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Is corruption on the part of consular officials good or bad?

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John Lee’s post on US visa policy is, for me, a reminder of how important it is for people to have rights. Rights can sound like an abstruse or arbitrary notion. “Natural rights” sounds like a ghost from the 18th century suddenly walking the earth again. “Human rights” sounds like newfangled UN-speak. But when a person is denied a visa for refusing to laugh at a consular officer’s joke, one feels a certain indignation, a certain repugnance, as if an injury has been done to something rather ineffable but very important. It is not proportional, not fitting, unjust. It is somehow intolerable. The ineffable something that has been injured is human dignity, or in other words, human rights. Rights are the only antidote to arbitrariness and discretion.

Anyway, one of the odd side-effects of an improperly discretionary regime that doesn’t give due respect to human rights, is that corruption can suddenly seem like rather a good thing. Which of the following is more offensive?

1. A visa applicant is rejected for not laughing at a consular official’s joke.

2. A visa applicant is rejected for refusing to pay a $5,000 bribe.

My intuition actually sort of tilts towards (1) being more offensive. I’m very tentative on this point. But at least in case (2), the applicant knows the process. He has more of a sense of being the author of his own life story, of having a say, of knowing the criteria, of being able to plan.

Of course, if I put on my “economist” hat, a very simple analysis suggests itself. If a visa applicant spends his time kissing up to a consular official by researching him and learning what, e.g., laughing at his jokes, puts him in a good mood, resources have been wasted. Perhaps the consular official likes being flattered, but probably he doesn’t value it much, and surely less than the effort to do it is worth. By contrast, if the applicant pays the consular official a $5,000 bribe, both parties clearly benefit. The consular official is $5,000 richer, and the visa applicant apparently values the visa more than his $5,000, or he wouldn’t have paid. Of course, the US public, of which the consular official is supposed to act as a representative, might be deemed to suffer by the decision. But whatever the US public’s stake in immigration may be, it can hardly be claimed that the willingness of visa applicants to laugh at consular officials’ jokes has anything to do with the interests of the US public. So if the consular official is given such discretion that he is entitled to accept or reject visa applicants based on whether they laugh at his jokes or not, then he can’t be injuring the US public by exercising the discretion that has been allotted to him in a fashion that enriches him personally. Efficiency is therefore served by consular corruption.

Now, what this leaves out is truth. I presume that consular officials who reject applicants based on an applicant’s not laughing at their jokes are not deemed to have done anything dishonest or illegal, but that consular officials are explicitly forbidden to take bribes. How does that consideration weigh against the greater efficiency of consular corruption?

One goal of my DRITI proposal is to remove such dilemmas by removing consular discretion. Only when the state seeks to discern and protect individual rights can true rule of law exist.

Did Open Borders Change the Course of World History?

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Allow me to make the following counterfactual: Suppose all immigration of Germans to America had been blocked from the start. Restrictionists would have had lots of arguments on their side: Germany was a hotbed of various collectivist ideologies that were inimical to American liberty: rabid Nationalism, Antisemitism, Communism, and National Socialism. IQ of German Americans is at best average. German immigrants only slowly assimilated and kept speaking German. And then alien habits like minors can drink beer. Etc.

Now let’s go back to 1940.

The US had a population of 132 million, Germany including Austria, Greater Germany, had a population of 79 million. So the US had a population 67% larger than that of Greater Germany.

Today about 17% of Americans claim German ancestry. Since there was only low immigration of Germans after World War II compared to other groups, the fraction should have been even higher in 1940. Assuming a quarter of US population in 1940 was of German descent, US population in the counterfactual would go down by 33 million to 99 million. Add the 33 million to the German population and you get 112 million. So now Greater Germany is 12% more populous than the US. The effect would have been like another major power of 66 million had entered the war on the side of the Axis.

And it gets worse: Forget about General Eisenhower, and get used to Generalfeldmarschall Eisenhauer. Same for Chester Nimitz for the Navy (now: Generaladmiral Nimitz) and Carl Andrew Spaatz for the Air Force (now: Generalfeldmarschall Karl Andreas Spatz). And more as a footnote: also no William Patrick Hitler receiving a Purple Heart for his service in the US Navy.

I will not expand on the counterfactual and make a claim that the Axis powers would have won the war. But then I am not sure I could argue the opposite. In a world of completely closed borders for citizens of Germany, Italy, and Japan, you would have to repatriate also millions of German emigrants and their descendents from the British Empire and another big chunk of the US population for Italian Americans.

How well did restrictionist predictions stand up in the real world? Letting a fifth column onto your soil could have disastrous consequences. Plenty of danger for the US, right?

Not really. Incidents of treason and disloyality were few and far between. The “Christmas Declaration by men and women of German ancestry” was more representative, signed among others by Babe Ruth:

“[W]e Americans of German descent raise our voices in denunciation of the Hitler policy of cold-blooded extermination of the Jews of Europe and against the barbarities committed by the Nazis against all other innocent peoples under their sway. These horrors … are, in particular, a challenge to those who, like ourselves are descendants of the Germany that once stood in the foremost ranks of civilization. … [We] utterly repudiate every thought and deed of Hitler and his Nazis … [and urge Germany] to overthrow a regime which is in the infamy of German history.“

Moral: You can look on immigrants as people who perhaps keep some allegiance to their old country and its culture. If that culture is thorougly collectivist as it was in Germany in 1940, that does not look good. Assimilation may be slow and incomplete.

However, that is looking on things only from the limited perspective of one country. If you look on them at a global scale, the effect is different. Even incomplete assimilation means having more people who are less committed to their previous views, and even some (and in the case of German Americans many) who are completely out of reach for collectivism. Open borders undermines collectivism.

So if you are concerned about liberty in the world long-term, you would want to have as many people as possible who are not stuck in collectivist societies and can be indoctrinated by totalitarian governments, and as many as possible who are exposed to liberty and have a chance to change their minds in an open society.

Good luck for the world that liberty went along with open borders for a long time.

The photograph of then-General Dwight D. Eisenhower speaking with paratroopers on the eve of D-Day, 1944 featured in the header is available at the Library of Congress.

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Economists want more immigration, why don’t you?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Introducing Hansjörg Walther

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

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

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

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