Ending Global Apartheid

Economist Lant Pritchett defends immigration, the least-popular--and most-proven--idea for helping the world's poor.

Imagine an economic distortion so massive that its effects dwarf those of all existing tariffs, quotas, and subsidies. This distortion is relatively new and inarguably regressive; created by policy makers in wealthy countries such as the United States, Sweden, and Japan, it keeps people in Indonesia, Bangladesh, and Guatemala earning fractions of what they otherwise might for the same work. Some of the poorest people in the world are hit hardest, and the policy further impoverishes the poor while reducing economic opportunities for the rich.

Here in the United States we call this distortion "border control." Lant Pritchett, a former World Bank economist, has focused his considerable intellectual firepower on diminishing its economic influence, pushing for more cross-border mobility and a freer world market in labor. Pritchett thinks the citizens of wealthy countries can be convinced of the benefits that even the privileged would enjoy in a more open regime. But he is primarily interested in the huge potential benefits for the world's would-be migrants, people now stuck in economically unviable countries, often in preindustrial economies, fenced in and shut out.

Born in Utah and raised in Idaho, the 48-year-old Pritchett is the son of a Mormon bishop and a graduate of Brigham Young University. He left Boise for Argentina at the age of 19 to serve a mission for the Church of Jesus Christ of Latter Day Saints, the first of many explorations of entrenched poverty and its causes. After picking up a Ph.D. at MIT, he stamped his passport in 40 more countries, often as a research economist with the World Bank. Today he's back in Cambridge co-editing the Journal of Development Economics and teaching at Harvard, where he conducts a class on development with his friend and mentor, former Treasury Secretary Lawrence Summers.

Pritchett is the author of a powerful new book that catalogues the staggering gains to be had from a liberalized immigration regime. Let Their People Come (Center for Global Development) relates, simply and unrelentingly, the voluminous data on global migration. If the 30 affluent countries making up the Organization for Economic Cooperation and Development (OECD) were to allow just a 3 percent rise in the size of their labor forces through loosened immigration restrictions, claims a 2005 World Bank report, the gains to citizens of poor countries would amount to about $300 billion. That's $230 billion more than the developed world currently allocates to foreign aid for poor countries. And foreign aid is a transfer: The $70 billion that rich countries give leaves those countries $70 billion poorer. According to the World Bank study, wealthy nations that let in 3 percent more workers would gain $51 billion by boosting returns to capital and reducing the cost of production.

The aggregate gains from a regime of completely open borders are so large as to seem unreal, but immigration policy is perhaps best understood at the level of the individual. According to World Bank economists Martin Rama and Raquel Artecona, data from the 1990s show that a Vietnamese laborer who moves to Japan will make nine times what she would at home, adjusted for purchasing power. A Guatemalan will find wages for the same work increase sixfold in the United States; a Kenyan who moves to the U.K., sevenfold. "These wage gaps create pressure for migration," Pritchett writes, "because they are not primarily explained by differences in the characteristics of people. Wage rates are predominantly characteristics of places." The biggest single determinant of how well off you will be is not the college you get into, the color of your skin, your gender, or your work ethic; it's the country listed on your passport.

Pritchett's thesis is the kind of thing that sends conservatives and liberals alike running to reinforce the barricades, and he isn't one to shy from controversy. He compares the world's system of mobility restrictions to South African apartheid, a system that provoked Western opprobrium precisely because a privileged class allocated mobility rights unjustly. Apartheid, like fettered labor markets, was a system that "sharply limited the mobility of people, that kept people in disadvantaged regions with no economic opportunities, that destined millions to lives without hope, and that split workers and their families—merely because of the conditions of their birth." The analogy to labor markets, Pritchett points out, is almost exact, with the notable exception that labor restrictions uphold much larger inequalities than apartheid ever did.

If there is one group of people he does not have to convince, it is those unfortunate enough to have been born in economically stagnant countries. Pritchett estimates that labor flows would be at least five times greater if people were free to move. What's keeping so many would-be migrants in place? "Men with guns," Pritchett says. His message is less a call to arms than a call to lay them down, less a provocation than a vision of a richer, better, freer world.

Senior Editor Kerry Howley interviewed Pritchett (whose book can be downloaded at cgdev.org) in August. Comments may be sent to [e-mail].

Reason: You worked for the World Bank while writing this book. The World Bank provides assistance to nation-states, and here you are saying that many, if not most, of the extremely poor would be better off just leaving. Shouldn't someone focused on development encourage people to stay and make their country economically viable?

Lant Pritchett: There are two elements to that. I'm reasonably convinced that the argument that more foreign aid is a way of preventing more people from coming because it will make people better off isn't consistent with the empirical work that's been done. If we succeed in making Africa richer, there is going to be more pressure in outward migration rather than less. A lot of people in Africa are not creating pressure for immigration because they are just too poor. The idea that aid and migration are substitutes is just not consistent with the experience of the world.

The second thing is, we shouldn't create hostages. We shouldn't keep people locked in place within some arbitrary post-colonial boundaries just so we can continue with the bold experiment of trying to make nation-states develop. People should be free to move.

Reason: And if we got rid of those boundaries, what would the world look like?

Pritchett: The key to predicting that is price differentials [differences in prices charged for the same product in different places]. If you look at what has happened with enormously successful trade liberalization in the past 40 or 50 years, price differentials have fallen a lot. The only remaining enormously egregious price differential in the world is in the price of labor.

But I think the question of what would happen if world barriers to labor were erased tomorrow isn't that interesting because it's not going to happen. And to some extent it's good that it won't happen immediately. If the world were thrown open to labor mobility today, I suspect it would cause massive disruption of a kind that nobody really wants.

Reason: You consider barriers to the movement of people more problematic than remaining barriers to the movement of goods.

Pritchett: At this stage we have more or less eliminated most of the barriers to goods. Quantitative restrictions are almost eliminated around the world. Relative to when I started working as a trade economist in the early 1980s, the world is completely liberalized. So the incremental gains from anything that could happen as a result of WTO [World Trade Organization] negotiations are just infinitesimal. If we did everything, all the remaining goods liberalization, the monetary gains would be between half and two-thirds of the gains from just allowing 3 percent more workers into the OECD. Given the current enormous wage differentials, a minor relaxation of people mobility easily swamps all remaining liberalization on the goods side. There are almost no tariffs left over, say, 20 to 25 percent, and yet wages for unskilled labor differ not by percents but by an order of magnitude—workers in some poor countries make 8 cents an hour, not 8 dollars an hour.

My main point is that we're giving all this intellectual and political and analytical attention to mopping up that last little bit of trade liberalization. Which is a good thing; I'm all for it—but let's get our eyes on the next big prize.

Reason: Why has it been so hard to refocus?

Pritchett: To some extent it's the March of Dimes phenomenon. March of Dimes cured polio. They found a polio vaccine. Once the organization that was set up to find a polio vaccine found a polio vaccine, what did they do? They raised money to cure other diseases. You keep doing what you're good at. So we have this enormous machinery around goods liberalization. It's going to continue doing what it's doing. And they dominate the agenda. So people who are concerned about poor people still have the issue completely framed by this obsolete machinery.

GATT [the General Agreement on Tariffs and Trade] frames the debate because GATT has been an enormous success. People concerned about cotton subsidies say, "Let's make the Doha round of WTO negotiations more favorable to the poor." But they're still buying into the whole agenda framed by GATT and the WTO, which has the persistence of a successful organization. They found the polio vaccine; they just can't quit.

Reason: You're offering strategies for poverty alleviation, but the left seems largely hostile to this agenda.

Pritchett: The left is right to be deeply ambivalent about this. They're wrong about where they end up. They're legitimately concerned about the increase in inequality inside the Organization for Economic Cooperation and Development, and particularly the United States, which is an enormous social and economic issue. They worry that if we let in more workers it will be bad for those who are doing the worst in America. They fear that if poor people come to the United States, they might cause deeper inequality here.

Being against migration to the United States is wrong for two reasons. One, I don't think it gets the scale of the poverty in the United States vs. poverty in the rest of the world right. Second, if you are really concerned about inequality in the United States, there are many things you can do that would be better than blocking other people from coming to our country. I don't want to say that people who are concerned about inequality in the U.S. aren't right to be concerned about inequality in the U.S. But I think taking that concern and using it to keep people from coming to the United States is victimizing the world's true victims in favor of people who happen to live closer to you.

