Immigration Followup

I’m a little frazzled this week, so I haven’t caught up with all the comments on Monday’s
post on immigration, but I know there’s been some discussion about the actual costs and benefits of admitting unskilled immigrants. I thought I’d supply some numbers that might inform that discussion; all of this is lifted from Chapter 20 of The Big Questions.

When an unskilled Mexican immigrant arrives in the United States, his wages typically rise from about $2 a hour to $9 an hour — call it a $7 an hour gain. He also bids down the wages of American workers by (and this is a high-end estimate from the labor economics literature) about $.00000003 per hour; multiply that by a hundred million American workers and you’ve got a collective $3 an hour loss.

Now there seems to be something like a consensus that it’s okay for US policies to benefit US citizens at the expense of Mexicans, but there also seems to be something like a consensus that there’s a limit to that; we would not want, for example, to allow Americans to hunt Mexicans for sport. So when we consider turning someone away at the border, one good question is: Are we willing to do $7 worth of harm to a Mexican in order to confer $3 worth of benefits on American workers?

Note that the potential Mexican immigrant is typically much poorer than those American workers, and that it’s not uncommonly argued that we should care more about the poor than about the rich. If you weight that $7 loss to the Mexican and that $3 gain to the Americans accordingly (i.e. assuming logarithmic utility, which is a quite conservative assumption — that is, one that biases the result in the anti-immigration direction), you discover exclusion hurts the Mexican about five times as much as it helps the Americans.

So, at least if you buy into that way of thinking (which pervades a lot of the policy literature) then exclusion is justified only if you “count” a Mexican as less than one-fifth of an American. That’s a pretty extreme position. It’s not as extreme as hunting Mexicans for sport, but it’s still pretty extreme.

Now add to all this the fact that our Mexican immigrant typically brings well over $3 worth of benefits to Americans, which more than offset the $3 wage drop. As a source of cheap labor, he brings down the prices of American goods, so that even the workers whose wages dropped can come out ahead. If your wages drop by 10% while prices drop by 20%, you’re a winner.

So: The easiest way to justify an anti-immigration stance along these lines is to 1) ignore all benefits of immigration to Americans and focus solely on the costs, and then 2) treat a $3 loss to Americans as more consequential than a $7 gain to Mexicans, even when the Mexicans are much poorer than the Americans. That seems to me to be a very difficult calculation to defend.

I do realize that some commenters have raised issues regarding culture and politics that are not directly addressed by the above. But insofar as there’s been discussion about effects on American wages, etc., I hope these numbers will help to focus things.

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150 Responses to “Immigration Followup”


  1. 1 1 Roger

    No, these numbers do not clarify anything. First, they are bogus estimates from pro-immigration sources. Second, they don’t have anything to do with your arguments in Monday’s posting.

  2. 2 2 Dmitry Kolyakov

    Professor Landsburg, a couple of months ago I noted that there are only 2 major issues where I would disagree with your opinion – one being the capital gains’ taxation and another one immigration. So I am glad you have now decided to revisit the issue of immigration as well.

    As I can not remember my (rather lengthy) objections on capital gains getting much in terms of a real response (at least from you), I will spare everyone a lengthy laundry list of objections to your position on free immigration.

    Instead let me thank you for your beautiful example of altruistic economics and and present you with an opportunity to start following your noble principles right now, without waiting for a lengthy bureaucratic procedure by the state.

    Let me start by assuring you that I, not being a tenured professor, am most likely to be worse off than you (if you object to my person in this respect, I, also being a selfless soul, can direct you to another couple of billion candidates for you to choose).

    So I am pretty sure that a loss you might suffer by sacrificing one of the rooms in your house for me to live in will be much smaller than my gain from turning from homeless (let’s assume) to your proud neighbour. My benefits from living so close to a person of your stature are also likely to outweigh any nuisance I might cause to you by loitering around your house and stepping on your plants occasionally (I might actually come from a culture where it is considered a sign of respect to the host).

    I do not have the same strange looking “labour economics data” to quantify it, but it appears self-evident that my gain is likely to outweigh your loss by far (especially if I am very poor).

    So, just as you say : ”Now there seems to be something like a consensus that it’s okay for US policies to benefit US citizens at the expense of Mexicans (hope that applies to all foreigners – DK), but there also seems to be something like a consensus that there’s a limit to that…”

    And in this case, “Are we willing to do $7 ($X) worth of harm to a Mexican (poor Dmitry) in order to confer $3 (< $X) worth of benefits on American workers (rich professors)?”

    The rest of your logic also applies: “Note that the potential Mexican immigrant (me in this case) is typically much poorer than those American workers (in the academia), and that it’s not uncommonly argued that we should care more about the poor than about the rich.”

    So, unless you count me out as 1/n (whatever) of yourself, which as you say would be “pretty extreme”, I am eagerly awaiting the keys from your house in the mail.

    Ah, and of course I would be willing to help you a bit around the house for a reasonable compensation which would be lower than your equivalent in lost professorial time, thus conferring some additional benefits of trade on you.
    When another 10-20 people decide to follow my example, you would be better off still – they will drive down my prices, most likely.

    I promise you to be well-behaved (until you actually admit me that is – when there, I will vote for and otherwise support whoever promises me equal rights on your house – especially your “social safety net”, or your nest egg as you might call it).

    So – everyone get ready for a nice housewarming party!

    I (the free rider) hope that an idea to rent that room out (auction the work/immigration quotas to the highest bidder subject to background checks) will never cross your benevolent altruistic mind.

    And before anyone started writing that “the state does not own the country”, like I was thoughtfully told in one of the previous discussions, please consider that ownership is an earned right protected by the state in exchange for our taxes – just like citizenship. Even if you inherited both your house and your citizenship, someone, sometime ago had to earn them for you.

  3. 3 3 Jonah

    Pray tell, how can immigrants effect a 20% drop in prices of goods, while at the same time lowering US wages by only 3$ cumulative over 100 million workers?

    It is much more likely that a worker with which the immigrants compete (never an econ prof) is going to see his livelyhood much damaged, to the point of not being able to find work in that sector of the economy, while his living standard is going to increase by a miniscule amount. Consider a retaurant worker. He will see his wage decrease, but not even restaurants are going to become cheap enough to offset that (as labor is not the only cost), let alone rest o the economy.

    But the biggest argument against your utilitarian calculus is that it can be extended indefinutely. Even if I am left with only $10, there is someone in Bangladesh who could benefit from them more than I can – thus worldwide redistribution of immense scale is completely justified.

  4. 4 4 Harold

    A point of detail, if we are counting all the gains to the USA as well as the costs, we must apply the same to the Mexican. We must therefore compare the cost of living in Mexico and the USA. His $7 dollar gain may not allow him to buy $7 more stuff.

    These numbers apply to allowing a single Mexican into the USA. I think the belief of many is that these numbers change if the numbers of Mexicans becomes very large. So another two questions: 1) does it change for large numbers 2) would unrestricted immigration lead to sufficiently large numbers for this change to come into effect.

    To get at question 1 a bit, there are different ways it could change. One is by “compounding” The second mexican gets a benefit slightly less than $7, because average wages have been depressed by $.00000003 per hour. As we get more and more, the gain for the Mexican will be less and less. I am not sure how the $.00000003 per hour is calculated, but with more and more Mnexicans, this will change also. I do not know in what way it will change exactly, but I think it will be different, and the simple $7 gain will not apply. Any clarification here would be helpful.

  5. 5 5 Steve Landsburg

    Roger:

    No, these numbers do not clarify anything. First, they are bogus estimates from pro-immigration sources. Second, they don’t have anything to do with your arguments in Monday’s posting.

    First, they’re not suppsoed to have anything to do with the arguments I made in Monday’s posting; they’re supposed to address some questions that came up in comments.

    Second, they’re estimates from the labor economics literature, not from “pro-immigration sources”; they in fact come from papers that are not even attempting to address the issue of immigration. (They are instead estimating, e.g. elasticities of demand for labor, which we can apply to this question.)

    Third, we can disagree about facts, we can disagree about logic, and we can disagree about interpretations, but if you’re here to accuse me of making up numbers or of quoting them dishonestly, then we’re no longer having a productive conversation.

  6. 6 6 Steve Landsburg

    Jonah:

    Pray tell, how can immigrants effect a 20% drop in prices of goods, while at the same time lowering US wages by only 3$ cumulative over 100 million workers?

    You are comparing the effect of a vast number of immigrants on the price of goods, with the effect of one immigrant on wages.

  7. 7 7 Steve Landsburg

    Harold:

    To get at question 1 a bit, there are different ways it could change. One is by “compounding” The second mexican gets a benefit slightly less than $7, because average wages have been depressed by $.00000003 per hour. As we get more and more, the gain for the Mexican will be less and less. I am not sure how the $.00000003 per hour is calculated, but with more and more Mnexicans, this will change also. I do not know in what way it will change exactly, but I think it will be different, and the simple $7 gain will not apply. Any clarification here would be helpful.

    This is absolutely correct. But the question I am raising is: Do we currently have too much or too little immigration? To answer that question, we can reformulate it as: Would one additional immigrant be, on balance, a good or a bad thing? Therefore it’s appropriate to do the calculation for one immigrant. After several more immigrants arrive, we can ask again: *Now* do we have too many or too few? And at that point we can redo the calculation, with, as you say, different numbers.

  8. 8 8 AMTbuff

    The correct rate of immigration is bounded by the need to assimilate the immigrants to the existing culture. That rate has been exceeded in much of California.

    Most public schools in Los Angeles County have become virtually worthless due to immigration from the south. Entire cities have become Spanish-speaking.

    In Europe the situation is worse. Arab immigrants actively resist assimilation, retaining a culture which is incompatible with the existing European culture. That situation will explode at some point. Our immigrants from the south and from Asia will be much easier to assimilate over the coming decades, provided that the rate of immigration remains low.

  9. 9 9 Dmitry Kolyakov

    “Would one additional immigrant be, on balance, a good or a bad thing?” – is such a switch of a question we discussing a really honest tactics?
    Weren’t we discussing free immigration vs. restricted immigration in the first place?
    I am not even mentioning the standard “good, but for whom” aspect. (dropping an A-bomb on some small US town instead of Hiroshima and Nagasaki might have been good for the humanity as a whole, but what would you do to those Enola Gay pilots in that case?)

    The question of one additional immigrant 1. was not something I believe most of us (including you previously) were discussing here 2. quite hard to answer at this level of detail, given the quality of the data (even if it is indeed from legitimate labor economics literature) 3. Not something that can be easily affected by policy – it rather moves tens of thousands at a time, so those marginal values are going to be quite different anyway.

  10. 10 10 Sonic Charmer

    The fact that the state (any state) prefers avoiding $X loss of utility to its citizens to $NX of gain to foreigners does not mean we ‘count non-citizens as 1/Nth of people’. That is simply not a correct way to characterize what’s going on.

    I favor utility gains to my own children over utility gains to the children of people in, say, Turkmenistan. This is normal human behavior. It takes a very smart economist to ignore human nature entirely and not only see it as weird and unjustifiable, but to try to interpret it as a *moral* sentiment regarding how much one ‘counts’ other people. I assure you Steven that I ‘count’ humans living in Turkmenistan as fully human and with a 1:1 ratio as against my children, but that doesn’t mean I’m inclined to feed, clothe, house, and educate them. If you are unable to see or admit that there is a difference between how much we wish to help people and how we morally ‘count’ them as humans, this discussion cannot get past square 1.

  11. 11 11 Harold

    Steve. There are, as always, different questions we could be answering. Whether we should have more immigration is very different from whether we should have open borders. I have never seen you advocate open borders, but some may see it as an extension of what you have said.

    The figures above imply a uniform workforce, I think; or at least 100 million unoform workers. I think this was what Jonah was getting at. If we stratify this, we may get different answers. Say 10% of workers are in the unskilled sector. Say also that all immigration is into this unskilled sector. The numbers will be different. It does not seem reasonable that the $.00000003 per hour should now be multiplied by only 10M, so I presume that the wages would be bid down by more than the original. Is this the case? The total “loss” may be very much the same, but perhaps it is concentrated among fewer Americans? What difference does this make?

    On a more philosophical note, following your argument leads us to a point where we must start to value the worth of a Mexican compared to an American. Right now we might be able to say $3 loss to an American is not worth more than a $7 gain to a Mexican, so we should allow more immigration. But at some point we either have to say the value is equal, and the market will prevent immigration when losses and gains are equal, or the worth of an American (to us) is greater. This seems to me impossible to do on anything other than arbitrary grounds, and perhaps a ratio of 5 to 1 is as good as any?

  12. 12 12 Ken

    Dmitry,

    Your room in Landsburg’s house is precisely the sloppy, lazy thinking of protectionists. A person’s job is not his private property. He has no right to it. At any time, his employer can fire him for any reason allowed under his employment contract. Similarly, that worker doesn’t have property rights on other jobs either. However, Steve’s house is his private property to do with whatever he likes.

    To turn around your example, the more appropriate example would be this: you need a place to live and Steven having an opulent house has plenty of room. He decides to rent you one of his rooms. You go from homeless to not homeless for the low price of $200/month.

    Assume there are 100 other houses in Steve’s neighborhood and because he’s now got a border, this reduces the value of all houses by $1, a cumulative $100. The benefits to you exceed $200/month (otherwise you would simply stay living on the street) and Steve gets a profit of $199 for the first month (accounting for the drop in house value), then $200/month thereafter.

    What you’re saying is because of this loss, it’s not just the right of his neighbors to force him to kick you out, it’s actually morally imperative.

  13. 13 13 Ken B

    “To answer that question, we can reformulate it as: Would one additional immigrant be, on balance, a good or a bad thing?”

    On balance, assuming a law-abiding worker with no axes he intends to grind very hard, a good thing. Pretty much orthogonal to the question, should the president have power to selectively enforce the law.

    What frustrates me about these discussions is the attempt by some to draw large scale conclusions from the current state, or on the other side, to shoe-horn the current state into certain asymptotic conclusions. An example of what I mean. I think it quite clear that right now more immigration of productive workers is economically desirable. Some disagree. But it’s mau-mauing to argue that on some assumed principle of unrestricted immigration and to imply that skeptics or opponents are base and vile, or that concerns about liberty costs are silly or fraudulent.

    A more extreme example may clarify. Dr Memory mocks such concerns with comments about la raza and herding whites into camps. Consider instead Israel. I do not think it foolish for Jews in Israel to believe unrestricted immigration into Israel could end up kind of like that.

  14. 14 14 Ken B

    It’s always interesting to see which posts get the most traffic. Steve has hit on a topic that generates a lot of comment. But more can be done if we learn form experience. I think if he can frame some argument deriving the proper immigration policy from Peano’s Axioms it will break the site-meter!

  15. 15 15 JohnE

    @Ken

    “boarder” not “border”

  16. 16 16 Doctor Memory

    Ken: it is a very good thing, then, that we are not Israel, not much at all like them in any way.

    I’ll happily allow that the calculus of costs and benefits may be substantially different for (much, much, much) smaller countries. I will not allow that “but what if the circumstances were completely different?!” is a particularly good starting point for discussing the actual circumstances at hand.

    (Even in the case of smaller countries I’m strictly dubious of any argument couched in terms of an alleged right to cultural uniformity: I acknowledge no such right and I think we are decades past the point of needing to extend the benefit of the doubt to those claiming to speak for it.)

  17. 17 17 Doctor Memory

    Er, sorry, “Ken B” there. As previously noted, we have more than one Ken in the fray here.

  18. 18 18 JohnE

    To those against looser immigration: Do you think Texans are worse off because of immigrants from Michigan? Are there any arguments for restricting immigration from Mexico to Texas which would not apply to restricting immigration from Michigan to Texas?

  19. 19 19 Andy

    I would think that the immigration policies of all countries matter here. Seems a bit unfair if all other nationalities can come freely to the US but Americans are not allowed to move elsewhere if they don’t like it.

  20. 20 20 teler

    AMTbuff,

    I realize this is a bit off topic from where Steven wanted us to go, but I figured it was worth mentioning based on your derision of Spanish-speaking immigrants moving to California from Mexico.

    The original language of most of the cities in California, especially in southern California, was Spanish as they were mostly founded as SPANISH-speaking missions by SPANISH-speaking missionaries. After Spanish, the most common languages in the missions would have been the variety of native languages spoken by the American Indians who lived and worked there. ENGLISH was forced onto these communities after the Mexican Cession (1848), the discovery of gold (1849), and the gold rush of Americans from the east that followed. You might argue that its been English speaking for over a century now, but lets not pretend that English was the language predestined to be spoken in California.

  21. 21 21 Ken B

    @Doctor Memory:
    ” I will not allow that “but what if the circumstances were completely different?!” is a particularly good starting point for discussing the actual circumstances at hand.”

    Agreed, but it is a good point to start rebutting arguments from principle that ex hypothesi ignore the circumstances at hand. Which many in this debate do.

    As for the multiple Kens, I can only advise that you count your blessings. 2 so far :)

  22. 22 22 Ken B

    @Ken: Haven’t you earned a letter yet??
    I think A and C through Z are available.
    :)

  23. 23 23 dullgeek

    I’m a little confused by the comparison between $7 and $3. Because it appears that the $7 is a per mexican gain. While the $3 loss is an aggregate loss amongst all americans – but is instead a $0.00000003 loss per american. In exclusion the Mexican’s $7 loss compared to the american’s $0.00000003 gain seems like it hurts the mexican a *LOT* more than 5x. Simple division yields the mexican being hurt 233million times more than the american.

    Things that I know I don’t know:
    * number of mexican immigrants: I’d be interested in the comparison of aggregate gain to aggregate loss rather than just per-person.
    * logarithmic utility: perhaps this can compress 233million down to 5? If so, I’d like that compression algorithm for my disk backups.

    Do the things I know I don’t know explain my confusion or am I otherwise confused?

  24. 24 24 nobody.really

    Even assuming everything Landsburg has said is accurate —

    1. Landsburg has justified greater immigration – not greater Mexican immigration per se. The Pew Research Center reports that Asians immigrants not only outperform Latin American immigrants (and the US population in general) on a range on economic variables, but Asians currently immigrate at a greater rate than Latin Americans. Thus, even if Landburg persuades you of the merits of changing some aspects of US immigration policy, we are still left to discuss which aspects to change.

    2. Landsburg argues that greater immigration may benefit US citizens in general – and perhaps even benefit every US citizen. But it is far from clear that greater immigration benefits every citizen equally. And here we return to Coase: It is not clear to me that low-income US citizens have a right to exclude people who would compete against them in the labor market. But it is also not clear to me that high-income US citizens have a right to derive the benefits of these new entrants. I suspect there are a broad range of mutually beneficial outcomes that might be derived – many of those outcomes involving transferring a portion of the benefits of greater immigration from the US citizens that would benefit the most to the citizens that would benefit the least.

    As with so many arguments grounded in economic efficiency, implementation would be facilitated by policies designed to ensure that everyone derives some comparable benefit from the increased efficiency.

  25. 25 25 Steve Landsburg

    Sonic Charmer:

    I favor utility gains to my own children over utility gains to the children of people in, say, Turkmenistan. This is normal human behavior. It takes a very smart economist to ignore human nature entirely and not only see it as weird and unjustifiable, but to try to interpret it as a *moral* sentiment regarding how much one ‘counts’ other people. I assure you Steven that I ‘count’ humans living in Turkmenistan as fully human and with a 1:1 ratio as against my children, but that doesn’t mean I’m inclined to feed, clothe, house, and educate them. If you are unable to see or admit that there is a difference between how much we wish to help people and how we morally ‘count’ them as humans, this discussion cannot get past square 1.

    Actually, I think it does mean that we count the Turkmenistan folks less than we count our own children, and I agree that this is human nature and there’s no use fighting it or decrying it.

    But when we’re talking about immigration, we’re often talking not about our own children, but about strangers born in Mexico versus strangers born in (say) Arizona. And when you start favoring one stranger over anothet because of where he was born, that’s where I think things are starting to get unncecessarily ugly.

  26. 26 26 Ken B

    nobody.really: “But it is far from clear that greater immigration benefits every citizen equally”
    They don’t. Some lose. There’s the rub.
    If I cured cancer tomorrow there would be some people harmed by it.
    “It’s an ill wind that blows no-one good” is the converse.

  27. 27 27 Zazooba

    Little of my criticques were based on wage effects. My concerns are mostly political and cultural.

    That said, I am suspicious of your economic analysis for a number of reasons (although I would not be surprised if I am wrong on at least some of these counts).

    your reasoning implictly assumes that a low-paid Mexican worker is transformed into a higher-paid immigrant worker when transplanted to the US. This is undoubtedly true to some extent. Mexico does not function very well and any given worker should be more productive in a better functioning economy.

    But, why is Mexico poorly functioning? To some extent at least it must be due to its being run by Mexicans and being full of Mexicans. So, it seems reasonable that when a significant number of Mexicans come to the US, they make the US a little more like Mexico than it was before. This likely has a deletorious effeect on the US. I don’t see an estimate of that effect in your calculations. For instance, we know with a fair amount of certainty that Mexican immigrants are less educated than the average American, and that their children will be less educated for quite some time to come. Everyone seems to think that less education is bad and more education is good. I don’t see any estimate of the deletorious effects of lower average education in your calculations.

    Something else troubles me about your logic. Do we really have a shortage of low-skilled labor in this country? I thought we had a surplus of high-school dropouts, not a scarcity of them. If there are any benefits to US citizens from low-skilled labor, why can’t we achieve those benefits with the low-skille workers we have?

    Your model seems to work if you use the following logic: The US is better run than Mexico. Because it is better run, any given person is more productive here. Therefore, it is welfare-increasing to have people work in the US rather than Mexico. This does not necessarily harm other US citizens if all that happens is that the immigrant’s productivy is increased. Why not confer the benefits of US governance on as many foreigners as we can?

    This is not ridiculous. After all, why should Mexicans suffer because they are governed by Mexicans and have to work for Mexican boses and with Mexican workers? It is not, however, obviously correct for the reason I brought up above. If part of the reason that Mexico is unproductive is due to the presence of Mexicans, then the Mexican immigrant will lower overall productivity in the US.

