Captive Citizens

The left and right's plan to create fortress America


If there was ever any doubt that the totalitarian temptation identified by economist and Nobel laureate F.A. Hayek in his brilliant tract, The Road to Serfdom, is alive and well, even in the sweet land of liberty, two current crusades of the left and the right ought to put it to rest.

The restrictionist right is deploying ever more draconian methods to chase prospective Americans out of the country, including imposing what some call a "business death penalty." And the tax-and-spend left is devising ever more punitive ways to prevent existing Americans from leaving the country, including imposing a rather ominous exit tax.

Hayek's genius was to recognize that eliminating feudalism and monarchy didn't mean that the West had eliminated the danger of tyranny. Modern-day central planners restricting the peaceful, voluntary activity of individuals in the name of achieving some grand collectivist end open up new dangers. Since their plans inevitably leave individuals worse off, people find ever-new ways to circumvent them.

But the government doesn't take its failure as a sign that there might be something wrong with its ends—that perhaps they are out of sync with the normal aspirations of people. Rather, it blames the failure on an insufficient use of force. Thus an initial round of coercion inevitably spawns subsequent, even harsher rounds, putting the country on Hayek's "road to serfdom."

It is exactly this logic that's unfolding in the right's crusade to get rid of illegal Mexican labor in the name of national sovereignty—and the left's crusade to redistribute wealth in the name of social justice.

The illegal immigration "problem" is wholly and solely the product of America's post-1964 immigration policies. That's when America suspended (due to labor union opposition) the bracero program, a federal policy that made it easy for American businesses to hire guest workers from Mexico. This program was replaced with a hyper-restrictive, hyper-onerous quota system that has turned landing a temporary work visa—such as an H-2A or H-2B—into the equivalent of winning the lottery.

The upshot—predictably—is widespread flouting of the law, with Mexicans entering illegally and American employers hiring them illegally.

But instead of re-examining these policies, the restrictionist right has been systematically escalating its war: militarization of the border; electric fences; deportation; E-verify. The latest step is the "business death penalty." This measure was initiated in Arizona (under the Democratic governorship of Janet Napolitano), blessed by the Supreme Court, and is fast becoming the tool of choice for states everywhere seeking to become illegal-free.

Under it, a business that is caught employing illegals a second time is forced to give up its licenses to operate in the location where the violation occurred. One more infraction after that and its license to operate anywhere in the state is revoked, forcing it to shut down—or go illegal, just like its Mexican workers. How long will it be before they start arresting owners? And all of this not for defrauding customers or selling dangerous products, but simply for hiring people who can help them make a buck. This should be unimaginable in a country founded on a commitment to liberty. Yet here we are.

A government that is powerful enough to stop people from coming into the country is, of course, also powerful enough to stop them from leaving. And Sen. Chuck Schumer's Ex-Patriot Act takes a giant step in precisely that direction. It was inspired by Facebook's Eduardo Saverin, a Brazilian émigré who renounced his American citizenship to adopt Singapore as his country ahead of the company's IPO to (allegedly) avoid paying capital gains taxes on his new-found wealth.

This drove Schumer into paroxysms of rage. "Saverin has turned his back on the country that welcomed him and kept him safe, educated him, and helped him become a billionaire," he roared. "This is a great American success story that has gone horribly wrong."

A question, Senator: Are the California businesses and residents leaving in droves for low-tax Texas also "success stories that have gone horribly wrong"? Or is it California that has "gone horribly wrong"? And if capital gains taxes are driving rich Americans out of the country, isn't that an indication that perhaps these taxes are too high?

Not to Schumer, it seems. He wants to increase America's exit taxes to twice the current capital gains rate. (America, incidentally, is one of the very few countries that has exit taxes.) But his plan would put unacceptable burdens on the exercise of the right to exit. This right has been enshrined in international law ever since Nazi Germany and the Soviet Union tried to abrogate it by imposing similarly onerous exit taxes on fleeing Jews to use them as cash cows to finance the state's aims. Without this right, individuals have no safe hedge against tyranny at home. Nor can they vote with their feet on government policies—the main reason, remember, that America's founders guaranteed complete mobility between states.

A free people interested in keeping their government accountable can't let a politician violate this right to indulge his abstract ideas of social justice. Otherwise, the same walls that the right wants to use to stop poor people seeking to become wealthy from getting in could well be used by the left to stop wealthy citizens from getting out.

The Totalitarian State of America, anyone?