Reason: It seems strange to worry more about inequality within the arbitrary boundaries of a nation-state than about much larger global inequalities.

Pritchett: Exactly. I've never understood a view of the world in which the place in which a person was born becomes the key factor in whether you care about them.

Reason: Is there a legitimate concern about brain drain? About skimming the best and brightest from developing countries, leaving them worse off?

Pritchett: Again, I think there are some elements of legitimate concern about that, particularly since the political economy of immigration will lead rich countries to do more and more skimming rather than less and less. But that said, it's the same path you take toward free trade. Rather than say you're against free trade, let's put the emphasis on fair trade. When it comes to brain drain, let's get more unskilled migration rather than saying let's stop all migration that could cause brain drain.

That's the turn that the more sophisticated NGOs [nongovernmental organizations] have taken on trade, where they really have moved from a free trade to a fair trade agenda, which has its downside but is enormously positive relative to an anti-trade agenda. But they haven't taken that same turn at all on the immigration issue. We say, look, let's have migration that's the best possible for everyone. Profitable, welfare-improving trade is usually driven by differences. And there's nowhere the differences are larger than in the endowments of unskilled labor.

Reason: Why have attitudes about free markets in labor not evolved alongside attitudes about free markets in goods?

Pritchett: I would push back on the premise. The average citizen, if asked, is against free trade, particularly in Europe. The proportion of people against free trade is almost as high as the proportion of people against migration.

The comparison isn't quite fair: One issue is usually phrased incrementally—should we have more immigration?—vs. overall free trade. That raises an important political economy question. What the world managed to do on free trade is build in mechanisms that created political coalitions and a momentum toward freer trade. That worked in spite of the fact that if you ask the citizens on the street, their reaction might not have been pro–free trade. That is political genius. And we really do have the founding fathers of the post–World War II system to thank for having created mechanisms that have led to this enormous progress that domestic politics doesn't necessarily favor.

Reason: Milton Friedman has pointed out that open borders are incompatible with the welfare state.

Pritchett: I would have thought Milton Friedman would have taken that as an argument for open borders.

The free mobility of labor is incompatible with the welfare state if every person who is physically present in a location to perform an economic service automatically comes into the same set of welfare benefits as a local. That needn't be the case.

This is what liberal democracies find hard. But it's not impossible. You have to confront the injustice of the world and say this person is better off even without the welfare benefits, and this process is good for the world.

Reason: You then create a division between first- and second-class citizens. Isn't that worrisome?

Pritchett: The world now is divided into first-class citizens of the world and fifth-class citizens of the world. The idea that we wouldn't help a peasant trying to eke out a living on a side of a mountain in Nepal by letting him work in the United States, just because we have to, if he comes to the United States, endow him with all the rights of U.S. citizens—I think that moral calculus is backward.

So the first answer is: Milton Friedman is wrong. It's not incompatible with a welfare state; it's incompatible with a welfare state that doesn't differentiate between people within its territory. Singapore manages to maintain an enormously high level of benefits for its citizens with massive mobility. Kuwait has one of the highest immigrant populations in the world, and you can't ask for a more cradle-to-grave welfare state than what Kuwait gives its citizens. So it's obviously possible to maintain whatever level of welfare state you want and have whatever level of labor mobility you want, as long as you're willing to separate the issues.

Reason: The political scientist Robert Putnam has done research showing that diversity correlates with diminished feelings of trust within a community. It seems plausible that higher levels of immigration could erode support for a welfare state.

Pritchett: Again, this depends on how migration is structured. No one looks at the H1-B holders, or the au pairs, both of which are temporary mobility labor schemes, and says, "Gee, this undermines the welfare state." I think it is an issue only if you insist that mobility across the border for people who provide an economic service automatically endows them with a full set of political rights.

The world would be a much better place if that were not true. One of the awkward paradoxes of the world is that Bangladeshis and Pakistanis and Nepalis are enormously better off precisely because the Persian Gulf states don't endow them with political rights. Because if you said to Kuwaitis, every Bangladeshi who comes in is going to acquire the full entitlements of Kuwaitis, I'm sure the Kuwaitis would cut the flow of Bangladeshis to zero. The Bangladeshis have been made enormously better off by the ability to work in Kuwait.

No one responds to Putnam's research by saying we should make America less diverse. The logical consequence of that line of thinking is, let's resegregate America; let's re-create nondiverse communities. I think Lester Maddox used to say something like that in the '50s.

Reason: I take it that you believe property rights are foundational to wealth creation. Do citizens "own" their countries? And if you think just anyone should be able to come over the borders, are you denying citizens their property rights in their country?

Pritchett: I agree that citizens have a property right to their country. But the beautiful thing about institutions that create property rights is that they're a free good. If we allow in another 10 million, 20 million, 30 million people, then what has created American wealth—its economic institutions that allow entrepreneurship, that allow free markets, that allow people to innovate, that allow people opportunity—none of that is eroded by letting in more people.

America isn't Kuwait. The wealth of Kuwait is that they're sitting on this pool of oil. The wealth of America is that we have developed fantastically successful economic institutions. Those institutions are not zero sum. No one has suggested we should have limited America's natural population growth because with 300 million people there are fewer benefits of our institutions of property rights to go around. It's the same thing with migration.

Reason: You argue that it's not morally permissible to discriminate on the basis of nationality. But at what point do you have to stop letting people in because the sheer numbers threaten institutions of wealth creation? What's the limit?

Pritchett: To say it's not morally permissible doesn't create black and white. Right now all kinds of things that cause much smaller differences in human welfare get much more attention. If we say we are going to discriminate against ethnic Indians in Mexico vs. other citizens of Mexico, there would be a hue and cry across the world. But if we say we're going to discriminate in favor of people of Mexican descent born in the United States vs. people of Mexican descent born in Mexico, this creates absolutely no moral outrage.

Another example: The differences in well-being between people born in poor countries and people born in rich countries are orders of magnitude larger than differences between the genders within those countries. But books written about gender probably outnumber books written about this point by 100 to 1.

That said, citizens do have a right to control their country in favor of its existing citizens. So let's create a mechanism in which citizens can feel perfectly confident that their legitimate rights and concerns are protected, which at the same time leads to more benefits for more people in the world. I am never talking about open borders. Open borders in the current environment is a nonstarter. It might take us 50 years to get to anything like that. What I am saying is: Let's figure out ways of protecting the concerns people have about their country while at the same time allowing for more migration.

Think of free trade. I think now, in this liberalized environment, if you look at the kind of compromises made early on in the '50s and '60s, unwinding the prewar restrictions, you'd think they were going so slowly; they weren't bold. The free trade ideology didn't necessarily win the day, but in the long run it did.

Reason: So you do see progress.

Pritchett: I think so. The future is incredibly difficult to predict, and certain attitudinal things shift overnight. Just prior to World War I, every single European country had a monarch. Twenty years later, the very idea of monarchy was regarded as ridiculous. No one in 1910 would have predicted that. I don't rule out the possibility of a very rapid shift in the attitude toward this issue. It's possible that 20 years from now people will look back and say, "Well, that was just a ridiculous idea that we had to shut down labor mobility." Not only will labor mobility seem politically acceptable; it will become so triumphant that the opposite is unthinkable. This can happen very fast when it does happen. I'm 48 years old, and I lived through America's attitudinal shift toward the environment. And it happened overnight.

Reason: What role does technology play in all this? Does a strong regulatory state with a well-maintained, centralized database enable more immigration because people feel safer? Or would that technology just allow rich countries to more effectively keep people out?

Pritchett: It's hard to tell how much of the backlash against illegal immigration is against immigration and how much is against illegality. There is a legitimate concern that the law should be obeyed. Massive gaps between de jure and de facto are socially dangerous. So I'm pro-immigration, but I am not pro-illegality. I think you should do something about reconciling the legal situation for the people inside our country. I'm dubious about the "live in the shadows because the regulatory regime is unjust" strategy.

Reason: You worry that it gives immigration a bad name.