    Note also, that if you genuinely believe this, then a better way to achieve your objectives is to have Mexicans stay in Mexico (which they would probably prefer ceteris paribus) and have the US run Mexico and confer the benefits of US governance on Mexico. Kind of a neo-colonialism. This too is not ridiculous as the example of India suggest that European colonialism, especially British, can have some beneficial effects.

    Moreover, the whole argument rests on the Mexican being a worker. But, under a simple minded open-borders policy, this would not be true of many immigrants. In fact, I find it unbelievable that a true open border policy would not attract millions of immigrants per year who have no intention of working and intend only to get into the welfare system as quickly as possible. We could limit immigration to only productive, non-violent workers, but then we would be in the business of picking and choosing immigrants which open borders people seem to find so distasteful.

  28. 28 28 Steve Landsburg

    dullgeek: One Mexican immigrant = $7 in gains to one Mexican together with a total of $3 in losses spread out over 100 million American workers. Does that help?

  29. 29 29 Bearce

    Steve,

    The most common objection toward illegal immigration is not only does it displace an unskilled American worker, but also that immigrants benefit from free-riding. The $7 dollar gain vs. $3 dollar loss and a drop in the price-level only gives slight justification for their immigration from a cost-benefit perspective. You’d have to show that 1) this gain offsets what they may take in public goods/services without paying taxes (assuming they don’t, some do), and 2) the other costs illegal immigration accrues are substantially less. These other costs include impacted public schools from so-called ‘anchor babies,’ increases in crime that may result in displaced American workers, etc.

  30. 30 30 Ken B

    “And when you start favoring one stranger over anothet because of where he was born, that’s where I think things are starting to get unncecessarily ugly.”

    And yet while you would want to itercede in Arizona if religious fanatics threw acid in the faces of school-girls I suspect you do not in Afghanistan. So there’s more to this than just location.

  31. 31 31 Bearce

    Also, Steve, would you mind linking the $7 dollar gain vs $3 dollar loss to 100 million American workers source? That’s sounds like a really staggering statistic.

  32. 32 32 Zazooba

    The underlying moral question you raise is quite thorny — to paraphrase: Should we count Mexican welfare equally with that of US citizens, or, should we count Mexican welfare at all in our calculations.

    Counting foreigner’s welfare equally with that of US citizens’ would likely quickly lead to something approaching utter collapse. The logical result of this assumption would be to admit all immigrants who have no intention of working and intend only live off the production of US citizens. Indeed, they wouldn’t even have to immigrate. Taking this position seriously would mean we should immediately give most of what we produce to such people without them having to incur the dead-weight costs of actually moving here.

    My personal take (which I ams not all certain is correct) is that the perceived morality of these situations is usually determined by evolutionary factors. In fact, I think that most things human have a strong evolutionary component to it. From that persepective, morality is the set of rules a group evolves to confer survival advantages on the group. In this case, the operative group is the US and benefitting foreigers at the expense of the US is evolutionarily counterproductive. Perhaps the group could be expanded to include Mexico in some way, but that expansion would have to benefit the US in some way to make it evolutionarily viable.

    (I have no doubt that an evolutionary approach yields all sorts of problems with sub-group opportunism. But, that seems to be the nature of evolutionary biology, and evolutionary biology doesn’t really care what I think about the aestetics of evoluationary reality.)

    Taking an evolutionary perspective also produces a very sad inversion of the whole notion of who is rich and who is poor. We are fixated on wealth as being “good,” but wealth is only a means to an evolutionary end, which is survival and propagation of the blood line. When viewed from an evolutionary perspective, Mexico is doing much better than the US because it has a higher population growth rate. Most successful of all is sub-saharan Africa which has astounding population growth rates. (The popluation of Ethiopa has doubled in the last 30 years and will doubld again in the next 30.) So, the evolutionarily “poor” countries are the European countries and their offshoots, while the evolutionarily “rich” countries are the less developed countries.

    The evolutionarily rich countries have been able to do this largely because of advanced medicine and agriculture developed by the European countres and freely given to the evolutionarily rich countries (plus generous physical food and medical aid). In a world with such European generosity, an optimal evolutionary strategy is to be a parasite off the productive countries and to produce as many children as possible.

    One thing I haven’t thought through is how your basic imperative to treat all humans as equally worthy should be applied from the evolutionary perspective. Perhaps evolutionarily rich countries should offer to interbreed with the evolutionarily poor countries to help spread the evoluationary wealth around. Any ideas?

  33. 33 33 Zazooba

    Steve,

    Someone above mentioned that you aren’t a open borders advocate. I was assuming you were.

    If you are not, perhaps you are just advocating that immigration by poor people willing to work is a good think in general. I don’t think I disagree too much with that. I can agree that having more worthhile people in the country is probably a good thing.

    The real disagreement comes when talk turns to having more worthless people in the country. I think that is a bad thing because it hurts the people already here and I don’t see a good reason they should allow it. On the other hand, your dictum seems to say that the worthless people are just as important morally as everyone else, so they should be let in.

    It is hard to believe I have accurately guessed your view though. I have a feeling you are just making very narrow points about the effects of certain types of immigration in certain circumstances, which is the stuff of academic publications, but not all that interesting generally.

  34. 34 34 Zazooba

    Steve,

    Your whole moral approach also strikes me as oddly lacking in economic intuition.

    In an Adam-Smith-style free market, eveyone acts selfishly, but by voluntary contracting between selfish individuals, the system makes eveyone better off because each transaction must make each transactant better off. In a free market, there is requirement that each participant take the other particpants’ welfare into account. It is the selfishness of the other participants that makes a selfish participant act as if he were taking the welfare of the others into account. That is the beauty of a free market. It doesn’t require altruism, it functions even if everyone is selfish.

    In your Mexican immigrant example, why should the US take the welfare of the immigrant into account? Isn’t there some way the selfishness of the immigrant can make us act as if we took it into account. For instance, why wouldn’t it work for the immigrant to say:

    “I will benefit by $7 if you allow me to work in your country, and other US citizens will be harmed by $1.” (I made the $1 up.) “Therefore, let me come and work in your country for $7.98, give $1.01 to the US citizen harmed (for a total cost to you of $8.99) and I will do $9 of work for you. Eveyone in the US will be better off, and I will be better off. It is in your interest to let me in.”

    If we act selfishly to protect the welfare of US citizens, wouldn’t this sort of bargain be struck naturally?

    It is a little odd that you are resorting to God-like moral calculations when there is probably a simple free-market way to achieve the welfare gains you are concerned about.

    I think this is a great insight, if I do say so myself.

  35. 35 35 Zazooba

    @nobody.really

    “I suspect there are a broad range of mutually beneficial outcomes that might be derived – many of those outcomes involving transferring a portion of the benefits of greater immigration from the US citizens that would benefit the most to the citizens that would benefit the least.

    As with so many arguments grounded in economic efficiency, implementation would be facilitated by policies designed to ensure that everyone derives some comparable benefit from the increased efficiency.”

    Damn. Nobody.realy had the same insight that I was so proud of.

    Good job nobody.really.

  36. 36 36 Zazooba

    BTW, all this is irrelevant to the Obama immigration thing (as someone above noted)

    Obama just wants more votes for himself and other democrates and he doesn’t give a damn about whether it hurts anyone else.

  37. 37 37 Dmitry Kolyakov

    Ken, thanks for your reply, but may I suggest that we avoid labeling anyone’s thinking as sloppy and lazy and stick to the substance?

    It would be also nice if before turning my example around (which you are welcome to do) you would first properly react to my actual example.
    I’ve said several times in the previous discussions and hinted at it again in my post, but some people still prefer to ignore the obvious – the right of ownership, while paramount, is by far not the only right granting its bearer certain exclusivity over objects. Sovereignty rights over the territory and the citizens grant the state exclusive rights (you have to obey the decisions by US Courts, but not the courts of Zimbabwe (good for you)), citizenship rights allow the citizens certain privileges in their state which the foreigners do not enjoy, etc.
    Whether your legal right not to let other people to where you live (house or country) is derived from this or that particular right (citizenship or property) is not relevant here. You simply currently have that legal right.

    I was not saying anything at all about a person owning his or her job – I have no idea why you chose to discuss this. What a person instead has (or “owns” if you prefer) are his citizenship rights that grant certain privileges over non-citizens – a result of either his own efforts, of those of the generations of his ancestors. All those people were presumably building the country, its infrastructure and did what they could to make it an attractive place to live. People in different countries did this with different success and everyone would now like to enjoy the fruits of their and their ancestors’ labors. In this case it is quite similar to property again – if I know that the results of my and my ancestors’ work will be redistributed without any compensation to me among whoever likes the country we have built – do I have any incentives to build it? Will there ever be any patriotism if you only address an American when you need something from him (be it worldwide taxes, going to Vietnam or feeling less safe in a good half of the world), but when its you turn to deliver you tell him you got a better price south of the border?
    A bit like saying to your ageing wife that nowadays the girls are generally younger and she is no longer competitive…

    Admitting the best providing they pay their way is one thing, letting everyone for free is something very different.

    Professor Landsburg currently has a legal right not to let me live in his house if he does not want it. American citizens have a legal right not to let non-citizens come to the US and enjoy the same rights and benefits as themselves if they, again, do not want it. So Professor Landsburg advocates a voluntary surrender of such rights on moral and “universal good” grounds comparing the losses of the citizens with the gains of foreigners. My request to him to voluntarily surrender his right not to let me live in his house follows exactly the same logic and comparison – the greater good has increased, it is just not him who reaps the main rewards. I am sorry that you have apparently missed it.

    Now, as I understand we both share this dislike for sloppy lazy thinking. Could you then explain me something in your apparently well-crafted quality example: how come having a boarder in one house decreases price of all other houses? This deal will decrease the supply of rooms available for rent which would push the rents and rental values and hence the price up. (removing a penniless homeless bum from the street will do nothing to reduce the amount of money hunting homes for sale – the bum has no access to any money to speak of. Even if he had the money and was looking to buy, his actions would be market-neutral if he rents at market prices).

    One could go on and on discussing the (questionable) relevance of this example, but this job is probably not for a lazy thinker such as myself.

  38. 38 38 Dmitry Kolyakov

    @JohnE: I guess it is up to the Texans to decide. If they do not want to grant equal rights to newcomers from Michigan (and enjoy reciprocity)they can always start secession from the rest of the US, if they want to grant the same rights to Mexicans – they can apply to join the state of Mexico. I guess so far their preference is rather clear.

  39. 39 39 Dmitry Kolyakov

    “…And when you start favoring one stranger over anothet because of where he was born, that’s where I think things are starting to get unncecessarily ugly.”

    But is it not completely rational to care more for someone who is more likely to affect your life? Your children are vastly more likely to affect your life and hence be important to you than people from Ashgabat, but someone from Arizona, being your fellow US citizen is also somewhat more likely to affect your life than someone from Guadalajara (by voting for a presidential candidate you despise, by getting penniless and joining a gang you are way more likely to encounter, or by turning out to be an attractive female student who goes to Rochester with a particular passion for economics).

    I believe that this preference is absolutely defensible unless you, of course, base you morals on some faith rather than pure rationalism.

  40. 40 40 Sonic Charmer

    Actually, I think it does mean that we count the Turkmenistan folks less than we count our own children, and I agree that this is human nature and there’s no use fighting it or decrying it.

    Ok then, I’ll go with your definition of ‘count’, stripped (I trust) of the moral baggage people usually ascribe to such a statement as ‘hey, you’re counting those other people less!’. In that case, why did you bring it up as part of your argument, since (by your statements here) it can’t and shouldn’t be?

    But when we’re talking about immigration, we’re often talking not about our own children, but about strangers born in Mexico versus strangers born in (say) Arizona.

    For the purposes of all such discussions, I consider and understand myself (and my children) to be a citizen of the United States, since I live in a geographical region over which the government of the United States holds sway, and in which a culture exists that is dominated by other people within that same nation-state, all of whom are (to at least some extent) under the sway of the US government, and thus affected, in some diffuse (but nonzero) way, by the policies of said government.

    Hence, I don’t treat myself as a disinterested party to proposed US government policy changes, even though (as you say) it’s quite possible that the brunt of any given policy change wouldn’t affect me per se.

    Again, this is the normal and understandable way humans generally think about government policy, at least when they are not economists. If I am not supposed to understand myself (a US citizen) as affected by the policies of the US government as they affect the nation-state at large, then much of what we know and think of as ‘politics’ will have to be revamped. Fortunately, in most regular conversations one doesn’t find oneself having to explain this sort of thing at such a pedantic level, as it is understood and unobjectionable to most.

  41. 41 41 Maznak

    Well, I share the libertarian instincts, but also another thing is true: I elect my government to increase my utility; not to care for the utility of all human beings. So it is logical for my government to give my well being much higher weight than to the well being of strangers. In fact the well being of strangers is almost irelevant for my government and rightly so. But maybe immigration is good for me for different reasons and in such case I would like my government to promote it. Some of the things that I would not like to see would be if my language became minority in my country, increase in crime and more burden on the welfare system. I would even rather suffer some economic harm to avoid those things.
    I live in an European country where we have a large Vietnamese minority. On average their presence is beneficial and I would not hesitate to allow more of them in.

  42. 42 42 Super-Fly

    @Jonah

    You can’t be serious. Do you truly believe that immigrants don’t compete for professorships? Take a cursory glance at UR’s econ department and you will find that a good 40% of them were born outside the U.S.

    I’m a grad student in the natural sciences, and I have to compete with people from all over the world. *Most* of the people in my department are immigrants. If universities banned hiring immigrants, I would love the decreased competition in the work force but I would bemoan the drop in productive research.

  43. 43 43 Zazooba

    I got it! I got it! I worked it out!

    The more I think about it, the more I am convinced that the evolutionary perspective combined with a gains-to-trade from interactions between self-interested groups perspective explains pretty much everything here and removes the moral reprehensibleness of it all. (h/t nobody.really.)

    Humans band together into cooperative groups to aid their survival and the propagation of their bloodlines. These groups are most cohesive when they are among people with similar bloodlines, but, since larger groups are more effective (e.g., more powerful armies), the groups need not always be extremely closely related by blood. The US is one such cooperative entity that is not closely related by blood. Since the benefits of a large, cooperatifve population overcome to a large degree the diversity of bloodlines in the US, it has been successful while being less ethnically cohesive than other countries that have relied more heavily on ethnic cohesiveness such as Japan, Finland, France, etc.

    These cooperative entities interact and selfishly look after their own interests when they do. Here, the insights of free-market economics come in. By selfishly looking out for themselves in a relatively peaceful world where most interactions are by consent, most interactions must be beneficial to both parties, and so self-interested interactions are mutually beneficial to each side.

    Thereforem, it is not necessary for anyone to weigh the benefits of a transaction to another group. The self-interestedness of the other group takes care of safeguarding the other group’s interests.

    Moreover, such “moralistic” posturing would be weak and insincere because it would be against self-interest and so of little actual use.

    Further, such moralism would tend to be used as a smokescreen by one subgroup to advance their interests at the expense of other subgroups withing the cooperative entity. THIS IS EXACTLY WHAT OBAMA IS DOING – he is using moral granstanding to screw one part of the electorate he doesn’t like by importing voters who will vote for him and his buddies and increase his power. Therefore, the moralistic approach is commonly a subterfuge by EVIL PEOPLE who want to HURT you and yours.

    If the American approach to governance and production makes workers more productive than they are in their current situation, there are various ways this can be effected (to the benefit of all) without harming others in the group by indiscriminantly importing workers and parasites.

    Caveat: Opportunistic subgroups will constantly try to take advantage of the cooperativeness of others in the group by forming ethnically cohesive subgroups who put their own interests ahead of the group’s. This is a good reason not to allow immigration by ethnically cohesive groups who will not assimilat to the larger group. This is why it is important to limit the rate of immigration to a relatively low level to allow assimilation of such groups. Since assimilation is often by intermarriage, it can take a long time.

    This is why the moratorium on immigration from 1924 to 1965 allowed the US to develop such a cooperative society that it could afford to be generous to small cohesive subgroups — such generosity was not seen as threatening the dominant group. Too bad we are losing that cohesiveness and those benefit of restricted immigration and are now headed towards a future of squabbling subgroups all trying to advance their interests at the expense of other subgroups. Too mad evil people want to further undermine that cohesiveness for their own selfish reasons.

    Corrolary: Welfare works best if each subgroup feels it is getting its fair share of the welfare and not being shafted by other subgroups. Therefore, it is best not to import cohesive subgroups that will disproportionately draw welfare benefits at the expense of other subgroups.

  44. 44 44 vald

    @Zazooba

    What generosity towards subgroups are you talking about that occurred between 1924 and 1965?

  45. 45 45 Zazooza

    @vald

    Civil rights. Affirmative action. Welfare. Public housing. An overwhelming desire to believe the best about non Asian minorities.

  46. 46 46 JohnE

    @ Dmitry

    I don’t believe you answered either of my questions.

    To rephrase: from a moral (not legal) viewpoint, what makes immigration from Michigan to Texas different from immigration from Mexico to Texas?

  47. 47 47 Martin-2

    Andy – “Seems a bit unfair if all other nationalities can come freely to the US but Americans are not allowed to move elsewhere if they don’t like it.”

    If fairness calls for passing up economic gains to all parties involved then I don’t see the appeal. But I also don’t think treating people as though they are personally responsible for their country’s policies is fair (especially if they’re trying to leave that country).

  48. 48 48 Martin-2

    “In your Mexican immigrant example, why should the US take the welfare of the immigrant into account?”

    The US is not a single person. As a resident of Massachusetts I have relatively little at stake whichever way immigration policy goes (of course a self-interested analysis puts me in favor of immigration as I stand to gain cheap goods, better professors, etc).
    Steve has two main arguments:
    1. Immigration helps immigrants far more than it hurts the particular American workers who lose jobs.
    2. Immigration helps Americans more than it hurts particular American workers who lose jobs.
    So one doesn’t need to consider the gains to immigrants to be in support of more immigration. But I personally find the first point more compelling. I’m flattered that many of you consider me 5x more worthy and deserving of wealth than a similar bozo in Mexico or Cambodia, but I don’t see why you should.

  49. 49 49 Martin-2

    Could one argue that illegal immigrants are especially beneficial since they can accept below-minimum wage, allowing for the correction of a market distortion?

  50. 50 50 Zazooba

    @JohnE

    “To rephrase: from a moral (not legal) viewpoint, what makes immigration from Michigan to Texas different from immigration from Mexico to Texas?”

    People in Michigan and Texas have a mutual understanding that they will allow free movement between the states. Each state believes that such an agreement will be, on net, beneficial for it. They formalized this agreement when they formed the United States of America.

    Mexico has not reached such an agreement with Michigan and Texas.

  51. 51 51 Steve Landsburg

    Martin-2:

    Could one argue that illegal immigrants are especially beneficial since they can accept below-minimum wage, allowing for the correction of a market distortion?

    Yes.

  52. 52 52 Josh

    I wonder just how much richer the average person on this earth would be if we all lived in a “united states of the world” in which we could travel/move anywhere on earth as easily as an American can travel anywhere in the USA. And add in a global common language to boot thy everyone learned from birth. That would be the ideal world, but what I wonder is how much more rich it would make the average earthling.

  53. 53 53 Mike H

    @Steve : you forgot to count
    *) the increase in prices in America due to the Mexican’s consumption of American goods and services
    *) the drop in prices in America due to the 10^8 Americans’ decreased consumption of American goods and services
    *) the effect of the Mexican’s emigration on the wages and prices his countrymen back home enjoy.
    *) the effect his emigration has, purely as an example of what’s possible, on Mexican’s desire to pursue various courses of acion (education, emigration, entrepreneurship, etc)
    *) the effect this all has on exchange rates and the the consequent changes in the global competitiveness of American and Mexican industry
    *) the effect this, in turn, has on Australian, Chinese, Ecuadorean and Uzbek (etc) workers and consumers.

    Is there a simple way to account for all this in one fell swoop? Or must we add it all up carefully? And does the fell swoop give the same result as the careful addition?

  54. 54 54 Dmitry Kolyakov

    @ JohnE – well, I believe I did answer, maybe not in a way you expected.

    I addition to what Zazooba said – to your rephrased question: The Michigan “immigration” is different to the Mexican immigration because the Texans apparently (as per their legal decisions I mentioned) voluntarily accept the former (in part because they value an option to freely migrate to Michigan but not so to Mexico, in part because they expect less trouble with integration of Michigan newcomers) but not the latter.

    What is the moral difference between an attractive female stranger embracing you and a drunk guy with a knife (he may well turn to be a better person in the end) doing the same? I guess only your consent.

    That would be enough for my morals (as they are based on pure rationalism) – but I of course can not be sure about yours.

  55. 55 55 Dmitry Kolyakov

    Professor Landsburg wrote:
    “Martin-2:

    Could one argue that illegal immigrants are especially beneficial since they can accept below-minimum wage, allowing for the correction of a market distortion?

    Yes.”

    Many people oppose the market distortion of minimum wage. Prohibition of drugs, state monopoly on violence and the ban on prostitution are also essentially market distortions that many would like to see corrected.

    So why waste time trying to persuade fellow citizens and change laws democratically in the direction we desire, when we can just sit and applaud illegal migrants, drug dealers, terrorists and pimps for correcting their respective market distortions?

  56. 56 56 Dmitry Kolyakov

    @Martin-2
    ” As a resident of Massachusetts I have relatively little at stake whichever way immigration policy goes…”

    As an upper deck passenger on the Titanic I have relatively little at stake whichever way the situation in the hold develops…
    Do you really need to wait till it gets to your doorstep? Won’t it be a bit late to change anything then?

    In the past decades the enlightened northern Europeans also liked to lecture the southern Europeans (i.e. people who actually knew what they were talking about) on virtues of openness to migrants (including illegal). Now that many of those illegals and semi-legals have headed for richer northern pastures creating Arab, Albanian and African ghettos (which are definitely not as nice as the original Ghetto in Venice) across the whole Western and Northern Europe – from what I hear those righteous guys are no longer that sure.

    You also wrote:
    “Steve has two main arguments:
    1. Immigration helps immigrants far more than it hurts the particular American workers who lose jobs.
    2. Immigration helps Americans more than it hurts particular American workers who lose jobs.”

