All posts by Nathan Smith

Nathan Smith is an assistant professor of economics at Fresno Pacific University. He did his Ph.D. in economics from George Mason University and has also worked for the World Bank. Smith proposed Don't Restrict Immigration, Tax It, one of the more comprehensive keyhole solution proposals to address concerns surrounding open borders. See also: Page about Nathan Smith on Open Borders All blog posts by Nathan Smith

Halfway measures towards open borders

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Full-fledged open borders seems far off to the point of being utopian, but there are several principles/programs short of open borders that might be easier to achieve, and which would bring some of the benefits of full-fledged open borders while bringing it closer. These are a few:

1. The right to invite (see here). People benefit by being able to invite others, and this is something they might demand more of from their governments. It exists with fiance visas and family reunification visas. California growers lobby for the right to invite guest workers into the country. What if professional women agitated for the right to import maids and baby-sitters? What if the elderly agitated for the right to import drivers? Zuckerberg’s immigration advocacy group might be thought of as agitating for the right to invite high-tech workers on H1-B visas. An unlimited right to invite would be almost the same thing as open borders, but even if, say, every US citizen could sponsor a couple of guest visas per year, that would loosen things up a lot.

2. The right to emigrate. Rich countries should feel a lot guiltier than they do about the fact that their immigration policies make them complicit in some of the world’s worst regimes by not giving people a way out. If the world took human rights seriously, one of our top priorities would have to be the worldwide establishment of a right to emigrate, if one’s home country provides very inadequate freedoms or economic opportunities. That is, rich countries would seek to make sure that everyone had somewhere half-decent that they could go. IMPALA may help with this, by making it possible to quantify the extent to which probably billions of people are imprisoned in destitute and/or unfree countries today. The pursuit of a global right to emigrate might involve using aid money to incentivize some countries to become haven or refuge countries, while other rich countries did their part by providing this aid money. By the way, this needn’t be done out of altruism. It might be in the geopolitical interests of the United States or Europe to ensure that Russian young men of an age to serve in the army have some place to run away to, or to facilitate the voluntary depopulation of Iran. Emigres might even provide a useful pool of volunteers for a Foreign Legion eager to liberate Iran with American guns and air support, but without American boots on the ground.

3. The rights of the “larger body.” I picked up the phrase “larger body” from C.S. Lewis’s The Four Loves; it means that the experience of being an incarnate being extend beyond the actual organism under our control to include many objects of our natural loves, including wives, husbands, children, parents, brothers, sisters, pets and other animals, and friends. US immigration policy, which to some extent accommodates family reunification motives, gives some de facto recognition to the rights of the larger body, but what is missing is a definite legal and moral doctrine that the state cannot justly separate families or close friends, and must accommodate the needs of this important aspect of human nature. This falls short of open borders since, of course, not every aspiring immigrant is part of the “larger body” of any US citizen. It is different from the “right to invite,” above, because I mean by the right to invite, not a fundamental human right, but a positive right which governments would establish to please or pander to citizens rather than from a sense of inexorable duty.

4. Citizens’ right to interact with, hire, sell to, rent apartments to, illegal immigrants. When citizens have to check the papers of potential employees, contractors, tenants, customers, or whatever, that’s inconvenient, and also a little scary, since presumably some punishment awaits if they make a mistake. The defense of a small businessman’s right to hire without verifying papers, or better yet without papers at all, or the landlord’s right to lease a house without papers, would ease the way for immigration, too. For that matter, I would insist that the state acts unjustly if it refuses to issue driver’s licenses to illegal immigrants, because its authority to police the roads can properly be exercised as a means to the safety of motorists and pedestrians, which is not jeopardized by an illegal immigrant as such being on the road, but, on the contrary, is jeopardized when illegal immigrants can’t get driver’s licenses and so, if they feel it necessary to take the risk or driving for economic or personal reasons anyway, will be under particular temptations to hit-and-run if they get in an accident. If an illegal immigrant hits a pedestrian, then runs instead of helping, because if he helps he’s afraid he’ll be deported and never see his family again, and the pedestrian dies, the illegal immigrant is probably to blame, but the state is certainly culpable in the pedestrian’s death for gross negligence in its duty justly to police the streets. Establishing this principle would help the open borders cause.

5. International migration negotiations. On the analogy of international trade negotiations, meaning that one state agrees to admit the citizens of another state in return for like privilege being granted to its own citizens. For example, what if the US and the EU made an agreement whereby Europeans could migrate to the US and work freely, and Americans could do the same in Europe. I would anticipate large gains on both sides, as Americans would benefit culturally from access to Europe’s treasury of ancient, beautiful cities, while Europeans would benefit economically from access to America’s relatively more prosperous and dynamic economy. The politics of such a deal would be very different from those of allowing mass immigration from developing countries. Once the precedent was set, it could spread.