Pritchett: Exactly. During Prohibition, alcohol sales became associated with organized crime. But there was nothing intrinsic about having a drink that linked you to organized crime. I would much rather repeal Prohibition than allow bootleggers to flourish, because Prohibition is a dumb idea.

Reason: The electronic employer verification program has the potential to enforce immigration allowances that are egregiously low.

Pritchett: That doesn't worry me.

Reason: It doesn't?

Pritchett: I think I have more of the opposite worry, which is the general taint of illegality around the natural process of people moving across borders for economic opportunity. If we could eliminate that, that would be a big win.

Reason: What role do international institutions have to play in knocking down barriers to labor, if any?

Pritchett: I think they're going to have a very modest role, at best. In part it's embedded in the term international, if by international you mean cooperative agreements among nation-states. I don't think any country is going to enter into a binding international agreement that gives up control over its borders, and I don't think international organizations are going to play a role in free labor in the exact same way that GATT played a role in free trade.

Reason: It's taken as obvious that our duties to our neighbors come before our responsibilities to far-off populations, but that raises the question of who our neighbors are. What will it take to expand that moral community beyond the nation-state?

Pritchett: That doesn't have to happen. We don't have to come up with some sort of completely cosmopolitan, completely globalist morality to move ahead on labor migration. I think it's going to happen in the other way. I think we're going to move ahead on migration; people are going to become more and more exposed to the fact that people from other places in the world are, in very deep ways, human beings exactly like us; and eventually, in an unpredictable way, the attitude toward this will shift.

The thrust of my book is, let's look for politically acceptable mechanisms with which to make incremental changes that are feasible now. If we wait for the grand shift to happen, we'll be waiting forever.

Reason: You are probably often accused of thinking too much like an economist. What if the numbers don't capture the cultural damage caused by immigration: the loss of what it means to be an American, the loss of the sense of community. How do you address that?

Pritchett: The narrow answer is that what it means to be an American is to be open to migration. Being an American is an open idea, not a closed idea. It's not a blood relationship. The idea of being American is an idea of being open to people from other places coming and making a contribution. I think we've lost sight of that.

The broad answer is that there have to be political mechanisms to address these things. I'm not proposing some economic theocrat be put in charge of immigration policy and superimpose people's legitimate concerns about community and culture on top of it. I just think all those concerns can be addressed if we're more creative about the kind of policies we're willing to consider. For instance, the issue of temporary vs. permanent mobility: If you have to say that every person who comes across the border has a right to stay forever, you can't separate the economic question of who should be physically present in our nationally controlled territory to provide economic services from the question of who can determine our future culture. I want those questions separated. If you separate those questions, we can create more economic benefits.

Reason: What's the ideal size for a guest worker program?

Pritchett: There is definitely not an "ideal size." Maybe I'm too unprincipled, but if we can establish that this is a good thing for poor people, I'd be happy with a small one.

What complicates the American situation is that we already have more people present in the country illegally than would be admitted by the most massive guest worker program that anyone would dare propose. So you can't say we'll repatriate every single illegal immigrant and replace them with a guest worker. That's not even feasible. We have an unusual situation—that we have pushed the problem into the shadows. I'd be happy to get the mechanics of a guest worker program established, so it's accepted this is something we can do, and then work toward a bigger one.

Reason: Will American voters ever have the stomach to do what it takes to keep temporary workers temporary? If you become pregnant as a guest worker in Singapore, you're sent out of the country. Is that going to be possible in a more democratic, egalitarian society like the U.S. or Sweden?

Pritchett: Given the things that democratic egalitarian societies have been willing to stomach, in both recent and current history, I find it difficult to believe that the hardest of all moral things they would have to do is get tough enough to have a guest worker program. Not to criticize America—which I love; I'm an American—but to say that a country that had Jim Crow laws in my lifetime doesn't have the stomach to have a guest worker program? It seems pretty inconceivable to me.

You'd be doing something tough that is in the interest of enormously greater global justice. We have found the stomach to do morally reprehensible things without any greater interest of global justice. We're willing to put millions and millions of young African Americans behind bars for drug offenses.

You can't enforce the border at the border. You have to enforce the border behind the border. And you can't enforce the border behind the border unless citizens believe the enforcement's fair. If people become convinced that sending pregnant temporary workers home is a necessary part of a fair and legitimate system of migration, we'll be willing to do it. If we don't think the system we've created is fair and legitimate, we won't be willing to enforce it. The conundrum we've backed ourselves into is that we have a system that no one thinks is fair or legitimate.

Comments

[DavidS]

Nice link to Facebook.

[DavidS]

or the Onion

[MB]

I think it's The Onion.

[DavidS]

or something

[JasonL]

This was a great interview. There are some complex issues glossed over a bit, in that a guest worker program must come with an enforcement arm that distorts the benefits of the program. I have the suspicion that more people are being helped by the current state of illegal immigration than would be the case in a guest worker plan of any practical size, and I worry that we'd be trading a more beneficial informal system for a formalized small program.

Still, the analysis of the moral questions seems dead on to me. If you've walked around any third world streets, your understanding of poverty changes quite a bit. I don't know how anyone who supports a minimum wage in the united states or civil rights legislation could coherently oppose strict immigration standards. This country is nowhere near 'full'.

[crimethink]

So now enforcing national borders is "global apartheid"? Hyperbole much?

[JasonL]

"I don't know how anyone who supports a minimum wage in the united states or civil rights legislation could coherently oppose strict immigration standards."

Uh, that didn't make sense, I meant to say, "I don't know how those people can coherently support strict imigration standards."

[Click \'n\' Learn]

At least both of them are quite open about being globalist scum. And, as could be expected, they completely ignore the huge non-financial costs of the scheme, such as giving PoliticalPower inside a country to the countries that send "guests". The obvious example is the PoliticalPower that Mexico has inside the U.S. due to their links to various U.S. nonprofits and even Democratic politicians. They've explicitly said they're going to be using those nonprofits to push their agenda, they're apparently going to finance an AdCampaign, and officials from that government are even encouraging people to vote their way in U.S. elections (in addition to making threats). Sometimes I think it's a shame that treason is so narrowly defined.

[Cesar]

They've explicitly said they're going to be using those nonprofits to push their agenda, they're apparently going to finance an AdCampaign

And clearly the way to defeat them is to SpamBlogs with RidiculousLinks.

"I'm ChrisKelly, and I have such an ego I think the future of TheRepublic depends on MyBlog."

[JasonL]

I sometimes feel that maximizing exposure to wacko's deranged racist rantings would help my position more than almost anything else. He could be the guy you tar all the border fence people with. Maybe he could write pamphlet material for the strongest anti immigration candidate left in the race.

By all means, anyone who is inclined to seal the borders, Click N Learn. Let me know how you feel about yourself.

[Cesar]

Jason, I don't think LoneWhackoff is as much racist as he is extremely xenophobic. He thinks theres some GlobalConspiracy to undermine AmericanSovreignty. I think he'd be just as outraged in the IllegalImmigrants were Swedish.

[The Democratic Republican]

I haven't read lonewacko, BUT, just to be clear, it isn't xenophobia, racism, etc. to demand that a nation have the right to control its borders. Even we want every immigrant from the whole world in the United States, that is a decision the U.S. has the right to make, not anyone else.

[Cesar]

I haven't read lonewacko, BUT, just to be clear, it isn't xenophobia, racism, etc. to demand that a nation have the right to control its borders.

I like secure borders to keep out people who means us hard or carry contageous disease. But I don't think borders should keep out Mexican gardeners. So I lean more to "high walls, wide gates" than "open borders".

[MikeP]

It is a great interview. I love this bit...

Reason: You then create a division between first- and second-class citizens. Isn't that worrisome?

Pritchett: The world now is divided into first-class citizens of the world and fifth-class citizens of the world. The idea that we wouldn't help a peasant trying to eke out a living on a side of a mountain in Nepal by letting him work in the United States, just because we have to, if he comes to the United States, endow him with all the rights of U.S. citizens-I think that moral calculus is backward.

So the first answer is: Milton Friedman is wrong. It's not incompatible with a welfare state; it's incompatible with a welfare state that doesn't differentiate between people within its territory.

[MikeP]

just to be clear, it isn't xenophobia, racism, etc. to demand that a nation have the right to control its borders. Even we want every immigrant from the whole world in the United States, that is a decision the U.S. has the right to make, not anyone else.

