Tag Archives: gradual move to open borders

If Open Borders Are Instituted Gradually, What Should Be The Initial Number of Immigrants Admitted?

In a recent post, Vipul wrote about the importance of better understanding the number of people who might migrate under policy changes in the direction of open borders.  One reason why he considers this important is to evaluate the legitimacy of concerns about “swamping:” “One of the main concerns of people ranging from hardcore restrictionists to moderate pro-immigrationers and even some who identify as being pro-open borders is that true open borders would lead to very large numbers of people moving over short time periods in a manner that would strain housing, electricity, water supplies, and other infrastructure in the countries receiving the immigrants.”

Whether receiving countries would be swamped if open borders were implemented, and what the swamping would actually be like, is pivotal to determining the morality of open borders.  That’s because, absent the possibility of a swamping that turns a receiving country into an economic and political basketcase similar to Haiti or Somalia, from a moral standpoint there are no obstacles to instituting open borders immediately.

In fact, two of the strongest moral arguments in favor of open borders include caveats in which extremely harmful swamping might override the arguments.  In “Aliens and Citizens: The Case for Open BordersJoseph Carens uses John Rawls’ question about “what principles people would choose to govern society if they had to choose from behind a ‘veil of ignorance,’ knowing nothing about their own personal situations,” such as their class, race, sex, or natural talents, to address immigration policy. (p. 255)  Since people would be prevented “from knowing their place of birth or whether they were members of one particular society rather than another,” (p. 257) he concludes that they would choose an open borders regime: “In considering possible restrictions on freedom, one adopts the perspective of the one who would be most disadvantaged by the restrictions, in this case the perspective of the alien who wants to immigrate.  In the original position, then, one would insist that the right to migrate be included in the system of basic liberties for the same reasons that one would insist that the right to religious freedom be included: it might prove essential to one’s plan of life… So, the basic agreement among those in the original position would be to permit no restrictions on migration (whether emigration or immigration).” (p. 258)  (The original position means when people operate behind the “veil of ignorance” about their personal situation when choosing society’s laws.)

However, in “Migration and Morality: A Liberal Egalitarian Perspective,” Mr. Carens states that with open borders “… the number of those coming might overwhelm the capacity of the society to cope, leading to chaos and a breakdown of public order… A threat to public order could be used to justify restrictions on immigration… because the breakdown of public order makes everyone worse off in terms of both liberty and welfare.”  At the same time he writes that “the state is obliged to admit as many of those seeking entry as it can without jeopardizing national security, public order and the maintenance of liberal institutions.” (p. 30)

In “Is There a Right to Immigrate?” Michael Huemer argues that unless there are “extenuating circumstances,” people have a right “not to be subject to seriously harmful coercion.” (p. 432)  Therefore, unless special circumstances can be identified, physically barring immigrants from entering a country and expelling those already inside a country are violations of immigrants’ rights not to be harmfully coerced. (p. 434)  Mr. Huemer addresses a variety of justifications for this coercion against immigrants, including claims that immigration hurts native workers, that immigrants fiscally burden natives, that the government should prioritize the interests of disadvantaged natives, and that immigration threatens natives’ distinctive cultures.  Mr. Huemer effectively shows that these justifications do not override immigrants’ rights not to be harmfully coerced through immigration restrictions.

Nevertheless, the possibility of swamping gives Mr. Huemer pause.  He writes, “No one knows what the full effects of a policy of open borders would be, since it has been a very long time since U.S. borders have been open.”  Referring to Brian Barry, who predicts a billion immigrants coming to the U.S. with open borders and disastrous consequences, Mr. Huemer states that “Perhaps Barry is correct that the result would be disastrous for American society.  If so, this is the sort of extremely negative consequence that, it might be argued, outweighs the rights of potential immigrants to freedom of movement.” (pp. 453-454)

So would receiving countries be swamped with open borders, and would that swamping essentially destroy the economic and political systems that made those countries desireable destinations in the first place, thus overriding the moral imperative for open borders?  That is what Vipul is apparently exploring, but it seems that a clear answer will be elusive.

