Monthly Archives: October 2012

“The arc of the moral universe is long, but it bends toward justice.”

7 Comments

I am no recent convert to the cause of open borders, but like others in the blogosphere, including Vipul himself, I have become increasingly convinced that this is the most important moral cause of our times. Vipul has kindly invited me to join this blog, and I consider it a great privilege. My convictions about immigration stem not only from intellectual pondering, but personal experience.

A bit about myself: my father is Chinese Malaysian and my mother is Filipino (with some Chinese heritage). My parents met during graduate school in Thailand. I was born while my father was completing further studies in Japan. I lived in Singapore for the first few years of my life, and grew up in Malaysia, a country I am proud to call home. I came to the United States for college, unexpectedly obtained a green card before graduation, and presently work in a major US retail bank. Along the way, I’ve studied abroad in the United Kingdom and held immigrant visas in both Australia and New Zealand (both rather long stories for another time there).

As a matter of nature, of genetics, I literally would not be here today without immigration. As a matter of nurture, of life experiences, I would not be who I am today without immigration. I’ve virtually lived the benefits of open borders. Being able to cross borders has taught me countless things about life and about humanity; it has given me countless acquaintances and friends; it has made my life immensely richer in ways you can never aspire to place a dollar value on. If we do talk dollar values, I earn much more in my current job than I would at the highest-paying similar alternative in Malaysia.

Yet I have enjoyed the benefits of immigration through blind luck: I have caught more than my fair share of lucky breaks. I had no say about being born into a relatively wealthy, well-educated and highly mobile family, the biggest lucky break of all. Nothing entitles me to the great blessings I have had, the same blessings which have largely been denied to, say, the children of farmers in Bangladesh.

Continue reading “The arc of the moral universe is long, but it bends toward justice.” →

Introducing John Lee

54 Comments

The first blog post on the Open Borders blog (written by Vipul Naik) was published back on March 18, 2012. Shortly thereafter, Nathan Smith joined with an inaugural blog post on Hong Kong. Alex Nowrasteh, also an open borders advocate, agreed to have his writings re-posted on the Open Borders blog, making a total of three bloggers on the site.

We’re glad to announce that a new person will shortly be joining the Open Borders blog. This is John Lee, a Malaysian working for a US bank. John has written a lot about Malaysia-specific issues — you can read more about these at his blog-cum-website. He’s also been advocating open borders and engaging restrictionist arguments in the comments section on EconLog, which is how we discovered him. John will bring a unique cross-national perspective to his blog posts. His first blog post should appear in a couple of days.

Welcome, John!

Victor Davis Hanson

2 Comments

I made the following comment about Victor Davis Hanson at EconLog, in response to David Henderson’s recent post:

Hanson’s argument seems to consist entirely of anecdotal evidence. Well, here’s my anecdotal evidence. I moved out to the Central Valley of California a year ago. I lived for a little while in southeast Fresno, then in Sanger, a small town a little east, very near orange orchards, and now I’m in central Fresno. I haven’t had any encounters with crime. I once hired a guy who was a member of the Bulldog gang (inactive) to fix my car (didn’t know he was a gangster till he got to talking– very talkative guy). He had a lot of resentment towards the cops, and if I recall correctly his dad (we were at his parents’ house) was behind on the rent, but he was nice enough to me. I often leave my door unlocked at night. That’s dumb and it’s just my forgetfulness, but it’s indicative that I don’t feel a lot of fear. Basically, life is normal. If you look at crime statistics– see here: http://www.disastercenter.com/crime/cacrime.htm– property crimes are down, murders are down, forcible rape is down, burglaries are down by MORE THAN HALF since 1986, when Reagan’s amnesty passed. But “no one calls the sheriff anymore,” says Hanson. Well, surely they’d call the sheriff about MURDER, and that’s fallen sharply. Really, shouldn’t Hanson give us some evidence? Not just personal anecdotes but solid, statistical evidence? By his account, central California sounds like it’s descending into anarchy. Who am I to believe, him or my own lying eyes? As someone who lives here, his account just doesn’t ring true.