Welcome Atlantic readers! (And, how you can help)

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This morning, Shaun Raviv published an article about open borders in The Atlantic, one of the finest magazines in the world, entitled “If People Could Immigrate Anywhere, Would Poverty Be Eliminated?” Atlantic readers: welcome. If you want to give us money to support the cause, sorry, you can’t. As far as I know, we don’t have an infrastructure for that. What you can do is comment on our posts. We love to get thoughtful, high-quality comments, so as to see what kind of impression our arguments make on outsiders. We adapt what we write about considerably in response to thoughtful criticism. In particular, see here, here, and here. We’re good listeners here. We’re Socratic and inquisitive.

Here’s Shaun’s description of Open Borders: The Case.

Vipul Naik is the face, or at least the voice, of open borders on the Internet. In March 2012, he launched  Open Borders: The Case, a website dedicated to the idea. Naik, a Ph.D. candidate in mathematics at the University of Chicago, is striving for “a world where there is a strong presumption in favor of allowing people to migrate and where this presumption can be overridden or curtailed only under exceptional circumstances.” Naik and his two primary co-writers, Nathan Smith and John Lee, parse research into    immigration impacts, answering claims by those they call “restrictionists”–people who argue against open borders–and deconstructing writings on migration    by economists, politicians, journalists, and philosophers.

My favorite part:

In 2008, Clemens and his frequent co-writer, Harvard economist Lant Pritchett, came up with a new statistic called “income per natural.” Their goal was to show “the mean annual income of persons born in a given country, regardless of where that person now resides.” They found that large percentages of people from Haiti, Mexico, and India who live above international poverty lines don’t actually reside in their home countries. “For example, among Haitians who live either in the United States or Haiti and live on more than $10 per day–about a third of the U.S. ‘poverty’ line–four out of five live in the United States,” Clemens wrote. “Emigration from Haiti, as a force for Haitians’ poverty reduction, may be at least as important as any economic change that has occurred within Haiti.”

Getting this kind of coverage makes me think again about a question that’s sometimes come to us: What can I do to help? For example, Bryan Caplan blegged: “Suppose you wanted to spend your charitable dollars to increase the total number of people who migrate from the Third World to the First World.  What approach would give you the biggest bang for your buck?  Are any specific countries, organizations, or loopholes especially promising?”

A rather staid, cautious answer is that you might be able to join the list of sponsors of the IMPALA data project. They didn’t ask me to solicit money for them and I don’t even know whether they’d accept it, but I assume a large project like theirs would have things to do with financial support, and we could definitely use better data on migration policies around the world. If you want to learn about trade policy, you can go the WITS database hosted by the World Bank, and get very detailed information about volumes of trade around the world, broken down into very specific categories, as well as about tariff rates and other restrictions. There is nothing close to that for immigration law, but the IMPALA data, when available, should help. See this talk for more about IMPALA’s data project.

IMPALA is not agitating for open borders, of course. But as I argued a while back, good indices measuring the openness of all the world’s borders could be quite useful for advocacy: Continue reading Welcome Atlantic readers! (And, how you can help) →

Singapore: 29% of the labor force is foreign

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From Singapore’s Success: Engineering Economic Growth, by Henry Ghesquiere:

Like other countries, Singapore controls the income of foreign labor. Here, too, economic growth has benefited from openness. Augmenting the domestic labor supply is an integral part of the country’s overall development strategy.

Foreign manpower made a key contribution to Singapore’s economic growth. By 1970, full employment had been achieved and Singapore began to attract temporary foreign workers, then accounting for 3.2 percent of the labor force. Their number grew rapidly, reaching 7.4 percent of the workforce by 1980. By 2000, foreign workers made up an estimated 29 percent of Singapore’s labor force– 5 percent higher-skilled or professionals on an “employment pass” and 24 percent lower-skilled holders of a “work permit.” Expatriates filled half of the 600,000 new jobs that were created during the 1990s, with the other half filled by the domestic labor force. The upward trend has continued since.

Foreign workers now play a key role in Singapore’s economy. Low-income earners, mainly from the Philippines and Indonesia assist in households and with elderly care, while road and construction workers hail from all over South and East Asia. Professionals and highly skilled workers are being courted through an aggressive open-door policy to attract global talent. Foreigners on temporary work permits and employment passes are expected to leave at the expiry of their term, unless renewed. There are procedures to keep the lower skilled as a revolving pool on fixed employment terms to prevent them from establishing roots. Jail penalties await landlords and employers who house or employ illegal immigrants. Foreign labor and the Singaporean economy have become intertwined in mutual dependence.

