Monthly Archives: July 2013

Economists want more immigration, why don’t you?

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A perennial assertion of open borders skeptics is that they are the voice of reason and empirics in the immigration debate, while open borders advocates are soft-headed people thinking with their hearts instead of their brains. So this humble blogger spent a Friday lunch hour in Washington, D.C. attending a Cato Institute panel titled What Economists Think About Immigration. Incidentally, the panel was broadcast on C-SPAN, and thanks to them, you can also view the full panel online.

Of the four people on stage, only one was a new face to me:

  1. Alex Nowrasteh (moderator of the panel, Cato Institute researcher, and an Open Borders blogger)
  2. Madeline Zavodny (panelist, chair of the Agnes Scott College economics department)
  3. Ethan Lewis (panelist, associate professor of economics at Dartmouth, and my former econometrics professor)
  4. Michael Clemens (panelist, Center for Global Development researcher, and the man who single-handedly changed the way I think about immigration)

Zavogny presented first, talking about high-skilled immigrants to the US and how they contribute economically to the US. I think even open borders skeptics tend to favour high-skilled immigration. Those who don’t are either unmoored from reality, or openly admit that they don’t have a hard empirical reason for their belief that high-skilled immigrants should be banned from taking good jobs. So I won’t cover Zavogny’s presentation in depth.

Clemens presented third, but similar to Zavogny, I don’t think he covered much terribly new ground in the debate (at least, that would be new to someone already familiar with the academic debate on immigration’s empirical impacts). Clemens presented a version of his double world GDP lecture, covering the usual ground: immense gains to migrants, doubling world GDP, banning “brain drain” dehumanises immigrants and doesn’t help anyone, and ending restrictions on freedom of movement may seem crazy, but crazier things have happened (see: the abolition of slavery).

Lewis, on the other hand, presented some really compelling and new material. To me, one of the new things was how strongly he feels about immigration! I suppose econometrics does not lend itself to very passionate lectures, but although I knew he studied immigration while I was a student of his, I had no inkling of the depth of his support for reducing immigration restrictions.  (Full disclosure: I was also a student of his wife, Elizabeth Cascio, who supervised my senior seminar and final economics paper.) Even more new and exciting to me: Lewis presented some of his latest work, which finds that immigration has boosted the income of Americans across the board — even low-income Americans.

Perhaps the most commonly-cited harm of immigration is its impact on the wages and employment of natives. Immigration supposedly reduces wages across the board. This is a complete myth, which no economist would sign on to (at least, none that I’ve read, including prominent skeptics). There is concern among a few economists that immigration harms income and employment for low-earning natives. However, few find this result, and most that do have been subject to various criticisms: the impact they find is extremely small (the most popular estimate here would suggest that 20 years of immigration to the US resulted in a cumulative 3% decline in low-earning natives’ wages); it’s sensitive to the removal of a few data points; it doesn’t account for how capital investments  react to the influx of labour; it relies on data from a period when other things driving reduction in wages, such as the decline of trade unions, could be confounding the results.

Lewis presents a slide (at roughly the 25:30 mark in the C-SPAN recording) suggesting that not only has immigration increased the wages of high-skilled natives, as you would expect — it has also increased the wages of low-skilled natives. Why does the wage data suggest this? What plausible mechanisms are there? Lewis suggests two major things:

  1. Changes in the use of capital — firms respond to an influx of immigrants by investing less in capital than they had planned, creating jobs for low-skilled natives as well as immigrants and ameliorating the potential negative wage impacts for low-skilled natives
  2. Immigrants compete in a different labour market than natives — immigrants whose English fluency is limited or non-existent will compete among one another for jobs, and natives emerge unscathed thanks to their English skills

Lewis presents the arguments for these mechanisms quite well, so I’d urge you to watch his talk yourself. In particular, he has a number of interesting charts backing all these points up. My understanding is he has a forthcoming paper that will fully flesh out the ideas in his presentation. My take is this is just one data point, but if you’re analytically evaluating the likely outcomes of more immigration, seeing this ought to make you revise upward your assessment of the probability that immigration helps or doesn’t harm natives. And given the existing literature, that assessment should already have been assigned a fairly high probability in the first place — certainly not the 0% chance that so often seems to be assumed in immigration debates.