Reason Foundation Senior Analyst Shikha Dalmia is a columnist at The Daily, where this column originally appeared.

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  1. the government doesn’t take its failure as a sign that there might be something wrong with its ends?that perhaps they are out of sync with the normal aspirations of people. Rather, it blames the failure on an insufficient use of force.

    Pretty good summary of the problem. If something the state does isn’t working, the only solution they think of is to do the same thing, only harder and deeper.

  2. They were going to make it Fortress America a long time ago, but they lost all their hovertank pieces.

    1. Wolverines!!!!!

      (Yes, we shouted that then the partisans took action).

    2. Yeah but the lasers they had based in Minnesotta and Detroit helped stem the tide of invaders from the west allowing the partaisan units to free most of the east coast

    3. No more combined arms bonus!

  3. Procedures were followed, family was terrorized, a house was burned.

    But no cops were hurt, so it’s all good.

    1. I’d be willing to bet their homeowner’s i surance doesn’t cover damage by “lawful actions of the state” either.

      1. Lol good luck for them with the insurance. I remember we had problems with just a minor fire caused by a huge flood during the 92′ Nor’Easter that hit NJ. Flood insurance said since the fire caused the actual damage, even though the flood caused the fire, homeowners was liable. Homeowners said that since the flood was the root cause of the fire, Flood was responsible. If we had that kind of problem for a relatively small claim, can you imagine what they are going to have to deal with.

  4. Well if you listen to many of the people who believe in the social contract, even if you take everything somebody made in the country that is still right, because he owes everything to his country. I know a lot of people who very seriously would support a 100% leaving tax.

    1. In a statement from Brian Fallon, a Schumer aide, “[he won]an NRA marksmanship award at age 14…

      Wait, what?

      1. It used to be common for high schools and middle schools to have shooting teams and shooting classes in PE. The NRA sponsored and made awards. That is, UNTIL Chickie got his dirty hands into gun control.

        1. It used to be common for high schools and middle schools to have shooting teams and shooting classes in PE.

          That I know. I was just surprised that Chuckie:
          A.) Has shot a gun
          B.) Was good enough at shooting to merit an award

        2. Until quite recently students on the shooting team at Northern Michigan Univ. kept their rifles in their dorm rooms.

    2. That’s pretty much the smug douchebag Triple Crown.

  5. The base function of the state is to maintain a court system to decide disputes of law and to maintain a virtual monopoly of physical power through military and police forces. The libertarian state uses these powers to protect the property and lives of citizens from invasions and insurrections. The state also uses its brute forces to “make” markets by enforcing business contracts and protecting property. It also uses force to punish those who violate the rules and scope of legitimate business behavior. Since brute force is vital to the role of the state, and since the labor of common citizens provides this force, it is essential that all citizens who serve in the armed forces should be compensated for their loyalty even if they have no property or business ownership rights. Otherwise why should they lay down their lives to protect the state in times of war. The upshot is that laws which restrict immigration and which restrict employment of foreign workers are completely legitimate in a libertarian state. Just as with all market rules there is some temptation for violation by certain participants. However, especially if there is an large excess supply of labor, these sorts of laws can definitely serve the common good. Although such rules may discomfort the profit margin of some participants this sacrifice must be accepted as part of the price one pays for the benefits of living in society.

    1. Why are laws restricting foreign workers completely legitimate in a libertarian state ???

      If I as a business owner want to hire foreign workers to work for me, and then the state stops me from doing so, that very clearly is not something any libertarian would accept.

    2. hacima, you’d need the most generous reader in the world to concede all the points you make without justification.

    3. The state also uses its brute forces to “make” markets…

      …especially if there is an large excess supply of labor…

      …this sacrifice must be accepted as part of the price one pays for the benefits of living in society.

      I think we should conclude that hacimo has no understanding of a libertarian society at all.

    4. Um, no.

      For proponents of minarchy, the only function of the state is to protect individual liberty. All law would be derived from that principle, instead of the current and messy but popular situation and what you propose, of positive and/or utilitarian law.

  6. If you’ve not read The Road to Serfdom, please do so. Hayek’s book is great in its own right, of course; but reading it produces an “entertaining” side-effect. As occurs with 1984 and Atlas Shrugged, you will find yourself screaming in horrified recognition at current events being described in those “old” pages.