Indeed, that is the very definition of sovereignty.

But since that same argument can be used to claim that a nation has the authority to, say, execute anyone it cares to for any reason within its borders, it is neither useful nor interesting in answering the question of whether the nation should.

[Steve Smith]

Oh, and the descendants of the people who were forcibly taken from Africa are better of than those that remained.

Let's bring back slavery to help the world's poor.

You too can get an economics degree. Just submit eight box tops of corn flakes to .....

[DavidS]

From the article:

the arbitrary boundaries of a nation-state

I'd say that neither Reason nor Pritchett are passionate believers in sovereignty... Not criticising, just saying.

Great article - more please.

[sv]

really interesting interview. kerry, it says you conducted it in august. why is it only being posted now?

[DavidS]

Not sure about the title though - what's innovative about Lant's ideas is not that he's pro-free borders (it's an orthodox if impractical idea), but that he thinks the solution is a benign apartheid within rich countries...

[BakedPenguin]

I have no problem with secure borders. Allowing a lot more people to come here with green cards will make our borders one hell of a lot more secure than a 20 ft. wall.

If people are given a legitimate means of doing something, they will generally follow it, unless they have some more nefarious agenda. Make it relatively easy to let people into the country, and the only ones who will try to sneak in will be those attempting something illegal. End the WoD, and the only ones doing it will be the real scum - human traffickers, murderers, actual terrorists, etc. The important point is that they won't have a huge crowd of innocents to hide in.

[John]

They are not David. The writers at Reason are transnationalists who deny the US the right to do pretty much anything. Now the fact that they live in this nice country and that their lives are about 100 times better here than they would be in most of the world or even in an aggregate of the rest of the world seems lost on them.

[MikeP]

I'd say that neither Reason nor Pritchett are passionate believers in sovereignty... Not criticising, just saying.

There are two meanings of sovereignty that get mashed together by opponents of free migration.

The first is the authority of a government to do whatever it wants within its dominion. The second is, apparently, identification with a nation-state.

I doubt that either Reason or Pritchett is challenging the first. In fact Pritchett makes it clear that political palatability is a prerequisite for immigration reform.

But the second meaning is better termed "nationalism" or "Americanism" or the like. Calling it "sovereignty" simply admits sloppy reasoning that makes arguing for freer borders the equivalent of arguing for the overrule of the state.

[Kerry Howley]

Thanks sv. The interview wasn't time sensitive, so it was pushed back a few issues -- and we can't post here until it has appeared in print.

[John]

"End the WoD, and the only ones doing it will be the real scum - human traffickers, murderers, actual terrorists, etc. The important point is that they won't have a huge crowd of innocents to hide in."

That is an interesting point, although I think nitwits like Howley and Pritchitt would probably even deny the US's right to deny entry even of those people. I agree that if you let more people in legally, it would be easier to stop the criminals. Of course, anything short of an end of borders will not stop the problem of illegals. There are always going to be criminals and the like tryting to get in the country. I would be a lot more open to more immigration if in doing so we made it much easier to kick someone out after they committed a crime. That is a good deal for both the economy and society in that you would get more law abiding workers and you hopefully kick the criminals out of the country. The problem is that I have no faith in the government's ability to ever do the deportation part. We will just get more people and more criminals.

[Click \'n\' Learn]

MikeP is, as usual, wrong: The first is the authority of a government to do whatever it wants within its dominion... I doubt that either Reason or Pritchett is challenging the first.

I don't think either care too much, just as long as some people are able to make money on the deal. But, leaving that aside, as soon as you allow millions of people from another country into your country, you give the sending country PoliticalPower. That can, once again, be seen in the case of Mexico which, once again, has PoliticalPower inside the U.S. Because of that PoliticalPower and other things, we cannot do everything we should be able to do.

[DavidS]

I think nitwits like Howley and Pritchitt would probably even deny the US's right to deny entry even of those people.

Did you read the article, John? Lant was fairly warm to Singapore's policy of kicking immigrants out just because they were pregnant. The whole point of his argument is that one should import people, on a temporary basis, to work.

The writers at Reason are transnationalists who deny the US the right to do pretty much anything.

Are you a free trader? That's a 'transnationalist' way of thinking too.

[BakedPenguin]

The problem is that I have no faith in the government's ability to ever do the deportation part. We will just get more people and more criminals.

John, I understand your distrust of the government's competence, but I think it would be a lot easier (politically and logistically) for them to deport 1,000 criminals than 100,000 illegals.

[the statist]

Ron Paul hates illegal immigrants he is the only politician running who is willing to round them all up and end thier "birthright" citizenship. Vote for Ron Paul!!!!

[economist]

While I agree in principle with the idea of free migration, the presence of a large population of people from countries with non-capitalist/anti-capitalist backgrounds threatens the free-market economy. Someone's going to get pissed at me now.

[crimethink]

A liberal republic (in the old sense of the "L" word) cannot function with just any population. We hear over and over on this site about how naive the Bushites were to think they could just set up a democracy in Iraq or Afghanistan and it would magically work, despite the complete lack of liberal traditions in the populations of those countries.

Yet, now we hear that we're supposed to accept massive migrations of people from illiberal countries, at a much greater rate than we can possibly assimilate, and this won't be a threat to our republic (and indeed, to oppose such migrations is tantamount to "apartheid").

[Carter]

"You have to confront the injustice of the world"

No I don't. In fact, efforts to confront the injustices of the world should be resisited. Spare us the moralizing of Libertarian Jellybys.

"The future is incredibly difficult to predict, and certain attitudinal things shift overnight"

Exactly, the attitude of our 'immigrant' laborers could shift overnight.

[alisa]

Crimethink --
A couple of points.
First, a liberal republic is based on institutions. Elections, property rights, civil liberties. Iraq and Afghanistan lack those institutions; America has them. Adding immigrants who have no experience with democracy won't make our institutions go away. Not to mention that some people flee those illiberal countries for the very purpose of moving to a democracy where they won't be persecuted.

Second, immigrants do assimilate. Within three generations, almost all are fluent English speakers. First-generation immigrants have crime rates below average for their income level. Unlike in Europe, where immigrants are often segregated to rotten banlieues, American immigrants move from poorer to richer suburbs in the same pattern they have through the 20th century.

I'd love to hear you explain what kind of "threat" you have in mind from immigrants.

[MikeP]

Yet, now we hear that we're supposed to accept massive migrations of people from illiberal countries, at a much greater rate than we can possibly assimilate, and this won't be a threat to our republic (and indeed, to oppose such migrations is tantamount to "apartheid").

And you know that the natural rate of migration from illiberal countries is far greater than what the US can possibly assimilate because...?

[Juan]

Take a very simple institution, like traffic laws: On my experience, Venezuelan tourists in the States drive a lot differently than back home. Make of that what you will.

[BakedPenguin]

Erm, the whole "they'll bring illiberal culture" argument disappears when you have a guest worker or green card program. If they can't vote, their political views aren't of great consequence.

[MikeP]

BakedPenguin,

You have either not Clicked, or Clicked 'n' not Learned.

[BakedPenguin]

MikeP - there's obviously a LaRazaConspiracy to give me RheumatoidArthritis. I avoid as much pain as possible by not clicking on links that are CompleteBullshit.

[crimethink]

If they can't vote, their political views aren't of great consequence.

Can the North Africans in the Paris banlieus vote? Their views seem to be having some consequences, no?

[Robert]

the whole "they'll bring illiberal culture" argument disappears when you have a guest worker or green card program. If they can't vote, their political views aren't of great consequence.

I tend to think so, but I'll allow for the strong possibility that's not so. That is, their proximity to people who can vote may be influential in a bad way.

[BakedPenguin]

Can the North Africans in the Paris banlieus vote? Their views seem to be having some consequences, no?

Yes, and when unemployment among immigrants gets to 35% or whatever it is in France, there will be similar problems. I don't think even Edwards's policies would be so bad for the economy (though it'd be close.)

[Mick]

Kerry,

Thank you for giving us more options to think about in the immigration debate.

Keep it up!

[John Rhoads]

Just to remind you all, governments don't have rights...only people do.