    The first bit, I think was not debated by most, what was debated however is its relevance for the policy discussion at hand. Many people just do not buy into all these God-like morals of caring for the whole humanity (as opposed to normal rational selfishness and prioritizing in favor of those closer to you). As I said before – dropping the bomb on some small US town instead of Hiroshima and Nagasaki would create a net benefit for the humanity as a whole, but are you fine with this outcome?
    If some people feel particularly selfless why wouldn’t they just make a personal donation to a charity of their choice and not force the costs of their generosity on their fellow citizens?

    On the second statement however – I think many (myself included) would object. And if that is what Professor Landsburg is saying – let him confirm it and we can then discuss without all the gratuitous references to universal good and highly subjective morals.

  57. 57 57 JohnE

    @ Dmitry and Zazooba

    Your statements are true, though not very helpful. Sure most Texans may think that they are better off having immigrants from Michigan but worse off for having immigrants from Mexico, but why do they think that? What is it about Mexican immigrants that make Texans worse off?

    To be clear, there are some answers to this question that I would accept, while there are others that I would find reprehensible. For example, if someone said they were against Mexican immigrants because it made them materially worse off, then I would accept that (even if I think the facts contradict it, per Steve’s citations). However if someone said they were against Mexican immigrants because they didn’t like Mexicans, then I would find that reprehensible.

    To borrow Dmitry’s example: If you told me that you prefer embraces from white people, but not from black people, I would find that morally reprehensible. But I don’t think society would be justified in forcing you to accept hugs from black people.

    However, if you told me that you prefer to sit next to white people on the bus but not black people, I would find that also to be morally reprehensible. In this case I think society would be justified in NOT forcing black people to sit at the back of the bus, even if the majority agreed with your preference.

    Another example: Many US cities used to have zoning laws that forced blacks to live in certain neighborhoods. Suppose we lived during that time and I ask you, “From a moral viewpoint, what is the difference between a white family moving into your neighborhood and a black family?” You reply, “The families in my neighborhood apparently (as per their legal decisions of voting for city councilors who make such laws) voluntarily accept white families moving in (in part because they expect less trouble with integration of white families) but not black families moving in.” My reply would then be, “What you say is true, but not very helpful. Why don’t you accept black families into your neighborhood?”

    Dmitry hints at some other reasons when he talks about expecting “less trouble” from Michigan immigrants versus Mexican immigrants. What do you mean by “less trouble”? If you are talking about potential crime perpetrated by immigrants, then my reply would be that surely there is a better way than nationality to determine the likelihood of an immigrant to commit a crime. And even if there wasn’t, there is a lot of data to suggest that it is the Mexican immigrant who is less likely to commit a crime. Here is some reading on that:

    http://marginalrevolution.com/?s=immigration+crime

    However if by “less trouble” you mean that they speak the same language or share a common cultural heritage or more likely to integrate into society, then I would say that is beginning to sound suspiciously like the reasons given for keeping black families out of white neighborhoods (“It will change the character of our neighborhood!”).

  58. 58 58 Harold

    Zazooba: I think you are onto something with the evolutionary explanation. I will add that these evolutionary explanations are entirely speculative. There was one proposal that women prefer pink because they needed to pick out berries from the forest. It turns out that until about 100 years ago pink was considered a very masculine color, and the evidence that women inherantly prefer pink is very weak. So a note of caution is required.

    When humans existed as small groups of up to 150, everyone pretty much knew everyone quite well. Co-operation was therefoe good, and the group could behave in a co-ordinated way. This is the size of group I think our biology evolved for. The individual succeeded if the group succeeded, so behaviour evolved to promote group success. Individuals shared may genes with group members, so genetic propogation was enhanced by group success. This involved competition with other groups of similar size, with whom you shared fewer genes. You would help members of your group, and compete with members of other groups.

    This size of group probaby persisted for tens of thousands of years -or longer. Long enough for the group binding behaviours and instincts to be part of our biology. It is only very recently that groups have grown from 150 to millions. Other mechanisms are then needed to maintain cohesiveness. Religion has been suggested as one of these mechanisms. Patriotism is a similar binding attitude.

    The problem with these mechanisms is that they grafted our evolved (biological) attitudes and instincts for small group living onto large groups. The ones that were succesful, such as religion and patriotism, persisted until today. They work by sort of tricking us into behaving as though we were in a small group, when actually we are not. Thus we apply our evolved feelings for kin with whom we share many genes, to distant strangers with which we share only a citizenship. Our biology has been hijacked to serve a different purpose. It persists only to the extent it is succesful.

    The existence of these attitudes says nothing about their morality – I suppose it is the classic is/ought question. Today we are faced with a very different world than the one these original feelings evolved in, and very different from the one where they became attached to gods and nations. The fact that most people share a feeling about something does not make it right, nor does it mean that we should not use our reason to question it.

  59. 59 59 Harold

    I will add that quite apart from morality, our shared feelings are not necessarily the ones that will lead to greatest success.

  60. 60 60 Scott F

    It seems that there are two somewhat conflicting points of view to take into account:
    The first, what is the correct policy when weighed by greatest potential social benefit? This viewpoint, even if Prof. Landsburg’s #s are off by a factor of 2 in both directions, unequivocally argues for increased immigration.

    The second, what is the correct policy when weighed by greatest benefit to Americans? This viewpoint is a bit more murky, because it is reasonable for anyone to care those immediately around themselves. Furthermore, even though we are talking about strangers with this policy we can imagine that the degrees of separation between ourselves and someone in AZ vs. ourselves and someone in Mexico might sway us towards policies that protect the Arizonians first. Of course, this ignores the other benefits in terms of prices of goods, decreased costs of labor to business owners, etc, which all benefit those same Americans.

    The question then becomes, is helping someone who knows someone who knows your cousin worth more then the benefits to all those people and the Mexican immigrant?

    This argument is more or less the ‘Jerk Factor’ argument that the professor uses. So the question is, how big of jerks are we willing to be?

  61. 61 61 Zazooba

    @JohnE

    “Sure most Texans may think that they are better off having immigrants from Michigan but worse off for having immigrants from Mexico, but why do they think that? What is it about Mexican immigrants that make Texans worse off?”

    “From a moral viewpoint, what is the difference between a white family moving into your neighborhood and a black family?”

    Mexican immigrants will probably make Texas more like Mexico. The people in Texas prefer to live in Texas, not Mexico. If they wanted to live in something like Mexico, they could live in Mexico, but they don’t want to. It’s pretty simple really. You seem to be upset that Texans like Texas and want to live in Texas. I’m much more open minded. I’m fine with Texans liking Texas and wanting to live in Texas the way it is. It’s their state not mine. Who am I to tell them how to live? Who are you to tell them how to live?

    If you want to live in a Mexican-American neighborhood, go right ahead. I’m open minded about that too. Curiously, people with your views rarely live in Mexian-American or black neighborhoods. If you genuinely believed what you are saying (that one should be indifferent between having black families in your neighborhood or on the bus next to you), then you would live in a predominantly black neighborhood, because houses are MUCH cheaper in such neighborhoods. I’m guessing you don’t live in such a neigborhood, though. Why not? (Honest answers only, please.) The average house price in Detroit is less than $30,000. Why don’t you live in Detroit?

    I don’t mean to be unkind. I really don’t. I understand your impulse to be fair and moral. It is admirable. I don’t think, however, you have really thought things through and given the people you criticise the benefit of the doubt. Once you come to accept the fact that blacks are much more violent per capita, all the things you find objectionable are pretty obviously rational behaviors.

    I wish blacks weren’t more violent and for decades I hoped that the new civil rights era would make black behavior indistinguishable from white behavior. For decades we tried to make that happen and spent a lot of money doing it. But, unfortunately, it didn’t happen. Most unfortunate is that well-behaved blacks suffer greatly from the presence of violent blacks because they are often hard to distinguish.

    Now, we have to accept the facts and act accordingly. Most of us don’t want to say this out loud and so most of don’t say it out loud. I’m pretty sure that you act AS IF you accept these facts, though. I’m pretty sure you don’t walk through a “bad”, i.e. black neigborhood after dark when you don’t have to, and I’m pretty sure you would not send your children to a school that is mostly black. (Even Barack and Michelle know not to do that.) You just don’t want to admit WHY you do what you do, at least not yet. Which I understand. These facts are a big disappointment to people of good will who wanted to help blacks. We are still very reluctant to acknowledge these facts. So most of us accept the facts but don’t talk about them much.

    But blaming others for acting according to the facts is dishonest, and as a person who obviously values decency, you shouldn’t be doing such things.

  62. 62 62 Zazooba

    @Harold

    I agree that evolutionary explanations are often highly speculative and often outlandish — “just so” stories. I have read some of the debate about group-level selection and do not pretend to be able to resolve the debate.

    My take on the evolutionary explanation for group cohesion is that it is incredibly helpful from an evolutionary perspective for a group to be cohesive, so if there is any way to actually achieve group cohesion, it would be strongly selected for. For instance a group with enough cohesion to build ships and sale them for extended periods would quickly settle distant lands and thrive while less-cohesive groups would not.

    Moreover, we actually see that humans have a strong tendency to form cohesive groups. What other explanation is there for the massive dominance of sports and how else to explain why millions of non-participants watch sports? Therefore, it appears that come mechanism has evolved to make humans form cohesive groups.

  63. 63 63 Dmitry Kolyakov

    @JohnE

    I guess we answered both your initial and your rephrased questions to the best of our knowledge – I am not entirely sure what you mean by a “helpful” answer.
    If you mean to ask why exactly the Texans think what they think and then why they think what leads them to think what they think, and so on – my answer is I do not know. As said – better ask the Texans.

    I do not think it is as you say “helpful” to second guess the people of Texas – if you want to understand their motives fully you probably should go and live there for some years – if your opinion does not change, you will then be able to persuade your neighbors from a position of knowledge and experience.

    Do you prefer strangers not to come to you home unless you invite them? Do you do this because you do not like their skin color or because of some other considerations? I do not know, and as long as you are acting within your rights why should I know?

    Does a certain professor I am repeatedly trying to engage for a meaningful discussion never answer to me because he dislikes people of my ethnic background, because my opinions are silly, or because he is just very busy? I can not know for sure, but as long as he is acting within his rights – I have no moral authority to demand his reasons – it’s just his right.

    I am not sure what makes you seek a racism explanation in everything people do or say to protect their citizen’s rights, their safety and their jobs. The problem here is illegal immigration and import of poverty. (unsatisfactory framework for legal immigration is also part of the problem). The only reason Hispanic immigrants are specifically discussed is that they happen to form a lion’s share of illegal immigration, from what I understand. I am pretty sure that if some area starts getting a disproportionate number of say, Uzbek illegal immigrants, you will soon hear some rumblings about the unpleasant Uzbeks among the locals. The reaction is likely to be more positive if all those Uzbeks come legally, are educated, skilled and of good character and thus contribute positively to the society both as good neighbors and taxpayers.
    I am quite sure that racism/nationalism is not the cause here, although, if people’s frustrations are not dealt with for a long time, it may become an unpleasant side effect.

    And at last:
    “In this case I think society would be justified in NOT forcing black people to sit at the back of the bus, _even if the majority agreed with your preference_.”
    If the majority agrees with my (imagined) preference, than who is the society you are talking about? The supreme court justices who always seem to know better than the people they are supposed to protect? Or do you suppose that some people’s moral principles should weigh more than other people’s?

    Now a real life case to test your approach: a couple of years ago an African American colleague told me that he lived in a condo just north of the central park in NY that would only admit African Americans of certain income level (although I am not sure anyone would tell you so on official record). A condo is not exactly like a neighborhood you were talking about, but it could’ve been instead a gated community which is quite close.
    So if I, and say my old Chinese friend like the property, should we try to sue them to death until they admit us? Should we label them racist? (I can assure you my colleague who lived there clearly wasn’t, a very nice guy actually). Or should we accept their preference and go someplace where people would actually want to see us as neighbors? What would you do?

  64. 64 64 Martin-2

    Zazooba: I’m skeptical of your progression from “you would rather walk through a typical white neighborhood at night than a typical black neighborhood” (true) to “you may not want black/Mexican families moving to your neighborhood”. When a family moves to my town I know at first glance
    a)their ethnicity
    b)their income level
    c)the value they place on education.

    So I’m guessing choice of living condition is a stronger signal of someone’s character than their ethnicity.

  65. 65 65 Seth

    However if someone said they were against Mexican immigrants because they didn’t like Mexicans, then I would find that reprehensible.

    And how many Mexican immigrants do you live next to?

  66. 66 66 Dmitry Kolyakov

    “So I’m guessing choice of living condition is a stronger signal of someone’s character than their ethnicity.”

    Than ethnicity – yes, than their whole prior life and prevalent behavioral patterns of their social group – hardly, unless they prove otherwise.

    Or do you think that a drug dealer moving closer to a university is most likely to be driven by a “value he places on education”?

  67. 67 67 JohnE

    @ Zazooba and Dmitry

    So to be clear, if your city passed a referendum (according to the city’s laws) which prevented any black families from moving into the city, you would be okay with that?

  68. 68 68 JohnE

    @ Dmitry

    “do you suppose that some people’s moral principles should weigh more than other people’s?”

    Some moral principles should weigh more than others. It does not matter who holds them. For me, majority does not equal morality.

    “should we try to sue them to death until they admit us? Or should we accept their preference and go someplace where people would actually want to see us as neighbors?”

    You should be able to live there if you want to. You should not expect to change others’ preferences.

    “Should we label them racist? (I can assure you my colleague who lived there clearly wasn’t, a very nice guy actually).”

    Anyone who supports the policy of excluding you from the condo solely for your race is racist. If your friend does not support that policy, then he is not.

  69. 69 69 Harold

    Much of our morality is based on justification of gut feelings. I propose that gut feelings have developed in part to promote group cohesion at the expense of suspicion of strangers. Our innate confirmation bias results in our noticing examples where foreigners (out-group) behave badly, and therefore reinforce our gut feeling. This allows us to persecute with a clear conscience. I think examples of this can be seen in some of the above posts.

    We also have developed reason to deal with changing circumstances. It is difficult for us to use that reason without it being overwhelmed by our biases, but we should make the effort.

    There was some discussion about Texans. In the USA, I think it generally agreed that they do not have the right to prevent black people moving into their area, even if they would prefer it to remain all white. If there were a lot of immigrants from Brooklyn, they would make Texas more like Brooklyn. The Texan prefers to live in Texas than Brooklyn. However, he does not have the right to prevent the immigration if it is within the USA. So there must be another factor if he is allowed to prevent the immigration from Mexico.

  70. 70 70 Dmitry Kolyakov

    @ JohnE

    “So to be clear, if your city passed a referendum (according to the city’s laws) which prevented any black families from moving into the city, you would be okay with that?”

    I am not sure if I would like to stay in that city, but I would not start a riot because of that, if that is what you are asking. (I might vote against it, if I think it is a bad idea, but if the majority wants it, I would respect their decision.) If I am not ok with the opinion of the majority, I will just move away.

    What I certainly would not do is preach to them arrogantly what to do with their lives and their city just because I think my moral values matter more than those of the whole city.

    “Some moral principles should weigh more than others” – and who decides? You you would prefer to do it yourself, right?

    “For me, majority does not equal morality.” – it does not need to.

    Your moral is your deeply personal affair which should guide your actions and no-one else’s. Majority is how people in most democratic countries have voluntarily agreed to settle things (this principle may be imperfect but this is the current compromise and is better than most known alternatives).

    Trying to impose your morals on unwilling people (rather than persuading them if you can) – well, I guess this will not be moral by most people’s standards.

    ““should we try to sue them to death until they admit us? Or should we accept their preference and go someplace where people would actually want to see us as neighbors?”

    You should be able to live there if you want to. You should not expect to change others’ preferences.”

    Should it be OK to avoid answering the actual question?
    Please answer – would you sue them, or would you look for another condo – those are the 2 only real-life alternatives?

    “Anyone who supports the policy of excluding you from the condo solely for your race is racist. If your friend does not support that policy, then he is not.” Everyone living there knows about the policy and has paid to be there and no-one of them protested against the policy and left. An equivalent in your example would be positive voting at a referendum. So they all supported the policy, even if only with money. Including my colleague.
    Again – are they racist?

    Some hostels and university campuses will not allow women co-eds to live in male-only dorms. Are they sexist?
    Years ago I visited my late grandfather’s former neighbor who then lived in a elderly home in Chicago – they would always strictly assign certain age groups to certain buildings. Are they ageist?

    Can’t we just leave the people alone unless they are crossing the border to the neighbor to do him harm? If all they are doing is just mending their fence to protect their right to live their life?

    Have a very good weekend. Hope you will not meet too many of the people you so like to defend in some dark alley.

  71. 71 71 Dmitry Kolyakov

    @ Harold

    ” In the USA, I think it generally agreed that they do not have the right to prevent black people moving into their area, even if they would prefer it to remain all white. If there were a lot of immigrants from Brooklyn, they would make Texas more like Brooklyn.”

    Sorry for a brief reply: It is indeed generally agreed (by the majority, including majority of Texans who first joined and than never left the United States as a state) that all US citizens (be they black or from Brooklyn) have a freedom of movement in all states of the union. Some individuals may be not happy with this, but the majority clearly supports this deal. This freedom of movement is very much part of Texas now which Texans apparently like and want to live in. Allowing non-Americans freely settle in Texas will however materially change the place and the majority simply does not support this change.

    I guess this is the main difference and there is no need to look for some other factor.

  72. 72 72 Zazooba

    @JohnE

    “So to be clear, if your city passed a referendum (according to the city’s laws) which prevented any black families from moving into the city, you would be okay with that?”

    You have touched on the most difficult question here, and to be honest I am torn and not sure how to resolve the question.

    My imperfect and incomplete reasoning on the subject is:

    Way back when, freedome of association was assumed, and people could associate with whom they wished and exclude whom they wished. Hence, many communities had covenants on such things.

    Then, after the 1960s civil rights changes, the assumption was that we should all be treated equally and anyone could live wherever they wanted. This was supported by the assumption that the civil rights revolution would make everyone the same, and so there would be no need to exclude anyone. Alaas, that wasn’t true.

    In my mind, this comes down to people’s fealty to their ethnic subgroup and their fealty to the US. I have explained why fealty to the US is very important and social cohesion is very important. Therefore, I lean strongly towards the government not being able to take sides among subgroups. This suggests government entities should not be able to do what you suggest. It also suggests affirmative and other minority priviledges should not be allowed. For national cohesion, it is very important that all subgroups feel they are being treated fairly. So all this suggests a municipalty should not be able to legislate and anti-black residency law.

    On the other hand, ethnic subgroup cohesion seems to be stubbornly ineradicable. Many ethnic groups are proud of their enthnicity and public opinion supports this. (Irish pride, Jewish pride, etc.)

    Further, since it is rational to avoid concentrations of blacks it is nigh impossible to force people not to do so. (Even blacks avoid concentrations of blacks.) Society has evolved a number of ways for people with the means to do so to avoid blacks. (You might ask yourself how you have done so, and how you would feel if you were forced to live in Detroit.) Since formal governmental prohibitions on blacks are no longer legally possible, people use other means to achieve their desires, most prominently, real estate prices. The Obamas used that method to avoid concentrations of blacks for themselces and their children. Among blacks, higher-class blacks have evolved mechanisms to avoid lower-class blacks, most prminently via real estate.

    I honestly don’t know what the solution is. It seems to come down to a fundamental tension between ethnic cohesion and national cohesion. I tend to think I would be ok with one approach or the other, but would be against a blend of the two where some groups get to take advantage of ethnic cohesion while others are forbidden to. National cohesion is probably most important, so mandating that the government be color-blind is probably the best. I would probably be ok with this if it were universally applied so that affirmative action was banned and the ghastly race hucksters were driven out of business (and George Zimmerman set free and profusely apologized to). In the end, I think it critical that we all trust that one ethnic group will not be allowed to take advantage of another.

  73. 73 73 Dmitry Kolyakov

    “Since formal governmental prohibitions on blacks are no longer legally possible, people use other means to achieve their desires, most prominently, real estate prices.”

    Very true. And this is clearly not only about blacks, it is true for every group other groups sometimes prefer to avoid. I am not sure why some keep steering the discussion to African Americans – the discussion is (at least was) about illegal immigration, where Africans, as I understand are clearly not the worst offenders. Is it perhaps because the past history of slavery and discrimination against blacks makes some people willing to play on other people’s sense of guilt to avoid an honest discussion of the substance?

    As a matter of fact in some European countries some black neighborhoods may even feel safer than certain other ethnic neighborhoods. Again – racism is not the cause here, but an unfortunate side effect.

    The fact that the legislation forces the people to pursue less efficient ways to satisfy their needs (such as creating local real estate bubbles to price out undesirable potential neighbors) should not make anyone with an interest in economics particularly happy.

  74. 74 74 Hamish Atkinson

    I’d like to get back to the economics of immigration. As I see it, each immigrant causes a complex chain of effects. A rational citizen of a country looks at the effects of immigration and forms his attitude to immigration based on the effects he is aware of and able to understand.

    The trouble is, the most obvious and immediate effects of immigration on the incumbent population are generally negative:

    1. When there is less than full employment, the immigrant will likely displace a person from a job. Cost to incumbent: -$7/hour (government may pay that person welfare, but that is simply a transfer from other taxpayers).

    2. The immigrant often doesn’t speak English well. This makes communicating difficult. Their children might not have English as their native language, which causes communication difficulties in the local school. Cost: difficult to calculate, but there’s definitely an economic cost.

    3. The immigrant bids wages down amongst people with similar skills: Aggregated cost across all the unskilled workers in the country: -$3/hour

    Total cost so far: $10/hour. Unfortunately, that is as far as most poor Conservatives/Republicans get in the calculation – to them immigration is obviously bad. End of.

    But more intelligent rational citizens can see beyond that:
    4. The bidding down of wages reduces the cost of services. Since the UK allowed immigration from Poland, I can get my car washed and valeted much cheaper. The Mexican or Filipino maids and gardeners are renowned for bring cheap home help to the US. Hotel rooms and restaurant meals across the rich world are cheaper (and often tastier) because of immigrants working in the hospitality industry. My train fares are cheaper because of the immigrants cleaning the station.

