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The American polity can endure and flourish with open borders

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Very interesting discussion in a recent comments section. Let me start with a quote from an e-mail by Garett Jones to Vipul Naik:

I would emphasize a different conclusion: That the low-IQ immigrants will tend to worsen the institutions of the higher-IQ countries they move to. Low IQ immigrants will, to some degree, tend to make the country they move to more like the country they came from.

Partly this will be due to MRV and Caplan/Miller reasons: low IQ groups vote for bad policies.  Partly it’s because they will tend to elect individuals from their constituencies, which will, on average, tend to lower the average IQ of the legislature.  And partly it’s because the bureaucracy will tend to hire individuals from low-skill groups, which will lower government quality.

For these and other reasons, new low IQ citizens impose a tax on the nation’s institutions, and this institutional cost should be counted in a candid cost-benefit analysis.

*Shorter version: Good institutions are rare treasures, and institutions are endogenous with respect to (among other things) citizen IQ.  *

I would like to bracket the concerns in the second paragraph about voting, because I regard this as a solved problem, as far as the theory of open borders is concerned. Just because you let people in doesn’t mean you have to let them vote. There are already millions of Green Card holders in the US who can’t vote. The keyhole solution (Vipul’s term: I hadn’t thought of it at the time) which I advocate in Principles of a Free Society is open borders with (a) migrants preimbursing the government for their voluntary deportation if they become destitute (at least those under a new open-borders visa), (b) a surtax on (those) migrants, (c) mandatory savings, withdrawable only in the migrant’s home country, or forfeitable as part of (d) a path to “earned” citizenship once a migrant has saved a certain threshold amount in this mandatory savings account. Migrants would thus be given a substantial incentive to return home rather than to stay. Those who would choose to stay would presumably do so: (a) because their homelands were an especially bleak alternative; (b) because they foresaw high earnings in America so that forfeiting the savings account was worth it (these people would probably have relatively high IQs, on average); or (c) because they especially like, admire, and enjoy America (these people would presumably place a particularly high value on American institutions). To mix these migrants into the electorate is a very different, and doubtless much more favorable, prospect, than simply allowing anyone to come and vote. Of course, this is just one of many possibilities that would separate the right to come, live, and work from the right to vote. I made a similar point in the comments of the Garett Jones post, and added that “It’s even easier to maintain high hiring standards for the bureaucracy, which obviously doesn’t have to, and doesn’t, hire a representative cross-section of the resident population.” I also posed the question:

If I were to hypothesize that the maintenance of high-quality institutions depends mainly on the characteristics of an elite, and need not be much affected by adverse changes in the composition of the broad mass of the population, would the evidence that Garett has studied contradict me?

This was the jumping-off point for a very interesting debate between BK and John Lee. BK’s comments, in particular, are highly interesting and informative, yet I find myself unconvinced and dissenting at many points. BK answers my question:

Yes, if we are just referring to the overall demographics of a country. Note that across countries, smart people earn higher incomes as the proportion of smart people rises, not the absolute total.

Chinese-Singaporeans generate income almost twice as great in mostly Chinese Singapore as the large Chinese-Malaysian minority does in Malaysia (about $70,000 per annum vs about $38,000), even though there are less than 3 million Chinese in Singapore but almost 7 million in Malaysia. But the Chinese make up 75% of Singapore vs 25% of Malaysia…

There is a Chinese elite, but this isn’t enough to fix the institutions, which have to represent the general population. All this occurred in the context of strong legal discrimination in favor of Malay majority, racialized anti-business sentiment, and big gaps in political views between Chinese and non-Chinese Malaysians.

OK, but wait. There is a Chinese business elite in Malaysia, but the political elite is Malay. It is this Malay political elite that imposes “strong legal discrimination in favor of Malay majority, racialized anti-business sentiment,” etc. It is also important that (a) the Malays have deeper historic roots whereas the Chinese are relatively recent arrivals, and (b) the Malays are linguistically and religiously homogeneous (more or less, I think: BK and John Lee both know the region better than I do). If we’re looking for lessons from Singapore/Malaysia that cross-apply to a hypothetical open-borders United States, this argument would only be relevant if we’re supposing that voting immigrants would become the majority of the population, develop solidarity among themselves, and vote for “strong legal discrimination” and “racialized anti-business sentiment” against the offspring of today’s natives. With immigration tariffs and a gradual path to citizenship, you could more or less ensure that voting immigrants would never constitute a majority. Since immigrants would come from many different countries, it’s unlikely they’d develop solidarity among themselves except on wedge issues that related to them directly. Instead, they’d want to assimilate with American natives. Given that American society has a powerful absorptive capacity– if you’ve got fluent English and a college education and want to be a normal American, people will treat you like a normal American; and if you wereborn here, it’s taken for granted that you’re a normal American, never mind your background– any scenario resembling that in Malaysia is really quite implausible.