In apparent response to concerns about swamping, some, including Mr. Huemer (p. 454), have advocated for a gradual transition towards open borders.  This would involve increasing immigration levels over a period of time.  If receiving countries are not being severely swamped after each increase, then immigration levels would again be increased.  Politically, and perhaps morally, this approach may be warranted, although the suffering associated with restrictionism would persist.

At least the initial increase in immigrant numbers under a gradual transition could be substantial, without severe swamping of receiving countries, based on Israel’s experience with high levels of immigration from the former Soviet Union in the 1990s.  Philippe Legrain has highlighted this experience in his book Immigrants: Your Country Needs Them.  This flow of people to Israel was, in Mr. Legrain’s words, “one of the most dramatic experiments in the history of immigration.” (p. 133)  Mr. Legrain notes that between 1990 and 1997 over seven hundred thousand immigrants from the former Soviet Union arrived in Israel, a country with a population of about 4.6 million in 1989, and almost half of the immigrants entered in a two year period. (p. 134)  Mr. Legrain puts these numbers in perspective for America:  “Imagine, then, what would happen if over 15 million foreigners were suddenly to arrive in the U.S. over the next two years, rising to 29 million over eight years.  Twenty-nine million people who don’t speak English, don’t have jobs to go to and don’t even have any experience of working in a capitalist economy… Mass unemployment?  Riots in the streets?  Perhaps even the collapse of society?” (p.134)

Citing an Israeli economic expert on this impact, Mr. Legrain states that at first native Israelis’ wages fell by about 5 percent for men, and there was a sharp rise in interest rates.  However, “Israel’s economy seems to have absorbed a vast number of new workers without a rise in unemployment.”  Unemployment among native Israelis dropped during this period, and by 1997 the ex-Soviet employment rate was similar to that of native Israelis.  (p. 135)  In addition, by 1997, “natives’ wages had recovered to where they would have been without the mass immigration, and interest rates had fallen to their pre-immigration levels.”  Mr. Legrain concludes that “flexible advanced economies can absorb large numbers of immigrants without any cost to native workers if the inflows are reasonably predictable, and with only a short-term cost to them if they are unexpected.” (p. 135)

Some might counter that the ex-Soviet immigrants had higher levels of education than those who might immigrate to western countries from developing countries under an open borders policy.  However, Sarit Cohen and Chang-Tai Hsieh found that “… the Russian immigrants suffered from substantial occupational downgrading in Israel and thus did not increase the relative supply of skilled workers in Israel.” (p. 27) Many female immigrants, and presumably many male immigrants, ended up doing menial service jobs. This fits with Mr. Legrain’s explanation of how differences between native and immigrant workers limit competition between the two groups:  “… critics of immigration would be the first to argue that  immigrants and native workers are not identical.  The newcomers will almost certainly speak the local language less well, have fewer contacts and less knowledge of local practices… At most, then, they are imperfect substitutes for local workers, which implies that they only indirectly compete with them in the labour market—thus limiting any short-term harm they might cause natives.” (p. 137) Thus, despite their high education levels, the immigrants from the former Soviet Union should not be viewed differently from those who would enter developed countries under open borders.

The Israeli experience suggests an initial immigrant admissions level for the U.S., as part of a gradual move towards open borders, could be established that is much higher than current American admissions levels.  I don’t know how Mr. Legrain calculated the U.S. equivalent of 29 million people over eight years based on the Israeli experience, but my calculation is significantly higher.  First, there were over 820 thousand immigrants over the eight years, including immigration from other source countries in addition to that from the former Soviet Union.  Using the 1989 Israeli population of about 4.6 million and using a rounded down figure of eight hundred thousand immigrants between 1990 and 1997, there was about a 2.1% annual addition to the 1989 population over eight years.  A 2.1% addition to the current U.S. population of about 316 million yields more than 6.5 million new immigrants a year (52 million over eight years).  Therefore, a conservative recommendation would be to establish an initial immigration level to the U.S. of 6.5 million a year.  (By comparison, there have been about one million immigrants who have gained permanent legal status in the U.S. each of the last three years.  The undocumented population has been falling in recent years.)  The level would be raised regularly thereafter, assuming no devastating effects on the U.S. from previous levels.  Other receiving countries including Canada, Australia, New Zealand, and those in Europe and East Asia could also set their initial immigration levels at 2.1 percent of their current populations.