    5. The bidding down of wages reduces the cost of goods. Fruit and veg in the US would be much more expensive if it wasn’t picked by immigrants. You can buy a car cheaper because of immigrants working in the factory and its suppliers. Almost all manufacturing uses a large amount of cheap immigrant labour.

    6. The bidding down of wages in the public sector reduces taxes. Just as the cheap cleaner in the train station reduces the cost of my ticket, the same effect applies to unskilled jobs done in the public sectore (road sweeping, maintainence of parks, building/repairing our roads, etc)

    7. Immigrants often work harder than incumbents. I know employers in UK that swear by employing Poles and Nepalese workers because they have a strong work ethic. This work ethic is only partly a cultural thing – the process of leaving your roots and travelling to another part of the world takes a certain sort of person, that is likely to work harder. This is of course looked upon differently by different people. union members trying to get away with doing the minimum amount of work see this as bad, because it makes them look bad and forces them to work harder. But employers love it, because it increases the productivity not just of the immigrant, but of the rest of their employees as well. The net effect isn’t measurable in hourly wages, but rather in the increased $ value of what that worker produces in an hour.

    7. Competition from unskilled immigrants encourages unskilled incumbents to gain skills, so they can earn more than minimum wage. For example, young black women are more likely to go to college because of new immigrants. Thus, the average productivity of incumbent workers is increased by a knock-on effect on increased education.

    8. All of the cost reductions in 4-6 create new opportunities. Immigration means that there are now new businesses that can now be profitable that wouldn’t be without immigration. Existing business that can sell more product at a lower price point may need to hire more workers to produce those products. This creates jobs, that probably more than offset the obvious job loss in point 1. But this effect is so far down the chain of consequences that opponents of immigration never comprehend it.

    9. The extra jobs created then cause more money to flow around the economy, creating new opporuntities. They also reduce the cost of welfare schemes, thus reducing taxes.

    Employers can see it clearly. People with large capital investments know their capital will work harder with cheaper labour. But poor people don’t see it. It doesn’t help that the gains of 4-7 are enjoyed more by affluent people than by poor people. Whilst a shop assistant or production line worker will enjoy a cheaper orange picked by immigrants, or a cheaper McDonalds, they are unlikely to hire a maid, gardener, or buy a new car. They certainly pay less (cheaper) taxes.

    So, even leaving aside the altruistic motive of increasing the Mexican’s wage from $2 to $7, there is probably a net economic benefit to immigration. However these gains are not equally shared across the whole population. Workers on low wages can still just about rationally oppose immigration in their own self-interest, but the rest of us should be in favour, even just in our own self-interest. If we were rational.

  75. 75 75 Dmitry Kolyakov

    @Hamish Atkinson

    Thanks for coming back to economics!

    A note, however: do you really expect to have a civilized constructive discussion if you start by contrasting “poor Conservatives/Republicans” and “more intelligent rational citizens”? I guess many people even fully agreeing with the rest of what you are saying can be slightly upset by such a classification…

    Nonetheless, I am not one of those people, so let me continue.

    You wrote: “So, even leaving aside the altruistic motive of increasing the Mexican’s wage from $2 to $7, there is probably a net economic benefit to immigration.” Thank you for this. This is exactly the discussion I was hoping to have by opposing various rather unconventional altruistic/moral/ethical theories here that are not even fully supported by most commenters here, let alone by the broader society. Altruistic motives (unless they are shared by most of those potentially bearing the costs) are best satisfied by a private charitable donation or volunteering, I believe.

    A special point on your point 5 (prices of goods) – I frankly think this is an even weaker point than prices of services. Why not simply import those goods? Is it really a good idea for a developed country in our post-industrial age to import low value-added industries dependent on unskilled labor, rather than import the products of the same industries? Letting those industries develop in poorer countries will additionally give those countries chance to develop (for you, altruists). If business is done by developed world standards – with all workers legal (not the case for California oranges), all taxes paid and all health and safety requirements fulfilled, there is little chance for commodity stuff produced in rich countries to be cheaper than imports from the poorer countries. So you’ll end up with your competitive industries subsidizing low-value added industries (and losing in competitiveness) and getting a lot of new social problems in return.

    Pardon me by not analyzing each and every of your points – but would it be fair to generalize that you would prefer to live in a society where most other people’s incomes would be driven closer to a third world level by cut-throat competition, but not yours, and you and possibly your peer group will become relatively much richer? Maybe you are relying on some indirect barriers to competition in your profession (industry associations, unions, certification, personal connections, native English, etc.) or you are seriously underestimating the number of people in the world willing to do your job for much less pay and with much less sleep?

    Because if you actually wanted to expose _everyone_ including yourself to the same level of competition and therefore, drop in wages – you would not need to change anything in the UK/US immigration policy – you would be immensely better off just relocating to one of many developing countries of the world. As an expat from an English-speaking country you are almost certain to fare much better then locals of comparable skill (not the least because of the scarcity value).

    In reality, however, such relocations to developing countries (apart from personal reasons) are nearly always happening either with a substantial (sometimes huge) premium to what the relocating professional could expect at home, or when this person is not good enough to get/keep a similar position at home. (there are, of course, exceptions, but that is what they are, exceptions). This tells something about the real preferences of people when living among poor and often desperate people with a huge income disparity and little middle class to speak of is concerned. Opening borders to migrants in a complete and fair manner (and not, as some probably hope, letting others compete, while protecting themselves) would very soon make richer countries very similar to those developing ones just as a matter of market equilibrium.
    Overcrowding, poverty, overloaded infrastructure and of course, very soon a majority of voters easily led by most obvious populism.
    But sorry, no lucrative expat packages and no UK/US passports to quickly get back to a proper comfortable country if there is some trouble.

    Just to be precise – I see many positive points in controlled migration of the people most likely to improve human potential of the host country. Easily admitting scientists, qualified professionals and successful entrepreneurs is importing quality, letting in hordes of uneducated unskilled people is importing poverty.

  76. 76 76 Hamish Atkinson

    @Dmitry Kolyakov
    You said “if you actually wanted to expose _everyone_ including yourself to the same level of competition and therefore, drop in wages … you would be immensely better off just relocating to one of many developing countries of the world”

    Strange you should say that, I am actually working in India at the moment. And yes, the package is good because of supply and demand – not many people with my skills are willing to do it, and barriers to immigration prevent the people I’m working with moving the other way (plus they might not want to – their standard of living is pretty good by Indian standards and not far off what it would be in the UK). The fact is that the movement of workers to where their skills are required generates value. Barriers to immigration prevent that improvement to the economy of the destination country. The biggest financial advantage goes to the person willing and able to move. But there are plenty of advantages to the recipient economy and incumbent workers. I have to live in the destination country and spend my money here. The company I am working at benefit from the increased productivity of my team. The team members benefit from their increased productivity with higher wages. The government benefits from taxes on my wages, the team’s higher wages and the increased profits of the company here.

    Whilst, as a rational, self interested person I should be against barriers being lifted to immigration of people with my skills, in actual fact I am not. I think that I would rather do the job I am doing at home in the UK with a lower salary.

    Unfortunately it is not as simple as that. If my team moved to UK, they would have to be paid UK minimum wage (or more if want them to not quit and move to another company). The projects they work on might not be profitable (even with my lower salary), and their standard of living would be probably be worse on minimum wage in the UK than it is now in India.

    So, I think on balance we have probably achieved the most efficient improvement by my working in India. This is true in my industry (IT) because the internet makes it possible for workers in India to be almost as efficient as similarly skilled workers located in the West (and much cheaper because of the lower cost of living and high supply of skilled labour in India). It might not be true in other industries. (Most unskilled labour in the service industries can only be done in the country where the service is rendered).

    Which brings us neatly to your objection to immigration helping US or UK manufacturing being efficient. This isn’t as clear cut a case as Mexican gardeners or Indian IT developers, it falls somewhere in between. The main variable is actually trade barriers. Although free trade is widely accepted to be a good thing, there are still plenty of trade barriers and subsidies of inefficient industries in the world. In many cases, abolishing trade barriers would be a more efficient way to reduce the cost of manufactured goods than allowing sufficient immigration to keep all manufacturing workers at the minimum wage. But delving into the details of this is beyond the scope of this discussion of immigration. If you’re interested in trade barriers, I recommend “Making Globalization Work”, by Stieglitz. I haven’t read The Armchair Economist, but I might after reading this blog.

    Just to be clear, the reason I’ve talked about the economics of migration of unskilled workers is because those were the figures Steven chose to examine in the original post. I’m not against the migration of skilled workers (I myself am one, if only temporary), even in my industry and of workers with my skills.

    Finally, with regards to my use of “poor Conservatives/Republicans”, I should perhaps say “people opposed to immigration of unskilled labour”. I accept that there are plenty of left-wingers who oppose immigration and free trade also.

    I do hold, however, that the negatives of immigration are easily grasped by everyone, whereas the benefits are less tangible, but significant enough that most people, if thinking rationally and fully cognizant of the big picture would be in favour of immigration.

  77. 77 77 Dmitry Kolyakov

    @Hamish Atkinson

    “Strange you should say that, I am actually working in India at the moment.” – Why would it be strange? Your decision shows that you are a rational person. You (and you acknowledge that you are in a minority in this respect) have followed your personal preference. The majority of British citizens have followed their preference (which is apparently not only to stay, but also to support significant tightening of immigration in recent years (even too significant, in my opinion)).

    I do not want to be impolite and match every of your positive points for migration with mirror-like negative ones, but I just want to note again that a mere laundry list of the positives (some of which are not so straight forward) is not likely to be a balanced analysis.

    Can’t help however noting something that you mentioned yourself – ” I think that I would rather do the job I am doing at home in the UK with a lower salary.” Isn’t the fact that you need a much higher compensation without any increase in job or life satisfaction indicate a net loss (even if it is covered by someone else)?

    From what you are saying further I understand the following (please correct me if I am wrong):

    You are a person of rare or unique skills which even the large and powerful Indian IT industry can not easily find in its own country (without paying a huge premium anyway).

    If so – very few people (not me certainly, as I noted before) would object to freedom of movement for people like you anyway. You are helping improve the human capital of your host country and not vice versa.
    If you are such a person have you ever thought that your view of the world (in respect of work migration) could be less relevant to more regular people of whom there is a clear majority in pretty much every country?
    Is it correct that you are only able to receive your above UK compensation, because so many local people around you have to receive below UK compensation? If so, how sustainable you think is this situation?
    I have seen quite a number of different companies in different industries that started (years ago) with almost exclusively expatriate (and well paid) stuff and within years progressed to having only the very senior managers as expats in order to ensure better control from the international headquarters if it’s a foreign company and some finance/investor relations people if it’s a local one. As soon as cheaper local people (quickly) learn the skills most lucrative expat positions at specialist and middle management levels disappear. “Employers can see it clearly” as you say.

    Please do not get me wrong – I am happy for you to have acted according to your preference – I am just saying that this particular experience is not likely to to be very relevant if say the UK opens its borders, certainly not if we are talking about longer term. I am also happy for the majority of Brits to have acted according to their preferences.

    ” In many cases, abolishing trade barriers would be a more efficient way to reduce the cost of manufactured goods than allowing sufficient immigration to keep all manufacturing workers at the minimum wage. But delving into the details of this is beyond the scope of this discussion of immigration.”

    I am not sure I understand. So you acknowledge removing trade barriers is more efficient than immigration, but still prefer the latter to the former despite all the social costs? I do not think that any amount of Stieglitz (whom I can not call myself a big fan of anyway) will help me understand that logic.

    When reading The Armchair economist, by the way, be sure not to miss a tale of two cities, Grimyville and Cleanstown.

    “(Most unskilled labour in the service industries can only be done in the country where the service is rendered).” – very true, never objected by me and still does not address my objection really.

    My main objection is, just to repeat for clarity, is that a complete opening of borders and labor markets for all migrants will eventually make the UK very much like a third world country simply as a matter of equilibrium. Actually, probably worse, because of the relocation premium the migrants will likely expect, the integration costs and unrest because of large chunks of the society falling into poverty (which is not the same as being born into it). There are clearly many advantages of living in a developing country (many things are cheaper) and you rightly list most of them. There are also numerous advantages of living in a developed country. The very balance of people willing to move from the first world to the third and in the opposite direction (and the premiums they are demanding) should be quite telling of what lifestyle is more popular. Why would you want to make the UK just another India (only worse) when you can happily stay in real India and let those who prefer the UK as it is be there?

    Peculiarly enough, many British expats I’ve spoken to quoted “too many migrants” as one of the chief reasons for leaving the UK…

  78. 78 78 Hamish Atkinson

    @Dmitry
    I have some sympathy for your statement “letting in hordes of uneducated unskilled people is importing poverty”. The key words here are “poverty” and “hordes”. If you define the poverty line as being “half of the mean real income of the population”, then yes, unskilled immigration increases “poverty” because it increases the mean income, whilst raising the number of people earning less than half the mean income. However, because of lower prices, a lowering of nominal income of unskilled workers may not mean a lowering of real income, at least for low levels of immigration. Thus “poverty” can increase, without anyone getting poorer.

    However, if you let in “hordes” (let’s use the less emotive “lots” from now on) of unskilled immigrants, then not only will “poverty” increase, but mean real income of the poorest 25% will fall. As earlier comments have alluded, the figures quoted by Steven represent the marginal cost/benefit analysis of letting one extra unskilled migrant into the country legally. If you were to relax all controls on immigration of unskilled labour that would change significantly. The US Federal minimum wage of $7.25/hour is greater than $2/hour expected wage in Mexico, so immigrants would flood in, regardless of the net benefit to the incumbents. In fact, even if not all of the immigrants could find work (let’s say 95%), an expectation of $6.89/hour would still draw. Unless you provide adequate welfare (a political impossibility because of populist objections of tax payers supporting immigrants), the other 5% might turn to crime to make ends meet. More incumbent workers would be displaced from their jobs than jobs are created, leading to increased crime and requirement for welfare.

    The presence of 11.5 millions illegal immigrants in the US shows that they are certainly willing to migrate for less than the minimum wage.

    Unfortunately, once you get here, the number of extra jobs created by the extra immigrant getting a job is likely to be less than one, which means that someone in the US may be displaced from a job, with no replacement job generated. The number of people unemployed (and possibly turning to crime) will increase, especially if minimum wage laws prevent people getting a job.

    But is the cause of this immigration? Or the minimum wage? The minimum wage constraint skews the benefits towards the migrant (and incumbents with a minimum wage job), at the expense of 1) unemployed people that would have a job if it would be profitable to employ them at less than the minimum wage, 2) unskilled workers that are unwilling to move to where the labour is required, or work hard enough to be selected for a job over a hard-working immigrant and 3) shareholders of companies with US/UK operations that would be able to compete globally with cheaper labour.

    As mentioned before, illegal immigration sidesteps the inefficiencies caused by minimum wage laws, but does so at the cost unfairly penalizing law-abiding employers, risking exploitation of workers without access to lawful recourse, and feeding money to criminal people-traffickers. It also removes jobs from the unemployed in the US, who might be willing to migrate to another state to work legally for $7.25/hour, but not for $6/hour.

    There are strong arguments that removing minimum wage laws, but enabling stronger unions would be more efficient, as unions would be free to accept wage packages less than the current minimum wage, but still in their members’ interests, whilst still keeping wages at suitable levels in those industries that can afford it.

    Even without minimum wage law constraints, though, there is a level of unskilled immigration at which the net benefit of immigration to the incumbents turns negative (total of net job losses, cost of welfare, increased crime, reduced wages, less the savings of lower cost of living across the whole population and increased income for shareholders and pension funds). Allowing immigration beyond this point can only be justified by altruism.

    Before you reach this point, though, the poorest portion of the population would start to get poorer. My answer to this would not, however, be to restrict immigration. Rather, I would suggest a more progressive taxation and welfare scheme. This would redress the fact that the better off benefit more from the reduced costs. Better welfare and retraining would be necessary for those incumbents displace from jobs by immigrants. The rest of the extra taxes from the better off raised should be spent on education, to give more people skills that raise their productivity and allow them to avoid having to compete with the newly arrived unskilled.

    Finally, while there are 8.2% of the incumbent population unemployed, but labour shortages in some areas, some state assistance in relocation costs might be useful. One of the reasons immigrants get jobs is not because they are better skilled, or harder working, but simply because they are willing to move where the work is. For those citizens willing to move, we ought to help them by offering to spend the money we would have spent on their unemployment benefit/welfare on helping them get a job.

  79. 79 79 Dmitry Kolyakov

    “I do hold, however, that the negatives of immigration are easily grasped by everyone, whereas the benefits are less tangible, but significant enough that most people, if thinking rationally and fully cognizant of the big picture would be in favour of immigration.”

    I am pretty sure that things are more balanced. Some people underestimate the positives, some people the negatives. Decades ago, for example, when immigrants from former colonies started arriving in the UK there apparently were many people noticing “cheaper car washes and valet parking” but hardly very many were foreseeing things like future Brixton riots, emergence of whole London neighborhoods where it is not a good idea to be both white and unarmed after dark, and so on…

  80. 80 80 Hamish Atkinson

    Yeah, and the benefits and costs of immigration are not spread evenly. But that could be fixed by more progressive taxation, welfare and education.

  81. 81 81 Dmitry Kolyakov

    @Hamish

    ” unskilled immigration increases “poverty” because it increases the mean income” – How does bidding down wages increase the mean income? Please explain what you mean here. I simply meant absolute poverty – people just will keep arriving until stopped or until their lives will become just as poor as at home plus some modest premium for having to move.

    “However, because of lower prices, a lowering of nominal income of unskilled workers may not mean a lowering of real income, at least for low levels of immigration” – Let us be clear as to what we are discussing here. I thought you were advocating opening borders for immigration. If what you are suggesting is something else please say what exactly. Because “low levels of immigration” you’ve mentioned sound OK to me as well.
    On the subject of your thought – well, it is theoretically possible (i.e. “may” as you say) but highly improbable, so unless you have some statistics or solid calculations to prove it, please forgive me for not accepting this assumption.
    Here is why it feels so counter-intuitive. Unskilled workers tend to spend most of their income on food and shelter, than maybe on some capital goods, on financial services if they are indebted and only a tiny fraction on direct unskilled labor. They do not employ gardeners and pay few taxes. So all in all 10% would be a rather generous share of unskilled local (most foodstuffs and goods are imported anyway) labor in the cost base of their consumption. Let’s even make it 20% to be extreme. So if his income falls 20% (which is quite feasible even at relatively low level of immigration you were talking about) the only way for him not to lose (let alone improve) his real income would be to have every other unskilled worker to work for free. How feasible is that?

    “As earlier comments have alluded, the figures quoted by Steven represent the marginal cost/benefit analysis of letting one extra unskilled migrant into the country legally.” – I do not remember anything specifically said about “legally” but that does not even matter because if the analysis is exactly just that – than to me it is a thoroughly unpractical discussion of no particular consequence.
    It is a bit like trying to kill a mosquito on the moon – your data for aiming your cannon even if gathered in good faith is inevitably too rough (for the granularity of one mosquito/one person), your chances of aiming with such precision are close to nill, you do not even try to account for most important factors like the wind (social costs) and if you (super-unlikely) succeed, it will be almost impossible for you to even know if you got it right and you will wonder if the trouble was worth it.
    A more practical discussion like “we suggest we should allow additional, say, 5 million unskilled immigrants, let us calculate costs and benefits” would be way more relevant. But I never heard anything more concrete than free immigration (because “freer” is not concrete at all). Before you no one even wanted to defend the assumption that such migration will cause a net benefit to the citizens of the host country as opposed to the whole humanity as Prof. Landsburg initially suggested.

    “But is the cause of this immigration? Or the minimum wage?” – Just same as for tariffs. You think the minimum wage is bad (i do, too) but instead of sorting things out in your own house first you would like to rely on illegal migrants (as legals would also be subject to minimum wage requirements) to overpower the democratic decision of the majority? Is the illness worth the cure?

    “…but enabling stronger unions would be more efficient” – I am lost. Honestly. How do you combine stronger unions with looser worker migration that is supposed to weaken current workers’ bargaining position?

    “Allowing immigration beyond this point can only be justified by altruism.” Ah, so you presume some such point? Than the difference in our opinions may be not that big. So, “what is your number?” (copyright by Zazooba).

    And finally:

    “Yeah, and the benefits and costs of immigration are not spread evenly. But that could be fixed by more progressive taxation, welfare and education.”

    So your suggestion is to let in unskilled migrants which will benefit the richer at the expense of the poorer (I do not mind, but I expect a total loss to citizens and that bothers me) and than try to reverse the effects by means of progressive taxation and welfare (with all the inefficiencies, bureaucracy and losses of them both)?

    Was not that exactly what the UK government was trying to do until they finally realized it is a road to nowhere and started reversing it?

  82. 82 82 Hamish Atkinson

    Great discussion Dmitry. Yes, I think our positions might not be so far apart. So, here’s what I propose:

    The amount of immigration should be set to somewhere at or between the amount of immigration that maximizes the mean benefit to citizens of the destination country and the level that maximizes global utility to all citizens of the world. Where that policy disadvantages the poorest citizens the gains should be redistributed by progressive taxation and benefits, especially better education for the children of the poorest citizens, and training/relocation for the unemployed. I make no distinction between unskilled and skilled immigration, other than that the utility of each immigrant is evaluated with regard to their skills.

    A true altruistic liberal with no xenophobic selfishness would advocate free immigration. But those are few and far between, most people naturally prioritize their own self interest, their families, their peers, their fellow citizens and last citizens of other countries (with some favoritism towards countries with similar language and culture). I don’t have enough faith in human nature to believe that I can persuade citizens to maximize global utility at their own expense, so I aim to try to educate some people that currently oppose all or most immigration that actually, some immigration will benefit them, or at least their country (which could then recompense the losers by taxing those that gain).

    I’m not advocating illegal immigration, I’m advocating not placing arbitrary, populist-inspired restrictions on the number of immigrants (like the UK coalition government is doing), rather I’m advocating we choose the number rationally so as to maximize utility.