Also, I think the fact that immigrants would know they were immigrants makes a big difference. Malays in Malaysia think of the land as theirs. They’ve been there the longest. South Africa is in a similar situation, as far as I understand: black South Africans see themselves as the rightful owners of the soil, the whites as intruders. Russia, whose history I know better, stands in striking contrast to the 19th-century United States, because while they could both be described as multi-ethnic empires, in Russia the subordinate nationalities had never consented to be part of the Russian Empire, but for the most part had been simply conquered (it’s a little more complicated but never mind), whereas in the United States, the subordinate nationalities (if I may put it that way for the sake of the parallel) had in a real sense consented to rule from Washington by crossing oceans to immigrate. They were therefore much less inclined to question the legitimacy of the government and far more inclined to develop patriotic loyalty to the United States, superimposed on a lingering loyalty to their various mother countries. Continue reading The American polity can endure and flourish with open borders →

Six possible positions on a specific keyhole solution

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This post is more of a utility post that grew as a spinoff of another post I’m drafting, which is getting a bit long. I hope to refer to this post in that other (forthcoming) blog post and in other forthcoming blog posts. I’ll be using the term “keyhole solution” a lot in this post, so if you haven’t already, I suggest you read the keyhole solutions page to get an overview of the term, and also check out all blog posts with the “keyhole solutions” tag on this website.

Consider keyhole solution A that has been developed to meet a specific objection to open borders. Suppose you are asked to specify a rank-order preference between three options:

  1. Open borders without keyhole solution A.
  2. Open borders with keyhole solution A.
  3. Closed borders and/or status quo.

Now, there are six possible rank-order preferences for this set of three options (we get the number 6 by taking the factorial of 3). I want to discuss each of these, and the kind of people who might want to take that position.

Open borders advocates who prefer open borders without the keyhole solution: rank-order (1) > (2) > (3)

These open borders advocates would prefer open borders without the keyhole solution. But, since the world is not an ideal world, they are willing to compromise and accept open borders with the keyhole solution. They are not genuinely convinced that the problem the keyhole solution addresses is a genuine problem that needs to be addressed through the keyhole solution. But they’re willing to go along with the keyhole solution as a form of dealism, or to placate existing interests and convert potential Pareto improvements into Pareto improvements.

John Lee seems to take this position with respect to the immigration tariffs keyhole solution. He writes in a comment on his own post:

Thanks Nathan. I think we agree on what’s probably the best achievable policy reform for now (immigration tariffs), but I am inclined to disagree with your moral preference for Pareto-improving policies here, as well as your characterisation of them as merely “a little unfair”. I think immigration tariffs would be a massive improvement, but remain a distant second-best policy (from a moral standpoint) to true open borders. I used to consider immigration tariffs the best policy here, but have been convinced by the economic evidence that I was placing far too much weight on natives’ welfare, and far too little on migrants’ welfare. (This change in my beliefs is something I plan to write more on, so I won’t elaborate too much on it here.)

The theme of compromise and the willingness to accept keyhole solutions to problems he’s not convinced are serious runs through John’s writings. For instance, in a comment, he writes:

Surely you’ve heard of the term “political compromise”? Keyhole solutions split the difference between restrictionists and hardcore open borders advocates. If you’re concerned about giving the other side a victory, that’s how it’s supposed to work.

Open borders advocates who prefer open borders with the keyhole solution: rank-order (2) > (1) > (3)

Here, the open borders advocate would support open borders both with and without the keyhole solution — the case for open borders is too strong for a keyhole solution to make or break it. But the open borders advocate still prefers open borders with the keyhole solution. Many open borders advocates take concerns about political externalities seriously, and are willing to consider keyhole solutions that would limit voting rights for recent immigrants as superior to open borders with voting rights. But even if they’re not able to get that preferred policy, they would still support open borders. The same is true for making immigrants ineligible for welfare: a lot of libertarian supporters of open borders would prefer that immigrants be ineligible for welfare benefits, but would support open borders even if this were not possible. Continue reading Six possible positions on a specific keyhole solution →

Immigrants are Important for Disaster Reconstruction

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This piece was originally published at the Cato-at-Liberty blog here and is reproduced with permission from the author.