Lewis wraps up his talk by urging the audience to think beyond the current policy debate in Washington, which focuses today primarily on whether to regularise the 11 million unauthorised immigrants currently living in the US. He points out that it makes absolutely no sense to ban people from migrating in the first place, and given the immense gains to the migrants, even if you don’t believe his estimates, you should be happy to enforce a tax or fee on them that captures some of those gains, to ensure all natives benefit from immigration.

Economists overwhelmingly reject popular myths that immigrants are economic harms. Yet these myths refuse to die. We no longer believe that Jews drink the blood of babies, that Chinese eat rats, or that Irish are just drunk beggars. Why do we believe that people born on the other side of an invisible line called the national border are an incredible harm to us, while people born on the other side of an invisible line demarcating a county or province are perfectly guiltless? Both types of people are as likely to “steal” our jobs and drive down our wages. But one person we call a criminal for crossing that invisible line; the other, we call a good citizen.

I can’t echo my former professor’s words enough. We need to think beyond today’s debates about immigration. The fact is, today’s debates rely on ignorant assumptions about immigration. They assume immigrants are “job thieves”. Having a debate on these terms is like arguing whether we should let more Jews in or hold back lest they start drinking our children’s blood or poisoning our wells. We’re starting from premises so utterly wrong that there’s no point having the debate.

Of course the US should have a process for legalising people who’ve lived in the US for a long period of time. If they ever did any harm by crossing an invisible line 10 or 15 or 20 years ago, as long as they aren’t committing any crimes and harming anyone today, we should live and let live. This is so basic that as Lewis says, we need to think bigger. We need to reject the myths of the past, and adopt a reality-based immigration policy — one that embraces all human beings as people with dreams and goals and potential and contributions that will enrich us all and build our communities.

Introducing Hansjörg Walther

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We here at Open Borders: The Case are thrilled to announce another addition to our growing team of occasional bloggers: Hansjörg Walther!

Hansjörg Walther is a mathematician by training with a doctorate from the University of Bonn, Germany. After a year at Stanford University, he went on to work in the financial sector and currently manages corporate bond funds for a mutual fund company. In his spare time he runs the blog “Freisinnige Zeitung” which is named after a daily newspaper that was edited by German Classical Liberal Eugen Richter from 1885 until 1904. Hansjörg is interested in historical topics and has written articles for various blogs and small German magazines. He also composes music as “Kapitalistenschweine” (Capitalist Pigs) that can be found on YouTube.

We look forward to hosting Hansjörg’s posts and hope our readers find his work enlightening!

REMINDER: If you’re interested in blogging for the site in any capacity, please fill out  our potential guest blogger contact form.

Immigration And Property Rights

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Opponents of immigration often compare nations to households. Under this analogy, citizens are members of the household, while an illegal immigrant is “like a roommate who doesn’t pay the rent.” We wouldn’t allow someone to barge into our household and use all of our private property, so why would anyone allow an immigrant to barge into a country and attempt to find a job?

Weaknesses of this analogy aside, it rests on a view of property rights that is perhaps best outlined here by blogger Simon Grey. In summary, the argument goes:

  1. Under most reasonable people’s understanding of property rights, a single owner of private property is entitled to keep anyone of his or her property for any reason whatsoever.

  1. A group of private property owners on adjacent properties may fence their properties together and do likewise.

  1. Such a group of property owners can further outsource the management of property linkages, such as common roads, sidewalks, etc. to a third-party (e.g. a homeowners’ association) if they so choose.