    Let’s clarify a few points:
    “How does bidding down wages increase the mean income?”.
    I don’t argue this, I argue that some immigration increases mean _real_ income. This stems mainly from:
    1) Immigrants willingness to move to where there is work. Take the UK as an example. Huge numbers of immigrants work in London, where there is demand for unskilled labour (see map http://news.bbc.co.uk/2/shared/spl/hi/uk/05/born_abroad/html/overview.stm), while large numbers of people born in Britain stay jobless in Northern Britain, Clyde, South Wales and Northern Ireland. (see map: http://www.bbc.co.uk/news/10604117) This fills jobs that otherwise would probably go unfilled. (I assume that those jobs wouldn’t be viable at a rate of pay sufficient to make people move from Northern Ireland). Note that rates of house ownership is negatively correlated with economic performance in a downturn – this is because renters (like immigrants) are more likely to move where there is work than owner-occupiers. This is why the public perception of immigrants taking the job of a citizen is often wrong.
    2) Immigrants often work harder, driving up productivity of all workers (well, not all, but certainly those that are slackers). Skilled immigrants even more so. See http://www.frbsf.org/publications/economics/letter/2010/el2010-26.html
    3) Any net reduction in the real income of the workers competing with the immigrants is offset by the reduction in cost of living and doing business for everyone else. If the effect of 1) and 2) is high enough, this works out as a net benefit (mean, across all citizens, not necessarily for the workers competing with or displaced by the immigrants, without progressive rectification). This article has a good analysis: http://www.theatlantic.com/past/docs/issues/96nov/immigrat/borjas.htm It’s summary “Rich Americans gain, poor Americans lose” is spot on, which is why I advocate progressive taxes and benefits.

    Note that benefits 1) and 2) work even within the constraints of legal unskilled immigration and a minimum wage law. For legal unskilled immigration, benefit 3) is severely constrained by the minimum wage.

    Benefit 1) is especially important. Into today’s dynamic global market, jobs are created and destroyed at a phenomenal rate. For economies to succeed, they need flexible labour markets. Immigrants are nothing, if not flexible. (Note that I also support measures to improve the flexibility of natives, like relocation help and retraining – it is more efficient for an unemployed person from the Clyde to retrain and relocate to where there is work, than to leave them unemployed and employ an immigrant). The pace of change is only going to accelerate as technology advances – see “Race against the Machine” http://www.amazon.co.uk/Race-Against-The-Machine-ebook/dp/B005WTR4ZI/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1340565061&sr=1-1

    The level at which immigration ceases to give a net benefit to existing citizens depends a great deal on the state of the economy. In a booming economy, only the laziest or least productive workers remain on welfare and large numbers of immigrants can be absorbed with a net benefit. In a recession, this is much more limited as there are domestic unemployed that could take the jobs, if they are willing.

  83. 83 83 Ron H.

    Ken B:

    “And yet while you would want to itercede in Arizona if religious fanatics threw acid in the faces of school-girls I suspect you do not in Afghanistan. So there’s more to this than just location.”

    The comparison, if one can be made at all, should be to acid thrown in the faces of school girls attending school in the US – one born in Arizona and the other born in Afghanistan.

  84. 84 84 Hamish Atkinson

    I forgot one massive benefit from immigration: the demographics of immigrants complements Western nations’ aging demographics very well.

    Most Western governments are deep in debt. But the on balance sheet debt normally quoted only include the value of bonds issued by the government. However, there is an unfunded liability that makes the bond debt look like borrowing tenner from your mate – care of our retirees.

    As the Western world gets older (our life expectancy is increasing by 6 hours a day) and our young have fewer children and have them later, this will put a huge strain on the method historically used to fund our pension liabilities – taxes levied on people of working age.

    When our life expectancy was 70 years, a typical worker would work for 50 years and expect to retire for 5. This cost could easily be born by taxing the workers.

    But now our life expectancy is 80 years and rising, we will soon expect to retire for 20 years, and the number of young people entering the workforce is less than the number of people entering retirement.

    With these demographics: (UK: http://en.wikipedia.org/wiki/File:Uk.pop.pramid.2010.jpg), we will not be able to sustain this model of funding our pensioners health and pension costs.

    Fortunately, the demographics of immigrants is very different to the demography of natives – immigrants tend to be young (meaning they will work and pay taxes for a long time before they retire). They tend to have more children, and they have them younger, than the natives of Western countries.

    All this provides a big improvement in our demographic profile, that will help in the upcoming funding crisis. The alternative is a society like Japan. Japan has a low birth rate and very little immigration. The population is getting older and taxes will have to rise to support the elderly. Japan is already massively in debt and its GDP is stagnant. (Although GDP per capita is growing because of deflation and a shrinking population).

    If we expect to enjoy anywhere near as prosperous a retirement as our mothers, we will need immigrants and children of immigrants to help our children pay for us.

    I suspect Dr Niall Ferguson is going to cover this in depth in this year’s Reith Lectures: http://www.bbc.co.uk/podcasts/series/reith

  85. 85 85 Ron H.

    @Hamish Atkinson

    “If we expect to enjoy anywhere near as prosperous a retirement as our mothers, we will need immigrants and children of immigrants to help our children pay for us.”

    Geez, what if we saved and planned for our own retirements instead of relying on others to provide it for us?

  86. 86 86 Gil

    Obviously the immigration debate can’t be based around that “immigrants improve the economy” since that’s debatable. If you can hire cheap immigrant over native labour then you’re better off. If you lost your job to someone who will do it cheaper then you’re worse off. Instead the argument should be “do people have the right to enter a country without restrictions?” Hence: “even if a large enough wave of immigrants from one particular country is such that while it provides the benefit of cheap labour it’s also large enough to create cultural and social disrutions much of which is despised by the native population?” Last time I look Libertarians are against national borders and people should be able to move and settle where they like and if one group moves in and displaces the earlier group then tough cheese.

  87. 87 87 Greg Robbins

    It’s amazing how passionate people are when arguing about immigration! Isn’t human capital a capital resource? Wouldn’t limiting it be just as bad as limiting any other capital resource, such as machinery or investment?

  88. 88 88 Hamish Atkinson

    That would be great Ron, but it’s not going to happen in our democracies without a brave and persuasive act of leadership. Sarkozy tried a step in that direction in France, by raising the retirement age from 62 to 65 and he’s just lost the presidency to Hollande, who promised to restore the age to 62.

    What do you think is easier to persuade voters to accept:
    That we retire later and pay money now to save for retirement, or that we let immigrants and their children pay for our retirement?

    Bear in mind that the old vote are more likely to vote than young people and that young voters tend to be more altruistic and easier to persuade to accept policies that help the old, at their own expense (especially since most young people are woefully uninformed and blasé about their distant future, other than global warming).

    Maybe the act of leadership would start with an information campaign along the lines of the global warming issue? Then, only when everyone understands and believes in the coming funding catastrophe, the politicians can enact the fixes required without being voted out of office, like Sarkozy was.

  89. 89 89 Ron H.

    @Hamish Atkinson

    “Maybe the act of leadership would start with an information campaign along the lines of the global warming issue?”

    Do you mean they should lie?

  90. 90 90 Dmitry Kolyakov

    @Ron H.

    I appreciate the fact that you are not happy with the current state of the climate change discourse (I, in case you were wondering also think that there is too much unjustified fear-mongering) but your comment does not do justice to Hamish’s suggestion – he is merely suggesting a public information campaign, which is hardly bad as such. It only becomes bad if the information given is of questionable quality, which, I think is not the case in his example.

  91. 91 91 Hamish Atkinson

    Thanks Dmitry. I too think some of the predictions of disaster are overblown, but sometimes people need shocking into action, and that is what is required for the pensions problem.

  92. 92 92 Ron H.

    @Dmitry Kolyakov

    I appreciate the fact that you are not happy with the current state of the climate change discourse (I, in case you were wondering also think that there is too much unjustified fear-mongering)…

    Fear mongering? It’s a great deal worse than that, don’t you think?

    Making information available is a great idea, and transparency in government is to to encouraged, but an “information campaign” sounds a little more sinister, and insults people by suggesting that they are too stupid to figure out for themselves that there’s a problem with the retirement system.

    If I understand Harmish correctly, he advocates welcoming immigrants so they, and their children, can be forced to fund his retirement. If that’s the case, we may not have much left to discuss.

  93. 93 93 Hamish Atkinson

    I wasn’t aware that immigrants are taken from their countries by force and made to work in the West (not since the slave trade was abolished anyway).

    I’m just saying there’s a time bomb ticking and the people that want to come to this country (despite the taxes they will have to pay to support our aging baby boomers) can help slow down the ticking as we transition to a more sustainable system.

  94. 94 94 Ron H.

    “I wasn’t aware that immigrants are taken from their countries by force and made to work in the West (not since the slave trade was abolished anyway).”

    I wasn’t either. Apparently you don’t read well.

  95. 95 95 Dmitry Kolyakov

    @ Hamish

    Thank you for this discussion!
    It has been refreshingly constructive after all the previous implications that anyone supporting anything but opening of the borders must be either a “sloppy and lazy thinker” or a racist.

    I think we have indeed came to a point where a marginal return on further attempts to hammer out the remaining differences in our opinions is not that high. We now at least seem to be operating on the same framework – we need to find out the optimal number of immigrants for a given country and then make sure our system for selecting whom to admit maximizes utility of the country’s citizens. (benefiting foreigners is very positive, but optional)

    While we appear to still be implying quite different answers to these questions – we are at least answering the same (correct) questions.

    Which reminds me to thank you for the links you posted (especially for the article from The Atlantic, which not only formulates our questions in a similar manner, but also has some quite interesting data).

    Please allow me some cherry- (nit-) picking from your last posts nonetheless:

    “…I’m advocating not placing arbitrary, populist-inspired restrictions on the number of immigrants (like the UK coalition government is doing)…” – fully agree. For example former classmate of mine who recently relocated to London to the European Headquarters of one of the Big 4 accounting firms could only (after much bureaucratic hassle) come as a “temporary internal transferee”, which on top of not letting her change jobs also precludes her from eventual settlement in the UK and requires her to leave after 4 years (she is a senior manager and her husband is a partner (same firm), they pay a lot of taxes and could pay all of them in the UK if allowed to settle.) Please be sure to send David and Nick my greetings at the next elections :)

    “(I assume that those jobs wouldn’t be viable at a rate of pay sufficient to make people move from Northern Ireland).” – This is a well known point and is has some merit, but only to an extent, in my opinion. Some (but not all) such jobs would indeed not be viable at first world wage levels – but is it always a bad thing? That would stimulate businesses to invest in unskilled labor-replacing technology (aka innovation)which would make the society well more “fist world-like” and from which later on even developing countries will benefit.
    Would you prefer to see 10 unskilled illiterate migrants with brooms or one decently paid guy from Northern Ireland with some brand-new Dyson cleaning machine in your street? Would Stephenson ever care to build the Rocket if, say, Chinese canal-diggers were widely available in Britain? Would we even have the automobile if most potential buyers still could afford grooms and coachmen? Please give it a thought.

    “It’s summary “Rich Americans gain, poor Americans lose” is spot on, which is why I advocate progressive taxes and benefits.” – Sorry for being repetitive, but reversing some sub-optimal income distribution through taxes clearly has its costs (inefficiency, corruption and populism – somehow tolerable in super-efficient states like Singapore and Finland, prohibitive in many other states) so it makes a lot of sense to avoid the situation in the first place where possible.

    ” In a booming economy, only the laziest or least productive workers remain on welfare and large numbers of immigrants can be absorbed with a net benefit. In a recession, this is much more limited as there are domestic unemployed that could take the jobs, if they are willing.” – True, so it appears beneficial to only grant the settlement option to those foreign workers who are likely to remain valuable even in recession. For example in Singapore, if you are highly qualified and paid, and therefore a high net tax contributor (and likely to remain so even if you take a pay hit in a recession), you are can be granted permanent status in 1-2 years and then (if you wish) become a citizen in 3 years from your arrival. In is more like 5-7 years for those less qualified (so they can look at your performance through the economic cycle) and most unskilled workers are not given a right to settle permanently unless they acquire skills and change category.

    And finally, demographics. This is indeed an important issue, but one still needs to be very careful.
    You wrote: “Fortunately, the demographics of immigrants is very different to the demography of natives – immigrants tend to be young (meaning they will work and pay taxes for a long time before they retire). They tend to have more children, and they have them younger, than the natives of Western countries.” I do not think we should get euphoric about this. The largest determinant of family size (especially among people who decide to migrate and leave their traditional environment anyway) is income and social status. It is natural to wish to bring your own children at least to your social and educational level, and the more educated/qualified you are the larger the bill. It is also harder to abandon or break your career for an educated professional mother. An investment banker potential mother faces a much harsher trade-off than a janitor. People with higher social status also have more alternatives in life than to change diapers (although that may be selfish). (one can discuss the factors forever, but i guess these are the most influential). So some professional migrants from India, for example, I’ve talked to either had or were planning to have max. 2 kids which is not too far from their caucasian native counterparts, despite the former belonging to the second most populous nation in the world.
    Unless you are particularly excited about higher birth rates in already existing ethnic ghettos and simply among less educated natives – there is no logical reason for you to be happy about this expected surplus of immigrants’ children. The brightest, most valuable of the migrants are going to be quite close in their procreation patterns to the locals anyway.
    The only major difference you are going to have between such big-family second-generation immigrants and direct unskilled immigrants is higher sense of entitlement simply because they have a certain passport in their pocket. (Also, would you like to send your child to a kindergarten where the majority can not (and some will never) speak proper English?)

    Even assuming all those children will grow to be decent valuable society members – what makes you think they will be happy to foot the large bill for someone else’s past largesse? They are most likely to vote those pensions out of existence if they can or migrate to whichever other country offers them better terms (including their former motherland). They will for sure be more mobile (you wanted that, remember?) than the natives. Only those not needed by other countries, because they are not an asset but a burden, will stay.
    I have heard one such opinion from one qualified immigrant currently in the UK (not exactly, but close to the text) “I hope I one day can go back to … (his motherland). They expect us to stay and feed all those old grumpy former colonial masters, whom even their children no longer want to feed, but have they asked us?”

    So, just like with the tariffs and the minimum wage – there is ultimately no escaping addressing the actual problem (huge unfunded pension obligations, in this case) – there is only so much sweeping under the carpet (printing money, lowering interest rates, allowing unskilled migrants) that you can do. If you keep popping codeine because you are terrified by an operation, it can do many things to you, but curing the illness is not one of them.

  96. 96 96 Dmitry Kolyakov

    “I’m just saying there’s a time bomb ticking and the people that want to come to this country (despite the taxes they will have to pay to support our aging baby boomers) can help slow down the ticking as we transition to a more sustainable system.” – If you put it this way, I have no objections. The important part is not to forget that this is only a temporary solution that has its costs.

  97. 97 97 Dmitry Kolyakov

    “If I understand Harmish correctly, he advocates welcoming immigrants so they, and their children, can be forced to fund his retirement. If that’s the case, we may not have much left to discuss.”

    Hamish, you see – I was not inventing anything. Whether we like it or not, many people will tell you something like that when you, retired Mr. Atkinson, will request them to support you in retirement in exchange for having let them use all social and physical infrastructure of your country you and your ancestors participated in creating. Services already rendered cost nothing, as they say.

  98. 98 98 Harold

    Dimitry on discussing entry of one single immigrant: “to me it is a thoroughly unpractical discussion of no particular consequence. It is a bit like trying to kill a mosquito on the moon – your data for aiming your cannon even if gathered in good faith is inevitably too rough (for the granularity of one mosquito/one person)”
    It looks as though you have just rejected economics, much of which is concerned with what happens at the margin.

    “Allowing non-Americans freely settle in Texas will however materially change the place and the majority simply does not support this change.” Whereas allowing Blacks from Brooklyn will not materially alter the place because those from Brooklyn also believe in freedom of movement in the USA? Sorry, that does not really make sense; you still need to find this other factor. Basically I think you are arguing that Texans have the right to prevent people moving there and diluting their culture, but American citizens also have the right to freedom of movement. The free movement right trumps the no-change right.

    It is this no-change right that I am not sure about. Do I really have a right to prevent someone else from inhabiting a space close to me because I don’t like the way they live? Zazooba seeems to assume such a right has existed also: ” Way back when, freedom of association was assumed, and people could associate with whom they wished and exclude whom they wished (emphasis mine). I think we can mostly agree that we can exclude who we want from out personal friendships, but this “right” was taken to mean exclusion from living in some areas. I hope we can now all agree that we have no right to prevent any citizen living wherever he wants. If you prevent me from buying a property, you have infringed my rights. You should not be able to do this without very good reason. I do not believe your so-called “right” not to have me as a neighbor is sufficient- or if it even exists.

    I assume Zazooba and Dimitry agree that the Native Americans had the right to resist immigration, although they had not the means. This was a case of might beats right. In this context the “worst offenders” are the white folks.

    “Further, since it is rational to avoid concentrations of blacks…” I fail to see any rationality here. Ask an African. And I fail to see how property prices exclude blacks – only those with less money. Oh -I see, those with less money ARE blacks, there not being any poor white people. I would havve though this mecahnism allowed you to avoid concentrations of poor people.

  99. 99 99 Dmitry Kolyakov

    Harold, your attention to what I’ve written rivals only your attention to the spelling of my name…

    “It looks as though you have just rejected economics, much of which is concerned with what happens at the margin.”
    So if i told you that your analysis on the quantum/atomic level is not practical for a decision which way to pull the lever on some machine you’ll tell me I’ve rejected physics? I have never said that this (or any other purely theoretical analysis) is not a legitimate part of economics. All I said is that marginal analysis is not _practical_ in this case for the reasons I outlined and you clearly avoided/failed to address (because accusations feel so much better and are so easier than a proper argument, right?) If you, however believe, that any policy decision can be taken based solely on marginal analysis, than is it really me who rejected economics (and common sense)?

    ““Allowing non-Americans freely settle in Texas will however materially change the place and the majority simply does not support this change.” Whereas allowing Blacks from Brooklyn will not materially alter the place because those from Brooklyn also believe in freedom of movement in the USA? Sorry, that does not really make sense” – It would, if you at least quoted/read the whole thought. It started like this, remember: “This freedom of movement is very much part of Texas now which Texans apparently like and want to live in.” Freedom of movement _for the citizens_ is an integral part of most democratic countries (and their parts, like Texas) that is mostly valued and approved by their population, this is what defines them, free movement _for anyone_ however, is not. If you do not understand (or refuse to accept) this rather simple concept, I can not unfortunately explain further.

    “Do I really have a right to prevent someone else from inhabiting a space close to me because I don’t like the way they live?” I think in most legal and moral systems you do not. This is not however anything at least I ever said you might. (If Zazooba ever said that, you can only wait for his reply). I guess what has been claimed is that if the majority of legitimate inhabitants/owners democratically agrees on certain standards of admittance to their home, condo, gated community or settlement they have a moral right to do so without being accused of the worst possible reasons. If this moral right is not supported by an adequate legal right they will do their best to achieve their goals by economically less efficient ways, most prominently by creating and supporting local real estate bubbles to price the unwanted neighbors out (or, when they are desperate, just abandoning their houses and running away as in Zimbabwe, for example). (You do not even need to be a democracy for this – I am pretty sure any international court would uphold a decision by, say the Pope (who also happens to be the head of state for The Holy See, a theocracy) do deport, say, Osama Bin Laden (even if the latter honestly just came to see the Sistine Chapel) from the Vatican.)

    ” If you prevent me from buying a property, you have infringed my rights.” – Have you ever been shopping for a house? Many sellers (let alone all landlords) of properties in demand will want to meet you to make sure they are leaving a property in good hands (and that their former neighbors will not hate them afterwards). Some would consult their neighbors. If they do not like you, they will not sell. Sue them if you want.

    ” I do not believe your so-called “right” not to have me as a neighbor is sufficient- or if it even exists.” – Sure it does not. Haven’t you just made it up?

    “I assume Zazooba and Dimitry agree that the Native Americans had the right to resist immigration, although they had not the means. This was a case of might beats right. In this context the “worst offenders” are the white folks.” – My only comment: mighty irrelevant. My “worst offenders” were about the current illegal migration situation and nothing else. Were there crimes and discrimination against the native Americans – yes. Is colonization relevant for what we are discussing here – no.

  100. 100 100 Hamish Atkinson

    I am not advocating that European Democracies run an unsustainable system for caring for our elderly, that is what we are doing. It is simply the way we have always done it. Before state pension provision and low child mortality, people had plenty of children so that enough would survive to support them in their old age.

    Since the transition to more caring states that looked after their citizens, the state has taken over the role of looking after the elderly, by taxing those of working age. There’s nothing wrong with this while the length of time spent in retirement is relatively small compared to the length of time spent working and the population is growing.

    We are hitting 2 big demographic changes at the same time:
    1) Rapidly increasing life expectancy (just in time for the bulge of baby boomers to expect a long retirement)
    2) Birth rates falling below the level required to maintain a stable population.

    These changes are turning the de-facto method of supporting our state pension scheme and health care from a sustainable and perfectly reasonable method, to an unsustainable one.

    I’m not arguing that we switch to the younger generation paying for our pensioners, that is what we are already doing. It’s all very well for you to say “I reject that”, but as long as the electorate don’t say “I reject that”, it’s not going to change.

    Even if we informed everyone about this, out of self-interest, the electorate might still keep the status quo. People under 18 aren’t allowed to vote, people under 30 are less likely to vote and people over 50 are likely to vote to keep their retirement age, pension credits and index-linked pension, thank you very much.

    France: case in point.

  101. 101 101 Dmitry Kolyakov

    Hamish, just in case you were replying to me – I am fully with you on the subject of your last post. I was merely warning as I said of the over-reliance on migration as the only or principal treatment for the pension system problems

  102. 102 102 JohnE

    @ Zazooba

    So you think a law prohibiting blacks from moving into your city is wrong. You think this because as citizens of a common nation, everyone should be treated equally and be free to live where they choose within that nation. I humbly invite you to extend this reasoning and conclude that as members of humanity, we should all be treated equally and be free to choose where to live. After all, is it not just as arbitrary to exclude someone from your city based on their race as it is to exclude them based on where they were born?

  103. 103 103 JohnE

    @Dmitry

    “I would not start a riot because of that, if that is what you are asking.”

    This is not what I’m asking.