Again, this gradual approach to open borders means that much of the suffering associated with immigration restrictions would continue for years to come.  I share Bryan Caplan’s concern that fears of swamping, which are unsubstantiated, stand in the way of open borders: “We’re trapping millions in Third World misery because we know that free migration has very bad consequences” arguably overcomes the presumption in favor of open borders. “We’re trapping millions in Third World misery because there’s a small chance that free migration has very bad consequences” does not.”   While I am very uncomfortable with the gradualist approach to open borders, at least we have evidence showing a relatively high level at which receiving countries should begin their gradual implementation of open borders.

 

A reply to “Direct Economic Democracy”

Direct Economic Democracy has measured the open borders movement and found it wanting. I couldn’t find any biographical information on the blog other than that the author lives in the UK, so for now the author is just DED to me. Judging by the two posts, DED and I (and probably most advocates of open borders) have substantively different worldviews, but I think there is potentially some common ground. So in addressing our differences I’d like to keep an eye toward our shared aims as well. After all, DED’s tagline is “Everybody matters”, a statement probably every free migrationist would heartily endorse. We advocate open borders in most cases because we think it’s a good way to empower people in poor countries to escape poverty. Likewise, DED is not a committed adversary of open borders, but instead seems to think the world is not yet ready for open borders and demanding free migration too early may evade or worsen the fundamental causes of world poverty:

In principle I share the libertarian ideal of everyone being able to live wherever in the world they fancy. I think the way to go about realising that aim is to first address the issues that create the disparities between rich and poor countries. Once that is (even if only partially) achieved, then the vast bulk of people would no longer have any desire to migrate. A few people would because of personal reasons and for exchange of specialist expertise. However opening borders would then not be opening the floodgates to a torrent of people driven by macroeconomic forces. It is only the prospect of such a torrent that keeps the borders closed now. My total disagreement with the Open Borders campaign is that they advocate opening the borders to a torrent of migration as a first-line response to the disparities between rich and poor countries.

DED begins the (second) post by criticizing free migrationists for describing labor in the rich world as “more productive” than identical labor in the poor world.

To my mind it is grossly insulting to describe that as “less productive” than working in yet another New York restaurant where insufficient custom means the food largely ends up down the sluice. Yet, in terms of how much the workers earn, it is “less productive”. It is all down to the fact that diners in New York have massively more money to spend than diners in Dhaka.

I agree that “productivity” is an unfortunate phrase, especially among non-specialists. It’s important to note that productivity is value-neutral as a technical term. Discussions of productivity differences between rich and poor countries, or similarly between rural and urban environments, have nothing to do with moral character. Because of the potential for connotative misunderstanding though, I prefer not to discuss “worker productivity” but simply wages instead. The pertinent fact is that wages for similar labor and skill sets are higher, sometimes vastly so, in the rich world than in the poor world, and liberalizing migration is the quickest and most straightforward way to eliminate this form of wage discrimination, to the immediate benefit the global poor.

DED suggests this approach is misguided because it fails to address the root causes of global poverty and assumes that such poverty is the result of bad governance in poor countries.

It could be argued that those in the rich world have little capacity to eliminate poverty in foreign countries and so have a greater chance of benefiting the lives of poor people by opening borders to immigration. That argument hinges on the idea that poverty is due to bad governance abroad and that the only answer is for the population to vote with their feet and emigrate. Firstly, I don’t think it is actually true that the rich world is a mere passive observer of poverty abroad. From what I can see, much of the blame for that poverty lies with active policies conducted by the developed world.

[…]

Much of the Open Borders logic seems to stem from the idea that market finance already has an inbuilt characteristic that would always lead towards an optimal solution for the world’s problems if only meddling governments were to stand aside.