  1. The above is similar enough to a state that appeals to property rights are consistent with this analogy.

I find this argument unpersuasive, for following reasons: First, under this argument, natives also have a right to transact with immigrants, thus the concept provides no special reason to oppose immigration. Second, because this argument makes certain assumptions about governance of the commons, it ceases to be an argument about property rights and reduces to a declaration about moral governance (an argument which can be disputed on a purely moral basis independent of property rights). Finally, advocating for open borders is in no shape or form a violation of anyone’s property rights.

Some Problems With Collective Property

Property transactions involve property’s being either bought-and-sold or rented. Unless an immigrant intends to sleep on the streets, someone within the country has voluntarily elected to either sell or rent property to the newcomer. And while it’s always true that one might run away from his or her debts, the fact remains that any immigrant is always a party to some kind of business transaction in being here. Unless those business transactions occur exclusively among fellow-immigrants (a totally unreasonable assumption), immigrants are trading with domestic natives who wish to trade with them, too. Thus, this is exactly the opposite of “a roommate who doesn’t pay his rent.”

Almost paradoxically, the anarcho-capitalist counterfactual utilizes just this rationale in its argument against open borders. The argument is that, because every free market transaction is a de facto “restriction” on absolutely uninhibited use of another person’s property rights, the open borders concept is logically impossible. Clever logic like this is classic Hans-Hermann Hoppe, but it nonetheless misses the mark.

Giving things away for free is hardly what we have in mind when we argue for free markets. Similarly, opening borders to free human migration means allowing people to travel so that they can solicit the kind of free trade to which Hoppe refers. Knocking on doors, renting apartments, and answering wanted ads are not the kinds of activities we typically call property rights violations, and this is all we really have in mind when we talk about open borders. The anarcho-capitalist counterfactual is neither an argument against this kind of activity nor a particularly strong justification for the restriction of it.

Suppose I live in a private, gated community with Steve Sailer, Joe Arpaio, and Mike Huckabee. Further suppose that John Lee wishes to live in our community. If John wants to purchase or rent land from Sailer, Arpaio, Huckabee, or the homeowners’ association in which theirs is the majority opinion, they would be within their rights to decide that they don’t want John in their community, and refuse to sell or rent to him. But what if I choose to rent my property to John? Aren’t I within my own property rights to enter into a leasing agreement with John?

Opponents of immigration may counter that my participation in the homeowners’ association bars me from doing so. If true, what’s to stop me from ending my contract with the homeowners’ association and renting to John, anyway?

Only by asserting that the homeowners’ association’s collective control over my personal property – i.e. by asserting that collective property rights trump individual property rights – can we conclude that I cannot rent to John. Of course, opponents of immigration can always invoke the principle of collective property rights to argue against open borders, but such claims run contrary to the spirit in which property rights were invoked in the first place.

After all, I doubt that what conservative opponents of immigration have in mind is the supremacy of collective use of property over individual property rights. If they did, a significant shift in public opinion would invalidate their argument. Indeed, a significant shift in public opinion might even invalidate their individual claim to property.

Claiming The Commons

A second problem with the property rights argument against immigration is that it assumes that only immigration’s opponents own the commons. Embedded in an appeal to property rights to close the border is the assumption that the border itself and the state mechanisms deployed to enforce it work only for those who oppose immigration, and not for those of us who do not.

In truth, public land, public offices, and public resources are merely stewarded by the state. We call it “public property” only because it is not owned by private individuals. It is tempting for libertarian minds to reason that this is unfair or inappropriate – perhaps such reasoning even has a sound basis – but so long as property is owned and operated by the state, it is subject only to the will of the state.

Therefore, if the state decides to take an anti-immigration policy stance, the borders will be closed. If the state chooses to open the borders to the many benefits of free human migration, the borders will be open.

Vipul Naik previously summarized how the state might choose to govern its decisions here:

  • Radical agnosticism: The nation-state’s government can admit or deny non-citizens in a completely arbitrary fashion, without having to justify itself to either citizens or non-citizens. In this view, whatever the government decrees is the right thing.