[Vida]

Interesting point of view Mr. Castro has regarding the existing brain drain... "Brain drain deals a double blow to weak economies, which not only lose their best human resources and the money spent training them, but then have to pay an estimated $5.6 billion a year to employ expatriates." He goes further to state that "More than 70 percent of software programmers employed by the US Company Microsoft Corporation are from India and Latin America." (http://www.ilw.com/articles/2007,1001-castro.shtm) It's time that the effort put by these people, who are contributing to the US economy, be at least acknowledged, if not thanked for.

[economist]

Vida,
Actually, if they want to keep their investment in their people safe, they should say that if they work in the country, the money is a grant. If they work outside, it's a loan. Over the amount of time you spend working in your home country the amount that would be a loan if you left decreases. It doesn't make common sense to spend money training people to work in your country if they have better opportunities elsewhere.

[Snorrebrod]

"Just prior to World War I, every single European country had a monarch. Twenty years later, the very idea of monarchy was regarded as ridiculous."

Quick: what was the name of the French monarch in 1913? The Swiss monarch?

And where did the English, Norwegian, Danish, Swedish, Dutch, Belgian, Spanish, and many other monarchs disappear to by 1933?

Pritchett is an ahistorical fool, which probably explains why he's so enthusiastic for unrestricted immigration.

History shows that the ordinary people in any country which brings in a lot of strangers will suffer, though the elites may be happy to exploit social turmoil for their own ends ("divide and rule") and to lord it over all the cheap labor.

Pritchett is surely correct to say that the movement for which he propagandizes sees world-trade mechanisms as a model. Wouldn't Jorge W. Busheron just love to get "Fast Track" authority for immigration as well as trade? (Also, while discussing the point Pritchett telegraphs that he thinks "guest worker" restrictions are just a temporary, nose-in-the-tent measure. Once the more-immigration mechanism is established those kind of restrictions can be eroded in a few years.)

But Prichett is entirely wrong (and disingenuous, since he must be aware that he's spouting lies) when he compares people to goods. Even considered as laborers, people are different-- because whether you work them 8 hours per day or 12, they still have time left over to commit crimes and interfere in local politics.

Even immigrant willingness to labor is not the unalloyed blessing Pritchett claims. He just dismisses the effect of importing foreign peons to compete down wages for the lower strata of local society. Pritchett asserts that rich countries would gain by some few billions if they let in millions of foreign serfs. Ask him how he computes those benefits... the answer is: he counts the sums employers save on wages (by employing immigrants for less than natives) as gains for society (same as you count, say, a lower price for cement as a gain, because your profits go up, in the short term at least).

Pritchett doesn't bother to discuss the distribution of those gains, though: all of them would accrue to people at the top, and all of the costs to people at the bottom. Natives forced into unemployment by mass immigration would then subsist by welfare and crime at a MUCH HIGHER cost (thanks to transaction costs and the negative-sum character of crime) to society overall than the gains to employers that
Pritchett counts.

Anyway, Pritchett's own pronouncements provoke an analysis which blows up his whole thesis: he says there's no difference between people, only places. But the actual, the incontrovertible fact is: there's no difference between places, only people! Really. Consider Mexico, which is close at hand, relatively familiar, and provides the bulk of unskilled immigrants to the USA at present.

Does Mexico lack for natural resources? Mexico floats on a sea of petroleum and is famous for the productivity of its mines. Mexico exports food and has plenty of high-productivity agricultural lands (they would be many times more productive if farmed in a modern fashion). Mexico has coastlines on the two greatest oceans with superb natural harbors. Does Mexico lack for labor? No, Mexico has a large and growing population with many people of laboring age.

Why then, is Mexico not rich?

The only salient difference between Mexico and the USA is the character of the population!

Bringing Mexico's people into the USA is the same thing as bringing Mexico's problems into the USA.

Who among you would like to move to Mexico? None? Then why do you want Mexico to move to where you are?

If your personal problem is that you resent having to pay so much for gardeners and you prefer obsequious brown janitors to those black ones that somehow make you feel awkward and guilty when you ask them to refill the soap dispenser... well, Pritchett's "bring in more peons" plan is for you.

[MikeP]

Ask him how he computes those benefits... the answer is: he counts the sums employers save on wages (by employing immigrants for less than natives) as gains for society

The sliver you identify is not even close to the total gain from employing immigrant labor.

Taking the two most common cases:

1) The immigrant worker does a job that would otherwise be done by a native worker.

In this case, you are correct that the economy is better off is in paying the immigrant worker less. But you are overlooking the bigger gain: The economy is also better off in that it can now employ the native worker at a higher valued job for a higher wage.

2) The immigrant worker does a job that would otherwise not be done by anyone.

In this case the economy is wealthier by the productivity of the job. Granted, if you consider the immigrant an extra-economic force, his presence is going to consume a good deal of that benefit. But the producer surplus of his employment is pure economic benefit, and the consumer surpluses of his consumption that are retained by the economy are also pure benefit.

(same as you count, say, a lower price for cement as a gain, because your profits go up, in the short term at least).

The fact that you so glibly describe this very real economic benefit as a temporary uptick in profits is telling.

The lower price of cement is a gain, now and as long as it persists. That it will first accrue to profits may be true, but as the lower costs become understood and competition takes advantage of them, the economic gains go straight to the consumers themselves ...now and as long as the lower costs persist.

[MikeP]

The only salient difference between Mexico and the USA is the character of the population!

You misspelled "institutions!".

Bringing Mexico's people into the USA is the same thing as bringing Mexico's problems into the USA.

Since Mexico's people do not bring in Mexico's institutions, but rather generally use those institutions that already exist in the US, Mexico's people do not by and large bring Mexico's problems into the US.

[waldo]

I completely support snorrebrod's arguments. I'd like to extend Snorrebrod's with two further arguments against the these of Pritchett: the first one is economically with an extension in the political.

First of all there is the economic argument. There are two ways of equaling two countries, say a rich and a poor one, using the traditional economic theory of comparative advantages. The first mechanism is that of capital flow from the rich to the poor country known as foreign direct investment (FDI) which is sought to be liberalized using the WTO, IMF and other international institutions. This works fine and my argument is that we should stick with this. The only negative effect of capital flow from the rich country to the poor country is that the capital owners in the poor country get poorer (cfr. inflation)

Now the second one is what we are talking about here: labour migration from the poor country to the rich country. effect: rich country gets more labour and wage prices drop and poor country gets higher wages as the available labour drops and the demand-supply system works so eventually you come at an equilibrium. So far the traditional theory.

Now let's take a look at what the modern theorists say about it. First of all, labour isn't homogeneous. As someone mentioned before you get a brain drain and as inventions, technology, education,... create work, the poor country gets drained with all the people that actually create work. So that the poor country doesn't reach the equilibrium with the rich country.

Secondly: why are rich countries so succesfull if capital is so free of movement there should be more convergence within the world theoretically spoken out of the background of the traditional comparative theory. The answers to that lie for example in the modern growth theory which says that some countries have found a good combo for industries to flourish and that is very diverse: from education, administrative (no corruption for example), politically, meeting the marketfailures (crime, streets, bridges,....),... Another approach draws from evolutionary economics, central is the difference between tacit (computer sciences (silicon valley) or financial tricks (London)) and codified ("easy" knowledge like textiles etc.) knowledge, tacit knowledge is way harder to outsource and you need ppl around who can talk with eachother about the newest evolutions (silicon valley or London's financial centre) Another approach is the new economic geography approach: economic activity gets centered around certain places because of the tacit knowledge, the modern growth theory and the demand and supply linkage to eachother (a big market needs a big supply preferably next to it and a big supply needs people to work in it).

So, in this first and second argument you see that even with free labour migration you get a concentration of the economy around certain zones and that the solution for devoloping countries doesn't lie in labour movement as a possibility for upgrading their own countries. The economic paradigm used by Pritchett is outdated.

Now I come to my political argument to disagree with Pritchett. Two trends involving labour migration tend to disrupt and cause negative effects. The first argument is the rise of extremeright and racism with the coming of so many foreigners. I do wonder if this is really what we are waiting for.
The second is the distributive effect. As cheap labour comes in the rich country, labour get cheaper, causing inequality within a country to grow. Certainly in our European system where social cohesion is very important, this will cause major disruptions in society and again give strong support for extreme right and racist feelings within society.