Hurricane Sandy walloped the East Coast yesterday. The strongest part of the storm focused its wrath on coastal cities, ravaging New York, Atlantic City, Ocean City, and others in the storm’s path. In the coming days, focus will turn from rescuing people to rebuilding the devastated areas.

Immigrant workers, especially in the building trades, are an essential component of any reconstruction. People living in places hit by Sandy are going to demand an influx of laborers to rebuild and replace their destroyed property.

During and after Hurricane Katrina in 2005, hundreds of thousands of people from Louisiana, Mississippi, and Alabama left their homes behind. For many from New Orleans, Houston became their new home. In contrast, around 100,000 immigrant workers quickly moved into the Gulf Coast area to take advantage of the labor market opportunities offered by the reconstruction in the aftermath of Katrina.

Many Americans also moved into the Gulf Coast region to rebuild with the immigrants. But in the year prior to Hurricane Katrina, Hispanic immigrant workers accounted for about 40 percent of the total growth in the construction sector-–the majority of whom were unauthorized immigrants. A year after the rebuilding began in New Orleans, an estimated quarter of all construction workers were unauthorized immigrants.

A tornado in Tuscaloosa, Alabama in April 2011 left 43 dead and tore a path almost a mile wide through the city. Immigrant Hispanic workers in Alabama responded with alacrity. “Hispanics, documented and undocumented, dominate anything to do with masonry, concrete, framing, roofing, and landscaping,” said Bob McNelly, a contractor with Nash-McCraw Properties. Three months after the tornado, Tuscaloosa issued 1069 business licenses with 81 percent of them related to businesses repairing storm damaged.

There is no economic silver lining to a disaster, despite what The New York Times thinks, but fortunately there is a mobile workforce capable of responding to natural disasters to aid in reconstruction. After dealing with the Tuscaloosa reconstruction, McNelly said that he prefers Hispanic immigrants workers. “It’s not the pay rate. It’s the fact that they work harder than anyone. It’s the work ethic,” he said.

Immigrant workers are the economic early responders to natural disasters. They are typically younger so they do not own houses and mortgages tying them down to certain areas. As a result, they move quickly based on labor market demands allowing reconstruction to start quicker and complete faster. Immigrant workers, mostly Hispanics in the building trades, will flock along with others to the areas devastated by Hurricane Sandy. As in previous natural disasters, they will be an important component of any rebuilding.

“Only high IQ immigrants” fails to understand comparative advantage

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OK, it’s time to give some strong back talk to this meme of “only high IQ immigration is good” which we’re getting in the comments. The simple rebuttal to “only high IQ immigration is good” is that this fails to understand comparative advantage and commits the maximize the average fallacy. But in a recent post, Vipul partially defends the high-IQ-only preference:

Not so fast, restrictionists would say. As Richard Hoste puts it, the comparative advantage argument works in the context of pure economics, but once we bring in crime and political externalities, it starts to falter. If crime rates go up, then your chance of being a crime victim goes up, all else equal (there are caveats to be added, but I’m using a simplistic picture of crime). Comparative advantage doesn’t come to the rescue here. And if low IQ means voting for bad policies (something that’s supported by Caplan’s research) then low IQ immigration would lead to negative political externalities.

So, I don’t think the comparative advantage argument is quite the right way to tackle the IQ deficit concern. So what is? I think we need to step back a bit and be clearer about how IQ matters to the moral and practical considerations that come up with respect to immigration and its effect on natives and immigrants. Does IQ matter in and of itself (as some indication of moral worth or desert), or does it matter because of its correlation with things like crime or political beliefs or social capital or what-have-you? It’s only the rare IQ elitist who argues that IQ is morally significant in and of itself. Most people who believe in the importance of IQ believe in it because it’s correlated with a lot of other things like crime, political beliefs, etc.

Vipul goes on to argue that people who make the “only high IQ immigrants” case are double-counting the harms of low-IQ immigration, and that IQ doesn’t give an extra reason for restrictionism, once one has taken possible effects on crime and politics into account. But I think Vipul is giving the “high IQ only” restrictionists too much credit. There may be subtle externalities arguments for why low-IQ immigration is worse, though I think they’re highly tenuous and have little empirical support (I’ll come back to that). But mostly, people are just failing to understand comparative advantage.