    1. I’ve re-read The Road to Serfdom and 1984 recently, but once is enough for Atlas Shrugged.

      Back in high school in the late 60s, I thought 1984 was about the Soviet Union and that America was an approximation of the libertarian ideal (flawed, perhaps deeply flawed, but at least holding the libertarian concept of liberty as an ideal). Now it seems that the 1984 dystopia more closely resembles the US, and has for quite some time. Though you can still get good gin in the US, Orwell’s commentary on perpetual war, the corruption of language, the utter contempt of the loathsome ruling class has for humanity, and mass brainwashing seems to fit pretty well.

      1. We have always been at war with…EurAsia or Iraq or Lybia.

        1. Or al-Qaeda or the Haqqani network.

  7. I think he’s confused as to what a ‘libertarian state’ is.

    1. Oh, for NotSure in regards to hacimo.

  8. Douchie The Elf is making a list
    of taxpayers, naughty and nice
    and with the fickle fuckle finger
    is ass-blasting them all like

  9. I seem to remember that there is a sentence in the constitution that prohibits export duties. Would that apply to outward imigration ?

    1. I think that prohibition only applies to the states.

    2. Outward immigration = emigration.

      As in, “Confiscation of the property of all emigrants”, the 4th Plank of the Communist Manifesto.

  10. Sounds like a rock solid plan to me dude.

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      1. Measuring your feet is an integral part of your decision.

        Are they going to provide neat little scales on the floors of voting booths in November?

  12. It’s generally difficult to argue with Reason writers in principle. I tend to agree with most of what they write.

    But seriously, now, in 2012, does anyone out there but Dalmia give two shits about immigration policy?

    Our economic opportunities are so great here, that people have gone back to Mexico, even as Mexico seems to be more of a failed state than ever.

    I look forward to a time when the average American actually has a reason to care about immigration again.

    1. Good call Barry. I’m more concerned with the ability to leave freely.

      The was this country is going I could see myself spending my middle ages abroad if I thought my economic situation would be better.

      Leaving freely as a current citizen goes hand in hand with coming freely as a non citizen.

      Matt Welch writes about immigration from time to time

  13. The author writes about “the left’s crusade to redistribute wealth in the name of social justice.”

    Or, one can trivially argue, wealth redistribution is necessary for a Republic.

    Great wealth inequality undermines the Republican form of government. Just as the great power of J.P. Morgan allowed him to steer the state, regardless of the will of the people.

    How much wealth inequality is a problem? Well, it seems clear to me that the current amount is too much, and that we slide towards the pomp of a Versailles.

    Monarchies and despotisms love wealth inequality. The dignity and honor of the Monarch depends on his wealth, and that others can not equal them.

    1. Wealth redistribution is anything but trivial. Ask Wesley Snipes. Our Republic got along ok without it. Go back to lawful currency, and end crony capitalism, and the wealth, like water, will find it’s natural level.

      1. Pardon, but they did impose higher taxes on the rich starting from the 1st Congress of the United States, which helps keeps wealth inequality in check.

        Further, our Republic got along without corporations back then, unless they were chartered as a specific act of Congress, and it was pretty much only for railroads and canals (public goods).

        It was also fine with human chattel slavery.

        Using the past as some guide is certainly problematic.

    2. you seem to be arguing against wealth in general rather than wealth disparity.

      The massively wealthy can “steer” the state only when the state has power to make or break its citizens and businesses. Defang the state and wealth no longer influences the state.

  14. I’d like to agree, but I can’t.

    Saverin hasn’t lived in the US in over 2 years. He finally decided to stop paying taxes to a country he doesn’t live in… and the rate likely doesn’t significantly affect that.

    But I can’t fault him… I don’t pay taxes to a coutnry I don’t live in either… I only pay taxes to the country I live in.

    I wonder what foreign country Schumer willingly pays taxes to every year since he isn’t as “greedy” as Saverin.

    1. Which ‘United States’ do you live in? According to Black’s Law Dictionary, there are six of them. Myself, I live in the Ohio Republic, but was tricked into declaring myself a US Citizen when I signed a legally binding contract at age 16.

  15. “But instead of re-examining these policies, the restrictionist right has been systematically escalating its war: militarization of the border; electric fences; deportation; E-verify.”

    I think this is too simple. Given the Democratic Party’s almost complete lock on Congress for decades, the “restrictionist right” has only been able to tinker at the margins (note that there is almost NO electric fencing on the border) — but the Progressive Left embraces the worst of both. Union protectionism and permissive open borders/sanctuary to import a pliable underclass.

