It is my belief that my DRITI proposal is the best immigration policy that has yet been proposed. Again and again, whenever I read about a new proposal for immigration policy, my reaction is something like “Not as good as DRITI.” Or, “Not incentive compatible; it needs a few more features to work; and at that point it would be identical with DRITI.” Or, “This is an attempt to solve problem x, but DRITI solves that problem more efficiently” or “less coercively.” Reading Paul Collier’s Exodus, my main regret was that he had never heard of DRITI. The book would be so much more interesting if he were assessing, contesting, debating with, and exploring alternatives to the best immigration proposal around, rather than the idiotic status quo, or a vague specter of pure open borders.

However, DRITI is easy to misunderstand, partly because it can be sold in ways that make it seem too good to be true. Thus, when I describe it as “the citizenist case for open borders,” that might sound like DRITI can work a miraculous restoration between Steve Sailer and Bryan Caplan. If I say that we can let everyone in while holding natives harmless, well, who could object to that? Yet I still doubt that I’ve conveyed to people just how fantastic DRITI would be. My endless harping on open borders probably makes it sound to some like I regard it as a panacea. Well, yes, I almost do.

A few quick calculations may elucidate. Gallup polls have found that 150 million people want to immigrate to the United States. Of course, DRITI taxes would deter some of those people, but the formation of diasporas would encourage faster migration, so if those factors offset each other, 150 million is probably a good estimate of the number of DRITI migrants. Now, suppose that average income of Americans is $60,000; average income in source countries is $10,000; and DRITI migrants close half that gap when they move. So they make $35,000 on average. Now let DRITI taxes take 28% of their gains for transfers to natives, plus 14% t0 be put into forced savings accounts. Immigrants have still doubled their incomes, and by revealed preference, they can’t be worse off. Meanwhile, 150 million times $10,000 equals $1.5 trillion of revenue. This money is then distributed evenly among all 300 million US citizens. Everyone gets $5,000 / year. The 60%+ of Americans who are homeowners would get land value windfalls, and Americans with relatively high skills (e.g., college grads and above) would probably see their wages rise, so the losers on the native side would be high school grads and under, people in manufacturing, the low-skilled. But $5,000 per person per year would significantly raise their incomes. A single mother of three, for example, would get $20,000 just in transfers from the government. Even if her earnings took a major hit from immigrant competition– and DRITI would mitigate that somewhat, since immigration who had to pay DRITI taxes couldn’t bid wages down as far– she’d probably end up better off. So DRITI could boost the wealth of most Americans, raise the earnings of many Americans, and largely eliminate income poverty among natives. At the same time, 150 million times $5,000 equals $750 billion channeled into savings accounts. Let’s suppose 2/3 of immigrants decide return home (and withdraw their forced savings there) and 1/3 decide to stay (and forfeit their forced savings). Then over time, an annual average of $250 billion more pours into US tax coffers, while $500 billion goes abroad. That’s about four times as much as all OECD foreign aid. And it would probably be far more effective on a dollar-for-dollar basis than government-to-government foreign aid, since it would go directly to the people on a work-tested basis, and not only to the people generally, but to a select class of particularly enterprising and hard-working people coming home after having witnessed how advanced economies work. And having witnessed how democracy works, too. DRITI return migrants would be likely to emerge as a kind of local elite in countries all over the world, and there’s every reason to think they would be a particularly enlightened one, having risen not through coups or corruption or nepotism or anything like that, but through hard work and foreign adventures. They would have to like their home countries enough to have returned home when they could have stayed in rich countries: they would be, if you like, patriots. The Marshall Plan is nothing to DRITI.

Still, DRITI has have what would seem to be “dark sides” to unreflective believers in the mainstream social norms.