Consider the following comment from holier then [sic: should be “than”] thou:

I will say in this case I’m In total agreement with Silicon Valley. People in Silicon Valley are supporting high IQ immigrants, often with unique skill sets. They tend to add value to the nation in the short and long runs. Also, because programming is generally a value creation, rather then value transference industry, the addition of new labor can actually increase the wages of natives. A foreigner who starts a new company adds to the demand for labor. And programming is one of the few industries where smart people with little financial capital can still become job creating entrepreneurs.

And:

For this reason I’m far more open to the case of supporting high levels of immigration of the high IQ, especially those that have skills in key industries. However, you’ll note that this is far different from being “open borders”. Open borders, in practical real life terms, means mostly supporting the mass immigration of low IQ low skill workers who will mostly compete for the existing pie rather then increase it.

This is just economic illiteracy. A foreigner who starts a new company doesn’t necessarily add to the demand for labor. He creates a few jobs directly, but if he competes successfully with existing domestic companies, he’ll destroy jobs elsewhere. If his new company is more productive than the incumbent firms he is grabbing market share from or perhaps driving out of business, he’s likely to destroy net jobs in that industry. Not that that’s a bad thing. To think it is is to be guilty of what Bryan Caplan, in The Myth of the Rational Voter, calls “make-work bias.” Productivity increases tend to hurt workers in particular industries while making consumers and investors better off. And the workers may not be harmed either in the long run, as the market recycles them into other industries. But there’s not much reason to think that foreign entrepreneurs are particularly likely to add net jobs to the economy.

Meanwhile, low-skilled immigrants can also create jobs. Suppose a lot of low-skilled immigrants come and are willing to work in restaurants for low wages. They don’t have the business skills to run restaurants, but they can wait tables and slice carrots and man the cash register. Meanwhile, a lot of hungry people in a hurry would be happy to pay $5 or $10 or $15 for a meal cooked by someone else, rather than having to do it themselves. Native-born foodies with a knack for business have an opportunity to raise some capital, set up a restaurant, hire the immigrants, while carving out a nice job for themselves running it. Of course, customers and investors benefit too. Again, I live in Fresno, and all around the city are orange orchards and vineyards. They need workers to pick the fruit. Native farmers, agronomists, irrigation engineers, etc., who have jobs in the agricultural sector depend on these workers to do the “low-skill” (it’s actually not that low-skill, I hear, but at any rate it doesn’t require much education) work that makes profits possible. Again, I work in a nice clean office building (except for the clutter on my own desk). Who keeps it clean? Not my fellow professors! We hire a janitorial service, which hires a lot of people for the low-skill work of emptying trash cans. Yes, I could take out the trash myself. But I have better things to do! Immigrants who take such tasks off my hands are “increasing the size of the pie.”

Or are these immigrants “competing for the existing pie” because other, less-skilled natives could have taken out the trash for me instead? No. That’s the wrong way of looking at it. Capitalism features competitive markets in almost every industry, but the people who are competing with each other are doing so by being productive, by creating value. To oppose “competition” to “increasing the size of the pie” is a mistake here. Some less-skilled natives probably do see their wages fall because of competition from immigrants (though even that’s controversial: less-educated natives may be able to exploit their comparative advantage in fluent English and being in the American cultural groove, and benefit from immigration just like higher-skilled natives). But if immigrant janitors do reduce the wages of native janitors, they’re still growing the pie. And the university benefits from cheaper housekeeping services.

Let me draw attention, by the way, to holier than thou‘s phrase “value transference industry.” This is not a term economists use. They don’t use it because it’s bogus. There is no phenomenon in the real world which it is sensible to refer to in this way. You could, if you liked, call theft a value transference industry, but that would be inappropriately neutral and non-judgmental. We don’t call theft “value transference,” let alone a “value transference industry,” we call it crime. Social Security might be called a value transference program, but it’s not an industry, precisely because it’s merely transferring, not creating value. It seems that holier than thou thinks the economic laws of capitalism ordain that some industries create value, others merely move it around. That’s just not how markets work. I advise holier than thou to delete this fallacious phrase from his vocabulary. Continue reading “Only high IQ immigrants” fails to understand comparative advantage →

Non-Refoulement (and “Secretary Hildebrand”)