So with free labour migration you get A LOT more inequality within the country while it is doubtfull if you get more equality globally

But... And now this is my final these. Hope you are still with me. Isn't this what it is all about in these so called technocratic and objective free trade debates about economy? Presenting a debate as objective while actually talking politics. Mr. Pritchett is a neoliberal wanting to widen the gaps between rich and poor on American model. Fine if you say that outright but instead he raps it up in so called objective talk. Perhaps we should look first at the preferences of society and to me, living in Europe, it is clear that that is not what society wants.

Free labour migration gets us A LOT more inequality within the country migrated to while it is doubtfull if you get more equality globally.

[Snorrebrod]

Quote: "1) The immigrant worker does a job that would otherwise be done by a native worker. In this case, you are correct that the economy is better off is in paying the immigrant worker less. But you are overlooking the bigger gain: The economy is also better off in that it can now employ the native worker at a higher valued job for a higher wage."

That is silly. If the economy wanted the native worker in a higher-valued job, he would already be in the higher-valued job, because it's higher-valued.

Look, one of the most curious things about the demand for low-skilled immigrants[1] is that their labor really isn't very valuable. Immigrants who can only command wages at the bottom of the scale aren't worth the trouble they cause!

The truth is that low-skilled immigrants don't just compete down wages for low-end jobs by some percentage, leaving everyone employed though somewhat less affluent. In practice immigrants displace many (in the USA, mainly black) workers into long-term unemployment. This is not something "guest worker" welfare restrictions can fix, because the unemployed natives are not guest workers, they are citizens who remain eligible for welfare (and readily available for criminal activity). When an immigrant arrives to do a low-skilled job for less than a native, he gets hired and the native gets fired. The native may or may not find another job, but since the wages he can command are limited by competition from immigrants any new job he finds will pay less than his old one did. When the jobs on offer pay less than welfare plus the subjective value of leisure time (and gains from crime) the native will end up a "discouraged worker," one of the long-term unemployed. The problem is particularly acute when the immigrants don't speak the national language (English in USA). Employers don't like to staff any given job category partly with natives and partly with immigrants-- often the two groups will quarrel, and at best they won't communicate very well. Since the immigrants are grateful for wages higher than those in their home countries, and the natives resent wage-imploding competition from the immigrants, employers usually just switch to hiring only the more complaisant immigrants, leaving natives entirely unemployable. (This has happened to American blacks in California. They've been driven out of whole industries by Mexicans.)

The USA already has a problem with fault lines in our wage structure. Productivity gains from technological advances in capital stock tend to raise wages for higher-skilled workers (who tend the machines) but, of course, diminish wages for low-skilled workers (because labor-saving machines reduce demand for unskilled labor). A gap appears in the wage structure at the level which divides the technically-savvy workers from the strong-back workers. Above that line wages may rise with technical advances, below it they fall. In the USA we have many workers who can only fill low-skill jobs. We honestly lack the ability to boost those workers' skills so they can get fancier jobs that pay more. Most of them lack the IQ which skilled trades require and no one has discovered any way to boost the IQ of an adult. Even if you believe that most native low-skilled workers are lazy rather than innately-limited (NB: I think you are wrong), that doesn't affect the bottom line, because we have no reliable means to affect peoples' attitudes. The carrots (income, respect) and sticks (life in bad neighborhoods) society already uses to motivate people to improve their skills are pretty strong, yet insufficient to propel low-skilled natives into higher-skilled jobs. Anyway, we must recognize that an important segment of our workforce is vulnerable already; they have no real hope of gaining higher-skilled work, so if we invite immigrants to drive down their wages that will be the whole story for them. They will never see any gains from immigration. (You might suggest we tax the immigrants enough to compensate the low-skilled natives, but that is essentially impossible-- a sufficient tax would raise the cost of immigrant labor above the cost of native labor, so it would be simpler to just do without the immigrants.)

Admitting desperate low-skilled immigrants to a country which has already industrialized to the point where demand for low-skilled native labor is very low (as demonstrated by the comparatively low wages such workers command) is almost guaranteed to put the bottom tier of native workers on the unemployment line.

Although employers gain when immigrants drive down wages, in the USA society loses. Employers of low-skill immigrants privatize profits and socialize costs. Suppose that with no immigrant labor available an employer would pay a native $8/hour to do a job. An immigrant will do the job for $6/hour. The employer will save about $4000 in the first year ($2/hour times 2000 hours/year), but the displaced native worker will draw nearly the same amount ($4030 in California) in unemployment payments during the first six months. Leaving aside other social spending on the displaced native and his family (and disregarding social spending, including a share of police and prison costs, on the immigrant), the unemployment insurance payments alone will make the whole deal a net negative for society because unemployment payments are funded by taxes and involve high transaction costs (bureaucracy). Basically, the employer's $4000 gain will cost middle-class taxpayers at least $5000, and probably much more.

Then looking further down the road, what is to become of the low-skilled native worker's children? Taxes on middle-class workers may fund social spending to feed and school those children even if their parents are unemployed, but the chance that they will grow up into productive adults is greatly diminished. Generally speaking, children of working parents are much more likely to acquire desirable social habits than children of the chronically unemployed. By this mechanism, among others, low-skilled immigration harms multiple generations of natives, in ways which don't show up clearly for years. (Every criminal in prison costs taxpayers more than $34,000/year (California), so if just one out of eight displaced natives or their children ends up in prison because of immigrant competition that will cost society more than the money saved on immigrants' wages, apart from any harm the criminal will do before he's caught and imprisoned.) Immigrants give immediate wage savings to employers but inflict long term social costs for everyone.

[1] The story is different for high-skilled immigrants. Of course they drive down the wages of natives, but their labor is potentially more valuable than the social costs they impose. With very high-skilled immigrants (e.g., scientists) society probably wins because they produce much more than they cost. But with moderately high-skilled immigrants (e.g., computer programmers) things are fuzzy. They produce a domino effect: when the immigrant computer programmer drives down wages for his native professional peers, that pushes wages down for everyone of lesser skills until some file clerk can get more by filing a phony disability claim than by continuing to work. Will society save more on wages in higher tiers than that disability check costs? Tough to say. But one thing is abundantly clear: moderately high-skilled immigrants are very, very bad news for the people they compete with directly. Taxes in the USA fall hardest on people making between about $90K and $110K/year, so native computer programmers not only give up wages to immigrants, they also pay the stiffest taxes to finance social-spending to bail out native workers displaced by immigrants. At least high-skilled immigrants don't commit much crime themselves.

It's interesting that Pritchett doesn't particularly want to import high-skilled immigrants who might actually be worth more than they cost. He wants to import vast numbers of low-skilled immigrants who certainly won't pay for themselves.

[MikeP]

If the economy wanted the native worker in a higher-valued job, he would already be in the higher-valued job, because it's higher-valued.

That's already the other case. This case looks at the native worker who is willing to pick strawberries at $30,000 per year while an immigrant worker would do it for $20,000. If you want strawberries picked with no immigrant labor, you'll be paying $30,000. Meanwhile a factory job that would pay $30,000, with better opportunities for advancement, goes unfilled. The rich will have their strawberries. No one will have the product of that factory. It would be better for the economy if everyone had their strawberries and someone had the product of that factory.

Admitting desperate low-skilled immigrants to a country which has already industrialized to the point where demand for low-skilled native labor is very low (as demonstrated by the comparatively low wages such workers command) is almost guaranteed to put the bottom tier of native workers on the unemployment line.

The actual result appears to be reduction in wage of 0% to 8% -- depending on the study -- for the very lowest skilled native workers, i.e., high school dropouts.

Your subsequent assertions are somewhat contradicted by the fact that unemployment in the US has been consistently at the lowest levels conceivable at the same time that all this supposedly harmful immigration has been occurring.

Incidentally, the effects of technology in disemploying native labor are an order of magnitude greater than the effects of immigration in disemploying native labor. Are you willing to take the same position with regard to "discouraged workers" to argue that technological improvements in production should not be allowed?

Lower costs are lower costs. Freer people are freer people. Free migration is a win for both economy and migrants.

