Ping, went into some detail on this matter. The tactics used by some of these people are several shades worse than Uber’s shady tactics to gain market share.

One doesn’t necessary have to directly help people migrate illegally in order to facilitate illegal migration or use illegal migration to help challenge the status quo. One can also assist illegal immigrants once they have migrated, with jobs, educational opportunities, places to stay, and evading immigration enforcement. These fall within the broad category of civil disobedience, on which we’ve done a few posts before.

That said, it’s not necessary to concentrate solely on breaking the law to make an entrepreneurial impact. Some other, more legally above-board routes of an entrepreneurial nature are described at our migration arbitrage business opportunities page and my philanthropic possibilities blog post. A particularly noteworthy example that I’d love to investigate further is CITA, a nonprofit that helps farmers in the United Stateas connect with people interested in doing farm work in nearby countries such as Mexico, so that they can legally apply for H-2 temporary work visas. There may be similar opportunities in other locations, such as Svalbard, Argentina, the UAE, Singapore, Sweden, and Thailand, where at least nominally there is considerable freedom of migration for people who have a job offer in the receiving country.

The social/moral psychologist

A fourth perspective, that is not seen so much from people when they are trying to push the world towards open borders, but that is a very important complement to such pushes, is that of the social or moral psychologist. Such a person strives to understand the world, and the way that humans are behaving in it. Social scientists are part of this spectrum, while moral psychologists such as Jonathan Haidt are in a different part.

Wonks versus philosophers: two apparent conclusions and why they’re premature

Some might interpret wonks’ apparent practicality as evidence that wonks are more keen to actually see open borders through than philosophers. This is not necessarily true. Many wonks may be motivated at least partly by their paycheck (not that this means they’re saying things they know to be false, but at minimum their proposing practical solutions doesn’t necessarily mean that they are more serious about migration liberalization).

One can also err by interpreting the divide in the opposite way. A person used to wonk-speak may consider a philosopher a starry-eyed extremist who lacks practical sense. But this isn’t necessarily because the philosopher’s actual practical recommendations (if he/she were required to come up with those) would be more extreme, it’s simply that the philosopher is trying to address a different question. Similarly, for those used to moral philosophy, the wonk’s moderation may seem like wussiness, but that may not reflect objective truth. The wonk/philosopher divide is thus closely related to the moderate/radical divide and the moral/practical divide, but it provides a slightly different focal perspective on these divides.

Some hybrids

I think of FWD.us (that we’ve blogged about in the past) as an ill-conceived attempt at an entrepreneur-wonk-philosopher hybrid. Coming from (and attempting to embody) a Silicon Valley culture, FWD.us adopted the machismo of entrepreneurs. It borrowed a little bit from philosophical language, but offered no clear idea of what the underlying moral beliefs were and why. But its proposed path to success was purely wonkish. In light of this confused hybrid, it’s unsurprising that the group hasn’t really been able to achieve much, and that Joe Green, the President and CEO, was ultimately pushed out.

The DREAMer movement offers another interesting kind of hybrid. At one level, DREAMers are entrepreneurs: they’re engaged in openly defying and disobeying an existing system of laws, thereby making the contradictions between those laws and commonsense morality more apparent. At another level, to the extent that they propose, or at least stand behind, policy changes, they are playing the wonk. And to the extent that they directly appeal to people’s conscience about the correct way to treat DREAMers, they are engaging in moral philosophy.

The DREAMer hybrid has ben most successful in the entrepreneurial sense: they were able to acquire sufficient political salience that a DREAM Act has sort-of-been in the works for a while, and in June 2012, Obama passed his de facto DREAM Act called Deferred Action for Childhood Arrivals. The credit goes to DREAMer thought leaders such as Jose Antonio Vargas and his organization Define American, as well as numerous other grassroots organizations that have pushed for the issue. As wonks, the DREAMers have been relatively weak, offering no compelling long-term or robust solution. As philosophers, I think they’ve been even weaker. My co-blogger Michelangelo, himself a DREAMer, takes issue with what he considers flawed DREAMer logic and proposes instead that the DREAMer movement should use the case for open borders as a foundation. Occasional blogger David Bennion has argued that the DREAMer movement, and undocumented organizers at large, could pave the way towards open borders, and cited his own work for the DREAM 30 as an example.

Pro-immigration organizations such as the Immigration Policy Center, not explicitly pro-open borders, offer an interesting hybrid. They’re largely wonkish, but they also engage in and indirectly promote various forms of activism that could be construed as entrepreneurial. Personally, I’ve found their philosophical foundations to be poor. This isn’t necessarily an overwhelming criticism, because they specialize in something else. There is also a somewhat related issue of how their pro-immigration stance could conflict with certain kinds of keyhole solutions, and how they may be reluctant to consider trade-offs that improve greater freedom of migration in exchange for fewer immigrant rights (I discussed this a while back in this post, but there’s a lot more I hope to say on the rights-volume trade-off in future posts, probably referring to the work of Martin Ruhs).

Addendum: philosophers, wonks, and entrepreneurs against migration

The philosopher/wonk/entrepreneur distinction also applies to those who oppose some or all migration. This reference page on our site discusses the various philosophical bases for anti-immigration arguments, and includes commonly used argument types such as citizenism, territorialism, and local inequality aversion. Unsurprisingly, I think that the philosophical bases for arguments against freedom of migration seem weak, but that’s what you’d expect from a blogger on Open Borders: The Case.

The anti-open borders wonkish perspective is represented by organizations such as those listed on the anti-immigration web resources page. In the United States, the most respectable (in the view of legislators) of the anti-immigration think tanks is the Center for Immigration Studies.

What about anti-immigration entrepreneurship? The Minutemen and various other vigilante justice and citizen initiatives to identify and report illegal immigrants come to mind. One could also argue that websites like VDARE offer interesting (if confused) philosopher-wonk-entrepreneur hybrids.

Introduction to Institutional Economics

November 17, 2014 Nathan Smith Leave a comment

Whether open borders would really “double world GDP” depends greatly on how it will affect institutions. So let me offer a brief introduction to institutional economics.