In this area as well, Singapore relies on the price mechanism as a policy instrument to manage the total inflow and skill level of expatriate labor. Under the foreign work permit system, employers pay a levy to the government budget that differs according to the skill level of workers and sector of activity. Permits are renewable every two years. Levies are raised if demand from employers is strong. Levies are lower or nil for better-skilled workers. This differentiation has encouraged construction firms to invest in training their workers and to introduce labor-saving techniques. One consequence of improved skill levels is increased competition: during the downturn in 1998, some local employees were retrenched while stronger performing foreigners kept their jobs, unlike in 1985. Also, the inflow of one important category of less-skilled workers may have indirectly contributed to higher productivity. The increase in female labor force participation from 29 percent in 1970 to 53 percent in 1999 has provided more than 228,000 additional workers over the past three decades. This includes 130,000 maids, allowing many families to have a second income-earner. The government explains the beneficial impact of the foreign presence, even though such a policy has led to some concerns among Singaporeans about future job prospects and more intense competition for housing.

Of course, I don’t approve of all of this. In particular, to jail landlords and employers who house or employ illegal immigrants is a  violation of human rights. That said, it may be more tenable for a city to adopt such measures– jail is indefensible, but fines might be tolerable– than for a country to do so, since congestion and local externalities perhaps give people a more legitimate stake in their immediate physical neighbors than any citizen of a large territorial state has in anyone’s residence, or not, somewhere in the territory, including perhaps in wild and uninhabited parts of it.

Most impressive is the statistic: 29% of the labor force is foreign (as of, I think, 2007). This share is a little less than twice as high as the 16.6% in the US. To get to the Singaporean level, the US would need to let in about 30 million more immigrants. Singapore is wealth worth emulating, considering that Singapore is about 20% richer than the United States (per capita). Moreover, Singapore seems to be maintaining rapid rates of GDP growth even since they’ve overtaken the United States and supposedly should be bumping up against the “economic frontier.”

UPDATE: By the way, the idea that foreign nannies and maids could free high-skilled women from housework and childcare and facilitate their entry into the labor force is particularly interesting. The feminist case for open borders?

Nonexcludable but rival goods

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There seems to be a widespread sense that while immigration can benefit immigrants, it hurts natives because immigrants grab a share of the pie. This argument is invalid as regards private goods and public goods, but it may be valid for nonexcludable but rival goods.

Economists distinguish private goods from public goods by two criteria: (a) rivalry, and (b) excludability. Private goods are rival and excludable. Public goods are nonrival and nonexcludable. At least, that’s what economists do when they’re being rigorous. There’s a frustrating tendency to stretch the concept of a public good from the narrow niche in which it is most proper and to which the theory of public goods– for example, the idea that you sum demand curves for private goods horizontally and demand curves for public goods vertically— properly applies, and use the word in a loose populist fashion to include lots of stuff that governments in fact provide even though it’s rival and/or excludable. Most obviously, here: public education. If economists had more logical rigor and theoretical integrity, they would proclaim with one voice that public education is not a public good, because classroom seats are rival– only one student can sit in a seat at a time; teachers can only grade one homework assignment at a time– and excludable– it’s perfectly feasible, though not permitted by current law but that’s irrelevant in principle, not to let a student into the classroom. But since that’s too politically incorrect, they usually say, with a shade of embarrassment, that, well, yes, education must be a public good, although it’s not an “impure” public good, since… well, since it doesn’t really meet the criteria for being a public good, at all. (At most, it has positive externalities.) I won’t say that education isn’t a public good, since everyone muddle-headedly insists that it is and I don’t feel I have a right to redefine the phrase public goods to be consistent with the theory. But I would advocate limiting the use of the term to exclude education.

While private and public goods get the most attention, the two criteria clearly imply, not merely a dichotomy, but a four-way typology, as shown in the table below:

Excludable Nonexcludable
Rival Private goods, e.g., food, shelter especially if privacy is a human need, a car if sharing isn’t feasible Parking spaces are one example. These goods might make the basis for legitimate nativist complaints
Nonrival Patented inventions and copyrighted books are the most well-known examples National defense is the classic example; public statues; music in the park; clean air

There would be many grey areas here even if what ought to be the clear case of education were definitely reclassified as a private good. We don’t exclude people from the park; but could we? Could we do it at reasonable cost? The park is usually non-rival, but perhaps on a brilliant bright Saturday when winter suddenly melts into spring, it is so crowded with picnickers that one can’t find a place on the grass, and the park becomes rival. Emergency room care is technically excludable: one could leave people who don’t have insurance or cash bleeding outside the doors. But it’s not legally excludable, since 1986, and perhaps it’s not morally excludable somehow, if we think a doctor has a moral obligation to help someone in desperate need in his field of vision even if they can’t pay. (I’m much less sure that that’s true, than that it’s wrong to exclude peaceful people from US territory by force.)