[MikeP]

when the immigrant computer programmer drives down wages for his native professional peers, that pushes wages down for everyone of lesser skills until some file clerk can get more by filing a phony disability claim than by continuing to work.

If you apply the essence of your argument to natural population growth, you would come to the conclusion that as more children enter the workforce, everyone's wages crash to the point the whole population files phony disability claims.

The economy is not zero-sum. If someone is willingly doing labor, and someone is willingly paying him to do the labor, both are better off, and those gains accrue to the economy.

Those in direct competition to newly introduced workers may see a hit on their wage. They can choose to accept it or to move into another line of work where their comparative advantage is now greater. A particularly common response is to subdivide the line of competition so both the new labor and the experienced labor are better used, resulting in a net increase in the experienced labor's wage.

[Snorrebrod]

Technology (capital) improvements only disemploy labor to the extent they increase (labor) productivity. Gains from such improvements are distributed unevenly because they often shift demand for labor from low- to high-skilled segments of the workforce, but the overall productivity gain is real.

Substituting low-skill, low-priced immigrant labor for native labor does not increase productivity at all (well, it may on a per-dollar basis, but not on a per-hour basis).

Real (capital) productivity improvements yield a surplus which makes society richer. Substituting cheap exogenous labor for native labor just transfers wealth from the native laborers to their (ex-) employers. There is no overall gain. (And to the extent that immigrants and the workers they displace absorb more social spending, they may make society worse off.)

Now if your fantasy, that availability of workers necessarily summons up jobs for them, were true then the economy would absorb the low-skilled workers displaced by immigrants. However, that notion (kind of a bastardized interpretation of Say's Law) is demonstrably false. Just look at the countries which are to supply the immigrants: they are full of underemployed labor. Why aren't those people employed at home?

Answer: because demand for labor varies with all kinds of considerations. Just because labor is available does not mean it will be employed. (And in the USA, minimum wage laws prevent the profitable employment of the least skilled workers.)

You wish to analyze labor as a commodity, ignoring the fact that workers are not goods-- they produce all kinds of externalities which goods cannot (like, say, competing with natives for housing, or producing children who will grow up into criminals, or at least fodder for demagogues). Fine. Think of immigrants as if they were tangible goods. If you admit them freely the price for labor of comparable quality in the USA will fall until an equilibrium is reached-- that is, until the wages offered for low-skilled labor in the USA are very nearly the same as wages offered in, say, Rio de Janeiro. At those wages the laborers will subsist at the lowest possible level. This may make American elites happy since it will solve their "servant problem," but it will have at least two bad effects: (1) The helots will be restless. It's worth a rabiblanco's life to walk into, say, a Brazilian favela. Your immigration proposal will bring those shantytowns here (since that is the goal; you said so yourself!). (2) America's highly productive "middle class society" will be destroyed, replaced with a lords-and-serfs society like most other countries in the world have.

As for the suggestion that American "institutions" could absorb and transform any number of immigrants into middle-class Americans, it has already been proved false. Just look at Los Angeles today, which has a huge Mexican population and is morphing into a Mexican city linguistically (in 2000 the Census found 54% of people in Los Angeles MSA spoke a language other than English at home), politically, and economically.

I have no objection to Americans investing in foreign countries to employ cheap labor there. Bringing the cheap labor here, though, is a different kettle of fish. Immigrant laborers won't go home to their ancestral favelas every day at 5pm. They will create favelas in the USA, and destroy the USA in the process. Worse, native Americans will be asked to finance the healthcare, education, policing, etc. of the immigrants. If the employers were charged with the full costs of such care, they wouldn't want unskilled immigrants. That proves their arrival is bad for the USA.

Finally, go read Garett Jones et-al., IQ In The Production Function which explains that immigrants from low-IQ countries are low-productivity workers in the USA even after controlling for education.

[MikeP]

Now if your fantasy, that availability of workers necessarily summons up jobs for them, were true then the economy would absorb the low-skilled workers displaced by immigrants.

You confuse cause and effect. I do not claim that the supply of immigrants produces jobs for them. I claim that immigrants come to the US because there are opportunities for them. Were the opportunities to disappear, so would the immigration -- as evidenced in the decline in immigration during and after the 2001 economic downturn. I fully expect a significant decline in unskilled immigration with the coming downturn, especially given that it is centered around the immigrant-heavy construction industry.

Just look at the countries which are to supply the immigrants: they are full of underemployed labor. Why aren't those people employed at home?

Because their economies are not the engines of productivity that the economy of the US is.

Indeed, as the US economy becomes more and more productive, and as the native population steeped in that environment raises their own personal capital to match it, gaps are generated in the supply of labor for lower skilled occupations that do not as yet admit themselves to productivity enhancements.

The US economy has jobs that so many from other economies would so much want to do. It is bad for them and bad for the US to make it illegal.

If you admit them freely the price for labor of comparable quality in the USA will fall until an equilibrium is reached-- that is, until the wages offered for low-skilled labor in the USA are very nearly the same as wages offered in, say, Rio de Janeiro.

Since we do not see low-skilled wages in Connecticut falling until they are nearly the same as wages offered in Mississippi, I have little faith in your model of labor migration.

[MikeP]

Just look at Los Angeles today, which has a huge Mexican population and is morphing into a Mexican city linguistically (in 2000 the Census found 54% of people in Los Angeles MSA spoke a language other than English at home), politically, and economically.

Your 54% is the number of people in Los Angeles County who speak nothing but English at home. Yet of the 38% who speak Spanish at home, a full two-thirds of them speak English well or very well.

As for politics, I do believe that LA still falls under Article IV, Section 4, of the Constitution as well as the 14th Amendment. And it's hard to tell what you mean by an economically Mexican city. To try to put some perspective on it, LA County has a per-capita income greater than all but one county in Mississippi and a per-capita income less than all but one county in Connecticut. Sounds pretty middle-of-the-road American to me.

[Snorrebrod]

No, the US Census found that 54% in Los Angeles (in 2000, it's likely worse now) speak other than English at home. Your source has perversely inverted the statistic.

Once again, the issue is not whether immigrants can find jobs here-- of course they can because they work for less.

The important issue is whether low-skilled natives will find jobs after they lose their current ones to immigrants. I've pointed that out to you several times but you refuse to address it.

Since low-skilled natives are eligible for unemployment and welfare and low-skilled natives are accustomed to a high standard of living and low-skilled natives are likely to go on public assistance if they lose their jobs to low-skilled immigrants, what do you propose to do about the natives?

There is no reason to think that displaced natives will magically acquire more human capital and qualify for high-skilled jobs.

When the displaced native moves to the next-best job, you want to import another immigrant to displace him again, until the wages the native can command fall to the wages immigrants will accept. That's what your word "opportunities" means, it means jobs which a low-skilled immigrant will do for lower wages than a native. There is always an opportunity for someone who will take lower wages.

Look, substituting an immigrant for a native in a low-skilled job will save an employer a few thousand a year. But social spending on the displaced native (plus the impact of crime) will cost more than that, plus the native's kids will more likely end up criminals.

Contra Pritchett, the reason a welfare state is incompatible with immigration is not just because the immigrants might draw welfare, it's because the natives will take up welfare when it pays better (net, as I wrote before, of subjective- value- of- leisure- time and proceeds- of- crime) than work.

Look, I'm fully aware that labor protectionism is a form of social spending. The question is like a "carbon tax" versus a "cap and trade" regime. The point is to design a scheme which produces the best social effects. Your plan is to import a lot of low-skilled immigrants to drive down wages for low-skilled work. That will save employers a little, but at the cost of more social spending on natives financed by broad-based taxes. It is virtually certain that when you net out employers' savings with society's costs the result will be negative. Employers are still eager for this because they will profit. They are happy to take a deal which pays them personally a dollar even if it costs society at large two bucks-- it's the same as, say, sports-stadium construction subsidies. Rent seeking always benefits some people even if it is negative-sum overall.

My plan is to maintain native workers' wages by forbidding employers to import low-skilled immigrants. We'll all pay a bit more for goods and services but less in taxes to finance social spending, and the children of those low-skilled workers will grow up in productive households and imbibe socially-useful attitudes. We do not "need" immigrant workers, we have plenty of unemployed/underemployed people in the US.