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In 1077, the monk Hildebrand who had become pope and taken the name Gregory VII, excommunicated the German emperor, causing a collapse of his power, on the grounds that the latter had usurped the Church’s right to appoint, or “invest” bishops. The “investiture controversy” that followed lasted for well over a century, and ended in a sort of Pyrrhic victory for the popes, who destroyed the German imperial House of Staufen, but at the cost of empowering its rivals, especially the kings of France, who eventually took the papacy “prisoner” at Avignon. Meanwhile, the duel of pope and emperor triggered a lot of thinking and gave the Italian city-states the chance to emerge as autonomous republics in alliance with the papacy against the empire. In my view, the investiture controversy was a crucial episode in the rise of Western freedom. Prior to the mid-11th century, the papacy was weak and more often than not a pawn of either the Roman nobility or the German emperors. Hildebrand and a few colleagues were bold ideologues who spearheaded what historian Norman Cantor has called a “world revolution.”

Turning to the present, the UN is a bit like the early medieval papacy: it is weak and widely disdained, yet it has a sort of latent institutional legitimacy which could be a very powerful instrument in the right hands. A charismatic and ambitious secretary-general, with a powerful and popular ideology and a willingness to use all the material means and moral influence of his office to pursue it, could change the world. I suspect that in many areas of international law and policy, e.g., the trade regime, the international patent and copyright regime, bilateral and multilateral investment treaties, sovereign debt, travel/migration/visa regimes, and so on. There are multiple equilibria. For example, it might be in poor countries’ interests not to expropriate multinational corporations if no one else is doing it– why make oneself a pariah to the investment community?– but in their interest to do so if they could all agree to do so at the same time to punish an investment source country, at the exhortation of the UN, because they would get a reputation not as thieves but as good global citizens (while also pocketing the expropriated wealth). A brave and charismatic UN secretary-general– let’s call him Secretary Hildebrand– might give his agency teeth one of these days.

If so, one of the aspects of international law he might give teeth to is non-refoulement, the principle that it’s illegal to return a person to a country where they’re likely to suffer persecution or torture. (I approve, on natural law grounds. Knowingly to compel a person to go where they’ll be persecuted or tortured is tantamount to perpetrating persecution or torture.) A grad student, Jessica Rodger, wrote a thesis about it. I quote:

[3] During the last days of August this year, a humanitarian drama unfolded in the Indian Ocean. 433 asylum-seekers were stranded aboard a Norwegian freighter, the MV Tampa, which had rescued them from a sinking Indonesian ship. They had requested refugee status from the government of Australia when they entered Australian waters, but their request had been denied. Despite pressure from the United Nations High Commissioner for Refugees, the United Nations Secretary-General, and the international community in general, the Australian government stood by its decision. The crisis was only resolved when the governments of Nauru and New Zealand agreed to process the asylum-seekers, with Australia providing financial assistance and transport.1

[4] The Tampa incident brought home to many in the Asia-Pacific region a fact that those in Europe and Africa have long known. The issue of asylum-seekers and the granting of refugee status is an incredibly complex problem which the international community, as of yet, is not fully equipped to deal with. This paper will examine the international law regime which has been developed to deal with refugees. The cornerstone of this regime, and the focus of this paper, is the principle of non-refoulement. Non-refoulement is the idea that it is illegal for states to expel or return (“refouler”) refugees who have a well-founded fear of persecution. Over recent years this principle, and the refugee regime itself, has found itself increasingly under threat.

[5] An examination of some of the more recent situations of mass refugee flows, and also of the restrictive refugee policies being implemented by Western nations, will help to illustrate both the importance of the non-refoulement principle and the problems which the states themselves face when trying to live up to their international obligations.  Both states and refugees often find themselves on uncertain legal ground when attempting to invoke the non-refoulement principle. The reason for this is that the parameters of the principle are not clearly defined. This has become especially problematic recently as refugee flows have increased and states have become more reluctant to accept asylum-seekers. States are therefore using the grey areas of the non-refoulement principle to get around their international obligations.

“Secretary Hildebrand” could exert pressure for the non-refoulement principle be written into countries’ laws, and encourage countries to punish non-compliance by making their trade policies, visa policies, and investment policies unfavorable to countries guilty of non-compliance. I suspect that any UN secretary-general famous enough to be a household name worldwide would have a good chance of forcing countries to make non-refoulement a reality.

I’m proud to report that the grandfather of a friend of mine forged a lot of documents, in the aftermath of World War II, so as to save people from repatriation to Stalin’s Soviet Union, where they would have been killed, and got them into the US instead. Such people are among history’s heroes. Schoolchildren should be taught to admire them.