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Open borders and the economic frontier, part 2

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In the first post in this three post series, I gleaned a theory of the economic frontier from some of BK’s comments and offered a few of my own responses. In this post, I’ll expound my own theory.

Two general points. First, how the economic frontier advances is both enormously important for human welfare and quite mysterious. It is important because long-run economic growth will determine how well we can mitigate world poverty and deliver ever-improving lives to future generations. A tiny increase in the rate of advance of the economic frontier, say from 3% to 5%, would make our descendants a century hence almost an order of magnitude wealthier. Second, open borders would likely affect the rate of advance of the economic frontier. Before reading BK’s comments, I had pretty much taken it for granted that open borders would boost growth, at least in the short run, as people move from low-productivity countries to high-productivity countries. Based on Clemens (2011)  and Kennan (2012), the modal result of formal studies so far seems to be that open borders would double world GDP, and the assumptions on which this result is based are actually conservative in some ways, e.g., they don’t assume that everyone would migrate to where their marginal product is highest. Negative institutional/productivity side-effects of open borders on frontier countries would have to be very large to offset this, but such effects are not beyond the range of plausibility.

My theory, which I’ll call the “Endogenous Division of Labor” or “EDOL” model, was the topic of the second chapter of my dissertation, Complexity, Competition and Growth (but don’t pay $103, it’s available here for free). More recently, and I think more accessibly, I published a new version as an SSRN working paper here, under the title “Development as Division of Labor: Adam Smith Meets Agent-Based Simulation.” All the data is drawn from a simulation I wrote, which is introduced in this video, and I’ll be happy to send the simulation (as a runnable JAR file) if you’re interested in exploring its properties on your own. It’s not that user-friendly, but I’ll even be glad to give you a tutorial via Skype. I’ll also be glad to present it at academic conferences or seminars or whatever. I think it would lend itself to public presentation quite well, though I haven’t got the chance to transfer. I’m trying to publish it. So far, the Journal of Political Economy rejected it, with some harsh but useful feedback. I plan to submit a completely rewritten version to the Journal of Economic Growth. Any feedback is welcome.

Continue reading Open borders and the economic frontier, part 2 →

Poor countries and IQ externalities

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BK helps make the case for open borders in poor countries:

Interesting point by Jones: if high-IQ people produce positive externalities well above their market wages in poor countries, then citizenists in poor countries should be willing to offer larges subsidies for high-IQ immigration:

“If IQ has the sizeable positive externalities posited here, then there may be room for a Coasian bargain between countries with low current LV IQ and higher IQ individuals in other countries.  One purely suggestive possibility: If the ratio of private to public benefits of higher IQ are even half as large as the 6:1 ratio suggested by Jones and Schneider (2010), a low LV IQ country could rationally offer a 100% subsidy for any wages a high IQ immigrant earns in excess of that nation’s median wage.  In practical terms, a 10 year income tax holiday for permanent immigrants with engineering degrees could accomplish the same goal of encouraging high IQ immigration. “

Favoring engineers seems too much like “picking winners,” and I don’t think the research is really there to support anything so specific (don’t forget that the most obvious externality of engineers, that they invent things, is global in nature) but a simpler policy recommendation to derive from this argument would probably imply that poor countries should simply open their borders to immigrants from rich countries. Rich countries generally have higher average IQ, certainly higher levels of education, and probably other traits– work ethic, perhaps, or trustworthiness– that make their home countries productive. I don’t have great data on this– go, IMPALA!— but I’m pretty sure it wouldn’t be very easy for an immigrant from the US or Western Europe, with or without an engineering degree, to migrate to India or Malawi or China or Russia and just get a job, never mind a tax holiday. Why don’t poor countries offer free immigration to holders of US, EU, Japanese or South Korean passports? I suspect that it’s some combination of (a) elite protectionism– a corrupt business elite makes the rules and doesn’t want the competition from capable Westerners or East Asians– and (b) global norms– rich countries have migration restrictions and they’re either blindly imitating or else retaliating out of pride against countries that exclude them. But it would be interesting to investigate further.

Related thoughts: (1) Would it be easy for rich countries to negotiate away restrictions against their nationals working in poor countries, in return for a bit more openness to migrants from those countries, or perhaps other concessions, e.g., aid or trade? (2) Would a high-profile open-borders movement in the US and/or Western Europe, even while unsuccessful domestically, change the climate of ideas and persuade poor countries to open their borders to migration, to gain the “moral high ground?”