Since the natives are US Citizens they have a legitimate claim on the protection of their government. The prospective immigrants are citizens of the countries where they live and have no claim on the United States (at least, no positive claim-- I think they have a right to have the USA leave them alone, in their homes).

As for your "engine of productivity" argument, the best predictor of national economic productivity is national average IQ. Bringing low-skilled low-IQ immigrants to the USA will likely destroy the "engine of productivity" you value so much. You dismiss international comparisons on the claim that the USA has "better institutions" than other countries. If those institutions were so fine other countries could copy them. The fact that they mostly don't proves that "institutions" mean nothing apart from the people who implement them. (You may say "Japan took up US-style institutions and prospered." I say, "sure, and the Japanese have high IQ's. What about, say, Liberia? How well did US-style institutions do there?")

(By the way, once you adjust for local cost of living, low-skilled wages in CT are about the same as low-skilled wages in other states.)

[MikeP]

No, the US Census found that 54% in Los Angeles (in 2000, it's likely worse now) speak other than English at home. Your source has perversely inverted the statistic.

Actually, I was the one who accidentally inverted it. I meant to type 46%. Apologies.

[MikeP]

The important issue is whether low-skilled natives will find jobs after they lose their current ones to immigrants. I've pointed that out to you several times but you refuse to address it.

You have pointed it out often, but you have failed to prove it. In contrast, I have suggested that the phenomenally low unemployment history of the past couple decades during a time of historically high immigration belies your argument.

It should be easy enough for you to prove your argument. Simply show an increase in welfare rolls or chronic unemployment commensurate with immigration. The fact that there are many different regions with many different immigration patterns should make it nicely robust.

In the meantime, forgive me if I still consider it self evident that consistent full employment during a time of high immigration means that the immigration is not permanently disemploying anyone.

Your plan is to import a lot of low-skilled immigrants to drive down wages for low-skilled work.

Uh, no. My plan is not to "import" anyone. My plan is to allow free migration just as we now allow (almost) free trade. If people don't find it worthwhile to come to the US to take jobs, I have no desire to make them come.

The prospective immigrants are citizens of the countries where they live and have no claim on the United States (at least, no positive claim-- I think they have a right to have the USA leave them alone, in their homes).

And I think they have a right to be left alone in their freedom to travel, reside, labor, and otherwise associate regardless of which side of the US border they were born on or which side of the US border they presently occupy.

[Snorrebrod]

The headline US "unemployment" rate is a poor guide to understanding the impact of immigration, not least because "discouraged workers" and prisoners are excluded.

You should read "Effects of Immigration on African-American Employment and Incarceration" by Borjas, Grogger, and Hanson.

Among other things, they show that a 10% increase in immigration translates to a 2.4% drop in the (native) black male employment rate and about a 1% increase in the black male incarceration rate.

(Why don't you accept the term "import" when applied to laborers? When Americans import Dutch cheese or Chilean table grapes that's just voluntary exchange. The same process occurs with labor. The only difference is that cheese or table grapes get consumed, and low-skilled labor leaves the workplace at 5pm to get drunk, blast salsa music, and jeer at passing women in the park.)

[MikeP]

You should read "Effects of Immigration on African-American Employment and Incarceration" by Borjas, Grogger, and Hanson.

Are there number or dollar estimates in the full paper that weigh the total costs of this effect against the benefits of the immigrants who did not displace low skilled workers? If there aren't, it's probably not worth my paying for the paper.

Also, since a good deal of the newly incarcerated were likely convicted under drug laws that became increasingly draconian just as immigration rose, I wonder if the authors accounted for the economic gain due to "unemployed" native workers who took jobs in the drug trade and did not find their way into prison.

Why don't you accept the term "import" when applied to laborers?

The term is fine so long as it is not loaded by context. I wanted to make it clear that I am not blithely for the immigration of scads of unskilled workers. Rather, I am pro-free migration. If individuals of low skill, medium skill, or high skill find it in their interest to migrate to the US, and if enterprises in the US find it in their interest to employ them, then they should be free to migrate -- temporarily or permanently.

[Per Kurowski]

If the US wants to get out of the hole were it is digging itself into, it has to grow so as to be able to take care of the outstanding stock of debt.

The most direct and expedient way to do so would be to call upon some 40 million more working immigrants to help them in that otherwise monumental task.

Why should industrial China be able to use rural China for their growth and not North America Central America?

[Mitchell Young]

People are not televisions or factory machines or microchips. They will eventually get citizenship, eventually vote, eventually have children. It is strange that an economist cannot comprehend that. It is doubly strange that open-borders libertarians don't look to the example of what the rise in 'Latino' political power has meant in California namely more wealth-transfer programs.

Neither the interviewer nor the 'economist' seems to have learned the concept of externalities. But anyone that drives the five, or surfer in Southern California campaigning to save San Onofre from yet another highway project understands the concept quite well. Yeah yeah , I know, privatize everything. Well, tell you what, you guys privatize everything -- including costs of schooling immigrants' children, health care costs for immigrants, roads that are congested by immigrant-led population growth, and a million other things, then we can talk.

Quite clearly immigration, unlike trade in goods, doesn't led to Pareto-optimal outcomes. It makes many people worse off, and benefits a few.

[Shua Nedy]

I have to say this article gave some good arguments for increasing (im)migration, but it actually points out some things that make me less likely to support a guest-worker program. Are we actually going to have a class of people that are less legally protected than the rest of us? Are we really going to deport a woman for becoming pregnant? Yes, on a purely utilitarian basis we would, but in terms of our long term identity as a land of liberty and equality under the law this is extremely dangerous. I support higher legal immigration, but we shouldn't fool ourselves that all these people are just here temporarily.

[Per Kurowski]

I agree with Denis de Tray when he says "only by moving accountability back to the developing countries can the Bank hope to make progress in the fight against corruption"... as long as we clearly remember this is no excuse to wash our hands from our own responsibility.

I am extremely enthusiastic about Lant Pritchett's arguments as they so closely mirror so many things that I have been arguing while an Executive Director in the World Bank (2002 - 2004) and thereafter? I must say not without much luck in getting the message thru.

That said there are nuances of course, like the following:

1. Are we really talking about the real dimensions?

El Salvador's GDP is about 18.5 billion dollars in 2007. If we from this GDP deduct the 3.7 billion that their emigrant workers sent and that clearly translated into a larger GDP we could say that El Salvador's GDP net of their emigrant workers is 14.8 billion dollars.

Now if say that the 3.7 billion that the Salvadorian emigrants remitted to El Salvador is 15 percent of their gross earnings (mostly salaries) then we could say that the Gross Emigrant Product GEP of the Salvadorians for 2007 is 24.7 billion dollars.

And there you have it El Salvador's GDP in El Salvador 14.8 and El Salvador's GEP outside of El Salvador 24.7!

And if you add El Salvador's GDP and GEP you come up with 39.5 billion?and you might then suddenly realize that El Salvador has been growing faster than China.

2. The emigrants deserve more say?at home!

The emigrants are easily forgotten by their homeland (except for their remittances) and at best welcomed lukewarm as immigrants by their new host and employer. In other words the emigrant/immigrant lives in a Limbo. I believe that the best way to assert the immigrants rights in the land of their host is to really assert their rights in their homeland. Therefore, for instance with reference to El Salvador, they should probably, among much other, have 50 percent or more of the seats in the Legislative Assembly of El Salvador.

3. We need to work on solutions not on borders!

I absolutely agree with Pritchard that the border should not have to be enforced at the border? among other things when border hinders present the problem that you might not really be sure on which side of them you might end up. In this sense and to help to create new solutions I am working at a plan that would have private insurers guarantee the government the return of immigrants after their visa expires.

4. The immigrants are much more needed than what is normally admitted!

The US, not because of the immigrants, has build up a tremendous overload of public debt that now needs to be serviced. Of course it will be harder to service it the fewer are working at that. Of course when the maitre arrives with the check that's not the moment you would like some of the guests to leave. But if they are free or forced to leave... why should they not?

It is clearly not political correct to even raise the question but as Pritchett also dares to hint in that direction let me do it here too. Is not the best stimulus package we could ever think of for the US at this moment that of bringing in forty million additional foreign workers to help it settle the check?

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