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Guests and Citizens June 7, 2007

Posted by federalist in Economic Policy, Human Markets, Social Politics.
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Daniel Henninger got in trouble with opponents of immigration when he suggested, “Conservatives will pay a price for demoting economic forces in immigration.”  Today he summarized their eminently reasonable platform as follows:

They want the borders secured, the laws obeyed, English spoken, taxes paid, costs raised on employers of illegal workers, welfare payments suppressed, enclaved Spanish neighborhoods broken up and a very, very long path to citizenship.

The obvious solution to the immigration “problem” is to open our borders to let in as many “guest workers” as the market demands, but also open the flow in the other direction to readily expel as many non-citizens as try to take advantage of our country.  I.e., if you can do something better or cheaper than us then come on over, but break our laws or abuse our system and you’ll get sent back from whence you came.

Citizenship

Proper citizenship is a social contract between each citizen and his country.  It is a peculiar contract because it is hereditary, and since most of us are born into our citizenship we don’t have to think deeply about it.  But if people stopped to consider the rights, benefits, and obligations of this contract, then most would agree that there should be significant obstacles to extending citizenship to outsiders.  Why?  For one thing a great deal of citizenship amounts to social insurance, and a fundamental characteristic of insurance is that if you allow people to opt into an insurance system after their insured risks are known then the system will collapse.  (Another reason citizenship traditionally excludes “outsiders” is the cultural issue: Citizens are expected, on the whole, to conform to the culture of the citizenry.  I don’t know if this is essential to the preservation of a country, but there is more than enough academic historical material on cultural assimilation to weigh that question.)

The question of illegal immigration has gotten tangled up with the question of how we should grant citizenship to those who are not born to existing citizens.  (At present the United States also grants citizenship to anyone born on U.S. soil, which is unnecessary, and which complicates these questions further.)  I think citizenship should only be gained through significant service, tax-paying, or some other contribution to the country that exceeds whatever a candidate could expect in return.  But this is a separate question from the matters of illegal immigrants and the market demand for foreign labor.

Competition

One obstacle to an open worker market is the number of American workers who are used to the layers of labor protectionism created by current immigration policy.  For example, it is extremely difficult for skilled professionals to work here illegally.  The number of visas granted annually for them to work legally is so small that it is exhausted within the first 48 hours of each year.  So the supply of skilled labor is artificially depressed, which artificially elevates skilled wages.  If the markets were allowed to balance it is almost certain that skilled Americans would see their wages drop.  (They may even lose their current jobs — particularly if they are unwilling to work for the lower market-clearing wage.)  But that’s a myopic way of looking at this matter: After all, if labor is cheaper then goods and services will also be cheaper.  As with all markets, those who were profiting from protectionism will lose their rents, but overall everyone will be better off.

Granted, the transition to an open labor market would have to be gradual to allow currently protected workers to adapt.  That transition is easy to implement through quotas (like we already have) or excess taxes on guest workers.  But in the end productive workers are an asset to a country and to an economy, not a liability.  We want more of them, not fewer.  The labor market is not a fixed pie, with a fixed number of jobs to give out.  Just because a foreigner takes your job doesn’t mean there isn’t something else for you to do.  On the contrary, more workers — particularly entrepreneurs, which can come from anywhere — tend to enlarge the labor market.  In the big picture more workers means more and cheaper goods and services for everyone, and more economic power to pursue whatever agenda the citizenry elects.

We want as many productive guest workers as our economy can employ, but we do not need to tolerate or accept law-breakers or free-loaders to get them.  As citizens we govern our own social contract, and we can exclude those who would abuse it.

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Comments»

1. Hamilton - June 8, 2007

You say,

“I.e., if you can do something better or cheaper than us then come on over, but break our laws or abuse our system and you’ll get sent back from whence you came.”

But how does that work when we can hardly track illegal immigrants within the country and the border is so porous that they can cross back and forth at will?

http://www.fedlocally.com

2. federalist - June 11, 2007

I guess on that angle I’m in the camp that believes that no realistic law can squash a market that is so out of balance. I.e., we can’t possibly hope to control illegal immigration until we have provided a legal way to sate the enormous demand that those lawbreakers are filling. Or until we impose unconscionable penalties on those criminals.

Right now if you’re an employer who needs unskilled labor you can try to find legal help, or you can avoid a plethora of regulatory hassles and get more eager labor for half the price by hiring illegals. Likewise, if you’re a poor foreigner you know that if you take moderate risks sneaking into the U.S. you can earn more in a day than you can at home in a month – and in the worst case you get fed and then sent home.

If we make it easier for employers to legally import labor, and for foreign labor to legally join our workforce, then we remove the incentives for breaking the law. Illegal immigration won’t go away, but the black market in labor that makes it so prevalent will dry up, and you will be left with fewer and more serious criminals — a more tractible law enforcement problem than combating the pervasive infrastructure that supports our massive undocumented workforce.

If we raise the penalties for breaking the law, we could also disrupt the market. But our people demand such a high level of due process and protection of human rights that I believe in practice this latter option would impose far more burdens on the taxpayers than on the lawbreakers.

3. rolando - February 5, 2008

Presidents and Governors have the pardon power to remedy vast injustices and travesties. We offer criminals deals all the time. Prosecutors have traditionally offered leniency to some defendants in order to get them to testify against other defendants. Leniency can be immunity from prosecution or reduced charges and recommendations for reduced sentences. Offering leniency is a long-standing and important aspect of the legal system. Law enforcement would be paralyzed without it.

Clemency, leniency, pardoning is not a departure from our justice system. A pardon is not a private act of grace. It is a part of the Constitutional scheme. When granted it is the determination of the ultimate authority that the public welfare will be better served by inflicting less than what the judgment fixed.

4. federalist - February 18, 2008

Eugene Fama Jr., in a sweeping condemnation of the current Republican party, notes the absurdity of rejecting cheap immigrant labor:

[W]hen bad economic policy south of the border (like the type the restrictionists want to adopt) causes inexpensive labor to migrate, it’s a direct subsidy to our economy — one we should welcome with open arms, Reagan style.


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