Milton Friedman and open borders

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I’ve not posted recently because I am on vacation till the end of this week. However, while on my hiatus, I managed to finish Milton and Rose Friedman’s Free to Choose. It’s an interesting book from an open borders perspective, since although the Friedmans explicitly cite barriers to immigration as an arbitrary and unjust infringement of liberty, virtually all the book is devoted to other infringements of economic rights which an open borders advocate would likely consider milder, if they considered them infringements at all (since, after all, not every open borders advocate is as much an economic libertarian as the Friedmans were).

The only time immigration really appears as anything other than a brief throwaway topic is in Chapter 5: Created Equal, specifically under the subchapter Equality of Opportunity. The Friedmans say:

Literal equality of opportunity — in the sense of “identity” — is impossible. One child is born blind, another with sight. One child has parents deeply concerned about his welfare who provide a background of culture and understanding; another has dissolute, improvident parents. One child is born in the United States, another in India, or China, or Russia. They clearly do not have identical opportunities open to them at birth, and there is no way that their opportunities can be made identical.

Like personal equality, equality of opportunity is not to be interpreted literally. Its real meaning is perhaps best expressed by the French expression dating from the French Revolution: Une carrière ouverte aux les talents — a career open to the talents. No arbitrary obstacles should prevent people from achieving those positions for which their talents fit them and which their values lead them to seek. Not birth, nationality, color, religion, sex, nor any other irrelevant characteristic should determine the opportunities that are open to a person — only his abilities.

…

In respect of government measures, one major deviation from free markets was in foreign trade, where Alexander Hamilton’s Report on Manufactures had enshrined tariff protection for domestic industries as part of the American way. Tariff protection was inconsistent with thoroughgoing equality of opportunity and, indeed, with the free immigration of persons, which was the rule until World War I, except only for Orientals. Yet it could be rationalized both by the needs of national defense and on the very different ground that equality stops at the water’s edge — an illogical rationalization that is adopted also by most of today’s proponents of a very different concept of equality: equality of outcome.

You have literally just finished reading virtually all that Milton and Rose Friedman had to say about the freedom of movement and migration in Free to Choose. It’s obvious that in their framework, immigration restrictions are reprehensible, arbitrary, and inconsistent with both libertarianism and egalitarianism. It would be interesting to compare the Friedmans’ framework of equality of opportunity with similar approaches, such as Amartya Sen’s approach of maximising human capabilities. However, it is still odd why the Friedmans would virtually disregard immigration altogether, except for citing it as a brief example of restrictions on trade. If we value human life more than goods or services, immigration restrictions cannot be treated simply as another version of steel tariffs or automobile quotas.

My hypothesis is the Friedmans did not think immigration or labour mobility unimportant; rather they felt it impractical to pursue the extension of these rights, when there remained other battles to fight — battles more easily won. After all, if you can’t persuade Americans to end trade restrictions or end wage and price controls, in spite of all the evidence that this would actually benefit them, you’re not going to be able to persuade them to end immigration restrictions, where the benefits to natives are even less salient. Monetary policy also strikes me as another issue which a 1970s libertarian (Free to Choose was published in 1979) might justifiably argue superseded immigration in importance, and the Friedmans devote much of their book to this.

Going beyond Free to Choose, it’s also apparent that Milton Friedman believed open borders to be incompatible with the modern welfare state. Obviously he did not consider keyhole solutions or other policy reforms that would be concomitant with any opening of the borders, an odd oversight for a man who was so willing to push the envelope in other areas.

One possible reason for this reticence appears in Chapter 10: The Tide is Turning. Here, the Friedmans argue:

…those of us who want to halt and reverse the recent trend [towards expansion of government] should oppose additional specific measures to expand further the power and scope of government, urge repeal and reform of existing measures, and try to elect legislators and executives who share that view. But that is not an effective way to reverse the growth of government. It is doomed to failure. Each of us would defend our own special privileges and try to limit government at someone else’s expense. We would be fighting a many-headed hydra that would grow new heads faster than we could cut old ones off.

Our founding fathers have shown us a more promising way to proceed: by package deals, as it were. We should adopt self-denying ordinances that limit the objectives we try to pursue through political channels. We should not consider each case on its merits, but lay down broad rules limiting what government may do.