There is one problem, however, that must be dealt with first. Institutional economics has become identified with economists like Dani Rodrik and Daron Acemoglu, with papers like “The Colonial Origins of Comparative Development” and “Institutions Rule” and with books like One Economics, Many Recipes: Globalization, Institutions, and Economic Growth and Why Nations Fail: The Origins of Power, Prosperity, and Poverty. All this is, as I see it, is fairly marginal relative to the real insights that institutional economics has to contribute, and the real task it has to do.

In the past couple of decades, there has been a boom in loose, hasty “institutional” narratives about comparative development, because “institutional” stories provide an interpretation of “total factor productivity”– the residual differences in international income that can’t be explained by factor endowments– that is (a) difficult to refute, because theoretically weak, and (b) somewhat politically correct. Cultural explanations of the wealth and poverty of nations are politically incorrect, though Deirdre McCloskey has ventured one. Racial/biological explanations are even more politically incorrect, though Greg Clark hints at one in A Farewell to Alms. But a book like Why Nations Fail stepped into a kind of vacuum, telling development economics what it wanted to hear. Its ascendancy is a disaster for the field. For lack of space, I’ll outsource my criticisms to Duncan Green and Jeff Sachs, satisfying myself with a few cryptic dicta. Property rights are not “inclusive economic institutions;” on the contrary, they exclude. They also permit “extraction,” e.g., coal mining, harvesting crops. “Inclusive economic institutions” ought to mean communism; to link democracy and capitalism by calling them both “inclusive” makes no sense. Non-democracies are no more “extractive” than democracies, in general. If anything, democracies take more resources from productive people by force, via tax and transfer systems. It’s not in the interest of democratic majorities to establish pro-growth institutions because, as Arrow’s impossibility theorem long since proved, it’s meaningless to speak of the interests of democratic majorities. It often is in the interest of autocrats to establish pro-growth institutions, so as to have more to extract: this is Mancur Olson’s “stationary bandit” argument. No matter how much we wish it were true, and no matter how much jargon we dress it up in, development is not a function of democracy. The thesis that growth depends on “inclusive economic institutions” which “inclusive political institutions” help to establish, while “nations fail” because “extractive political institutions” establish “extractive economic institutions,” has no merit.

(By the way, I’ve lamented the ascendancy of Acemoglu and Robinson before. See also Bryan Caplan’s link, and the comments below it, where I voiced more of my complaints. To my surprise, the Wikipedia page on Why Nations Fail actually links to both my post and Caplan’s! And here’s a post, “Comment on Smith’s Critique of Why Nations Fail,” with an extensive discussion following, in which I participated.)

I want to get back to basics. Here’s the core of institutional economics, which, by the way, has nothing to do with democracy. It starts, like most things in economics, with supply and demand:

Think of that chart as the central corridor of economics, of which every feature is a door into a room containing some subfield. Open the “D” door, and we enter consumer theory, with utility functions, budget constraints, own price and cross price and income elasticities of demand, etc. Open the “S” door, and we enter the theory of the firm, with long-run and short-run total and marginal and average cost, shutdown points and breakeven points, and behind that, isoquants and isocost lines; or, as an adjoining room behind the same door, we can enter industrial organization, with perfect competition and monopolistic competition and monopoly and oligopoly. Open the “P” door, and since prices are measured in money, we step into monetary economics, with price stickiness, and the equation of exchange, and various theories of the short-run trade-off between inflation and unemployment. Let “P” be wages and “Q” be employment and you’ve walked into labor economics. Let “P” be interest rate (or rate of return) and “Q” be quantity of loanable funds (or shares) and you’ve taken your first step in financial economics. Draw a new line below the equilibrium price and call it “world price” and you’ve got yourself an international trade model. Focus on “consumer surplus” and “producer surplus” and you’ve entered welfare economics. Push D down and to the right, or to the left, and call the gap between old D and new D a “tax,” or a “subsidy,” respectively, and you’ve entered public economics.

What about institutional economics? Where’s the door into that?

To enter institutional economics, stop to notice a few of the assumptions that must lurk in the background for the chart to make any sense. In particular:

Specialization. The model requires that some people have a surplus of the good to sell, while others have a need for the good to be met. Surpluses and unmet needs arise from, or at least are greatly multiplied by, specialization. Because I make X all the time, I’m very good at it; but for the same reason, I don’t have time to make any Y. So I supply X and demand Y. Thus supply and demand are born.

But not too much specialization, because you need competition too. The basic supply-and-demand model assumes price-taking behavior on the part of both buyers and sellers. Only competition can ensure that. But now suppose that a society of 1,000 people divides its work into 1,000 tasks so that each person is a monopoly provider of the one thing they do. There’s no competition, and no reason for suppliers to be price takers. So markets of the kind shown in the chart, with their nice efficiency properties, occur only somewhere in the middle of a spectrum running from no specialization to perfect specialization.

Property rights– including complicated contracts. Demanders must have some kind of property rights to the money they bring to market. They must have power to transfer these rights. Likewise, suppliers must have property rights in the goods they bring to market, and power to transfer them. “Property rights” can mean legal property rights, credibly backed up by a government, or customary rights, or private promises, or perhaps, occasionally, even the mere informal trading of favors. Often legal property rights and social trust are both necessary, as when contracts are signed, but cannot be made sufficiently detailed to cover all contingencies.

Some method of executing transactions, and it shouldn’t be too costly. Institutional economists talk a lot about “transactions costs,” and that sounds really, really BORING. Sure, it does take a bit of time and effort to move money from hand to hand, ring up cash registers, sign checks, mail stuff, etc., but is that really important enough to merit our attention? To this objection, the first answer is that “transactions costs” include things like contracts and search and establishing trust and getting incentives right. Transactions costs in this sense can plausibly be estimated to comprise more than half of US GDP. Second, and even more importantly, transactions costs determine the size of the network of specialization and trade. The transactions that don’t happen are as important as the transactions that do. Everyday example: the typical reader of this post probably does his or her own dishes, even though the value of his or her time is a good deal higher than many people who live nearby. Why? Because it’s too complicated to find them, hire them, communicate the nature and scope of the job to them, move them physically to where the job needs to be done, coordinate their entry and exit, and structure their incentives properly. Heighten entrepreneurial cunning and social trust enough, and you’d press a button, and some underemployed person in your neighborhood would come and do your dishes for you at an easily affordable cost, while you devote yourself to business or pleasure.