    “I might vote against it, if I think it is a bad idea”

    This is what I’m asking. Would you vote for it? Do you think it is a bad idea?

  104. 104 104 Ron H.

    @JohnE

    “So you think a law prohibiting blacks from moving into your city is wrong. You think this because as citizens of a common nation, everyone should be treated equally and be free to live where they choose within that nation. I humbly invite you to extend this reasoning and conclude that as members of humanity, we should all be treated equally and be free to choose where to live. After all, is it not just as arbitrary to exclude someone from your city based on their race as it is to exclude them based on where they were born?”

    To avoid the confusion that seems to exist on this issue one need only consider basic property rights. As a private property owner, you should be free to sell or not sell your property to anyone you please, for any reason. Your neighbors and everyone else in town should have that same right.

    To exclude someone because of their race or any other silly reason you might have, you, or you and your neighbors need only buy the property that is for sale, and you can then decide who can or cannot live there.

    Simple enough?

    As to freedom of movement, such a freedom doesn’t apply to private property.

    And yes, a law to exclude blacks or any other group of people would be wrong.

  105. 105 105 Dmitry Kolyakov

    @JohnE

    Thanks for clarifying your question, as your initial “would you be OK” was less clear and might have meant many things.

    “Would you vote for it? Do you think it is a bad idea?” – So it is my voting preferences you are interested in? Why? Do you believe in intimidating people to vote against their will and interest? Are you likely to be affected by my personal voting? Or you just seek a pretext to accuse me of something and escape the actual discussion (which is on illegal unskilled migration in case you forgot)?

    To answer you reinvented question: My voting will (always) depend on available information and the actual situation. In present day USA, given its rule of law and civil traditions I most likely would vote against. (This vote is going to be illegal anyway, so the question does not make much sense) This will as said earlier not affect my respect for the decision of the majority if it is different from mine.

    Do not be discouraged though, I’ll still give you a chance to call me a dirty racist and retire with a feeling of moral superiority that you apparently so desire (as you appear too bored to discuss policy or economics). Africans if anything are nowhere near the top of “my least preferred social groups” list, but as you keep hammering away at them – here you go:
    If I had an incredible misfortune to live in a certain part of Africa where it is not uncommon for white farmers’ daughters to be gang raped to make sure they contract AIDS and than spat at and called “racist” – then hell, I would not only vote, I would take my gun and make sure that no-one even remotely resembling those bastards comes anywhere close to my home, my loved ones or my neighbors other then over my dead body.
    I would also be particularly thankful to all the overseas hypocrites for their silent support of those crimes. (as anything remotely similar done by whites would be (and has been in the past) swiftly stopped by an outside intervention)

    Again for one last time – when people feel in danger and instead of having their lives and rights protected they get insults and accusations from those not (yet) affected by similar problems – that breeds real (and not your imaginary) racism, xenophobia, sexism, ageism and god knows what other -ism and phobia.

  106. 106 106 JohnE

    @ Dmitry

    In the US, given its rule of law and civil tradition, you would be against such a law.

    So you would be against immigration restrictions in the US then (given its rule of law and civil traditions)?

    By the way, I am not calling anyone here racist. I’m assuming everyone here is not racist. Rather I think that any moral reasoning which rejects racist laws (which I think we all share) could equally be used to reject laws restricting immigration.

  107. 107 107 Harold

    Dmitry – apologies for the mis-spelling, I forgot to go back and check it.
    Regarding marginal analysis, see SLs reply to my earlier comment on this subject:

    “This is absolutely correct. But the question I am raising is: Do we currently have too much or too little immigration? To answer that question, we can reformulate it as: Would one additional immigrant be, on balance, a good or a bad thing? Therefore it’s appropriate to do the calculation for one immigrant. After several more immigrants arrive, we can ask again: *Now* do we have too many or too few? And at that point we can redo the calculation, with, as you say, different numbers.”

    Now, I think there is something a little misleading here, because SL seems to be asking a very different question than everyone else. Most seem to be addressing the issue of what happens when we re-do the calculation after 5M or so immigrants have arrived. However, the question posed by the economist is still what happens when an extra one arrives, making the marginal question relevant and practical.

    I want to look at the moral basis for excluding people.

    “I guess what has been claimed is that if the majority of legitimate inhabitants/owners democratically agrees on certain standards of admittance to their home, condo, gated community or settlement they have a moral right to do so”

    We can agree that usually one has the right to admit whom you want to your home. Generally, you have no right to interfere with whom somebody else invites to their home. However, communities have certain rights to ensure that members conform to public behavior standards, which must be made clear before they buy. Buying is an acceptance of these standards. What I am not quite sure about is what you mean by “standards of admittance”. Ethnicity or race is not a “standard”, and therefore should not be part of the admittance criteria. Therefore no one has the moral right to exclude anyone on the basis of race (I believe). There must also be clear physical boundaries. Members of my community have no right to prevent another community setting up elsewhere.

    So maybe a small group can morally set up a living arrangement where all agree on the rules, and they can enforce these rules in part by limiting admission to those who agree with the rules. In order for this to be morally correct, obviously these rules must be moral.

    Also, as a general principle, individuals should be allowed to live where they want, to own property, and behave in any way they want as long as it does not clash with others doing the same. Anyone should be free to choose to abide by the rules of the hypothetical community and live there, if they can afford it.

    We are sort of saying that a country is one of these communities. It has the right to mutually agree rules of behavior before allowing admittance. “Mutual” here is a bit difficult, as unanimity will never be possible. These rules will have to be imposed on some who disagree. This establishes a moral right to exclude some people from countries, but only on the basis of sticking to the rules that are imposed on the current inhabitants.

    However, the moral rights are not limited to this.

    You also use the term legitimate, which is a bit uncertain. If we look at a hypothetical country at two time-points. Time A has a population of 100 citizens with average prosperity of 100. After a while, at time B it has a population of 1000 with average prosperity 150. However, the original 100 may have an average prosperity of 95. If we view it from Time A, these citizens may well object to the immigration of the 900 others. However, from point B the country is doing much better. From each time point, the citizens are “legitimate”, but do the citizens at time A have the right to prevent those citizens at time B from being there? What if the original inhabitants view the new arrivals as illegitimate? Does it change if the original citizens end up with a prosperity of 105? If we took a vots over time, the 1000 citizens would have more votes than the 100 – does this matter?

    Unlike JohnE, I assume everyone is racist to some extent. I think it is in our DNA.

  108. 108 108 Dmitry Kolyakov

    @JohnE

    “So you would be against immigration restrictions in the US then (given its rule of law and civil traditions)?”

    I am afraid you are not listening. If I answer yet again you will still not be satisfied, right? This question and its various rather repetitive derivatives have been answered several times from a variety of angles by both me and some other commenters. As I do not particularly enjoy writing same things over and over to people who do not want to understand (maybe because its somehow against their deep held religious or quasi-religious beliefs, I do not know), I guess we can just agree to disagree. I am not a big fan of forcing my preferences and opinions on obviously unwilling people (or seeing anyone else do that), as I’ve said several times here.

    I hope once you will realize what is going on with illegal/unskilled immigration. If you do not (which is your right) we all lose.

  109. 109 109 JohnE

    @Dmitry

    If you are willing to vote against a racist law because of the U.S.’s “rule of law and civil tradition”, then why would you not also vote against immigration restrictions? Surely the reason is not because you are “not a big fan of forcing [your] preferences and opinions on obviously unwilling people.” After all, you seemed willing to do so in the case of the racist law.

  110. 110 110 Dmitry Kolyakov

    @JohnE

    Come on, there must be some time to stop and not get obsessed.

    It is because freedom of movement for citizens (of any race or creed) and freedom for movement for anyone are not the same thing.

    The first is an integral part of most states and part of the “citizenship deal” which we all voluntarily participate in by holding our citizenship.
    There must be extraordinary circumstances for us to back out of this deal (like the one in my Zimbabwe example). The latter is however not an existing deal, an there must be extraordinary circumstances (like some genuine urgent humanitarian need) for us to enter into such deal without demanding an adequate compensation. The former is a right arising from popular consent, the latter is a privilege.

    You want to be charitable to foreigners – I applaud you, but please do not do it at other (unwilling) people’s expense.

  111. 111 111 Dmitry Kolyakov

    @Harold

    “Now, I think there is something a little misleading here, because SL seems to be asking a very different question than everyone else. Most seem to be addressing the issue of what happens when we re-do the calculation after 5M or so immigrants have arrived. However, the question posed by the economist is still what happens when an extra one arrives, making the marginal question relevant and practical.”

    I guess if there is indeed something potentially misleading, the onus should be on the blog owner (or at least on commenters fully subscribing to his views) to clarify. I am however still not convinced that even the question as you are defining it is practical for a policy discussion (although it may well be relevant for some theoretic, educational and other purposes – I honestly just have not formed an opinion on that). Once again:
    1. The data (even if collected in good faith) is too crude to be meaningful at one immigrant level of granularity. What stage of the economic cycle was the data collected on, for example? Marginal propensity of businesses to expand and not just to replace locals with migrants changes, marginal propensity of workers to take a pay hit and not go on welfare/join a gang/become alcoholic changes, and so on. If it is 4 months old – it is way too rough already, if it is 3 years old – it is as good as a wild guess.
    2. Even if the data is somehow magically real-time – what happens tomorrow, when the markets go south? Are you sure you’d be to let all those arrivals go? Even if, what would be the various costs?
    3. Do you know any instruction you could issue to the customs/INS/homeland security that will admit exactly 1 migrant more with anything remotely similar to fairness?
    4. Was there even any attempt to calculate the additional social costs (additional policing, bureaucracy, load on infrastructure, rise in social/ethnic tensions/integration costs etc.)?

    This is what I call not practical.
    If you are really a big fan of marginal analysis, you could at least try to select some meaningful level of granularity and do your best to include all known costs and benefits in your calculation.
    But, even if we forget about the quality of this analysis the only thing it seems to achieve in its original form is to demonstrate that the poor immigrants seem to gain more than their direct competitors from the incumbent workforce stand to lose. Well, anyone who was not sure of that might find this analysis useful. But I somehow think that to most that appeared self-evident anyway.
    Then, in his initial analysis, Professor Landsburg builds an altruistic bridge to the conclusion – we should compare migrants’ gain against our loss and, as this (however calculated) yields a net positive result so we must admit more people.
    This bridge appears too weak for any decent train of thought to me. That is what I was aiming at with my initial comment about a room in his house. The subsequent comments also showed that many people do not by into this unorthodox altruist logic. And hence – I invite anyone wishing to be charitable to unknown foreigners to do so privately. Without this bridge there is neither novelty, nor link to practice in the initial classroom exercise.

    Prof. Landsburg has indeed been surprisingly gun-shy when it came to any specific policy proposals, but as in his previous post he stated:

    “What morally relevant criterion protects the rights of the relatively rich foreigners who are already here but allows us to continue trampling the rights of the desperately poor foreigners we’re continuing to turn away at the border?”, it appears he is not really talking about 1 person, or even 1 million people – it sounds more like advocating opening the borders to me.

    “Ethnicity or race is not a “standard”, and therefore should not be part of the admittance criteria.” – Why? If that is what the owners (however different from us) set as a standard?

    “Therefore no one has the moral right to exclude anyone on the basis of race (I believe).” – What if some people (let’s assume) believe otherwise? And they are only willing to apply their standards to their community and not yours?

    I fully agree that racism is bad (like any hatred), but, as you correctly said many people still have it (in DNA, as you put it). I all racism and other hatred is necessarily solely the fault of the person bearing it – it may be a trauma caused by circumstances. (I also think smoking is bad, by the way :)

    “Members of my community have no right to prevent another community setting up elsewhere.” Depending on how you define “community”. If you mean that the people of Texas have no right to prevent another community setting up elsewhere (say in Oklahoma) – then absolutely.

    ” In order for this to be morally correct, obviously these rules must be moral.” – not cyclical?

    “Also, as a general principle, individuals should be allowed to live where they want, to own property, and behave in any way they want as long as it does not clash with others doing the same.” – but people’s basic rights always clash! That’s why people enter deals and participate in something called the state, that imposes some compromise on everyone. This compromise can be quite different, subject to majority’s consent. Apparently in most countries in includes free movement with minor restrictions for the club members (aka Citizens) and more substantial restrictions for everyone else. It is no longer really a question of abstract morality.

    “We are sort of saying that a country is one of these communities.” – exactly.

    ” “Mutual” here is a bit difficult, as unanimity will never be possible.” – that is precisely why we have stuff like “majority” and “democracy”.

    “From each time point, the citizens are “legitimate”, but do the citizens at time A have the right to prevent those citizens at time B from being there?” – It is actually not that complicated. Everyone should be responsible for their own actions. If the citizens at time A consented to admit all the new guys via a legitimate democratic procedure – than 1000 new citizens at time B would be legitimate. If they came in violation and were then legalized by some populist president without asking the people – than the actual citizens are right to be unhappy. In fact, they had better started doing something about it right now!

  112. 112 112 JohnE

    @ Dmitry

    This will be my last reply on this topic. Sorry if I’ve exasperated you.

    “freedom of movement for citizens (of any race or creed) and freedom for movement for anyone are not the same thing.”

    “The former is a right arising from popular consent, the latter is a privilege.”

    My goal is to call into question this commonly held belief. Sure the freedom of movement for citizens within a nation is something we enjoy because we (generally) all agree it to be good (thus it is a legal right). However, I also believe it to be an inalienable right. That is, it is a natural right which I (and everyone) hold because I am human and it cannot be taken away by anyone else. Thus, even if this legal right were taken from me by common consent, I believe I would still hold this right. Similarly, even if my legal right for freedom of speech or religion were taken from me, I believe I would still hold these rights. Thus I believe that a country that restricts these rights is morally in the wrong as they are keeping people from exercising their natural rights. This is true irrespective of whether the people of that country are willing or unwilling to extend said natural rights to legal rights.

    Furthermore, as with any natural right, I do not think this right stops at a country’s border, just as I believe I have a natural right to freedom of speech or freedom of religion no matter what country I am currently in. This is the nature of inalienable rights.

    Finally, I recognize that believing that freedom of movement is a natural right is not something that can be argued or reasoned. Individuals either accept it or they don’t. It is axiomatic. I am not trying to force this view on anyone. Rather, I think that many people accept freedom of movement *within a country* because they think it to be a natural right. My comments were meant to ascertain whether that was the case, and if so, point out that you should then accept freedom of movement (full stop) as a natural right.

  113. 113 113 Hamish Atkinson

    Dmitry, sems to me we have much in common, but one very important difference: where increased immigration benefits the country as a whole, but disadvantages some people more than others, you would rather not allow the immigration than allow the immigration and use a more progressive tax/benefit system to redistribute the gains so that everyone benefits.

    However, I don’t really understand your objection “reversing some sub-optimal income distribution through taxes clearly has its costs (inefficiency, corruption and populism – somehow tolerable in super-efficient states like Singapore and Finland, prohibitive in many other states) so it makes a lot of sense to avoid the situation in the first place where possible”.

    Surely most Western democracies are efficient enough and corruption low enough that we can manage this? Take the Swedish model (BBC Analysis Podcast: http://downloads.bbc.co.uk/podcasts/radio4/analysis/analysis_20120618-2037a.mp3). There is no reason why we couldn’t be as efficient as Finland,

    There are plenty of inequalities that we should correcting anyway, like capital gains, dividend and rental income taxes that are lower than taxes on employed income (Telegraph article about rental income taxes: http://blogs.telegraph.co.uk/news/danielknowles/100167552/how-our-tax-system-hurts-workers-and-rewards-rentiers/). What’s so inefficient about choosing a level for those taxes (and headline/higher rate income tax rates) sufficient to compensate the losers from unskilled immigration, whilst raising the personal allowance and changing the withdrawl of benefits for part time workers to be more progressive)?

    So, perhaps you can elaborate?

  114. 114 114 Hamish Atkinson

    Making taxes/benefits more progressive at the low income end of the scale might also tempt more of those unemployed people in N Ireland, S Wales, Clyde and the North of England off of benefits and down to where the work is, reducing the demand for immigrants to fill those jobs.

  115. 115 115 Dmitry Kolyakov

    @JohnE

    I too apologize if I have upset or irritated you. BTW, if you had mentioned natural and inalienable rights a bit earlier we could have had a way more focused discussion, I believe.

    We had a similar discussion when there was a dispute on taxes/voting rights link and equal suffrage.

    I guess the concepts of natural and inalienable rights are in a middle of a major legal theory/ philosophy dispute (which is even big enough to be mentioned on Wikipedia :) So different individuals are perhaps entitled to different views of something so controversial as this.

    I suggest we do not reopen this old discussion, unless you of course would like to discuss it (hope such a discussion will not add any anti-human rights credentials to my already substantial racist ones :)

    “Rather, I think that many people accept freedom of movement *within a country* because they think it to be a natural right.” – In this case I see why you want to expose such views as internally conflicting. I however (just to be clear) do not think that freedom of movement (for anyone) is a natural right, but rather (in the case of citizens) a product of mutual consent (“a deal”), which is enforced by the state via legal rights. That is why I resisted your line of reasoning.

  116. 116 116 Dmitry Kolyakov

    @Hamish

    “… like capital gains, dividend and rental income taxes that are lower than taxes on employed income” – Bravo! Yet another point where we seem to agree – I got kicked quite a bit for asserting the same here some months ago (my particular area of interest was the capital gains tax)

    On my note about the costs of reversing some sub-optimal through taxes: the potential costs/losses were exactly what I meant with my comment. I am not saying it is impossible to redistribute, I am not saying you should not redistribute at all (though I must be frank – my preferred level of redistribution would be lower than for many people). So it is not really a full objection – rather a word of caution. Even if you plan a fully legitimate redistribution, the factors i mentioned will cause some net loss (the exact size might indeed vary). And such costs/losses should really be taken into account when evaluating the policy options.

    “There is no reason why we couldn’t be as efficient as Finland” – but still most states are less efficient (often by a wide margin). I sure do not mean that other states could not, but many still quite obviously are not for some reason. It’s a bit like most of us could train to run a marathon, but I would not base my tomorrow’s schedule on the assumption that I’ll manage to do it.

    And again – the Swedish example is very interesting (though I am not sure how sustainable in a globalizing world), but again, pardon for not delving into the details, there must also be some reason why absolute majority of states are not like Sweden.

    On top of any technical losses even in an ideally efficient state there is always a moral hazard. Consider the similarity with the retirement system that you mentioned: assuming that we know some optimal level of redistribution and some optimal retirement age, what (other than massive tax evasion) will prevent some politicians from setting the redistribution too high and the retirement age too low, if it brings them votes? What also will preclude them from directing the benefits to where they think they will bring them most votes as opposed to where they are most needed?

  117. 117 117 Harold

    Regarding marginal analysis, I don’t know how you would go about such an analysis with greater granularity. I think it is standard procedure in economics to look at the marginal case, but I am not an expert here.

    I think SL in other posts has been arguing from the point of view of policy makers. It is not “us”, or even the USA who suffer the direct loss, but a group of American strangers, and a group of Mexican strangers (for example) get the gain. Of course, SL considers that everyone will gain in the longer term. Unless I am one of the Americans who loses, then I am being “altruistic” by preventing immigration, since I am damaging myself to benefit someone else. I am also damaging a third party even more. I do not claim that I have accurately represented SL’s view here, since I am going back beyond this post.

    ““Ethnicity or race is not a “standard”, and therefore should not be part of the admittance criteria.” – Why? If that is what the owners (however different from us) set as a standard?”.

    I was attempting to get at what a moral community may do. I believe one may have the right to set standards for public behaviour that anyone could in principle meet if they chose. Ethnicity or race are not behaviours. To put it crudely, I think racism is wrong, and therefore any system based on racism cannot be a moral one. This is why I said that any rules would have to be moral – it is not a circular argument, although it does beg the question of what is moral. If somebody believes racism is moral, then they will differ on their opinion of the morality of such a community.

    “If they came in violation and were then legalized by some populist president without asking the people – than the actual citizens are right to be unhappy. In fact, they had better started doing something about it right now!”
    What do you suggest the Native Americans do exactly? Everyone else is a non-legitimate resident by your reasoning. If they are somehow legitimate now, then is it time that makes them so? In which case, the Mexicans who have been here a while have a similar claim. How much time is needed to legitimise? Maybe it is not time, maybe it is being part of the nation building. Then similarly, anyone who has been working here a while has that claim also.

  118. 118 118 Dmitry Kolyakov

    @Harold

    “Regarding marginal analysis, I don’t know how you would go about such an analysis with greater granularity.” – I think that marginal analysis is not necessarily the tool of choice here, but If I were to conduct it, I would most likely just choose a more appropriate marginal step, that would be both realistic in terms of implementation precision and on the right side of potential margin of error of the available data. One person is not a must for marginal analysis, I believe. Nor is 1/2 of a person, one blood cell, or one atom. It can be one company of soldiers, one ship crew or the number (group) of migrants potentially moved by a smallest practical step in immigration policy. The step does not need to be the smallest item possible (that would be the quark, anyway), but the smallest item practical.

    “Of course, SL considers that everyone will gain in the longer term” – to me it would be a very interesting discussion (if supported by a credible cost/benefit analysis) – but, maybe I missed it? No one reproduced it here either. I so far have seen only this particular (or very similar) argument. It also applies to the rest of that bit of your logic. I will happily agree that host country citizens as a whole benefit if there is some supporting wholesome credible analysis. But until then such logic is incomplete.
    However to me the very structure of the argument presented in the initial post (and all comments in its defense) imply that the author is not that sure about that last conclusion.

    ” I believe one may have the right to set standards for public behaviour that anyone could in principle meet if they chose.” But why? So if I manage, say, a sauna, and want to make it a female-only sauna – am I not within my rights if I decline to let you in? That is a standard you probably will not be able to meet even if you want to…

    “If somebody believes racism is moral…” What if they think (rightly or wrongly) that they are motivated by something else then racism and do not understand why they should discuss their reasons with you?

    I can only again say on the question of morality is that in my book it is only still a question of morals if it is only imposed on those who subscribe to those morals. If they do not, it must be a contract, legislation, violence or something else, but not morals…

    Why Native Americans again? Do I really have to explain a difference between colonization and immigration?