The merit of this approach is well illustrated by the First Amendment to the Constitution. Many specific restrictions on freedom of speech would be approved by a substantial majority of both legislators and voters. A majority would very likely favor preventing Nazis, Seventh-Day Adventists, Jehovah’s Witnesses, the Ku Klux Klan, vegetarians, or almost any other little group you might name from speaking on a street corner.

The wisdom of the First Amendment is that it treats these cases as a bundle. It adopts the general principle that “Congress shall make no law … abridging the freedom of speech”; no consideration of each case on its merits.

In short, the Friedmans might be skeptical of some keyhole solutions in part because they don’t see this as a sustainable policy in the long run. I think this objection applies particularly well to some keyhole solutions that might be floated from time to time: banning or severely restricting immigration from developing countries, severely limiting immigration or citizenship based on educational attainment, etc. More generalist keyhole solutions, such as a more carefully thought-out visa system that recognises diverse reasons for crossing borders (as opposed to treating all immigrants as either permanent settlers or temporary tourists/students/guest workers), or immigration tariffs, don’t seem quite as susceptible to this objection to me.

The Friedmans go on to propose an “economic bill of rights” that would circumscribe the US government’s ability to regulate the economy. Their proposed language for an amendment pertaining to international trade: “Congress shall not lay any imposts or duties on imports or exports, except what may be absolutely necessary for executing its inspection laws.” This dovetails quite well with my personal ideal for open borders, given political constraints: government should not restrict movement across borders, except insofar as this is administratively necessary (e.g. to prevent an invasion, influx of criminals, influx of contagious disease vectors, etc. — all reasonable policy objectives).

The paucity of attention to immigration from the Friedmans remains puzzling to me, and I think points to just how radical the concept of open borders appears to many people. Even if you explicitly recognise the injustice of arbitrary immigration restrictions, as the Friedmans clearly do, it’s easier to ignore it than to say something about it, because it sucks you down a rabbithole of having to explain why you aren’t a crazy person (though that’s probably something the Friedmans already faced a lot, especially when justifying proposals such as the abolition of welfare or publicly-funded education).

To me, there’s nothing more crazy about open borders than there is about, say, free trade. Advocating free trade does not mean one would allow Mexican drug lords to cart in M16s or Taliban warlords to airdrop AK-47s over the US border. It does not mean one would gladly allow illegal goods such as narcotics or permit the illegal funneling of money, such as via money laundering, out of blind devotion to principle. What open borders advocates (or at least I) want is people who seek a better life, in good faith, to be able to do so as far as it is administratively possible to permit this. The Friedmans would have agreed.

The border as blindfold

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For the record, I thought it might be worth jotting down what I think is really the reason people reject open borders. Maybe it would be better to say the deepest, most fundamental, most difficult-to-negotiate-with reason people reject open borders. I don’t mean for the restrictionist commenters here or at EconLog: they’re unrepresentative. I mean the reason for the typical person in a typical rich democratic country, the person who hasn’t specially thought about the issue a whole lot. And this is only a hunch. Not only is my evidence merely anecdotal, but it involves a lot of interpretation on top of those anecdotes.

The welfare state / fiscal burden argument against open borders, as well as the political externalities argument, are, as I see it, easily defeasible via keyhole solutions. I think the arguments themselves haven’t occurred to a lot of ordinary people, but the answers to them are simply (a) don’t make immigrants automatically eligible for welfare, and (b) don’t automatically give immigrants the vote. Problem solved. Of course, that’s not all there is to be said. It is possible to argue that excluding immigrants from the welfare state, or from the franchise, isn’t really feasible. I don’t think it is possible to be justifiably confident that excluding immigrants from the welfare state, or from the franchise, isn’t really feasible. At any rate, the difficulty of persuasion does not seem to lie there. Some restrictionists don’t make these arguments, or after making them at first abandon them when they hear the answers to them, yet still resist open borders.

Why? Partly it’s just a natural conservatism of the mind which doesn’t accept novelties, no matter how strong the case may seem to be at the moment. I think this can be wise. Confronted with an articulate advocate of an eccentric view, one may feel oneself bested in the argument but still have good reason to refuse to be persuaded. One hasn’t had time to collect all one’s arguments and/or articulate all one’s intuitions in favor of the mainstream view. One hasn’t had time to consult all the other people who agree with the mainstream view and figure out why they hold it. One may raise one’s estimate of the plausibility of the view, and put it as it were on probation, but reserve judgment until one has had time to absorb a broader range of evidence. “Some clever and earnest people think this,” one might think, “and on the surface they seem to make a strong case. They’re probably wrong because everyone disagrees with them, and most people with such atypical views are wrong. Still, I’ll be on the lookout now for what good arguments there really are for the prevailing view. They might have passed me by before without my noticing. Now I’ll notice them if I hear them. And if they don’t seem to come along, I’ll gradually raise my subjective probability that these eccentrics have really hit on the truth.” That’s how I hope Open Borders: The Case might be influencing some readers. It’s also sort of my response, as of now, to BK’s advocacy of an IQ and the Wealth of Nations-type thesis (see here for more of my take on that).