Now, the comparative advantage argument suffices to show that natives will collectively benefit from immigration to the extent that only private goods are at stake, and in a sort of rough, approximate fashion, migration taxes and transfers to natives should be able to make open borders Pareto-improving with respect to private goods. Basically, just by coming into the country, immigrants don’t acquire access to any of the private goods natives previously possessed. Natives’ exclusive claims to their private goods aren’t affected.

As for public goods, while immigrants can’t be prevented from enjoying them, this is not a downside to immigration, because public goods are, by definition, nonrival. The fact that immigrants are enjoying them doesn’t reduce natives’ ability to enjoy them, at all. Even if immigrants make zero contribution to the public goods of their host country, natives have no grounds for objecting to their presence, because the natives still enjoy just as much of the public good as they did before. More likely, immigrants will make at least a small, possibly a large, contribution to the host country’s public goods. In that case, natives are strictly better off.

Nonrival but excludable (or partially excludable) goods are important because they include designs, ideas, blueprints, technologies, whatever you want to call them. Migrants won’t reduce the supply of those. Well, unless open borders has a negative effect on the progress of the global economic frontier, but that’s a topic for another post.

The category of goods for which the nativists’ “smaller-share-of-the-pie-for-us” notion might be valid is for goods that are nonexcludable yet rival. Parking spaces may serve as an example, for although exclusion is sometimes possible– parking meters, gates and tickets in parking garages– it’s costly to regulate street parking, so to hold down transactions costs it might sometimes be best to treat parking as nonexcludable. If parking is nonexcludable, newcomers to a city may lower the quality of life for existing residents, by crowding the streets with cars and making it hard to find a parking space.

How many nonexcludable but rival goods are there? We treat public education as one, though in principle it need not be. Likewise emergency room care. The streets themselves are treated as nonexcludable (and probably exclusion would be infeasible and/or would violate rights in many cases) and might be rival in some respects, e.g., if you’re using the street for a rally of shouting protesters, I can’t very well use it to play serene classical music. Do storefronts have a nonexcludable but rival character for window shoppers on a crowded day? Does the random interaction of people with strangers on the street somehow have the character of a nonexcludable, rival good?

The Gang of 8 immigration deal

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I’m not a political junkie (anymore) and I try not to follow all the feints and counter-offers and posturing and whatnot that comprises so much of political discourse, but at this point the momentum for immigration reform in Washington seems really to be bearing fruit. A deal has been made. The New York Times celebrates:

Huge news from the scorched desert of immigration reform: germination!

At last there is a bill, the product of a bipartisan group of senators who have been working on it for months, that promises at least the hope of citizenship for 11 million undocumented immigrants. It is complicated, full of mechanisms and formulas meant to tackle border security, the allocation of visas, methods of employment verification and the much-debated citizenship path…

There will be much to chew on in coming weeks, but it is worth a moment to marvel at the bill’s mere existence, and at the delicate balancing of competing interests that coaxed this broad set of compromises into being…

The bill gets around the “amnesty” stalemate by turning the undocumented into Registered Provisional Immigrants — not citizens or green-card holders, but not illegal, either. They will wait in that anteroom for a decade at least before they can get green cards. But they will also work, and travel freely. The importance of legalizing them, erasing the crippling fear of deportation, cannot be overstated.

Yes! Deportation is a particular disgraceful feature of the American polity, and it will be a tremendous moral relief to have it, if not permanently and generally abolished, at least abolished for most of the millions who live under the threat of it now. The Times deplores the length and difficulty of the path to citizenship:

That said, a decade-plus path is too long and expensive. The fees and penalties stack up: $500 to apply for the first six years of legal status, $500 to renew, then a $1,000 fine. If the goal is to get people on the books and the economy moving, then shackling them for years to fees and debt makes no sense.

The means of ejection from the legalization path, too, cannot be arbitrary and unjust — people should not be disqualified for minor crimes or failure to meet unfair work requirements. It should not take superhuman strength and rectitude, plus luck and lots of money, for an immigrant to march the 10 years to a green card.

Here I’m ambivalent, except about the “means of ejection” sentence. You can’t justly deport someone just because they don’t want a job, and to deport someone for, say, a speeding ticket, is a violation of just proportionality. My sympathies lie with a relatively short and easy path to citizenship. But reason tells me that if your goal is an immigration regime that is simultaneously incentive-compatible and humane, you can’t make the path to citizenship easy. And $500 here and $1,000 there are nothing compared to the income gains that immigrants to the US typically enjoy, though I’d prefer to see money extracted from immigrants in the form of taxes attached to earnings rather than as lump-sum fines and fees, so we can raise more revenue from those doing relatively well while mitigating the hardship we cause for the poorest immigrants. Continue reading The Gang of 8 immigration deal →