So how does institutional economics relate to the supply-and-demand chart that is the heart of economics? Institutions determine what markets exist at all, and who participates in them. Institutions enable– or fail to enable– enough people to do business with each other that all sorts of specialized markets can come into existence, creating wonderful productivity increases and wonderful consumer and producer surplus. And institutions take up the slack when markets can’t operate because specialization has been pursued too far to be compatible with competition.

Even though Adam Smith’s trumpet triumphantly declares, in the title of Chapter 3 of The Wealth of Nations, that “the division of labor is limited by the extent of the market,” economists have a bias against believing it, because it creates fundamental problems for the theory of competitive markets, a bias well-expressed by Becker and Murphy’s paper “The Division of Labor, Coordination Costs, and Knowledge.” When I read this paper for the first time in grad school as part of my dissertation research, I was very annoyed with it, because it missed the point in such a lucid and convincing way. Today, I love the paper for the same reason: it expresses a fallacy that pervades the economics profession, in a form that’s clear enough to be straightforwardly defeasible.

Becker and Murphy start by assuming that society’s tasks are infinitely divisible, that productivity in any given task depends on specific human capital, and that specialization raises productivity by allowing workers to focus their specific human capital acquisition efforts on one narrow task and therefore to acquire more of it. So far, the model points to perfect specialization, i.e., a society in which everyone is the unique specialist in one very narrow task. But then they argue:

Conflict among members grows with the size of a team because members have greater incentives to shirk when they get a smaller share of the output (see, e.g., Holmstrom (1982)). Moreover, efforts to extract rents by “holding-up” other members also grows as the number of members performing complementary tasks increases (see Chari and Jones (1991)). Further, the chances of a breakdown in production due to poor coordination of the tasks and functions performed by different members, or to communication of misleading information among members, also tends to expand as the number of separate specialists grows… Principal-agent conflicts, hold-up problems, and breakdowns in supply and communication all tend to grow as the degree of specialization increases.

They go on to assume that average coordination costs have the functional form C=C(n), dC/dn>0, that is, average coordination costs increase with the size of the “team.” That’s why they think that “sometimes the division of labor is limited by the extent of the market, but more frequently in the modern world it is limited by other forces.” To support this claim empirically, they go on to give many examples of markets where there seem to be quite a few fairly substitutable specialists. The facts they cite would constitute evidence against the theory that “the division of labor is limited by the extent of the market,” if that theory implied that there should be only one monopolistic specialist in most tasks. But it does not, and the literature they cite in support of the concept of “coordination costs” implicitly contains the reasons why the extent of the market can limit the division of labor well before the technical limits of useful specialization have been reached. Most “coordination costs” are related to missing markets, and would be mitigated if the market were large enough.

Start with the “team production” problem of Holmstrom (1982). The output of a team is usually such that the sum of the marginal products of its members is greater than the value of what the team produces. But that’s a complex and jargon-ridden way of saying it. Let me try again. There is a popular saying that “the whole is greater than the sum of the parts.” Now, if that’s true, what happens if you take one part away? The whole is no longer a whole, and its value is greatly reduced. That reduction in value is the “marginal product” of the part, in the sense that it is what that part adds to the value of the whole, provided all the other parts are in place. But, precisely because “the whole is greater than the sum of the parts,” every part has a large “marginal product.” The traditional theory of the firm assumes that each factor is paid its marginal product. If “the whole is greater than the sum of the parts,” then the sum of the marginal products of the parts is greater than the whole, so each factor can’t be paid its marginal product within the team’s budget constraint. And that creates “hold-up problems,” with each team member being in a position to blackmail the rest for a large share of the team product. Such hold-up problems can cause the team’s cooperation to break down, even though its potential product is more than enough to pay team members their opportunity costs.

But now suppose that the market is large enough that every team member is readily replaceable. If you want to interrupt me here, and object that even if outsiders were ex ante replaceable, once the team has begun work, its members gain lots of project-specific knowledge that makes them irreplaceable, then you haven’t meditated deeply enough on the condition that “the market is large enough.” In a large enough market, there will be many other teams working on very similar projects, at a similar stage, so team members remain replaceable throughout the project. In that case, the hold-up problem is easily solved. If any team member demands an undue share, just fire him and poach a similar person from some other team. If the market isn’t quite that large, maybe there’s a moderately similar team member who can be recruited if someone demands too large a share, and that at least mitigates the problem. The larger the market, the less the “coordination costs” associated with moral hazard in teams, relationship-specific or asset-specific or project-specific knowledge and investments, opportunism, hold-up problems, etc. A similar logic applies to production breakdowns due to logistical problems or miscommunication: the larger the market, the easier it will be to buy key spare parts when there’s a bottleneck.

And so, in my dissertation, I proposed the following modification of Becker and Murphy. Rather than C(n), average coordination costs are C(n,N), where n is the size of the team, and N is the size of the market. C(n,N) is an increasing function of n, but a decreasing function of N. Division of labor is limited by the extent of the market, but there isn’t perfect specialization, precisely because as the economy approaches that limit, coordination costs become too high. People under-specialize to avoid getting trapped in monopoly-monopsony relationships where they’re vulnerable to opportunism, hold-ups, coordination failures, etc. To the extent that monopoly-monopsony relationships are inevitable, that’s what firms, those “islands of planning in a market sea,” are for. Where market relationships would be dysfunctional, power relationships arise instead. In a world of perfect information and costless and complete contracts, there would be no need for “firms” or “jobs”: we’d all be free agents, trading goods and services. But because a boss and employee need to do a lot of relationship-specific investment, and the boss has better information about the value of various things the employee could do, the economy is mostly organized as firms and jobs, instead.