I agree that the rich world is not merely a passive observer, but actively enforces policies that inhibit effective development in much of the world. Such policies include the arbitrary borders imposed by Western colonialism, agricultural subsidies cosseting rich farmers and tariffs inflicted on poor farmers, and, I must include, the coercive restrictions on movement known as border controls. I do think that another culprit behind persistent poverty in the world is bad governance. It seems hard to deny that governance has at least some impact in a world that has supplied such natural experiments as the Korean peninsula and East/West Germany. Although too often even the fault of bad governance can be laid at Western feet: the governments of the rich world have exhibited a nasty habit of propping up authoritarian dictators who are friendly to Western interests, or at least the interests of insiders. Then again, it’s important to remember that the “natural state” of humanity is grim poverty and early graves.

My point is not to enumerate the causes of world poverty but only to demonstrate that advocating open borders is consistent with any number of causes of world poverty, including causes DED likely favors. DED rather unfairly implies that advocates of open borders believe that our favored policy is the one true Way to cure what ails the world. But nothing about our advocacy suggests that other complementary policies should not be pursued as well. “Complementary” here is, to some extent, to taste. DED and I will likely disagree on the most effective and most just package of policies to subdue world poverty, but I see no reason in principle why DED, who has no fundamental problem with the freedom to migrate, should not include the opening of borders among their favored policies. Simon Caney’s slate of proposals might be of interest to readers of DED’s ideological persuasion (unfortunately gated). If DED fears the effects of a “torrent” of immigrants, (see here and links therein for a discussion of how likely this is) then the appropriate response is to advocate a gradual opening of borders, rather than defending the status quo.

Even by DED’s own standards of wanting to “address the issues that create the disparities between rich and poor countries” and getting the money to go to where the people are, liberalizing migration is effective. Remittances sent by immigrants to their countries of origin move resources directly into the hands of the poor by magnitudes greater than current official aid from the rich world. Diasporas facilitate investment in the poor world by increasing information flows between agents in rich and poor countries and, importantly, providing economic links augmented by trust and long-term commitment that is absent from far-removed investors.

I have tried to be constructive and non-confrontational in this post because at the end of the day, someone with DED’s concerns and commitments is exactly whom I want to reach (I speak personally here, and not necessarily for my fellow bloggers). But I do want to address some distracting and unnecessary provocations in DED’s posts. Linking to a study relating migration to schizophrenia in a throwaway comment (first post) is insulting to migrants. Hopefully we can all agree that restricting the freedom of movement of people around the world is not an effective way to prevent schizophrenia. And the mention of the Highland Clearances was jarringly irrelevant. No advocate of open borders is proposing a forced relocation of anyone anywhere. It shouldn’t come as a shock that we would decry the Trail of Tears as a blight on American history as well. These were brutally coercive policies that have nothing to do with a liberal migration regime.

It’s reasonable to highlight the abuses that can occur when people migrate to places with minimal standards for human rights protections, as in DED’s link to the story of indentured labourers in Dubai. But I see this as an argument for nations more committed to human rights to open their borders to provide more and better options for the world’s inevitable migrants. This story “underlines a wider phenomenon of migrant workers being in a less assertive position to ensure that they receive a fair level of pay”, something advocates of open borders seek to correct by bringing migration into the formal, regulated economies of democratic societies.

I’ll just close by urging Direct Economic Democracy and their readers to reconsider open borders, or at least reform in that direction, as a policy that could bring substantial benefit to millions of people, even as other systemic maladies of our imperfect world continue to demand solutions.

A case for open borders that is radically agnostic about migrant count

In a previous post, I considered the considerable divergence, even among open borders advocates, about the raw count and selectivity of migrants under open borders. I argued that it is important to get more clarity on these questions, including understanding the source of disagreement and how different views regarding these can affect the other estimates (including economic growth estimates) related to open borders.

In this post, I attempt to sketch several arguments that could form building blocks of a case for open borders that is radically agnostic about how many people would move.

The right to migrate argument

This argument states, simply, that people have a right to migrate. Denial of this right is immoral. How many people would end up choosing to exercise that right is not of direct relevance. Migration restrictions are immoral because they prevent a large number of people who are in a position where they may wish to exercise the right from doing so. The human capabilities case for open borders is somewhat similar.

The lower bound argument

This argument states that even the lowest possible estimate of how many people would actually move under open borders (perhaps such estimates can be obtained by looking at the number of people who have moved under relatively modest migration liberalization regimes) is high enough to make open borders worthwhile. Whether we are talking of 10 million people over a decade or 200 million people over 2-3 years, open borders would have huge impact.