    “Otherwise, the same walls that the right wants to use to stop poor people seeking to become wealthy from getting in”

    Oh please, that’s lame — most just wanna know who’s coming in, and that’s restrictive? We’re a nation of immigrants, but it cant be unrestricted and uncontrolled.

    1. Democrats LOVE e-verify, don’t kid yourself shakia

  16. Potential citizens? Don’t make me laugh. We’ve seen what these visa workers are we’re well aware they offer nothing worthwhile to the US. They are parasites who seek only to steal and fatten themselves on the hard work of others. Google for yourselves and see what happened to incredible US firms that truly invented and innovated, when these third world parasites were negligently put in charge, because of the PC disease. Google to read about these fraudulent H1B’s, who don’t have the education or skills they claim on their CV’s, they lie about their degrees and education, and scam billions of US taxdollars, or investors or company resources. Google the name Anjan Dutta-Gupta, who cheated the US Navy, and was allowed to get away with it, by bribing politicians. Google Anil Potti, an Indian national who fraudulently obtained a US visa, claiming he was a Rhodes Scholar and had medical degrees from India, when in reality he didn’t. If it hadn’t been for real breast cancer researchers, who read some of his hackneyed writings on the scam research he was doing at Duke University in North Carolina, he could have killed breast cancer patients. Duke UNiversity, the American Cancer Society and the American Cancer Society wasted hundreds of millions funding that parasite’s scam. Indians come to the US to take, not to create or give. They are parasites, and the scammer who wrote the article, is angry that there is a danger to parasites like herself not being able to loot the US taxpayer.

  17. Just a few examples of the facts, Indian and Chinese visa workers are frauds, parasites
    Adaptec – Indian CEO Subramanian Sundaresh fired.
    AIG (signed outsourcing deal in 2007 in Europe with Accenture Indian frauds, collapsed in 2009)
    AirBus (Qantas plane plunged 650 feet injuring passengers when its computer system written by India disengaged the auto-pilot).
    Apple – RD CLOSED in India in 2006.
    Australia’s National Australia Bank (Outsourced jobs to India in 2007, nationwide ATM and account failure in late 2010).
    Bell Labs (Arun Netravalli took over, closed, turned into a shopping mall)
    Boeing Dreamliner ES software (written by HCL, banned by FAA)
    Bristol-Myers-Squibb (Trade Secrets and documents stolen in U.S. by Indian national guest worker)
    Caymas – Startup run by Indian CEO, French director of dev, Chinese tech lead. Closed after 5 years of sucking VC out of America.
    Caterpillar misses earnings a mere 4 months after outsourcing to India, Inc.
    Circuit City – Outsourced all IT to Indian-run IBM and went bankrupt shortly thereafter.
    ComAir crew system run by 100% Indian IT workers caused the 12/25/05 U.S. airport shutdown when they used a short int instead of a long int
    Computer Associates – Former CEO Sanjay Kumar, an Indian national, sentenced to 12 years in federal prison for accounting fraud.

  18. Deloitte – 2010 – this Indian-packed consulting company is being sued under RICO fraud charges by Marin Country, California for a failed solution.
    Dell – call center (closed in India)
    Delta call centers (closed in India)
    Duke University – Massive scientific fraud by Indian national Dr. Anil Potti discovered in 2012.
    Fannie Mae – Hired large numbers of Indians, had to be bailed out. Indian logic bomb creator found guilty and sent to prison.
    Goldman Sachs – Kunil Shah, VP Managing Director – GS had to be bailed out by US taxpayers for $550 BILLION.
    GM – Was booming in 2006, signed $300 million outsourcing deal with Wipro that same year, went bankrupt 3 years later
    HP – Got out of the PC hardware business in 2011 and can’t compete with Apple’s tablets. HP was taken over by Indians and Chinese in 2001. So much for ‘Asian’ talent!
    HSBC ATMs (software taken over by Indians, failed in 2006)
    IBM bill collecting system for Austin, TX failed in 2012 written by Indians at IBM
    Intel Whitefield processor project (cancelled, Indian staff canned)
    JetStar Airways computer failure brings down Christchurch airport on 9/17/11. JetStar is owned by Quantas – which is know to have outsourced to India, Inc.
    Kodak: Outsourced to India in 2006, filed for bankruptcy in Jan, 2012.