The role of “good institutions,” then– at least, as I read it: but the issue is very complex– is not so much to give people political representation and redistribute income, or even to provide public goods, tax or prohibit activities with negative externalities, subsidize activities with positive externalities, and ensure that industries remain competitive. I don’t think it’s even primarily to enforce property rights in an everyday sense– plenty of regimes can do a decent job of preventing shoplifting and trespassing– but rather, to do arcane things like protect minority shareholders, and put Martha Stewart sent to jail on obscure charges that most people can’t understand. Why does it matter to protect minority shareholders? Because then people will hand over their hard-earned money to companies they’ve barely heard of, which is pretty amazing if you think about it. And that allows firms to raise cash for new projects, and for people like Mark Zuckerberg who have done something really useful to become billionaires through an IPO, mitigating the burden of nondiversifiable entrepreneurial risk.

How important are institutions for comparative development? That’s too difficult a question for me to answer with much confidence, but tentatively: I think culture does a lot of the work that is sometimes attributed to “institutions,” but culture and institutions together probably are the main explanations of differences in “total factor productivity.” To see what I mean by “culture,” consider the question: why do US universities really create and disseminate knowledge, when it’s ridiculously difficult to monitor what a professor actually does in the classroom? Because professors are inducted into a culture of learning, to the point where we really care about knowledge and truth and rigor, etc., not (only) for the sake of payday or tenure or even prestige, but for its own sake. We give Ds to terrible students, even if it gets us bad teacher evals, because it’s wrong to tell the world that someone understands economics, who doesn’t. And I’m sure similar forms of professionalism apply in many fields. I’m skeptical, on empirical grounds, of Weber’s “Protestant work ethic” as a theory of comparative development, but I think that kind of explanation, concerning how culture, history, and religion shape individual behavior and values in a way that isn’t reducible to homo economicus, is probably important to the wealth and poverty of nations. In cutting-edge, innovative industries, culture usually has to do the initial work in solving team production problems. Rewards are wildly incommensurate with effort and risk, and perverse incentives are all over the place, but people do the right thing because they love cars, or computers, or whatever. Later, institutions codify and enforce the modes of cooperation that culture discovered, though even in mature industries, norms and values and intrinsic rewards are crucial to sustaining high performance.

Given my perspective on institutional economics (including culture), how would open borders affect the institutions of rich countries? Would they “kill the goose that lays the golden eggs?” Or would poor people enjoy the productivity-enhancing power of sophisticated, wealth-fostering institutions (and cultures), without damaging them?

There’s a farm I know in Maine which sells veggies by an honor system. The veggies are laid out on tables in a shed, with prices, and it’s up to you to put money in their cash box. No one is watching. It’s a very convenient and affordable way to buy fresh vegetables. This business model might collapse under open borders, as a critical mass of immigrants prove less honest than Americans, and shoplifters make honor-system sales unsustainable. Or, it might not. It wouldn’t surprise me much if even more honor-system commerce took place under open borders. But I’d expect less of it. I’d also expect to see more littering and open defecation under open borders. I think the kinds of transactions that are as vulnerable as this to a deterioration in mass behavior are of minor importance to the economy, but I’m not sure.

In big business and high finance, by contrast, I doubt open borders would do any serious damage to culture and institutions, as long as open borders doesn’t mean open voting. These are elite institutions with plenty of gatekeepers, and no one rises high enough to make the rules without being thoroughly shaped by the rules first. Even the average native-born citizen knows little about them and has no power to influence them, except very indirectly at the ballot box. Big business and high finance have a much larger effect on GDP than rural veggie stands, though their relative importance for quality of life is perhaps a good deal less than for GDP.

In general, I think most civil society organizations and trust-based commercial relationships wouldn’t be harmed by open borders because one isn’t dealing with random strangers, but with people self-selected and/or screened in various ways. Universities, for example, only accept students, and hire faculty, who meet their standards. The fact that someone is physically on US soil doesn’t compel a university to do business with them in any way. The exception here is that anti-discrimination law sometimes does compel private and public organizations to deal with people they would prefer to screen out (especially under the deplorable “disparate impact” doctrine which forbids people and companies to statistically discriminate on grounds that are correlated with race, and that courts or bureaucrats should arbitrarily decide are inadmissible).

My main fear for institutions under open borders is that law and public opinion would fail to recognize that private discrimination against immigrants is morally fine and should be legal. If firms, public bureaucracies, and civil society organizations, whose members and leaders obviously have the best knowledge about those organizations’ goals, needs, and workings, were arbitrarily forced to include people they didn’t want by bureaucrats and judges, then they could sustain serious damage, and the killing the goose argument might come into its own.

Open borders might also have a beneficial impact on institutions through international Tiebout competition.

Snakeheads as high-impact entrepreneurs

November 16, 2014 Vipul Naik 4 Comments

I recently read The Snakehead: An Epic Tale of the Chinatown Underworld and the American Dream by Patrick Radden Keefe. The term “snakehead” is used for a person who manages human smuggling operations for people from China (note that “human smuggling” should not be confused with human trafficking). The book is a fascinating, and in some ways disturbing, story of the huge network used to smuggle Chinese people illegally into the United States. I discovered the book when reading up an obituary of Cheng Chui Ping (better known as Sister Ping), one of the most reputed snakeheads.

Image source: The New Yorker

There is a lot of interesting material in the book, and although its relevance to the basic moral case for migration is fairly limited, it sheds light on many aspects of the realities of the ground. The book’s focus is the complex human smuggling operation of people from China and neighboring areas (but mostly from the northern part of Fujian province in China) to the United States, with most of them ending up in the Chinatown in New York City. But much of what it discusses is relevant to migration in other contexts.