Much more visible poverty in rich countries. DRITI would let in tens of millions of people from countries a lot poorer than the US. Some of these would succeed to the extent that they would not be poor even by US standards. A minority might fail to the extent of struggling to meet basic needs, and there would be more homelessness and begging in the streets– probably a lot more– than there is now. Charitable soup kitchens would be very busy. But perhaps even more challenging in their own way would be the vast middle of the DRITI immigrant distribution, who were moderately successful in their own eyes, and better off than at home, but quite poor by US standards. The market would cater to them, and great shantytowns and slums would emerge, full of people planning to live in America for a little while and go away, finding ways to make ends meet that would seem fantastically abstemious to normal Americans. Many of these would never bother to learn English.

No welfare for immigrants. Some think there should be a level of income/living standards below which no one should fall, and there are a lot of public programs in place– food stamps, public housing, Medicaid– vaguely designed to achieve this end, though ultimately, since the 1996 welfare reform, the US doesn’t quite have a social safety net. DRITI would deny immigrants, or at least DRITI visaholders, access to these programs. The only solution if a DRITI immigrant wound up in desperate poverty, hungry or sick etc., would be to let the immigrant send himself or herself home, thereby forfeiting the deposit required to get the visa. Doubtless, some immigrants would face pretty severe hardships before resorting to that, either because they didn’t want to lose their money or because they didn’t want to go home. And we’d see them.

Destitute voluntary deportees dumped in foreign cities. Those who did take the voluntary deportation option would get dumped in foreign cities, nearly penniless (though the DRITI deposit might include a small amount of money to be given to them back home in the event of a voluntary deportation). Many of these would have sold all they had, or even borrowed, in order to get a DRITI visa to America. They would return home disappointed and impoverished. I doubt there would be very many cases like this, but there might be many, and there would certainly be a few.

Regressive transfers from poor immigrants to better-off natives. DRITI immigrants wouldn’t be earning much, yet a substantial share of their small earnings would be taken away in taxes. The proceeds would be used to pay transfers to natives. It would probably be very common for two people to work side-by-side, one a DRITI immigrant the other a native, doing the same job and earning the same wage, yet the native would enjoy a much higher standard of living than the immigrant, because the native would be receive transfers from the government, while the DRITI immigrant would be paying extra taxes to the government. Quite affluent people, too, would receive transfers financed by taxes on poor DRITI workers.

Diasporas of foreign sojourners isolated from mainstream society. With tens of millions of foreigners arriving on DRITI visas, large foreign diasporas would form on US soil. There would Chinese neighborhoods, Indian neighborhoods, Vietnamese, Russian, etc., in many cities, in some of which a foreign language would be the dominant spoken tongue, and which might have more loyalty to and interest in their home countries, than the United States. Many of the people in these communities might mingle very little with US natives.

Discrimination. I favor explicitly permitting discrimination against DRITI immigrants, because statistical discrimination can be efficient and to avoid subjecting natives to “forced integration,” but even if it weren’t explicitly allowed it would probably happen. But suppose it is allowed. Some jobs say, “DRITI immigrants need not apply.” Or “No Nigerians need apply.” (Like “No Irish need apply” in the last century.) Some advertisements on Craigslist or in the newspapers say, “Seeking quiet US citizen roommate…” There might even be restaurants, night clubs, resorts where DRITI immigrants were not allowed. I doubt that a significant part of US social space would be explicitly denied to DRITI immigrants, but they might feel the indignity of a certain amount of exclusion. Their friends might sometimes have to say, “Oh, we can’t go there though– you wouldn’t be allowed” and make other plans.

Taxation without representation. DRITI immigrants would be paying a lot of taxes, yet they wouldn’t have the right to vote. In fact, in the numerical example above, we would end up with a situation where 1/3 of the adult resident population of the US couldn’t vote. Is that a violation of democratic principles? (Not really. Democracy is about consent of the governed, and DRITI immigrants would have explicitly consented. But that’s a subtle point, and people would doubtless feel unease at the abrogation of the “one person, one vote” principle.)