The “it anyway won’t happen immediately” argument

This argument views open borders as a goal we should set our sights on as we gradually work towards it. Thus, determining the numbers of people who’d migrate under complete open borders is at best an illuminative theoretical exercise and at worst a distraction from the more important goal of seeking marginal change that is far better understood. Some proponents of this argument many view open borders advocacy as a means for shifting the Overton window in a manner that makes immigration liberalization appear to be a more “moderate” position.

The “market forces will prevent swamping” argument

One of the concerns that critics of open borders have is that under open borders, countries (mostly rich countries) that are attractive targets for immigrants will get swamped with large numbers of migrants. This is part of the motivation behind the desire to estimate how many would move under open borders. Some open borders advocates believe that market forces, loosely defined, will take care of this concern. If too many immigrants are moving into the area, rents and other prices will rise and wages will fall to the level that it is no longer attractive to move to the destination. Other non-pecuniary negative feedback loops may also counter the swamping threat. Many people use phrases like “migration flows tend to be self-regulating” to describe this perceived phenomenon.

The “however much it takes to attain labor market convergence” argument

This argument states that migration will continue until there is (upward) labor market convergence between the sending and receiving countries. Convergence may not be complete, but may stop when the place premium between the two countries is a factor of 1.5 or less (i.e., there is only a ~50% wage gain from migrating). The point here is that we don’t know for sure how many people would need to move in order for this convergence to occur, because of countervailing factors: governments may begin instituting economic reforms once people start leaving en masse, emigrants may return to the country to set up new factories and business connected with other countries, etc. Or, this may not happen. Uncertainty about how things play out result in considerable agnosticism about the number of people who move, but relatively more certainty about the nature and desirability of the eventual outcome for humanity.

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

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

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

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

My favorite part:

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

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

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

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

Auctions, tariffs, and taxes

A draft that Alex Nowrasteh sent me to read provoked me to think in a new way about various market alternatives for regulating immigration. All of the following policies use the price mechanism, in one way or another, to ration visas by willingness-to-pay, while capturing some of the surpluses generated by immigration to return them to natives.

1. Auctions. Under this mechanism, a certain number of visas would be sold to the highest bidder. There’s a lot to be said about auction design, but for concreteness, you could just let everyone submit a bid, and then accept the top x bids, requiring them each to pay, not what they bid (which would make them bid strategically) but the lowest acceptable bid (which would make them reveal their true values). Auction winners would pay their bid, and be issued visas.

2. Tariffs. Under this mechanism, the government would set a price for a visa, and whoever was willing to pay it would receive one. There might, of course, be restrictions: knowledge of English, perhaps, or criminal background check, or some regions of the world (Pakistan?) might be excluded or treated differently on national security grounds.

3. Taxes. This is the approach I’ve long advocated: the DRITI scheme would be one way to design it. In this case, to come would be nearly free– in the DRITI scheme, I have people preimburse the government for a deportation option which they could then exercise if they were destitute and wanted to go home– but those who came to work would pay a surtax (DRITI has some other features but never mind those for now).

Now, at a highly theoretical level, the effects of all these policies could be much the same. It is not the case that, say, auctions are necessarily more restrictive than tariffs, and tariffs than taxes. If you auctioned off enough visas, that could be quite a loose immigration policy. If you set a tariff, or a migrant surtax, very high, the policy could be rather restrictive. If the government knows its own preferences and the demand curve for immigration, it doesn’t matter whether it controls the quantity (via auctions) or the price (via tariffs/taxes): the number who will come, and what they will pay, will maximize the government’s objective function. Similarly, if immigrants know what they’ll earn and are not credit-constrained, it doesn’t matter whether they pay everything up front (via auctions/tariffs) or over time (via taxes): either way, those will come whose net present value of migrating is greater than the net present value of the payments required.

There are a lot of practical differences between the three policies but I think the crucial one is how the burden of uncertainty is distributed, if, as is realistic, the government does not know exactly what the demand for immigration is like, nor do immigrants know exactly what they’ll earn in the US.