Now, it’s true that central California is sort of rural and backward compared to the East Coast metropolises where I lived for the previous ten years. One misses the charm of Georgetown, the buzz of sophisticated conversation in a corner Starbucks, the intelligentsia. But making the immigrants go away won’t make the intelligentsia come. On the contrary. The agricultural industry here is heavily dependent on immigrant labor. A lot of the economy around here, as far as I can tell, would just unravel without it.

I listened to a little of Hanson’s book, Mexifornia. He commits every fallacy in the book, again and again. I’ll concede that median and average incomes are probably a bit lower in the Central Valley than they would be without the immigration. That’s not inconsistent with immigration being beneficial to most immigrants and most natives, or even to it being Pareto-superior to closed borders. “Pareto-superior,” of course, is a concept far too sophisticated for the likes of Hanson to understand. Which is why he shouldn’t be taken seriously on this issue.

Henderson responded:

@Nathan Smith,
Wonderfully put, Nathan.
Until the last two sentences. I know Victor a little. As I mentioned, we are both Hoover fellows and so I occasionally talk to him in the special coffee room at Hoover. Don’t sell him short. I bet he can understand “Pareto superior.” And even people who can’t understand have views on the issue that we should take seriously. I did take him seriously, which is why I bothered responding. If we don’t take people’s concerns seriously, we get nowhere.

Well,  OK. Let me take Hanson seriously by responding to the introduction to his book Mexifornia on Google Books. It will soon become clear why I’m reluctant to respond to the whole thing. I may also make clear my impatience with Hanson on the topic of immigration. (I understand that Hanson is an excellent historian of ancient Greece. A while back, I listened to a brilliant course on ancient Greece from Yale by Donald Kagan, who repeatedly stressed his admiration for Victor Davis Hanson. But good specialists often make bad public intellectuals. I’m also probably closer to Hanson on foreign policy than Henderson is.) Mexifornia begins by pointing out that public opinion and policy have moved in Hanson’s direction since 2003. Hanson is partly right, though he exaggerates: Continue reading Victor Davis Hanson →

The story behind the “double world GDP” estimates

1 Comment

[UPDATE: I have added a new blog post titled gains from migration: GDP versus surplus that covers an issue that I didn’t adequately address in this blog post: that even though the contribution to GDP is largely made directly through the migrant, the “benefits” of this, in terms of the social surplus, are captured more broadly.]

Critics of immigration generally spend very little effort critiquing the strongest quantitative argument in favor of open borders: that they would result in a one-time increase in world GDP by 50-150%, or, in short, slogan form, double world GDP (the canonical literature review is this paper by Michael Clemens and the slogan “double world GDP” seems to have first been used in this blog post by Bryan Caplan). Many of these critics are citizenists, and frankly couldn’t care less about world GDP. But others have scoffed at these estimates without providing a clear-cut argument against them.

To my knowledge, the best critique of these estimates is expressed in a series of blog comments by Ghost of Christmas Past, a commenter on EconLog. The most complete versions of the critique are in this comment by Ghost of Christmas Past on Caplan’s “National Egoism” post and this comment by Ghost of Christmas Past on Caplan’s persuasion bleg post. I would like to provide a detailed point-by-point response to Ghost of Christmas Past’s critique. Prior to that, however, I need to establish more clearly just where the “double world GDP” estimates come from and what I think are the weaknesses of these estimates.

The first question: how are these world GDP estimates calculated?