  • Agnostic democratic fundamentalism: Non-citizens should be allowed or denied entry based on whether the majority of citizens would consent to their entry. […]

  • Citizenism via democratic fundamentalism: Here, elected representatives need to make decisions based on what the majority wants. But in addition, individual citizens, whether as voters or political lobbyists or elected representatives, need to make and justify their political decisions using citizenist premises.

  • Citizenism as a direct basis for political decision-making: Here, elected representatives directly make decisions on a citizenist basis, irrespective of what the democratic majority decrees. In the ideal world here, the ruler is a benevolent citizenist dictator.

Thus governance of the commons effectively reduces to a choice between the arbitrary decisions of our rulers, the democratic process, or Citizenism.

Nearly everyone agrees that the first choice is senseless by virtue of its being arbitrary.

Meanwhile, if proponents of the property rights argument object to democratic fundamentalism under the assumption that it violates their property rights, they must not subscribe to the principle of collective property rights discussed in the previous section. (Thus, my desire to trade with immigrants is an exercise of individual property rights equal to their desire that I not trade with immigrants.)

Finally, if proponents of the property rights argument wish to object on the grounds of Citizenism, then they are subtly shifting the discourse from one concerning the different types of house styles that people may choose to an entirely different argument altogether. In essence, they are suggesting that the varied property rights held by immigrants and the native citizens who choose to engage with them, perhaps in transactions involving homes of diverse architectural styles, can and should be overridden if such interactions do not pass the Citizenist moral test.

In light of the above, it seems that property rights arguments cannot appeal to the commons at all and truly remain property rights arguments.

Ethical Shortcomings

The previous two sections discuss problems with the validity of the property rights argument, but this argument isn’t just invalid; it’s also irrelevant. Why irrelevant? Because I need not deprive you of your property rights to make the case for open borders.

Consider Simon Grey’s position:

Let us also suppose that the man and his neighbors are all of the same ethnicity and thus decide to form a group that allows all members to utilize each other’s properties for travel (with reasonable but equal limits, of course) while simultaneously blocking everyone who is not a member of the group from crossing the properties at all.  Would all the members of this group be within their rights do so, even if we personally find this to be quite distasteful?  Again, the answer is yes.

Or, alternatively, as expressed by blogger “The Crimson Reach:”

People have bad reasons for how they wish to dispose of their property, of course. We can second-guess them and complain about them. But we too might have bad reasons for doing so…. In any event, simply having a bad reason for what you want to do with your property can’t, in and of itself, add up to an argument that you shouldn’t be allowed to do so. Not without, again, demolishing the concept of property.

We see that appeals to property rights are often made with full awareness of the fact that one’s motives for closing borders might not be good at all. They might even be terrible reasons for closing the border. This is likewise acknowledged in the academic literature. For example, philosopher Christopher Heath Wellman writes:

First, let me stress that I seek to defend a deontological conclusion about how legitimate states are entitled to act, not a consequential prescription for how to maximize happiness or a practical recipe for how states might best promote their own interests. I understand that groups can have weighty reasons to limit immigration in certain circumstances, but what the best policy would be for any given state’s constituents (and/or for those foreigners affected) will presumably depend upon a variety of empirical matters, matters about which others are more knowledgeable. Thus, I doubt that any one-size-fits-all immigration policy exists, and I, qua philosopher, have no special qualification to comment on the empirical information that would be relevant to fashioning the best policy for any given state. However, if anything, I am personally inclined toward more open borders…. My aim is merely to show that whatever deontological reasons there are to respect freedom of association count in favor of allowing political communities to set their own immigration policy.

All three people I have quoted argue the case that states, like individuals, are within their rights to determine to close the borders if they so choose.

But so what? Open borders advocates don’t want to deprive anyone of their property rights. It is full cognizance of and respect for property rights that moves us to make the case for open borders through persuasive reasoning. We certainly know that you are freely entitled to oppose immigration. But we think the benefits are clear, obvious, ethical, and rational; hence, we aim to make the case for opening the border to human migration – by choice.