    Unless you of course imply that incoming settlers actually immigrated not to the colonies/the US, but to Native American tribes (which must have been internationally recognized states) (accessed their labor market, elected chiefs, lived in their camps among the natives, etc.)

    ” If they are somehow legitimate now, then is it time that makes them so?” – Not really. They (or people whose state they later joined) took the land by force from weaker adversaries. Hope you are not suggesting some neighboring country does this to the US.

  119. 119 119 Will A

    I wish the Federal government would do more to secure California’s borders.

    There are too many talented people leaving the state.

  120. 120 120 Dmitry Kolyakov

    And the more like some depressed third world region all the unskilled poor arrivals make it, the more of those talented people will prefer to move elsewhere…

  121. 121 121 Harold

    Dmitry. Thanks for engaging in a constructive manner. You raise some interesting points. On marginal analysis, I don’t see why larger groups could not be used, but I am not sure that the data is any better. We have data for average earnings per person etc, do we have any better data for groups? Is this not the same as doing the analysis for one person then multiplying by the number in the group? I think it unreasonable to suggest a margin of less than a person; such entities have no economic existence. It is also a reasonable point of view that groups do not have an economic existence, and all activity is by individuals. I think the point here is to decide at what point the calculations need to be done again with new numbers. For example, the analysis that SL gives may be good for, say, 10,000 immigrants. After that, we need to look again because the average earnings etc. will have changed. That means the size of the group is 10,000. Maybe I have just got your whole point wrong.

    You say ” will happily agree that host country citizens as a whole benefit if there is some supporting wholesome credible analysis But until then such logic is incomplete.” I am not sure what analysis you mean – there has been much discussion of why immigration helps through lower prices etc. All analysis is incomplete to some extent.

    “That is a standard you probably will not be able to meet even if you want to…” You should see me on a Saturday night! But seriously, your sauna example is interesting; do I need to re-think my criteria? Yes, I think I must refine my standards. I could be here forever trying to define morality, but for now I will leave it that the purpose of the community must be moral, and the rules must rationally achieve it. For example, lets allow for now that as a moral objective your community wants everyone to be able to speak English. A rational rule would be that everyone passes an English test. An irrational rule would be to say No Mexicans. An example of what I believe a non-moral objective would be to disallow anyone who could speak Spanish, since this does not affect your position, as long as they speak English as well.

    “what if they think they are motivated by something other than racism…” Everybody has an obligation to examine his or her ideas and behaviour in order to be moral. Failure to do so in the face of readily available evidence is not moral. These days there is sufficient open discussion of racism that I believe most people are immoral if they choose to embrace racism, even if they have told themselves it is for some other reason. Holding racist beliefs and telling yourself they are not racist does not make them moral.

    “it is only still a question of morals if it is only imposed on those who subscribe to those morals.” This is an interesting view of morals. The origin, and even the existence, of morals is a knotty problem, and many have come up with different answers. Your expressed view here seems to be at the extreme end of moral relativism, but I may have mis-understood. Are you suggesting that morals apply to you only if you agree with them? This sounds absurd, but I do not know what else you mean.

    I believe there are valid, moral reasons to limit immigration. I also think that there are other reasons.

  122. 122 122 Dmitry Kolyakov

    @Harold

    Thank you too!

    ” I think it unreasonable to suggest a margin of less than a person; such entities have no economic existence.” – Fully agree. And what I said was that it is unreasonable to suggest a margin of less than a minimum group that can be a reasonable increment for a change in immigration policy, such entities would have no practical significance :) But this is getting too abstract indeed.

    “I am not sure what analysis you mean – there has been much discussion of why immigration helps through lower prices etc.” – I want an honest and decently complete cost/benefit analysis, not just benefit “analysis” (aka laundry list). Your example is a bit similar to saying that protectionism is good because it helps through protecting local business. Comparing all material benefits and losses (protecting some businesses vs. higher prices and unbalanced economy for protectionism, lower salaries for all, but the highly skilled and social costs vs. lower unskilled element in costs), however would be the analysis I mean (and I guess the only decently complete one).

    As the unskilled labor cost element is relatively small in modern developed economies (and where it is unusually big, that usually means innovation is not working), I find it highly unlikely that unskilled immigration will pay for itself for the host country (US) citizens even before the social costs, as I was trying to illustrate in one of my replies to Hamish Atkinson . I am however open to persuasion if some, as I said credible and decently complete analysis proving otherwise is presented. (And than we can discuss the social costs a little bit :)

    ” An irrational rule would be to say No Mexicans.” – You are quite right. The problem here is that fine-tuning the enforcement of such standards requires resources, which are currently only possessed by the state. And if the state denies such citizens those resources and if the discomfort they are feeling is serious enough they resort to something more crude and more ancient – racism and xenophobia. In Monaco to take an exotic example (with one of the strongest (and not too corrupt) police forces per capita and very strict courts) I heard nothing about much xenophobia, although that place is full of all sorts of ethnicities. Monaco is also an example of pricing out unwanted groups.

    If such a group of citizens says – we would like everyone to understand some English and we would also like everyone belonging to, say, 10 social groups most likely to break the law in our town last year (including illegal work) (be they immigrants from Tibet, or middle-aged Polish females from Iowa) to post a bond that would be taken away if they break the law during their stay – would that be rational? I guess so. Would they be sent to hell by the government and called racist by many anyway? You bet…

    “Holding racist beliefs and telling yourself they are not racist does not make them moral.” – Come on! What if they just understand their motives and their circumstances better then outsiders? What is it is us and not them who is mistaken?

    “Are you suggesting that morals apply to you only if you agree with them? This sounds absurd, but I do not know what else you mean.” I am sorry this sounds absurd – perhaps I must clarify a little bit. To me it is only a question of morals, if both parties involved consider it as such. If not, it is some other question.

    For example, if we both subscribe to the moral rule that that the rich should share with the poor and, say, you are richer than me, when I approach you for a gift of $100, and you tell me that $50 would be enough because it is enough for my subsistence, and more money will destroy my incentives to work – we are likely to be having a morality discussion. If you however do not share my ideas (morals) and I try to achieve my goals by taking out a gun, or involving some people of power (like the police, the local gangster, the taxman or the judge) – that is definitely no longer a morality discussion. If in Napoleon’s moral view (shared by many Europe-wide back then) all Europe should be governed by France for its own benefit, and he imposes that moral by means of the “great army” – is it still a question of morality, or is it war?

    “I believe there are valid, moral reasons to limit immigration. I also think that there are other reasons.” And yet again I agree with you. Some people are indeed simply unjustifiably hateful. True.
    I am only saying that overruling people’s democratically expressed common preferences simply because some of their reasons might (we can not know for sure until we are in their shoes) be immoral is, how would you say… well, not moral.

  123. 123 123 Harold

    “Your example is a bit similar to saying that protectionism is good because it helps through protecting local business.” No, your position is that protectionism is good, in fact, that is exactly what you are saying. You say protectionism is good because it protects local employment and wages.

    “also like everyone belonging to, say, 10 social groups most likely to break the law in our town last year (including illegal work) (be they immigrants from Tibet, or middle-aged Polish females from Iowa) to post a bond ” A middle aged polish woman from Iowa is also a member of other groups, including socio-economic groups. Which do you use as classification? If she is poor then she belongs to a group that has a higher risk of criminal behaviour. I think you have to be very careful and thorough to avoid using these classifications to justify prejudice. Most examples I have seen tend to be the bad ones.

    “If in Napoleon’s moral view (shared by many Europe-wide back then) all Europe should be governed by France for its own benefit, and he imposes that moral by means of the “great army” – is it still a question of morality, or is it war?” Of course it is a question of morality – have you heard of “just war theory”? This attempts to specify when a war is just, or in our terms, moral. Napoleon’s war of conquest would be considered unjust by this analysis. Unless we are going to allow complete moral relativism, we must be able to say “this is unjust!” even if the perpetrator does not agree.

  124. 124 124 Hamish Atkinson

    Hi Dimitry, sorry for the late reply to this one, but it’s been a busy week.
    You wrote: “Would you prefer to see 10 unskilled illiterate migrants with brooms or one decently paid guy from Northern Ireland with some brand-new Dyson cleaning machine in your street? Would Stephenson ever care to build the Rocket if, say, Chinese canal-diggers were widely available in Britain? Would we even have the automobile if most potential buyers still could afford grooms and coachmen? Please give it a thought.”

    I have given this a thought and:
    1) I would prefer that everyone is literate and skilled, obviously. But let’s not mix up discussion of education with discussion of immigration – if you remove the emotionally-charged language from you argument, what you are arguing for is capital investment over unskilled immigration (or even providing more low-payed unskilled jobs to Brits). By artificially restricting the supply of unskilled labour, you can skew the market to a point where it becomes profitable to invest in labour-saving machinery. This transfers the profit made from sweeping the streets from the 9 unskilled workers to the people with the money to invest in plant or Dyson share, the workers in Dyson’s factory in Malaysia and the one worker qualified to operate the road sweeping machine (not to mention the rulers of Saudia Arabia or Iran, where it’s fuel comes from). But the net cost to the people paying for the streets to be cleaned (the tax payers) will be greater, because you have prevented the most efficient solution, forcing them to take the next most efficient option. (Minimum wage laws obviously form part of this distortion).

    2) Unskilled Irish (not Chinese) workers were in plentiful supply in Stevenson’s time, and did in fact build most the canal and railway network. Both trains and motor cars have plenty of advantages over canal barges and horse-drawn carriages, even if horses and carriages were as cheap to run. Are you saying a few extra immigrants would stop clever people inventing stuff? Really?

    Technological advances have had an enormous impact on productivity over the last two centuries and will continue to do so. These productivity gains destroy jobs in certain professions, but created new jobs in different professions just as fast. To take advantages of these changes, we need high quality, responsive education and a flexible labour market. I’d prefer if we put more emphasis on re-skilling and re-location of displaced workers, but that will only go so far and immigration can do the rest.

  125. 125 125 Dmitry Kolyakov

    @Harold

    It sadly appears that we are somehow back to “Dimitry, you rejected economics” phase…
    I would be happy to discuss some more if you wish, if you could pay just a bit more attention to what I wrote to you.

  126. 126 126 Dmitry Kolyakov

    @Hamish

    I have already been fussy about the misspelling of my name – did not expect such backstabbing from you too :)

    On your points:
    ” But the net cost to the people paying for the streets to be cleaned (the tax payers) will be greater, because you have prevented the most efficient solution, forcing them to take the next most efficient option. ” – True. That is why I was asking: “Would you prefer to see 10 unskilled illiterate migrants with brooms or one decently paid guy from Northern Ireland with some brand-new Dyson cleaning machine in your street?” You are right to say that the second option is likely to be (somewhat) more expensive. But still what would you prefer to happen in your street? I would prefer the latter unless the costs are prohibitive (in most real life cases they are not). To me it amounts to the difference between the first world lifestyle and the third. Again, as I said before, I have nothing whatsoever against those people who prefer third world lifestyles, but wouldn’t it be better for everyone if all options are preserved, and those preferring developing country living just followed your example and lived in one (while enjoying a better compensation package and helping build that country’s human capital)? It is closely related to a tale of two cities, by Prof. Landsburg I mentioned to you – why make Grimyville more like Cleanstown, if everyone preferring the latter can just go and live there?

    “Both trains and motor cars have plenty of advantages over canal barges and horse-drawn carriages, even if horses and carriages were as cheap to run”. What if they were cheapER as a solution (as in our broom/Dyson example)? Would a rational businessman invest in (potentially risky) innovation? BTW, if you are talking about current speed and capacity, there was not that much difference when those innovations were first introduced, nothing to justify a big premium anyway.

    “Unskilled Irish (not Chinese) workers were in plentiful supply in Stevenson’s time…” Well I do not have enough data to compare the wages of Chinese and Irish workers of the time, but to me the mere fact that some countries not so awash with cheap unskilled labor (Europe, USA) instantly presented a market for such an innovation (even if someone else was faster to invent), and some did not is quite telling.

    “Are you saying a few extra immigrants would stop clever people inventing stuff? Really?” What happened to the honorable British notion of fair play? :) I’ve never said that “a few” immigrants will “stop” anything. I said easier access to cheaper labor is going to make labor-saving innovation less profitable and hence less likely. “A few” extra immigrants ill only “slightly” push the labor costs down and make innovation “a tiny bit” less attractive. A number of immigrants big enough to bring labor costs close to the level of the poorer countries will disincentivize innovation way more significantly.
    A provocative question: Hope you are not suggesting that countries other than Europe/USA somehow had fewer “clever people” all those past several centuries?
    A curious example: In 1950-1960′s in the USSR there was a politically motivated drive to prove that many technical priorities belonged to Russian/Soviet inventors (also known as the “Russia is the motherland of the Elephant” drive). And all propaganda notwithstanding, some historians managed to come up with some (semi-)convincing evidence that some British/European inventions were indeed invented in parallel (and on some occasions even a bit earlier) in Russia. So the “clever people” apparently were there and busy inventing. I am sure that is also true for some other countries. The locomotive I was talking about was for example allegedly conceived by some Russian inventor only marginally later than by Stephenson. However that Russian engine never saw life. The market simply was not ready for it – the railway came to Russia only decades later and was mostly based on imported British/US technology. Having clever people is good, but having a ready home market is even better. Would the very same Steve Jobs still make all his innovations in his biological dad’s native Syria?
    Another case in point – Japan in the 20th century: not too many own inventions, but qualified and relatively (for the region) expensive workforce and hence, a ready innovation market and a very impressive technological track record.

    ” To take advantages of these changes, we need high quality, responsive education and a flexible labour market.” – Agree. But we still first need make those changes happen. Throughout history there have been “islands of innovation” where the alternative costs of innovation were highest (usually because of higher labor costs) and that were faster to develop and adopt innovation. Later even other countries and regions would be able to play catch-up and thus benefit from others’ innovation. Opening the floodgates and turning both the islands and former ocean depths into one giant swamp will however ensure that the whole formation will crawl with the speed of the slowest member. (it will make sense to delay innovation as long as there is at least one more potential unskilled migrant somewhere in the jungle who could be brought over and contribute to a cheaper old-fashioned labor-intensive solution)

  127. 127 127 Hamish Atkinson

    Sorry Dmitry, “dm” as a letter combination is practically unknown in English and thus rather prone to mistyping.

    I’m not sure you have the cause and effect right – technological gains are what is driving up real incomes, not real incomes driving technology.

    The vast majority of the population were very poor before the industrial revolution. As technology made each worker more productive, the potential income available for those workers rose.

    Initially, the benefits accrued mainly to the rich, who lived in the lap of luxury with many domestic servants. (Most of the scientific discoveries and inventions that drove the initial industrial revolution were made by pretty well off middle class people with servants – they benefited from a good education, sure, but you can also argue income inequality gave them the time to pursue their academic interests). Eventually, the rise of the unions and progressive taxation (income tax was not introduced in the US until 1913) helped spread the proceeds more widely through the population, which in turn created a bigger market for labour saving goods, which allowed economies of scale to bring prices down, making the market even bigger.

    But cheap unskilled labour doesn’t throttle innovation as you suggest, it merely changes what we innovate. At the moment there is a lot of work going into expert systems in the legal and medical fields. It is easy to see why – the potential savings are very large, and the current state of technology allows these sort of things to be automated cost-effectively. By comparison, most unskilled labour do fairly physical jobs requiring manual dexterity, or customer-facing jobs requiring human interaction. The big innovation gains for unskilled labour were made last century. This century, the innovation gains will be made in white-collar and skilled fields. (Let’s hope they don’t build Skynet just yet, though. Self designing, self building, self repairing robots could make all human jobs obsolete)

    We’ll have to watch Japan to see if what you are arguing turns out to be a good idea – with little immigration, plunging birth rate and an aging population, innovators there are desperately trying to make practical robots with human dexterity. I cannot help but feel that it would be much cheaper for them to accept an increase in immigration instead and try to improve the birth rate (encourage Catholicism, maybe? ;-)

  128. 128 128 Ron H.

    @Dmitry

    “You are right to say that the second option is likely to be (somewhat) more expensive.”

    No, he – and you – are wrong. When 10 unskilled workers are replaced by one skilled worker with capital equipment it is because it is cheaper. Otherwise it wouldn’t be done. Incentives matter, and reducing costs is the reason all our lives are better today than they were 50,000 years ago. If that were not so, we would all still spend our days gathering roots and berries and killing wild animals with our bare hands or scavenging what large predators had carelessly left lying around.

    “But still what would you prefer to happen in your street?”

    I would prefer that my street be cleaned at the lowest possible cost. The particular method used isn’t terribly important to me.

    “I would prefer the latter unless the costs are prohibitive (in most real life cases they are not). To me it amounts to the difference between the first world lifestyle and the third.”

    You, my friend, are an unabashed bigot.

    By the way, you might be well advised to try to convey your meaning, if there is any, more concisely and to the point instead of taking those meandering random walks through the English language that make your comments so unnecessarily long and tedious.

    Just sayin’.

  129. 129 129 Ron H.

    do any HTML tags work in this corment…I mean comment>/b> section?

    How aboutin this one?

  130. 130 130 Ron H.

    maybe if I write them correctly

    How about this one and this?

  131. 131 131 Ron H.

    insert text

    underline text

  132. 132 132 Hamish Atkinson

    @Ron H:
    “You, my friend, are an unabashed bigot.”
    I have to disagree with you, Dmitry has shown a willingness to engage in rational discussion that is uncharacteristic of a bigot.
    Therefore, I’d suggest that engaging in reasoned logical argument with him would be more productive than name calling.

    Regarding your objection “No, he – and you – are wrong. When 10 unskilled workers are replaced by one skilled worker with capital equipment it is because it is cheaper.” – we are not wrong, because we never argued that a local council would replace 10 unskilled workers with one skilled worker with capital equipment for any other reason other than cost.

    My point is that the artificial limits (on immigration or minimum wage) constrain the cost/benefit analysis in favour of investing in labour-saving plant. Without those constraints, the plant *might* still be the more efficient option, but it *might* not be. Obviously, it depends on a lot of variables: the cost of the plant, how long it lasts, what real interest rate you have to pay on the loan to buy the plant, how much the fuel costs to run the plant, how much it costs to maintain, how much you have to pay the trained operator, how much more productive he is than immigrants with brooms and how much you would have to pay them.

    Here in India, the variables are such that the optimal solution to this equation works out very different to the optimal solution in the UK. Basically, labour is very cheap and capital will get a much better return somewhere other than buying street cleaning machinery. 10 workers with brooms *are* cheaper here than one guy with a road sweeping machine.

    Dmitry: you have inferred that you prefer the way it is in the UK, but I’m not sure I understand why. You have indicated an aversion to “other people’s income driven down to third world level by cut-throat competition” that leads me to believe you have a lot of sympathy for workers in the UK that are earning minimum wage, but not much sympathy for potential unskilled immigrants to the UK. Yet, you oppose progressive tax and benefit regimes that would help reduce income inequality within the UK, whilst improving efficiency by “making work pay”, to coin the coalition’s byline for low-end tax and benefit reform.

  133. 133 133 Ron H.

    @Hamish

    that leads me to believe you have a lot of sympathy for workers in the UK that are earning minimum wage, but not much sympathy for potential unskilled immigrants to the UK.

    What do you suppose the word “bigot” means? Dmitry doesn’t like people who are not like him.

    …we are not wrong, because we never argued that a local council would replace 10 unskilled workers with one skilled worker with capital equipment for any other reason other than cost.

    You seem to have missed my larger point.

  134. 134 134 Steve Landsburg

    Ron H:

    “You, my friend, are an unabashed bigot.”

    I don’t think this kind of thing is likely to be conducive to an enlightening discussion. If you really believe you’re conversing with someone who can’t be swayed by reason (and who isn’t reasonable enough to teach you anything), then I encourage you to just walk away.

  135. 135 135 Dmitry Kolyakov

    As I am indeed not a native speaker of English, I had to look it up:

    Bigoted (adj.): Obstinately convinced of the superiority or correctness of one’s own opinions and prejudiced against those who hold different opinions.

    Such as calling someone whose opinions/questions you do not like or even understand a bigot, I guess?

    @Hamish

    Thank you for your words of support! (although I am afraid you might have been wasting them on that particular addressee)

    “you have inferred that you prefer the way it is in the UK, but I’m not sure I understand why.” – I am not saying it is ideal – I guess we seem to agree that many things there are far from ideal, in fact. However, true, I think I’d prefer living in the UK to living in most developing countries I have experienced. (Maybe it is just my weakness for scones with jam and clotted cream accompanied by` a proper cup of English breakfast, I guess :) As said I am quite fine with other people having different personal preferences. Some other developed countries are also quite pleasant to live in. It is hard to say exactly why I prefer it that way, but as said – just look on the migration flows/pressure – many people seem to have similar preferences.

    “you have a lot of sympathy for workers in the UK that are earning minimum wage, but not much sympathy for potential unskilled immigrants to the UK.” – Well, first of all – not really. I was really suggesting optimal policy steps from the point of view of the host country’s citizens, not my personal point of view. I personally am likely to actually benefit from completely open borders to the UK – but the UK government is not supposed to give priority to my interests, but rather to the interests of all UK citizens.
    Again just as it was discussed – I only care a bit more about existing local unskilled workers, because their problems are more likely to affect their fellow citizens in a variety of ways (also discussed) then those of foreigners staying in some foreign country. I also think that current citizens who and whose ancestors helped build the country as we now know it may (up to a point) be entitled to a bit more than the foreigners who can not be linked to such a contribution. That’s it. No particular affection for the northern Irish, no prejudice to, say, the Hungarians. Believe it or not.

    “Yet, you oppose progressive tax and benefit regimes that would help reduce income inequality within the UK, whilst improving efficiency by “making work pay”, to coin the coalition’s byline for low-end tax and benefit reform.” But this is not exactly the case. The only point I was insisting on was that wealth redistribution via taxes and benefits has its (often significant)net costs, which should be taken into consideration if your proposed solution requires an increase in such measures.

    As I indicated we may indeed differ on our views of the optimal taxation – and that is why I only said what I said in order not to start a tangential and pretty complicated discussion.
    If you wish we can discuss it, but this is something a bit different and potentially lengthy as well.