Anyway– now I’m finally getting to the point– the most stubborn reason I run into, which often seems to be at the bottom of all the others, is that the border protects people from seeing the poverty that it shuts out. As I put it in Principles of a Free Society:

So what an argument like Paul Krugman’s [that once they’re here, we have to take care of them] is that America’s moral obligation to “assure health care and a decent income” for a person is completely non-existent when that person is located outside America’s borders, then magically appears when a person crosses the Rio Grande.

The only guess I can offer as to why anyone would hold this belief is that people want to avoid, not actual guilt, but feelings of guilt that result when one has to see poverty close up. Migration controls serve as a blindfold, enabling Americans to ignore most of the poverty, deprivation, and vulnerability that exist in the world by keeping it physically at a distance. In the past, people lived without this blindfold. The wealthy lived amidst poverty, sometimes engaging in generous charity to the poor, sometimes learning, perhaps callously, to ignore them.

Citizens of a modern welfare state, by contrast, feel that the state should coerce people to give to the poor so as to remove from the streets the kind of visible poverty that would make them feel obliged to give, allowing them to feel conscientious and affluent at once. The price of this moral complacency is paid by would-be immigrants who are not allowed to come to America to better their condition by honest labor, lest their poverty trouble the consciences of affluent Americans. (Principles of a Free Society, p. 148)

Sometimes, people seem to think that immigration creates the poverty because people come here and are poor. Sometimes this is an argument of unguarded moments. Surprised by the failure of one or two favorite arguments, an until-recently-complacent restrictionist says, “But I don’t want to see people starving on the streets!”– even if they recognize that the people would be worse off elsewhere. Sometimes people seem to sense the weakness of the border-as-blindfold argument, and I get the feeling they’re casting about for other arguments, but that not wanting to see a lot of poverty on the streets of American cities is part of what is motivating them. In other cases, people are unapologetic. (I’ve argued this issue with a lot of people over the years.)

For example, one version of the argument I heard is that open borders would reduce private charity by inducing donor fatigue. That is, currently private charity plays an important role in helping the poor, but under open borders, people would see a lot more poverty and become callous, feeling the cause was hopeless, so private charity would fall in absolute terms. To this I would say (a) I doubt it: I think more visible poverty would evoke more private charity, though the average poor native might see less of it; and (b) even if private charity completely disappeared, that would be dwarfed by the benefits, according to the modal estimates, of open borders. But it was interesting to hear a conscientious defense of a position prima facie so embarrassing.

As I have noted elsewhere, using the border as a blindfold is analogous to the priest and the Levite in the Good Samaritan parable, who crossed to the other side of the road to avoid helping the wounded man. It is a self-interested rationale for closed borders, but self-interested in an odd way, since it presupposes that people feel empathy for their fellow human beings, but also that that empathy is situation-specific and instinctive rather than rational, and that the rational aspect of a person can avoid situations in which his instinct for pity will be awakened to his disadvantage. Maybe some of these people would, as Jesus told the rich young ruler in vain (Mark 10:21), sell all they had and give to the poor, if the world’s poor appeared on their doorstep, and they want the government to protect them from their own generous impulses by keeping the poor out of sight.

Again, all this is just vague guesswork about the thought processes of the typical restrictionist, derived from impressions in a variety of debates with many different kinds of people. I could be wrong, but anyway I think the phrase “the border as blindfold” is worth introducing to the conversation.

The case for open borders is universal

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I am indebted to commenter Caroline for asking a very important question in a comment:

I’d like to hear Vipul blog on the case for open borders for India. Surely India can use 100 million African imports? And what’s the justification for closed borders with China, Pakistan and Bangladesh?

Why should we Westerners have all the fun?