One of the things that Ghost of Christmas Past glosses over in his/her critique is that the “double world GDP” estimate is not simply the estimate made by Michael Clemens. Rather, Clemens does a literature review and considers the many different estimates, showing that they are in a range of 50-150%. The back-of-the-envelope estimate by Clemens is more of a sanity check of the following sort: okay, assume that gains are half of what we observe today, how much can that give us? Then, Clemens goes over the various aspects that go into computing these estimates and the degree of uncertainty behind each of these factors. For those who don’t have the time to read Clemens’ paper, a quick list of the factors that would need to be considered, solely from the migration of labor, are: the effect on migrants, the effect on competing labor, employers, and consumers in the target country, and the effect on competing labor, employers, and consumers in the source country. Of course, when people move, it’s a migration of both labor and consumers, as well as, possibly, a migration of capital. This would further complicate the analysis.

The overall story behind the double world GDP estimate is that the first-order effect on migrants — aka the benefit to migrants — is huge, thanks to the place premium. In other words, migrants gain a lot by migrating. What they do with these gains (for instance, whether they send part of the money to their home countries as remittances, or save and invest in businesses in the country they migrated to) is not directly relevant to the GDP gain estimate.

What about the gains and losses by others, including competing labor, employers, and consumers, in the source and target countries? These gains and losses could both be important, but they are quantitatively likely to be substantially smaller than the gains to migrants. There could be considerable debate about the sign of these effects. For instance, the debate surrounding the suppression of wages of natives is about the extent to which competition in the labor market from immigrants drives down native wages. Pessimists believe that the driving-down effect from three decades of immigration to the United States has been about 4.8% for high school dropouts in the United States, and closer to zero for other categories of workers. Optimists see the effects as zero or slightly positive at current levels of immigration to the United States (more US-specific stuff at the link). Both optimists and pessimists believe that substantially more open borders would probably lead to a bigger decline in native wages, though less so in the long term than the short term. The overall magnitude and sign of the effects is up for empirical debate. Note: Even with a modest wage decline, natives may still be better off if price declines and the expansion in the range of consumption options makes up for this decline. They may also be better off as employers and land-owners. It’s only a small fraction of natives who are unambiguously likely to be worse off — those who depend primarily on wages (i.e., don’t own land), work in unskilled jobs that directly compete with unskilled immigrant labor, and don’t value the expanded range of consumption possible through immigration.

So how does this fit in with the “double world GDP” estimate arguments? The crux is that these gains and losses figure as rounding errors compared to the huge gains experienced by migrants. Continue reading The story behind the “double world GDP” estimates →

Open borders, political externalities, and tipping points

5 Comments

In a comment addressed to David Henderson, Mark Crankshaw makes an interesting argument about the political externalities of immigration, raising the concern that unrestricted immigration may lead to a tipping point toward left-wing populism in the United States:

Here’s a hypothetical: what if, prior to 1989, there was a substantially supported political party in West Germany that favored the establishment of a Communist dictatorship and German re-unification under East German rule? And further that this party received about 45% of the vote (needing only 5% for a majority) and that this party was actively encouraging militant East German citizens and all others sympathetic to communism to immigrate to West Germany to tip the electoral balance in their favor? If you were a West German, would you welcome such immigration?

In my view, this is similar to the conditions in the US today. Admittedly, the Democratic Party may not wish to install a Communist dictatorship at present. However, I do believe that Democrat party policies are sufficiently noxious enough and that these policies will cause me substantial long-term economic and political injury if not sufficiently opposed. This substantially supported party has also proven very adept at building permanent racial-ethnic voting blocks based on a “share-the-wealth” platform.

I agree that immigrants are no threat to “impose” their political will against that of the indigenous population. However, what if the indigenous population is evenly divided ideologically and immigrants could permanently tip the balance in one direction? Wouldn’t immigrants from left-of-center countries side with our indigenous leftists and be quite vulnerable to “share-the-wealth” leftist populism? As one who favors limited government, I certainly see immigration as tilting the ideological balance to my ideological opponents–perhaps permanently. The re-election of Hugo Chavez this past week amply demonstrates that democracy offers no protection from leftist populism and the establishment of semi-permanent leftist rule. If it can happen in Venezuela, why not here?