“Overpopulation.” I put the term in scare quotes because “over” suggests excessive, which suggests a standard, optimal population, but there is no standard, no particular reasoning for saying that a given population level is optimal. Still, if DRITI grew the resident population by 50%, we would see a huge building boom, growing cities, more crowding in available housing, and a general rise in population. I actually doubt this would put a great strain on the natural environment; I suspect that it would show up more in the form of higher population density in city centers. At any rate, people would often find themselves thinking, “And this place used to be farmer’s fields!…” and we would hear many complaints of “overpopulation.”

If DRITI has so many dark sides, why do I support it? One answer is the huge gains in human welfare, the expansion of liberty, the mobilization of resources to end world poverty, the improvements in religious freedom, the geopolitical gains to the US vis-à-vis rivals, the undermining of dictators’ control over their subjects, and I think also, the stimulus to innovation that would come from the mingling of cultures and the appearance of a new mass consumer market on the doorstep of high-powered US corporations.

The other, more morally urgent answer is that we can’t go on this way. The Obama administration may deport over 2 million people. This is barbarous, morally unacceptable, inconsistent with liberty, freedom, respect for human rights, everything that gives America its moral substance and gives Americans a certain right to hold our heads high among our fellow men because of what we stand for. It is a crime. Yet if we stop doing it, we will motivate more people to come. The only way to make the law both morally tolerable and incentive-compatible is to open the borders to immigration. All the “dark sides” of DRITI are, unlike the status quo, morally acceptable.

I’ve been reading Paul Collier’s Exodus, and plan to write a series of posts in response to it soon. Meanwhile, I might as well lay the groundwork for that by jotting down a few reflections.

Here’s one. I’ve commented before on Robert Putnam’s research about immigration and social capital, or really, about ethnic diversity and social capital. He finds that in ethnically mixed settings people tend to “hunker down,” become less sociable, not only with other ethnic groups, but even among themselves. Putnam suggests, and Collier expands on the idea, that immigration could harm social capital. See our page on social capital decline. Also related are the writings of Hans-Herman Hoppe on immigration as “forced integration,” which I have previously responded to here. Thomas E. Woods recently wrote in this vein at The Freeman. Woods’ article, which contains phrases like “immigrants and the American bureaucracy that serves them” (!), is basically silly, but it does contain some serious ideas. In particular, Hoppe and Putnam have a point about “forced integration,” though it’s not the one they think they have.

Hoppe’s starting point is a “pure private property” society in which even streets are privately owned. This is completely unworkable, since it would create endless hold-up problems, and also unjust, since there is no just way for this kind of property regime to originate. As my theory of streets Principles of a Free Society elucidates, natural easements arise from people’s need to move onto and off of their property, and where these easements coincide to form streets, there is a place where over-lapping non-exclusive transit rights prevent individual appropriation. Consequently, no one can be excluded, including immigrants. There is some scope here for gated communities and other explicit contractual arrangements to “privatize,” as it were, streets that serve functions that go beyond mere transit. If a road also serves as a place for your club to meet and socialize, and no one outside the club has any claims on it, you might be justified in restricting access to it. That leaves some space in which Hoppian local communes, so to speak, might be carved out. But to say that immigration should be left to local communities to decide and then use that as a platform from which to demand harsh national immigration restrictions is absurd. Local communities are not, in general, well-defined. There would rarely be local agreement on whom to let in. Enforcement would be an insuperable problem. Some communities would choose to be largely open to the world, and would expand. The Hoppe plan would basically break down, resulting in some combination of open borders and local squabbling lead to the arbitrary denial to many individuals of the full and proper use of their own property. It is completely untenable to regard the mere entry of foreigners into the country, without the state using force to stop them, as “forced integration” by the state. Nativists are lying to themselves if they think is open borders advocates, rather than themselves, who are using force.