TL; DR

The book paints a poignant picture of the strength of people’s desire to migrate. There is also plenty of material in the book that sheds light on the international refugee system, and in my view it strengthens the case laid out in John’s recent post. The book does a good job of going beyond the simple (albeit mostly correct) narrative of migrants as ordinary, innocent people who simply want a better life for themselves. Rather, it notes how migrants, like the rest of us, care about their own (and their families’) long-term survival and flourishing deeply enough that they can sacrifice their own short-term interest, as well as a number of ethical scruples, in order to make that happen. Arguably, there is a strong selection effect, both for legal and illegal immigration: people who undertake such arduous journeys are the ones with the most to gain and the least to lose, which could tell us something about the sort of people they are. But the basic urges moving them are present in all of us. Many of the people we know would have taken similar decisions under similar circumstances.

Unfortunately, the existing immigration system makes criminals of these migrants, in both senses of the word: it labels the act of unauthorized border-crossing as a crime, and some of the measures that people take to evade detection often involve them committing, or indirectly financing, activities that are criminal in a more objective sense. While the migrants and their facilitators who engage in the latter are in some (albeit not all) cases blameworthy, some part of the blame also falls on those of us who support the existing closed borders system that aims to shutter off such a basic human desire, in full cognizance of the unintended but easily anticipated consequences. (I’ve had a draft post on the ethics of illegal immigration for a while, but it’s not going to be finished any time soon. But you can read my co-blogger Nathan’s take on the subject or our background page on the morality of violating restrictive immigration laws).

#1: Who migrates, how, and why?

The book’s focus is on Cheng Chui Ping (better known as Sister Ping), who owned a modest storefront and restaurant in Chinatown in New York City, but whose main business involved servicing migrants in two ways: facilitating their smuggling into the United States, typically via an intermediate country such as Hong Kong or Thailand, and providing a low-cost service for them to send remittances back home.

The operations managed by Sister Ping, and others with whom she collaborated, were extremely complex. Her money transfer system relied on peer-to-peer movement of money: the person sending money gives it to Sister Ping in New York, and her Chinese counterpart gives the money to her family. Occasionally, she may need to physically transfer some money between her New York City and Fujian operational centers. Banks do the same thing (at least in principle) but bureaucratic and regulatory overhead make them more costly, and moreover, many of Sister Ping’s clients didn’t have bank accounts. Sister Ping’s operation is similar to the Hawala system, an extremely cheap system of money transfer in South Asia, the Middle East, and North Africa.

The people smuggling operation similarly required cooperation from people at different locations. First, people were smuggled from China to a holding country such as Thailand or Hong Kong. Thailand was good for holding because there was a sufficient density of corrupt officers who could be bought to look the other way as people waited en route to the United States. The trip from Thailand to the United States could be undertaken by plane or by ship. Usually, the ships sailed across the Pacific and landed in California. Sometimes, they went via the Indian Ocean, stopping in East Africa or South Africa before setting off across the Atlantic. Since landing directly on the US Coast was tricky, sometimes they would land in one of the Central American countries and then cross by land or by boat.

This operation is pretty nontrivial and involves considerable risk. The money transfer and human smuggling business netted revenues in the billions of dollars annually during their peak, and the gains to the migrants and their families back home were considerably greater.

The smuggling operation was complex and impressive. But more than simply marvel at the ingenuity of the operation, we should note how it often failed people: there were accidents en route that killed people, and often the smuggling operation wasn’t successful. Sometimes people would be caught on arrival. The sad fact is that the closed border system led to much ingenuity, risk, and effort being directed to undoing the damage of closed borders, rather than to moving the world further forward (cf. the parable of the broken window).

The fees for smuggling were high. Even back in the 1980s, smuggling fees could be as high as eighteen thousand dollars. A pretty huge sum. And although the snakeheads like Sister Ping made a profit, the profit margin wasn’t extraordinary: the price was high because the costs and risks were high. So why were migrants willing to pay the fee, and how could they afford it?

The answer to the why is pretty clear: a huge place premium: The pay in Chinatown in New York City, even for somebody doing a menial job and with zero English language skills, was an order of magnitude more than what the person could make in rural Fujian. The male adult of the family could migrate, send remittances home, and work really hard so that his wife and children could enjoy a good standard of living (relative to the other natives) back home. (For more on the network of jobs accessible to these migrants, see this New Yorker piece).

What about the question of how? In short, diaspora dynamics, which in this case literally involves early migrants paying for later migrants. For the most part, smugglers like Sister Ping held migrants who’d just arrived in captivity until their family members and friends within Chinatown had paid the smuggling fee. The migrant was then released and not tracked. He now owed money, but not to Sister Ping, but to his relatives. And that created a stronger incentive system to repay. Either way, Sister Ping didn’t have to track the migrant or worry about what he ended up doing.

But how did the relatives come there in the first place? This is the basic idea of diaspora dynamics: the first few people are unusual in some way: unusually wealthy, unusually enterprising. They either migrated legally or were able to personally finance their unauthorized journey into the United States. Both of these signal some unusualness relative to the reference population they were from. Then they smuggled their relatives in. And they smuggled their relatives in. And so on. This does suggest that, after a few iterations, the selection effects could be somewhat weaker than one might expect a priori.

#2: Non-cooperating countries

A Slate article talks about the importance of spoiler countries and corrupt officials in facilitating the global human smuggling network:

Sister Ping’s operation involved associates in dozens of countries, and corrupt officials in a string of strategic entrepôts. In the early ’90s, she funneled passengers through Bangkok, Thailand, where corrupt airline inspectors turned a blind eye to phony documents. By the late ’90s, she was sending ships full of migrants to the shores of Guatemala, from whence they could proceed overland through Mexico. She didn’t need to worry about the Guatemalan navy. She had them on the payroll.