Conclusion

In light of all of the above, I can only conclude the following:

  • Every economic transaction between an immigrant and a native reflects an implicit endorsement by the native of that immigrant’s status in the country, in full consideration of that native’s property rights. Thus, property rights are as much an argument for open borders as they are against open borders.

  • Ignoring this fact amounts to a presumption that either immigration restrictionists feel they own the commons, or feel they are more entitled to public property than the rest of us. But as we have seen, this position calls into question its validity as a position based on property rights.

  • Even if immigration restrictionists are within their rights to close the borders, that still does not address the fact that the arguments for opening the borders are an appeal to change minds, and are therefore no threat to anyone’s property rights whatsoever.

On all points, I find the property rights argument against immigration unpersuasive.

Introducing Ryan P. Long

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We here at Open Borders: The Case are happy to introduce a new occasional blogger: Ryan P. Long!

Ryan is a software consultant originally from Utah, a state that has benefited from a large and thriving Mexican immigrant population. There, he eventually earned a B.S. in Economics from Utah State University, under the tutelage of a number of extremely intelligent immigrants from China, India, the Middle East, and several neighboring states. Shortly after graduating, he became an emigrant to Canada and lived there for a duration of about nine years. While there, he met a rather wonderful Bangladeshi immigrant and eventually married her. After a couple of years, they both emigrated to Fort Worth, Texas where he now works for a company staffed with some of the brightest immigrants from India, Latin America, Europe, China, and Russia. His interest in immigration is the natural result of its ubiquity in his life, but his embrace of the open borders paradigm is the result of the many conversations he has had over the years with friends about their pre-immigration lives.

We’d like to welcome Ryan and we look forward to his future posts here!

REMINDER: If you’re interested in blogging for the site in any capacity, please fill out  our potential guest blogger contact form.

A Thought Experiment: Haitian Migration

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As Vipul recently noted, one of the biggest questions surrounding open borders is just how many people would move to a new country. The estimates of doubling world GDP rely on this being a very large number. On the other hand, large numbers of immigrants moving to the first world also increase the concerns surrounding political externalities or the overpopulation and environment effects of migration. The number of immigrants who decide to move can potentially have important consequences for good or ill. At the same time precise estimates of how many people might move are likely to be impossible. We should probably expect at best to come to basic estimates.

But one way to help with that is to receive a multitude of informed opinions on the question and thus I come to you dear readers!

Since examining the entire world at once with this question is likely to be extremely complex, let’s use a particular country as an example: Haiti. Let’s get some basic facts about Haiti down as a way of making this task easier. Haiti’s current population is slightly under 10 million people with about a 1% growth rate under current birth/death/migration rates. The country currently has one of the highest emigration rates in the world at 5.5 people out of every 1000 leaving every year. Current income is also one of the world’s lowest with GDP per capita (purchasing power parity) at about $1,300 a year. This helps contribute to Haiti being one of the countries with the highest wage ratios with the US in a paper written by Michael Clemens meaning the potential economic gain to migrants is among the greatest (see page 11). The United States is home to currently over 500,000 Haitians with most in Florida and New York. According to Gallup polls, about a quarter of the adult Haitian population would like to migrate to the United States in particular. That would be about 1.5 million people (including everyone over the age of 15 as “adults” which depending on Gallup’s definition of adult is likely an overestimate, but then not including any children these migrants may wish to bring).

So my question to readers, if the United States were to open its borders tomorrow how many Haitians do you think would come here? Would everyone expressing an interest come or would economic factors stop them? Would the opening of borders increase how many would want to come? If other developed countries were to open their borders how many Haitians would that draw away from coming to the United States? And how much of a difference would at least partially French-speaking countries like France, Belgium, or Canada opening immigration have on drawing Haitians away from the US? Finally, would there be a difference in the amount of Haitian migration if the US opens its borders generally or if the borders are opened for only Haiti in particular? And would this emigration be a solution for Haiti’s numerous problems?