Under the auction mechanism, the government faces no uncertainty about what may the most important variable, namely, how many immigrants will come, though it faces uncertainty about how much it will raise from the auction. Immigrants, on the other hand, face a lot of uncertainty, because they don’t know if their bids will prove sufficiently high to qualify for visas. Immigrants might find it difficult to plan, not knowing whether they would be able to come or not. Also, they wouldn’t know how much they would end up paying. If an immigrant bids $500,000, he might be fairly confident of coming, but not know whether he’d end up paying $20,000 or $100,000.

Under the tariff mechanism, the government faces uncertainty about how many immigrants will come, and also about how much revenue it will receive in total, but not about what price each immigrant will pay. It knows how much revenue it will get per immigrant. Meanwhile, immigrants know what they’ll have to pay for a visa, and face no uncertainty on that front. But they face a lot of uncertainty about what they’ll earn in the US, and how much they’ll like it there. The value of immigrating is probably quite uncertain, but they have to pay the same price in any case. If they pay a lot, then are unlucky in the labor market, or have overestimated their value, or become unbearably homesick, they’re in trouble. Of course, they might also get large, unexpected surpluses if their fortunes in the US are better than they had anticipated. But it’s a risky undertaking.

Under the tax mechanism, the government faces uncertainty, both about how many immigrants will come, and about how much the immigrants will earn and therefore how much they’ll pay in taxes. The government, moreover, has to wait to get paid. Immigrants, on the other hand, face much less risk. They don’t know how well they’ll succeed in the US, but if they do badly, they can go home, or if they stay even though they’re earning little, they’ll pay little (though even a small amount might be painful) for the privilege of staying. If they do well, they’ll pay a lot, but they can afford it then. If they earn well enough but dislike life in the US, they’re not bound to stay just so they can pay off the debt they incurred for the visa: the visa was near-free. Immigrants also don’t need to have a lot of liquid assets to come.

I much prefer the tax mechanism, because the government can handle the risk easily. The government is highly “diversified” in that many immigrants will come, and more taxes from the successful will offset fewer taxes from the less successful. And the government can easily afford to wait and garnish wages rather than getting a lump sum up front. I think only the tax mechanism would (virtually) eliminate undocumented immigration, because anyone who could afford to pay a coyote could afford to get a visa. I also think the government could raise the most money through immigration taxes, because immigrants who were relieved of risk and the need to go into debt would be willing to accept arrangements that, on average, would ultimately cost them a good deal more than what they would have agreed to pay as a lump sum ex ante.

But it occurs to me (or perhaps Vipul suggested it, I can’t remember) that a policy path to open borders might involve (a) auctions first, (b) then tariffs, and (c) taxes last.

If the public appreciated the efficiency advantages of regulating immigration by working through markets, but was still spooked by the possibility of getting swamped, they might go for the auction approach. That way they’d still control how many immigrants came in.

If the auction mechanism had been in place for a while, people might start to feel they knew something about the shape of the immigration demand curve, which would make them more comfortable with the idea of tariffs, since the number of immigrants who would use them, though unknown, would be less unknown. People could make an educated guess. Moreover, the auction mechanism would have some problems which a tariff could resolve. For example, what’s the auction schedule? If it were annual, people would have to wait a long time for it, and to lose a bid could mean the disruption of a lot of big plans. If it were monthly, people would speculate on a favorable month. Prices might fluctuate in strange ways. Some might be willing to pay a lot more than the usual auction prices during the off-season, while others would overbid and regret it. A tariff would promise to be less arbitrary and raise more revenue.

Later, when the tariff mechanism had been in place for a while, people would have a clearer idea what the income profile of immigrants tended to be, which would help them project the earnings of a migration tax. There would be lots of stories about spirited, entrepreneurial aspirants to immigration who, however, couldn’t raise the money to come, though they seemed sure to succeed in the US if they could just get over that hurdle. Others would pay the tariff, get homesick, but be stuck, needing high earnings to pay off creditors. A switch to taxes would promise to relieve immigrants of risk and avoid excluding promising people merely because they had poor access to credit, while at the same time, increasing the revenue the government could take in.