This was one of the most surprising (and daunting) themes to emerge in my research: If criminal organizations, like multinational corporations, are mobile and opportunistic and can migrate wherever they like, engaging in a kind of jurisdictional arbitrage and seeking out an optimal environment in which to do business, then all it takes is one spoiler country, like Thailand or Guatemala, to render them virtually untouchable. When Sister Ping fled the United States after the Golden Venture incident, she settled in her home village in Fujian Province, where she enjoyed the protection of the Chinese authorities and proceeded to continue running her business for six long years. The FBI knew exactly where she was. But when they asked China to extradite her, Beijing brushed them off.

At least she was confined to China, you might say. But she wasn’t. She traveled all over the world during those years—even, amazingly, to the United States. How? When she was finally arrested in Hong Kong in 2000, she had a passport with her picture and someone else’s name. It was issued by Belize, a classic spoiler country.

Is the existence of spoiler countries a feature or a bug? If you consider the current closed borders system a moral anomaly, then it’s a feature, but if you strongly respect the status quo, it’s a bug. Some might argue countries don’t have the prerogative to be lax about facilitating migration to other countries while strictly enforcing their own migration laws, for that may be hypocritical. I don’t buy that argument. Nonetheless, some of the spoiler countries have relatively lax de facto immigration laws too, in some (albeit not all) senses. Thailand is arguably one such example (more on Thailand in another post).

#3: Sister Ping’s time in China

There is some level of irony in Sister Ping’s relationship with the Chinese government. On the other hand, she lent a helping hand to a large number of people who were escaping political and economic problems created through government policies, including some who were directly persecuted by the government. On that account, we might expect that Chinese government officials would take a negative view of Sister Ping. On the other hand, Sister Ping had helped a lot of people in northern Fujian migrate and become rich, and they had in turn sent back money and enriched their villages back home. This made her a popular figure back home in her region. Even if the government officials’ own feelings for Sister Ping were ambiguous, the people’s love for her made it difficult for the officials to take action against her. It would be a needless risk to their popularity with no upside. But it is ironic that the woman who facilitated so many people from China claiming refuge in the United States spent the latter half of the 1990s seeking refuge in China from the United States regime.

The irony dissipates somewhat by taking a bigger view. People want to be free and comfortable. Free to make choices in their own lives. Free to move elsewhere if those places offer better opportunities. Both the Chinese and the US government have a mixed record when it comes to curtailing those freedoms. The Chinese government’s record is more generally negative: after disastrous experiments with Maoism, the country has liberalized considerably but much progress remains to be made with respect to political and economic freedom. The United States government does a better job in protecting political and economic freedom for people within its territory, but getting in there can be tough (to be fair, the Chinese don’t have a great track record with immigrants either, particularly those from North Korea, who basically have nowhere else to go). Sister Ping and her clients appreciated the United States for its strengths. That’s why she migrated there and helped facilitate her clients’ moves. At the same time, they did not “respect the law” in the cases where it inhibited their basic freedoms. And to the extent that the very flawed Chinese government tolerated Sister Ping, she was happy to seek refuge there.

#4: What motivates people like Sister Ping?

Snakeheads (the people who head the human smuggling operations) differ considerably in their intentions and integrity. But the best among them, such as Sister Ping, seem like upstanding folks. Sister Ping was fairly wealthy. But more than most wealthy people, she had very little opportunity to bask in her wealth. She needed to maintain a very low profile in order to avoid getting noticed by the police, the immigration agencies, and local rival gangsters who might rob her. She generally kept her word to clients. Unlike other snakeheads, she stayed true to her 100% money-back guarantee: in case of a botched operation (even an ultimately successful one) she didn’t charge her clients.

So why did she enter the business? For reasons that, I think, are very similar to the reasons people become entrepreneurs. Ambition, a desire for power, a keen sense for business opportunities, and a desire to have an impact. And a cold, calculating utilitarian ruthlessness. A concern that the balance of her actions was highly positive for her clients, not necessarily that every individual action was beyond reproach. As Keefe (the author of the book I’m drawing on) wrote in The New Yorker:

To the end, Sister Ping remained defiant. Illegal migration is an inherently precarious business. Mattathias Schwartz recently wrote for The New Yorker about the lengths that African migrants will go to wash ashore on the Italian island of Lampedusa, and Jim Dwyer, at the Times, published a heartbreaking piece about the death of a young Ecuadorian girl seeking to reconnect with her parents in the United States. In Sister Ping’s view, the balance of her contributions outweighed the costs. “My life remains valuable,” she insisted, during the sentencing phase of her trial. “It remains valuable.”

In Chinatown, many people seem to agree. Her death was front-page news in New York’s Chinese-language newspapers, with articles describing her “righteousness,” and calling her an “immigration hero.” “Her warmth moved everyone,” a local man who came from her village back in Fujian told the Times.

Over in Silicon Valley, there is a stereotype of the bold entrepreneur who forges ahead bravely, taking risks and not caring for social convention. Perhaps one of the most flamboyant examples of the entrepreneur who’s willing to fight hard, John Galt-style, and doesn’t mind appearing arrogant, is Travis Kalanick, Uber CEO. While some of his business choices are arguably ethically challenged, others seem to be ahead of their time in challenging common but mistaken moral norms (such as the norms against surge pricing). Regardless of the specifics, Kalanick is an impressive entrepreneur: after a decade of working on businesses that failed despite being promising, he didn’t give up, and he got it right the third time, with Uber. This is a man who perservered and it paid off, for him, and the large number of people whose lives have been improved by Uber.

But the risk-reward ratio faced by Kalanick pales compared to what Sister Ping faced. Kalanick may end up a billionaire if Uber continues to execute well. Sister Ping probably had just as much, or perhaps even more, business sense, but because she chose to operate in an underground business, the opportunities to her were limited in scope. She had to adopt even more unsavory tactics than Kalanick, including outright violence. And even though she acquired money, it was far less than what Kalanick could accumulate, and she had little opportunity to live it out lavishly due to other constraints. When it comes to the risks, there is no comparison. Sister Ping spent the last 14 years of her life in prison. Kalanick will at worst have to pony up money in a lawsuit and shut down Uber, and in the median case will probably do pretty well for himself.