Crankshaw expressed a similar concern in an earlier comment addressed to Bryan Caplan:

I’ve read your paper summarizing the arguments against open borders (http://econfaculty.gmu.edu/bcaplan/pdfs/whyimmigration.pdf) and your counter-arguments against them. Your argument is persuasive. However, in the back of my mind, I fear that I can still see open borders going very wrong.

My fear of open borders doesn’t center on the immigrants per se, but with the anti-libertarian forces native to the US. Would not these non-libertarian groups attempt to co-opt immigrants and use them to subvert libertarian ideals?

The current presidential election appears, at least to me, that left liberals are able to co-opt recent immigrants much more readily than libertarians. Immigrants may not vote much, and may tend towards the status quo, but it appears that the status quo they lean heavily towards is the anti-libertarian left liberal status quo. Take away the African American vote and the votes of recent immigrants and Obama loses in a humiliating landslide. Does anyone really believe that if Romney were not the candidate opposing Obama, but that the opponent were a libertarian, that these recent immigrants would be voting libertarian? Or would they remain firmly supporting left liberals?

Here’s my framing of Crankshaw’s tipping point-style model:

  • The median American voter holds fairly anti-free market views.
  • The Democratic Party in the United States is moderately more anti-free market than the median American, whereas the Republican Party holds moderately more pro-free market views.
  • Elections are usually a close call between the two parties. If we exclude immigrants, then the Republican Party would win. But the inclusion of immigrants tips the balance partially in favor of the Democratic Party.
  • Slightly more immigration would tip the balance (possibly irreversibly and creating permanent damage) in favor of the anti-free market position of the Democrats.

Before responding, let me say that I have very little knowledge about the specifics of the platforms of the Democratic and Republican Party, and even less knowledge about the nitty-gritties of party politics. That said, I think that Crankshaw’s model is flawed. It is not the case that the political parties have ideologically rigid positions, and that there is a kind of binary decision about which political platform gets adopted based on who gets the majority of the votes. Here’s my model.

  • The median American voter holds fairly anti-free market views.
  • Both parties (the Democrats and the Republicans) use feedback mechanisms such as polling data to gauge where the median American voter lies. Then, they try to carve out niches fairly close to the median position, but that can still be rhetorically distinguished from each other and that extremists can identify with (apropos Hotelling’s law in politics and the median voter theorem). On the issue of free markets, the Democrats have rhetorically chosen a niche slightly more hostile to free markets and the Republicans have chosen a niche slightly less hostile to free markets compared to what the median voter prefers.
  • When there are changes in the nature of the median voter, whether through immigration, generational change, or the publication of an Ayn Rand novel, both parties will move their platforms to stay in the same position relative to the median voter. If the median voter becomes moderately more hostile to free markets, both parties will adopt policy platforms that are moderately more hostile to free markets, though the Democrats will still be relatively more anti-free market and the Republicans relatively less hostile to free markets than the median voter. If the median voter becomes moderately more pro-free market, both parties will shift their platforms to become more free market, but the relative positions will again be unaffected.
  • Switches in the relative position can occur, but these polarization reversals are relatively rare (one of them occurred with respect to race relations and voting blocs in the Southern United States with the Civil Rights Act in the 1960s).

If my model is more accurate, then immigration is unlikely to lead to tipping points. If the immigrants who tend to vote tend to be more hostile to free markets, this will move the needle a bit away from the direction of free markets. But I would not predict a tipping point toward left-wing populism. Both parties will modify their stances toward somewhat higher marginal tax rates, a few more regulations, etc., and the tightness of political races will be largely unaffected.

Is this something for a pro-free market person to worry about? Yes, and I will address the nature of immigrant political views in separate posts (for now, see the links from the political externalities page). But qualitatively, this is different from a “tipping point” concern. I think that the standard framework, that treats such political externalities as a cost of immigration that scales continuously with the amount and type of immigration, is adequate to deal with political externalities.

PS: This post is written from a US-specific perspective, but the basic insights, if correct, should apply in many other countries.