  19. More examples of the disease of Indian visa workers

    Lehman (Jasjit Bhattal ruined the company. Spectramind software bought by Wipro, ruined, trashed by Indian programmers)
    Medicare – Defrauded by Indian national doctor Arun Sharma wife in the U.S.
    Microsoft – Employs over 35,000 H-1Bs. Stock used to be $100. Today it’s lucky to be over $25. Not to mention that Vista thing.
    MIT Media Lab Asia (canceled)
    MyNines – A startup founded and run by Indian national Apar Kothari went belly up after throwing millions of America’s VC $ down the drain.
    Nomura Securities -(In 2011 “struggling to compete on the world stage”). No wonder because Jasjit Bhattal formerly of failed Lehman ran it. See Lehman above.
    PeopleSoft (Taken over by Indians in 2000, collapsed).
    PepsiCo – Slides from #1 to #3 during Indian CEO Indra Nooyi’ watch.
    Polycom – Former senior executive Sunil Bhalla charged with insider trading.
    Qantas – See AirBus above
    Quark (Alukah Kamar CEO, fired, lost 60% of its customers to Adobe because Indian-written QuarkExpress 6 was a failure)
    Rolls Royce (Sent aircraft engine work to India in 2006, engines delayed for Boeing 787, and failed on at least 2 Quantas planes in 2010, cost Rolls $500m).
    SAP – Same as Deloitte above in 2010.
    Singapore airlines (IT functions taken over in 2009 by TCS, website trashed in August, 2011)
    Skype (Madhu Yarlagadda fired)
    State of Indiana $867 million FAILED IBM project, IBM being sued
    State of Texas failed IBM project.

  20. Sun Micro (Taken over by Indian and Chinese workers in 2001, collapsed, had to be sold off to Oracle).
    UK’s NHS outsourced numerous jobs including health records to India in mid-2000 resulting in $26 billion over budget.
    Union Bank of California – Cancelled Finacle project run by India’s InfoSys in 2011.
    United – call center (closed in India)
    Victorian Order of Nurses, Canada (Payroll system screwed up by SAP/IBM in mid-2011)
    Virgin Atlantic (software written in India caused cloud IT failure)
    World Bank (Indian fraudsters BANNED for 3 years because they stole data).

  21. The libertarians, like neo-cons disdain the US constitution and bill of rights. They enjoy exploiting rights and freedoms for themselves, but refuse to respect the obligation for them to respect the rights of others. They call immigration laws, and the calls for US visa programs not to be exploited, and how such excessive importation of cheap foreign labor discriminates against US citizens, “fortress America”. These are the types who would have attacked the founding fathers desire for an independent United States of America, as “fortress America”.

    These libertarians and neo-cons are Marxists. Neo-cons are Trotskyites, and libertarians are much the same. They desire the US to serve their interests only, a plantation slavery state they can profit from. They know the price of everything and the value of nothing. Consider how Bloomberg now demands US states and cities have illegal aliens forced upon them.

    Unlike conservatives who want lower taxes, neo-cons and libertarians demand tax breaks for themselves, but also government subsidies, with higher taxes imposed on the working poor, and middle classes. They’re a parasite who seek to fatten themselves on the hard work and suffering of others. Keep India’s rotted, festering disease in it’s own swillpot nation. The US has been looted to fund that third world cesspool for too long.

    1. Not sure if trolling, or incomprehensibly stupid…

    2. The crack smoke is heavy with this one.

  22. Libertarians should distinguish between open immigration and illegal immigration. Defending the latter is not the same as defending the former. Introduction of contagious disease and identity theft as well as welfare and tax abuse are among the important distinguishing characteristics.

    It’s also worth discussing WHY there exists a black market in labor rather than mindlessly supporting the black market. If certain labor restrictions and price floors didn’t exist it probably wouldn’t be necessary to import an entire class of illegal workers to subvert them because the legal restrictions make it impossible for a legal worker to create value at the minimum price. Which brings up the interesting and related discussion of the practicability of open immigration in a welfare state (that being the reason why Ron Paul, for example, supports border security measures that libertarians like the author oppose).

  23. But the government doesn’t take its failure as a sign that there might be something wrong with its ends?that perhaps they are out of sync with the normal aspirations of people. Rather, it blames the failure on an insufficient use of force. Thus an initial round of coercion inevitably spawns subsequent, even harsher rounds, putting the country on Hayek’s “road to serfdom.”

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  26. Chuck schumer is on the restrictionist right? He’s the main voice screaming about the expat tax issue(well not expat but renouncing citizenship)

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