The following passages from the book illustrate Sister Ping’s determination and relentless resourcefulness:

Whenever people asked Occhipinti about Sister Ping, he told a story that he thought demonstrated just how untouchable she had become. Early on, he had gone to see her at the apartment in Knickerbocker Village, on Monroe Street. He’d taken along another investigator and an interpreter. Occhipinti didn’t have much to bust her on, but he made it clear to Sister Ping, through the interpreter, that he was on to her and he would get her eventually. To Occhipinti’s surprise, Sister Ping wasn’t fazed in the slightest. “You don’t have the time to get me,” he remembers her saying. “Or the resources.” He made a note of the meeting, and it ended up in Sister Ping’s file. It became part of her lore within the agency. But what always struck Occhipinti about the exchange wasn’t just the arrogance of it, or the insult, so much as the fact that she was right.

Keefe, Patrick Radden (2009-07-15). The Snakehead: An Epic Tale of the Chinatown Underworld and the American Dream (pp. 55-56). Knopf Doubleday Publishing Group. Kindle Edition.

A segment on Sister Ping’s brief jail stint in the early 1990s (distinct from her end-of-life jail stint starting 2000):

Sister Ping did go to prison, in upstate New York. She hated it […] She no doubt was also troubled by the opportunity costs of remaining in jail. Goldenberg had asked that she be permitted to serve her time in a halfway house in New York, arguing that she should be close to her four children, but also that if she was removed from her base of operations in Chinatown, “she would merely languish and her time would not be used profitably.”

[…]

She could still communicate with Yick Tak and the rest of the family in New York City, and as her lawyer had observed, Sister Ping was eager to use her time profitably. The nature of the alien smuggling business, after all, is that there is a pipeline. It sometimes took months to move people from Fuzhou or Changle to Chinatown, so at any given moment there were numerous people at stations along the way: in Shenzhen or Hong Kong, Guatemala or Belize, Tijuana or California, Vancouver or Toronto. “Sister Ping had to keep working from prison,” Patrick Devine explained. “Because when she went in, there were already dozens of people en route to the U.S.”

Keefe, Patrick Radden (2009-07-15). The Snakehead: An Epic Tale of the Chinatown Underworld and the American Dream (pp. 94-95). Knopf Doubleday Publishing Group. Kindle Edition.

But rather than merely admiring the net benefit that Sister Ping may have given her clients, the more important lesson we should take is that our perverse migration restriction regime made it the case that a business that involved such violence and high risk to life and limb was still one with high social value and a decent personal profit opportunity. How much better would the world be if the need for this kind of innovation was eliminated through a more open regime for legal migration? Sister Ping’s innovative energies could then have been directed to creating additional value rather than merely undoing the damage of immigration restrictions (yes, I know I’m repeating myself here).

Addenda

The book is interesting in two other senses that each deserve their own post.

#1: Writers on the subjects of ethnicity, race, culture, and immigration in the United States often describe Chinese immigrants as a model minority, with Mexican and other Hispanic immigrants being contrasted unfavorably with the Chinese. While the case for Chinese superiority cannot be completely ruled out, this book does a good job of deflating the strongest and most exaggerated forms of the myth. Highly selected people who migrate from China through legal channels, and their children, disproportionately inform elite commentators’ impressions of Chinese immigrants. Illegal immigration and human smuggling from China to the United States suffers many of the same qualitative problems that illegal immigration from Mexico and other Latin American countries does. If the United States had a land border with China and an ocean separating it from Mexico, it’s plausible that Mexicans would be touted as the model minority for Chinese to emulate (note also that the population size difference makes it easier to select highly successful Chinese immigrants). More in this OBAG discussion on Facebook.

#2: There is plenty of discussion in the book about various attempts to game the ambiguous rules for refugee status among Sister Ping’s clients. How morally justified were these attempts to stretch the spirit of the rules? This is a topic that requires a post of its own, but the upshot is that almost inevitably, a close examination of each individual case would make one sympathetic to it, even if it did not fit the narrow framework of political persecution reqired to qualify for refugee status. Chapter 13 of the book talks about the People of the Golden Vision, a movement that arose to release a bunch of people who landed ashore in New York City after the ship smuggling them, called the Golden Venture, ran aground. The chapter describes how ordinary Americans, whose prior views on immigration ranged across the spectrum of mainstream views, came to identify with the story of the immigrants. Once people got to hear the people’s stories and interact with them up close, they were convinced that these people should be granted the opportunity to stay in the United States. This is a topic that deserves a separate blog post, since it offers a blueprint of sorts for successful activism in the migration domain, and also provides insight into how actual contact helps resolve people’s moral contradictions in the direction most consistent with a free migration regime.

#3: The relation between human smuggling and organized crime at different levels is worth exploring. The book discusses the connection between snakeheads and local gang activity in Chinatown, with gangs playing important enforcement functions for snakeheads. This too is a topic worth further exploration in a separate post, in the broader context of understanding the role of crime in both the enforcement and the defiance of migration controls.

A request to moderates: show your work

November 14, 2014 Vipul Naik 2 Comments

As I posted on the Open Borders Action Group, I was struck by a passage from Madeline Zavodny’s piece in Peregrine titled Immigration Policy and the Surge:

Deporting them back to such bleak conditions may seem heartless (although not as heartless this summer’s sight of US citizens blockading buses carrying these migrants, reminiscent of protests against buses carrying black children to white schools some fifty years ago). But allowing them to remain in the United States for more than a few weeks guarantees bigger illegal inflows in the future and reduces further the possibility of comprehensive immigration reform.

Zavodny is a prominent speaker on immigration-related issues (for samples of her work, see her Senate testimony and her write-up on immigration and American jobs). She seems to have a generally favorable impression of work-based migration at all skill levels and has defended migration liberalization in many contexts. My co-blogger John Lee had briefly described her contributions to a Cato panel on immigration in July of last year. She’s writing for a journal devoted to the policy analysis of immigration. Therefore, it is reasonable to hold her statements to high standards.