But if the government not only permits the entry of immigrants, but also requires native citizens to interact with them on equal terms, on pain of falling foul of anti-discrimination laws, then a complaint of “forced integration” has merit. More generally, all manner of state-mandated equal opportunity and anti-discrimination rules amount to “forced integration.” That’s not to say we shouldn’t have them. Here my attitude is ambivalent. On the one hand, anti-discrimination law is an extremely sinister extension of the state’s jurisdiction. If a classic liberal state only enforces contracts, an anti-discrimination state micromanages what contracts you can sign, and, worst of all, does so on very subjective and non-transparent grounds. On the other hand, the evil which anti-discrimination law in the US was instituted to deal with– the vast historic crime of slavery, and its legacy of segregation– was very great. I am inclined to feel that the state’s act in prohibiting private discrimination was an intolerable affront to the rights of private contract, and at the same time, that it might have been worth it.

Of course, we don’t know what would have happened if the state had simply abolished de jure discrimination on the part of the government, and left private discrimination to individual conscience and civil society. There has been a revolution in values over the past generation to the point where I highly doubt that much private racial discrimination would occur, even if it were absolutely legal. Perhaps the achievements of the civil rights movement could have been accomplished without the sinister extension of state power to micromanage private decision-making. Indeed, perhaps it would have been even more successful. After all, there is a sense in which affirmative action makes racism true. If a university deliberately seeks to hire a diverse faculty, it will face trade-offs between racial/diversity criteria, which favor minorities, and other criteria. Ceteris paribus, that will mean that minority faculty will be lower in quality in other respects. If that’s the hiring process, it will be quite rational for faculty to think, even if they wouldn’t dare say, “He’s black, so he’s probably not that smart.” That may not be a valid statement globally, but it will be valid locally, precisely because affirmative action engineers things to be that way. Of course, affirmative action violates the norm of color-blindness, and it would be difficult to imagine in what sense it could fail to be regarded as unfair. It may lead to resentment, but even if not, people are rational, and if conditions have been created such that there is a local negative correlation between minority status and intelligence, experience, conscientiousness, or whatever, then their beliefs will reflect that.

Discrimination is regarded nowadays as almost the one unforgivable sin. One is indoctrinated against it in school, as one is not indoctrinated against fornication, adultery, or even theft. This is very misguided. It’s highly questionable whether discrimination, in general, is even wrong. Consider the following three motives for discrimination:

1. Hatred of the other. You don’t hire, don’t want to work with, don’t want to be served by, don’t want to rent a room to, don’t want to sell to, etc., members of a minority group, because you hate them. You regard them as inferior and/or bad, and find interaction with them unpleasant.

2. Statistical discrimination. You are aware that many personal traits which are relevant to you as an employer, landlord, teacher, waiter, or whatever, and which are not easily observable, are correlated with race. You therefore make probabilistic assumptions about a person based on their race.

3. Desire to help. You feel particular liking and sympathy for members of your own group, however defined, and when you know that some action of yours, whether purely altruistic or partially self-interested, will benefit another, you are more eager to do it if the benefit is conferred on a group you specially love. You may or may not be a member of that group yourself.

Now, it seems pretty clear that discrimination which proceeds from motive (1) is bad. But it’s not clear that discrimination from motives (2) or (3) is bad, and it might even be good.

It can be proved that statistical discrimination is sometimes efficient. As an example, consider the well-known complaint that it’s harder for African-Americans to catch a cab. This might be because taxi drivers are racist in sense (1), but I doubt it. More likely, taxi drivers are engaged in statistical discrimination. Cab driving is a rather dangerous business, because among patrons there are a few bad apples who might rob or even kill you. Doubtless, the vast majority of black taxi customers are law-abiding, but it is nonetheless a statistical fact that crime rates are higher among blacks, so the cab driver runs a greater risk. From an economist’s point of view, a smart solution would be to allow cab drivers to practice statistical discrimination by charging black clients more! The higher price would compensate for the greater risk, and blacks would have just as easy a time catching a cab. By that logic, explicit racial price discrimination by cab drivers might make the world a better place. But we’re unwilling to tolerate that, so cab drivers probably optimize by avoiding black clients. The somewhat serendipitous nature of customer-taxi contacts– Did he avoid me or did he just not see me hail him?— makes statistical discrimination difficult to regulate. Statistical discrimination in hiring seems harder to justify, since a job application and interview would seem to provide better information than crude racial patterns can supply. But maybe not. If Irish, say, are particularly sociable, or Asians particularly conscientious, it might be a profit-maximizing strategy to discriminate in favor of Irish people for head-hunters and salesmen, and Asians for analysts and accountants.