Another comment in a similar vein is from Mary:

Why don’t you tell Australia, commie China, why don’t you tell corrupt socialist India that Pakistan has the right to stream over it’s borders and take it over. You won’t because what you mean is, that the rest of the world has the right to violate US sovereignty, no it doesn’t. The US is a sovereign nation, it’s not a cesspit for slumdogs to fill.

In later agreement with Mary, Caroline writes:

Vipul writes: It’s also worth noting that, de facto, the right to invite, and the right to migrate, predate nation-states. Border controls are a relatively recent innovation.
–
A world population of 7 billion people is a relatively recent innovation as well, as is relatively cheap and fast mass transportation. And Mary is correct, although her words are inelegantly expressed: how come we never hear the open borders crowd agitating for the “benefits” of a mass immigration free-for-all for China, India, Africa, South America?

Vipul might have more takers for his position if he argued vociferously for open borders for India, for example. Of course, then he’d have to face the RSS and the rest of the Hindu nationalist crowd, who sometimes aren’t very nice, to put it mildly.

And before you point out that India is too crowded, polluted and overpopulated to allow open borders and indiscriminate immigration–why should people who squat out baby after baby with no thought to how they will be fed and housed, and who voluntarily pollute their nation excessively, be the only people who are allowed to have national sovereignty?

Are you then saying that people who stewarded their lands properly, and reproduced responsibly–i.e. us Westerners–are the only people in the world who don’t have the right to national sovereignty?

If so, then it’s the case of the good being punished and the bad being rewarded.

In a blog post titled Parable of the Neighborhood Watch, Sonic Charmer makes a related point (although this is not the focus or thrust of his post):

All the Smart People in your Neighborhood Watch nod their heads. They can think of no counterargument, and certainly don’t want to appear selfish and chauvinistic. And so, before long, before you even really know what happened, your Neighborhood Watch – the one you set up and contributed your money and time to for the sole purpose of, well, watching your own neighborhood – is spending most of its time worrying about and patrolling Other Neighborhood, judging its success on the basis of whether crime is being reduced there.

The funny part is, Other Neighborhood already has its own neighborhood watch group, and they’re not at all swayed by these moral arguments. They focus solely on their own neighborhood and never give it a second thought.

How would you feel at that point? Tricked? Hoodwinked? Scammed? At best, if you had a great attitude and the means, you’d be like ‘oh well, I guess I have to start up a whole new Neighborhood Watch now’. One that actually serves the purpose for which you intended the other one.

Other commenters, including commenters on Steve Sailer’s blog, have made similar points.

Before proceeding, I want to thank Caroline, Mary, and Sonic Charmer for making the key point: the case for open borders does not solely apply to any one country. I enthusiastically agree. As I see it, there are two related points being made:

  1. Open borders advocates, in so far as they focus only on immigration to the United States, are applying a double standard, and/or being hypocritical.
  2. Even if open borders advocates intend to be even-handed in their treatment of nations, the de facto effect of their advocacy is disproportionately on the United States.

A limited self-defense

I don’t claim to speak for all open borders advocates. But I will try to address these critiques specifically in the context of this website. My blog post is largely an elaboration of point (1) in my reply comment to Caroline.

First, right from the inception of the site, I have been focused on making the case for open borders from a universal perspective. As I write on the site story page:

Most websites dealing with migration issues do so from a very country-specific perspective. They are thus able to focus on the details of specific laws and concrete numbers. But it’s hard to separate out the country-specific aspects of their analysis from the generic arguments being made. With the Open Borders website, I’ve tried to separate out the generic arguments from the country-specific arguments. Since country-specific arguments already receive so much attention elsewhere, building the country-specific pages typically requires linking to existing resources. As of November 2012, all the country-specific pages are US-specific, but this may change with time as more content is added.

For examples of this distinction, see crime (generic) versus Hispanic crime and illegal immigration in the United States (US-specific). Or see suppression of wages of natives (generic) versus US-specific suppression of wages of natives (US-specific).

In fact, I faced the very same frustration that Caroline probably did: the over-reliance of open borders advocates on one particular country (often, the US) rather than a discussion of how the case for open borders may be made universally.

Back in April, I wrote a positive review of Peter Brimelow’s Alien Nation, where I indicated my agreement with

Brimelow’s critique of the restrictive immigration policies of countries other than the US, and his argument that the moral case for open borders should apply to all countries, not just the US (Page 251 onward, Chapter Doing The Right Thing? The Morality of Immigration)

followed by a lengthy quote from Brimelow’s book. Continue reading The case for open borders is universal →