Zavodny’s first sentence argues that governments deporting people is not as bad as private citizens demanding that governments deport people. At first sight, this seems puzzling, because advocating that something be done is rarely considered to be worse than actually doing it.

The puzzle is deepened by the fact that in her next sentence, as well as in the rest of the article, she seems to endorse at least some level of deportation as a necessary evil. So why exactly does she advocate that government do something, yet consider it heartless for others to advocate the same? As I wrote in a comment on my OBAG post, based off of a private discussion with John Lee (who has written the defining piece on how open borders differs from mainstream moderate immigration reform):

Seems like the main point of difference between many mainstream people and hardcore restrictionists is that the mainstream people endorse it, but are proud that they don’t boast about it. They endorse deportation as a “necessary evil”

But this attitude, too, is morally mysterious. Imagine that you are about to cross a bridge, and a police officer stops you, brandishing his weapon and forcing you to back off. If he shouts invective at you, calling you a loser who doesn’t deserve to cross the bridge, you aren’t going to be pleased. But would you really consider his behavior fair if he said “The bridge will snap in two if you go in there. Sorry, I don’t mean to hurt you, but if you move forward, I’ll shoot you!” or something similar? What if you point out that the bridge hardly looks on the verge of collapse, and besides, many other people are getting on and of it, and he simply brushes you off, repeating, “I don’t mean you any ill will, but you got to back off or I’ll shoot you. Give your family my regards.”

Now, if there actually were a good case that the bridge would collapse, and/or if he had good reason to believe that, and you sensed that, it might be different. But if he claimed in a blasé fashion that the bridge would collapse, yet offered no reasons, that wouldn’t come across that differently from shouting invective or displaying personal hostility.

The analogy with moderates should be clear: many moderates reflexively oppose large-scale admission of refugees or migration liberalization, while at the same time seeking to distinguish themselves from more hardcore restrictionists who, in their view, display unsavory prejudicial attitudes (in fact, even some hardcore restrictionist groups, such as Center for Immigration Studies, take pride in their lack of hostility to immigrants, as we’ve discussed before. But that’s a separate topic). But, as I’ve discussed before, few moderates care to spell out clearly why they think of open borders as going too far. Or rather, the reasons they offer seem like blithe dismissals, not the sort of strong, compelling evidence you might want to summon when denying people such a basic right.

There’s a good chance that people such as Zavodny could make, or cite, good arguments against open borders of the sort that we try to address on this site. Analogous to the bridge that’s just about to collapse, she might argue that open borders would kill the goose that lays the golden eggs. Or she might take a more distinctively citizenist line, something that’d be consistent with her public writing on immigration. She might even come up with new arguments or new variants of existing arguments that give pause to open borders advocates. But even if she is simply relying on arguments made by others, it is important for her to clarify what her particular mix of reasons is.

Whatever her reasons, I think she owes it to the people whose deportation she implicitly and explicitly endorses, and to the people whom she is proposing to shut out, to be more explicit. And the same goes for all people who publicly propose moderate steps, particularly if they style themselves as being morally superior to those who wear their restrictionism on their sleeve.

PS: I think everybody debating a big change such as open borders should ideally lay out their reasoning more carefully. I try to do this myself, and also encourage other open borders proponents to do so. I believe we do a reasonable job, but certainly people have been critical of us for not reasoning carefully enough, and I’d like to continue improving on that front. Moreover, I’m not claiming that just showing one’s work makes one immune to criticism. Those who disagree with us are welcome to dissect and critique our writing (as some have done) and the bloggers here do write detailed critiques of moderates who push back against open borders (as co-blogger Nathan did with Gene Callahan and many of us have done with Tyler Cowen). But I think we should (and do) respect people more who seriously try to grapple with the question “Why not open borders?” interpreted non-rhetorically, even if we have many object-level criticisms to make of their arguments.

PS: My previous post vindictiveness versus indifference in the open borders debate makes many closely related points.

Do immigrants cause traffic?

November 3, 2014 Michelangelo Landgrave 4 Comments

A common argument against migrants, domestic and foreign, in Los Angeles is that they increase congestion on the city’s already strained roads. In Malibu , one of Los Angeles’ most beautiful beach communities, residents are trying to pass legislation that would attempt to discourage further population growth in a misguided attempt to reduce congestion in the area. There is some truth to the argument as the most congested cities in the United States are also those with the largest percentage of foreign-born residents. If one were to run a quick regression on a city’s congestion level vs. foreign-born population I’m sure they’d fine a degree of correlation.

Traffic jam in Los Angeles. Source.

Given the likely existence of this correlation, should immigration be restricted to reduce traffic congestion?

Not at all. Migrants are attracted to economically well off cities. Well off cities grow large in size and in turn the largest cities tend to have the worst traffic congestion. For that matter congestion on roads isn’t caused by large populations but by inadequate pricing of roads. Washington, Los Angeles, San Francisco, and other highly congested cities wouldn’t suffer from their current congestion problems if they charged drivers a distance based use fee. The exact fee would vary between cities, but it would likely be no more than a few cents a mile with a surcharge during peak driving hours.

The adoption of distance based user fees would not only serve to reduce congestion, but also provide a stable funding source for maintaining current infrastructure and new developments. The United States’ is currently struggling to properly fund its transportation costs. Earlier this year the Highway Trust Fund had to receive funds from the general revenues in order to stay afloat. Roads have traditionally been funded through at-the-pump gasoline taxes, but increasing automobile fuel efficiency and political gridlock have made these taxes increasingly obsolete. Even if the current gasoline tax system could be reformed it would fail to promote a significant reduction in congestion as drivers would have little reason to worry about the marginal cost of travel besides the price of gasoline.

If the concern is that migrants are increasing congestion one shouldn’t seek to restrict future migration, deport current migrants, or even restrict development. There is an infinitely simpler and effective keyhole solution – adopt distance based user fees. Related arguments, such as the concern that an increase in a city’s population makes finding parking more difficult, are likewise best dealt with the adoption of better pricing mechanisms .

Open Borders: The Case