As for discrimination in favor of one’s own group, this has several things going for it. First, it seems like a good thing if one’s job isn’t just a paycheck, but is about making the world a better place. One way you might make the world a better place is by giving someone a service, or a job, that they love. But knowing whether they love the service, or the job, will have a lot to do with knowing them. Maybe you know via ethnic networks that your co-national Mr. X really needs the job, whereas you have no way to find out whether outsider Mr. Y does. Second, working with someone you like and identify with might just be fun, in a way that working with a stranger isn’t. Third, there may be a tacit “gift exchange” dynamic in hiring an insider, which is missing in the case of an outsider. In short, discriminating in favor of insiders may build social capital, the merits of which Robert Putnam has amply explained in his writings even if he is too much of a cheerleader for it.

American society has won a massive victory over racism in the past few decades. This is something to be proud of. It is, by and large, a step forward for justice. And yet in many respects it has gone too far, and impinged too much on freedom of association. I suspect that is part of the reason for the social capital decline that Putnam has exhaustively explored in the course of his career. Anti-discrimination norms in both law and personal ethics have severely restricted our ability to associate with those we like associating with. We have imposed an arm’s-length principle on the realms of commerce and to a considerable extent civil society as well, and paid the price in lost fraternity and neighborliness. It may be a price worth paying as regards blacks, who really were terribly oppressed for much of American history. That is something to atone for. But only in the case of blacks. Non-discrimination is not a general moral principle. It is only tenuously related to justice. It is not wrong to hire a family man, or a single mother, in preference to a bachelor or bachelorette, on the grounds that they need the job more, or are likely to be more stable. It is probably right to suppress the urge to engage in statistical discrimination with respect to blacks, even when that means sacrificing a bit of profit, though I think cab drivers who avoid a real risk of being crime victims by not picking up black customers are probably justified.

Now, let’s bring this back to immigration. With respect to immigrants, lots of discrimination with motives (2) and (3) will be warranted. Immigrants will often lack the language skills, cultural understanding, and perhaps values systems to be suitable for certain jobs or inclusion in certain clubs. More subtly but no less importantly, types of immigrants may tend to lack certain traits. It’s unfair, in a sense, if private discrimination denies to certain immigrants opportunities for which they are really qualified, simply because the groups of which they are a part tend to lack suitable traits. But we can’t make the world perfectly fair. And all the private discrimination on earth could never come close to the unfairness of migration restrictions.

It’s absurd to exclude a person from a country on the grounds that if he comes, he’ll face private discrimination. If that’s a price he’s willing to pay, let him. Very likely, the opportunities from which he is excluded, he wouldn’t have wanted anyway. Meanwhile, native citizens who are forced to integrate with immigrants– meaning, not just to see them on the street, which involves trivial harm and no violation of rights, but to be forced to hire them, rent apartments to them, accept them in a school, etc.– do have a valid grievance. Something has been taken away from them. Possibly– it’s an interesting question– the optimal world would involve both open borders and anti-discrimination laws, and native citizens should just be forced to integrate with all manner of immigrants, regardless of the psychic cost. One thing is clear, though: if we think native citizens should be spared from forced integration, the way to achieve that is to permit them to engage in private discrimination against immigrants, not to exclude immigrants by force from the territory of a country.

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