    On innovation:

    “I’m not sure you have the cause and effect right – technological gains are what is driving up real incomes, not real incomes driving technology.” – If I indeed said that that would be likely :) However, I was in no way mentioning the effects of income on innovation (that is a separate issue, but let us for now control for it), but rather effect of labor costs on the demand for labor-saving technology (innovation). Is there really a mistake here? Than could you perhaps elaborate?

    “But cheap unskilled labour doesn’t throttle innovation as you suggest, it merely changes what we innovate.” – Ok. So what exactly were the innovations happening in China, India and Ethiopia or even Turkey in Stephenson’s times (1829) – let’s see and compare, maybe they were equally valuable indeed :)
    Not to offend any other countries here is an example of innovative means of cargo freight common in Russia at the time (and a bit beyond): http://en.wikipedia.org/wiki/Burlak

    “…helped spread the proceeds more widely through the population, which in turn created a bigger market for labour saving goods…” Fine. And how exactly do you link those two if not via “their incomes and hence wage requirements as well as alternative costs of their time increased, the labor become more costly and so labor saving goods paid off better”? Would the same happen if the effects of the “rise of unions” were cancelled out by massive enough immigration of new cheaper non-unionized workers?

    “The big innovation gains for unskilled labour were made last century. This century, the innovation gains will be made in white-collar and skilled fields.” – I am not sure I can predict the future course of innovation just as well – if you are sure you can, we might want to start some venture fund to benefit from it :) Your notion might also depend a bit on the fact that innovation changes what occupations are considered skilled and what – less skilled. A car/truck (lorry :) driver would be considered astronaut-like when automobiles just appeared, but not so much now. The same might apply to some of the white collars you are expecting to be affected by innovation. The future forecasts notwithstanding even if many unskilled labor innovations have already been made, the have not yet been implemented in very many places. To me it is precisely because the abundance of cheap unskilled labor makes them economically inefficient there.

    “We’ll have to watch Japan to see if what you are arguing turns out to be a good idea” – And if I said something positive about Victorian England would we also have to watch current coalition to see if their budget balancing attempts succeed? :) I was specifically referring to “Japan in the 20th century” – no more, no less. I was discussing positive influence of relatively higher wages and skill level on implementation of innovation (even if most inventions are imported). Japan is an interesting and complex country and the example I was discussing is sure not the only thing that happened and is happening there. However, different things and different times are a different story.
    On the current situation I would say that Japan in my opinion is indeed facing difficulties pertaining to its demographic situation, just like most developed countries. And indeed, I think some level of migration would be beneficial. Remember, we agreed that we both support some level of migration (yielding optimal result to the country’s citizens), and some ratio of skilled vs. unskilled – it is just that our numbers might differ. But as always – I am happy for the Japanese to decide – it is their country, it is their call.

    So, just curious, what was your preference on the “brooms vs. Dyson” question? (unless you subscribe to the elegant “you are a bigot” option :) )

  136. 136 136 Ron H.

    Steve Landsburg:

    I don’t think this kind of thing is likely to be conducive to an enlightening discussion. If you really believe you’re conversing with someone who can’t be swayed by reason (and who isn’t reasonable enough to teach you anything), then I encourage you to just walk away.

    You are right, of course. By the time I wrote my comment I was indeed convinced that there was no possibility of a meaningful conversation with Dmitry, who, based on his many long circumlocutory comments, appears to disdain people who are poor, uneducated, unskilled, and who don’t speak English. In other words, people who aren’t like him. Hence the label “bigot”.

    So I have effectively walked away from the discussion, although I may continue to eavesdrop. :)

    Love your book, by the way.

  137. 137 137 Hamish Atkinson

    Dmitry:
    “So what exactly were the innovations happening in China, India and Ethiopia or even Turkey in Stephenson’s times (1829) – let’s see and compare, maybe they were equally valuable indeed :)”

    There are many complex reasons why Western Europe (and then America) became a hotbed of innovation and industry. High labour costs was not one of them at the beginning (by the 1950s, the jobs made possible by industrialization reduced unemployment and thus drove up wages). But going into them all is beyond the scope of this discussion. I suggest you watch Niall Ferguson’s excellent Civilization series for a description of the 6 “killer apps” (“competition”, “scientific revolution”, “secure property rights”, “modern medicine”, “protestant work ethic”, “consumer society”) that drove this change: http://www.channel4.com/programmes/civilization-is-the-west-history/4od (UK only)

    You quite reasonably ask, which would I prefer, 10 laborers with brooms or one with a machine? The answer is that would rather that India changed to become more like the west. That is, I would rather there was enough of a shortage of unskilled labour across the entire world, that the cheapest way to do all the boring, dirty and dangerous jobs would be do it with machines. However, I don’t believe this will happen while the global population is still rising.

    However, I am concerned about the future – the US GDP is beginning to recover from the banking crisis, but in doing so, the jobless figures are staying high – I worry that increasing automation will finally begin to destroy more jobs than it creates (to the benefit of those with capital to invest), or, if we abolished the minimum wage, drive unskilled wages down to poverty levels. What happens when Google’s driverless car becomes ubiquitous? When the road cleaning machine starts driving itself? What will those people do, in the future? How will the wealth be distributed? Will everyone have the chance to be a productive member of society?

  138. 138 138 Dmitry Kolyakov

    @Hamish

    “There are many complex reasons why Western Europe (and then America) became a hotbed of innovation and industry. High labour costs was not one of them at the beginning..” – Ok. I btw have never claimed that there was only one simple factor as opposed to “many complex” ones. I can assure you that I have done some reading on the topic and aware of different factors discussed. (NB. A joint purchase of The Armchair Economist and David Landes’s “Wealth and poverty of nations” was one of rare occasions where two books sitting next to each other on a bookshop shelf (as arranged alphabetically by author) both proved excellent). However let us stay focused – just to be clear, so in your opinion higher labor costs are not a factor in promoting labor-saving innovation (be it back then or right now)? Or are they perhaps not material?
    BTW, on your Japanese robots example – they may appear useless outside of Japan now, but who knows, maybe the will be extremely useful in future? With innovation you never know – it is always better to have it than not…

    “…I would rather there was enough of a shortage of unskilled labour across the entire world…” – So, is it fair to say, that you have your preferred option, but are not willing to take it until it is available to most people worldwide? And, while I envy your altruism and optimism on life expectancy, here is another question – would you also like to deny other people with the same preference (like your fellow UK citizens) such an option too?

    “I worry that increasing automation will finally begin to destroy more jobs than it creates” – But you’ve heard of the Luddites, right? :) I guess as long as people are willing to re-train as opposed to going on welfare or otherwise joining the noble and proud Lumpenproletariat (which again is greatly facilitated if the potential salaries in the new field are not driven down too low by immigrants and the re-training pays off) any automation that is short of your Skynet example will only benefit people. It did so many times before.

    Basically I guess we both agree that some life support (not big enough to destroy their incentives) should be given to fellow citizens who do not (yet) possess the necessary skills to thrive in the new and changing technological environment. However, it seems to me that I would like to do it at least partially by restricting lower-skilled immigration and thus raising wages and enabling them to be financially independent (which greatly and positively affects mentality even if you by far are not rich) and retain hope and motivation, whilst you seem to prefer the tax and benefit option (which, as I tried to argue has its net costs)?

    “What will those people do, in the future? ” – Well, I guess in the longer term there will always (until skynet anyway) be new professions for people to learn, new ways to be productive. I do not think your Great-granddad thought you would be an IT specialist leading a team in India :) He might’ve been concerned about reducing opportunities for weavers or some other such profession however.

    In the shorter term – it depends. If those displaced workers have some (semi-) decent alternatives many of them would go into some lower-skilled occupation, take some pay hit by remain productive valuable society members (with a mentality of someone who earns his own bread) and, if they are old – have a chance for an acceptable retirement, if they are young, – a base for re-training. If however such people are faced with stiff competition from immigrants for jobs and hence much lower wages, they are way more likely just to drift to life’s bottom creating problems both for themselves and for others around them.

    “increasing automation will finally begin to destroy more jobs than it creates (to the benefit of those with capital to invest)” – On the benefit of the capital owners: So far the development has been quite the opposite. Just look at the shares on labor in capital of GDP of most developed countries. Look at the (real) interest rates dynamics over long term. Innovation and economic growth in general make capital ever more available, there is ever more capital chasing profitable investment opportunities. The amount of capital available grows faster than the available workforce (at least in most developed or properly developing countries) and that improves the labor’s bargaining power. It is just that some professions within labor benefit more than the others. But the capital owners (they might at the same time provide the labor element of managers or entrepreneurs, but that is a different issue) have nothing to do with it. Many of those “with the capital to invest” are exactly those future and current pensioners who are in for a big trouble not only because of more time to spread the same amount of money over, but also because the pension pot is getting smaller due to lower real returns on their investment.

  139. 139 139 Harold

    Dmitry: It may be useful for you to read what I wrote, which I believe addressed many of the points you raised. If I am wrong, then why not point out where?

    I think we agree that basic economics says that free movement will be more economically efficient – more good to more people. You propose that limits are placed on this movement, accepting that there will be less efficiency, in order to protect the living standards of the current resdidents. I am not saying you are wrong – I do not believe efficiency is everything – but I am saying that this is a protectionist position. Do you disagree?

    Protectionism may be a rational position. The benefits of cheaper cars are unlikely to compensate me for the loss of my job if I am a 55 year old car factory worker. I and my colleages will be better off if foreign car imports are restricted and my factory stays open.

    Anyway, I think your point about the protectionism was that I was only counting one side of the cost / benefits, or assuming without evidence that one side was larger than the other. You are in the same position, since, as you say, we do not have an analysis that tells us which is greater.

    There seems to be two reasons why you prefer the high tech cleaner to 10 low tech ones. Please correct me if I am wrong.

    There is the economic argument that the current residents will be worse off, as discussed above, and a cultural reason that the 10 immigrants will change the culture you live in to one you prefer less.

  140. 140 140 Dmitry Kolyakov

    Harold:

    I did, but did you?

    “If I am wrong, then why not point out where?”

    Ok, if you are asking.
    Isn’t it a bit funny, that me, a non-native English speaker should do all the definition checking time after time here?
    So, how does, say, Wikipedia define Protectionism?

    “Protectionism is the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow (according to proponents) “fair competition” between imports and goods and services produced domestically.”

    You wrote: ” No, your position is that protectionism is good, in fact, that is exactly what you are saying. You say protectionism is good because it protects local employment and wages.”

    So, basically just a few points – 1.I have never said that protectionism is good (see the definition), in fact if you look at some earlier points here, I advocated free movement of goods across borders. So you pro-free trade zeal is completely misplaced here, if only because I share it. 2.I have never accused you of favoring protectionism, so your rebuttal is again a bit misguided. I merely drew you attention that the logic you mentioned (free immigration is good because internal prices are lowered) shares a logical flaw with many arguments for protectionism – it does not properly consider both sides of the equation and focuses only on the benefits instead.

    You also wrote:”A middle aged polish woman from Iowa is also a member of other groups, including socio-economic groups. ” True, but is it relevant? We are dealing with people trying to protect themselves from crime. Why would you suspect irrational/deliberately prejudiced behavior on their part? If they (and their law enforcement officers) believe that this is an appropriate classification for their purposes, why do you again want to overrule them based just on suspicion of prejudice? If their choice is sub-optimal because of prejudice or otherwise they will lose beneficial visitors of good character to a neighboring community/state. And so the most efficient will prevail.
    “Most examples I have seen tend to be the bad ones.” Bad in what way? They did not work, or you did not like them? Consider the example from one of SL’s books about the police stopping the larger proportion of black suspects with the same conviction rates. To an outsider that would look like prejudice/racism. But as Prof. Landsburg has shown it is just professionalism.

    Than there was something that really upset me: “Of course it is a question of morality – have you heard of “just war theory”?” Well, I must admit I had to look this particular theory up. I guess the reason is I am not a US catholic, as this theory, deeply rooted in Catholicism. is not very well known even among non-US Catholics, let alone pagans like me. So if you were more interested in moral teachings of certain parts of Islam than Catholicism we would have to agree that Jihad on America and 9/11 were just or moral? That is just unbelievable! Hope you are aware that something can be moral to you and even your friends and deeply despicable to some other people. Imposing your morals on them by force as opposed to negotiation and agreement in no longer moral for me – it’s an aggression.
    Just to repeat: Napoleon and many other people of his time supported France’s conquest, it was moral for them. Stalin and many people of his time supported spread of communism by force, it was moral for them. And finally Hitler and many people of his time supported advance of Nazism and occupation of Europe, it was moral for them. There were always some nasty people who did not subscribe to those morals, but the three great moralists I’ve mentioned never worried – they were firm in their beliefs and just ordered the troops to charge!

  141. 141 141 Dmitry Kolyakov

    Harold:

    “Anyway, I think your point about the protectionism was that I was only counting one side of the cost / benefits, or assuming without evidence that one side was larger than the other. You are in the same position, since, as you say, we do not have an analysis that tells us which is greater.” – While I appreciate the neatness of the trick – we are not necessarily in the same position even if indeed we did not have the analysis in question. It is the proponents of looser immigration who are suggesting a policy change so the onus should be on them to bring a convincing argument. Anyone could do it during these 140 something comments and still I can see nothing but abstract morals and on occasion insults instead of economics (I feel so guilty that I used to reject it, so I want to see as much of it as possible now).
    Of all the stuff discussed so far only the initial argument by SL can work, but it is contingent on universal acceptance of unprecedented levels of altruism which even many people here reject (and the author himself does not really support by still not having sent me the keys) and so does not really work.
    Of the arguments discussed so far – all non-super altruist pro-migration ones are very few and far between.

    “There is the economic argument that the current residents will be worse off, as discussed above, and a cultural reason that the 10 immigrants will change the culture you live in to one you prefer less.” – Almost like that, just a tiny correction: if by residents worse off you mean only their direct real incomes, then the second point is by far not limited to culture.

    Rather it is the total social costs: added crime and law enforcement costs, strain on the benefit system, strain on the infrastructure, possible creation of ethnic ghettos, the fact that your children might get to a kindergarten where the majority of kids do not speak English, and so their development will stall and you will have to transfer them to some expensive private one (same for school), rise in animosity and aggression (please do not think it is just the locals who dislike the incomers), eventually voters supporting whoever is the most populist, etc, etc.

  142. 142 142 Harold

    Dmitry: I think there are two separate questions which are a bit conflated. The one Steve asked in this post – should there be more immigration now? The other is should there be unlimited, or vastly more immigration.

    As I understand your position, you believe there should not be more immigration now. This question can be addressed with SL’s economic argument, although that only deals with economics.

    The analysis is for a $3 an hour loss by USA citizens. We don’t have an accurate measure of is the gains. SL asserts that “Now add to all this the fact that our Mexican immigrant typically brings well over $3 worth of benefits to Americans, which more than offset the $3 wage drop.” This is stated as fact, but perhaps requires some more details. I do not know the basis for such a confident assertion.

    However, we are left with SL’s analysis from the start:
    “So: The easiest way to justify an anti-immigration stance along these lines is to 1) ignore all benefits of immigration to Americans and focus solely on the costs, and then 2) treat a $3 loss to Americans as more consequential than a $7 gain to Mexicans, even when the Mexicans are much poorer than the Americans. That seems to me to be a very difficult calculation to defend.”

    This is for slightly more immigration now.

    It seems one must either accept SL’s justification, agree with more immigration, or disagree with the fugures in the marginal analysis.

  143. 143 143 Harold

    My above comment is going round in circles. The only point of interest is the degree of certainty Steve expresses that the benefit the immigrant brings is greater than the $3 loss as a result of lower wages. Is this an inevitable result of economics? Can we be certain?

  144. 144 144 Dmitry Kolyakov

    Harold:
    “The one Steve asked in this post – should there be more immigration now? The other is should there be unlimited, or vastly more immigration.” – The first question is as I as have repeatedly said is not well-defined enough to be practical – what is “more”? If it is one abstract person – why waste time discussing if we neither have the means to change anything in such increments, nor the data accurate enough to analyze at that level, nor any chance to feel any difference? Should we have additional 10 000 software engineers, 10 000 000 unskilled migrants, or even 1 000 of people the current average migrant’s profile – would all be examples of vastly more relevant and practical questions (requiring at least some different data). Having even 1 million new Steve Jobses is likely to be beneficial, having just one Bin Laden is most likely not. The second question however is what many people here seemed to assume some answer to based on nothing more than a relatively incomplete answer to the first one.

    “As I understand your position, you believe there should not be more immigration now. This question can be addressed with SL’s economic argument, although that only deals with economics” – No and no, in case you were interested in my opinion :)That actually was in my earlier comments quite a couple of times. I think that there should be more better immigration and less worse immigration :) I generally think that most countries have too little immigration precisely because endless attempts to force less then universally accepted morals on everyone make us less able to fine-tune the immigration policy and make many people object immigration as such. I mostly disputed arguments in favor of free immigration and equal treatment of those migrants likely to be a net asset to the society and those likely to be a net liability. SL’s argument does not properly address even the highly impractical question you have mentioned, because he only claims to have data (let’s not discuss it’s accuracy) on the costs to locals and benefits to migrants. Social/integration costs (the elephant in the room) are just omitted, the benefits to locals side is a pure speculation.

    Let us see what’s behind the last bit. (“Now add to all this the fact that our Mexican immigrant typically brings well over $3 worth of benefits to Americans, which more than offset the $3 wage drop.” – fits my definition of pure speculation perfectly)

    SL wrote: “If your wages drop by 10% while prices drop by 20%, you’re a winner.” Which sort of reminds me of the old Yiddish saying “If the grandmother had a beard she would be the grandfather…” (something like “Az di bobbe volt gehat a bord volt zi geven main zeide” :) )

    If you adopt a point of view of someone whose job is protected from competition by artificial barriers of entry or special knowledge (such as a tenured professor), or whose job would be more demanded in a developing market (such as Hamish, for example) you might indeed win (by shifting your costs to other citizens). However if we apply this logic to the local population as a whole, it is as simple as that:

    If the labor costs drop by x%, the only way for the prices to drop >x% is for the share of local labor costs in prices to be >100%

    As this blog is full of math fans feel free to disprove it using all Peano axioms and Fermat’s theorems you like :)

    So, while you are right to say “We don’t have an accurate measure of is the gains” (to the locals, I presume), if we have any intellectual honesty we _know_ that it is going to be less than their costs.
    People artificially protected from competition (both employees and investors), those whose jobs are more valuable in a developing country environment and selected foreigners (migrants, those benefiting from reduced competition at home, investors taking advantage of new US opportunities) will benefit, _everyone_ else will lose.

    On the bit of SL’s analysis you quoted:

    “So: The easiest way to justify an anti-immigration stance along these lines is to 1) ignore all benefits of immigration to Americans and focus solely on the costs, and then 2) treat a $3 loss to Americans as more consequential than a $7 gain to Mexicans, even when the Mexicans are much poorer than the Americans. That seems to me to be a very difficult calculation to defend.”

    Fine. What about reason 1a – “Compare benefits and costs and see that the costs are larger”? Has it ever crossed the author’s mind?
    On 2 – what a cute omission! The missing word is “Americans”. If you say “more consequential to Americans” this becomes “a very easy calculation to defend”. Anyone who disagrees is welcome to send the keys I asked for.

    To me, there are only 3 major exceptions to this general aversion to immigration:

    1. Those, who are likely to pay a lot of tax, so their net tax contribution equals or exceeds both direct economic damage to the locals and the possible social costs (which would be much lower for this category anyway)

    2. Those whose presence in the country is likely to ensure competitiveness in the business/technology areas which have a big first mover advantage. That would apply to selected highly qualified innovation technical specialists and scientists (but not all of them). This category will have a major overlap with the first.

    3. Those whose admission is advisable based on genuine compassionate grounds. That means that such people will be killed or imprisoned for long periods for something that is not a crime in the host country or are not able to receive medical or similar care they need while a charitable organization or individual is willing to guarantee such care in the host country. In all such cases a willing individual or a charitable organization should guarantee to support them if they are not able to support themselves adequately for the duration of their stay. People in this category should only be able to stay as long as those conditions are satisfied or until they become admissible under one of the first two categories.

  145. 145 145 Dmitry Kolyakov

    A small follow-up:

    As a matter of fact, as the share of local labor costs in the US domestic consumption is somewhat below 50% (slightly above before you adjust for exports and the trade deficit) the reality is likely to be exactly the opposite of Prof. Landsburg’s stated assumption: if you drive down everyone’s compensation (including all Lloyd Blankfeins of the world – good luck doing that) by 20% – the average drop in prices is very unlikely to exceed 10%

    This is again a very optimistic scenario, but in order not to write too long again I will stop here.

  146. 146 146 Hamish Atkinson

    @Dmitry: “The share of local labour costs in US domestic consumption is somewhat less than 50%”.
    Could this not have something to do with the fact the US is one of the most rapacious economies in the world, in terms of its per-capita consumption of energy and raw materials? What is the comparable figure in the more resource-efficient Western Europe? (In fact, when presenting statistics, can you provide a link to the source?)

    Also, does a shortage of unskilled labour in the US mean that US domestic consumption is spending a higher proportion of its money on foreigners’ wages and transport of goods from China, Korea and Mexico than it otherwise would?

    Basically, instead of quoting selected figures that tend to prove your point, isn’t it better to do a marginal analysis on the costs & benefits of admitting 1 extra unskilled immigrant?

    Steven’s quoted marginal analysis only looks quantitatively at the effect on unskilled wages, so is incomplete – I agree with you that he has not backed his statement “the fact that our Mexican immigrant typically brings well over $3 worth of benefits to American” with any hard evidence.

    Steven – perhaps you could back this “fact” with some quantitative evidence? Do you know of any studies that analyze the indirect benefits and costs of immigration?

  147. 147 147 Hamish Atkinson

    I’ve also had a few thoughts on earlier discussions:

    I accept the fact that allowing in extra immigrants will almost always create some losers amongst the existing citizens. In the case of an unskilled immigrant, the losers are unskilled workers having their wages bid down, or (especially with minimum wage laws), a citizen that loses a job to an immigrant willing to work harder for the same money.

    The benefits of unskilled immigration accrue disproportionately to the richer citizens, so, for citizens to accept immigration, these gains have to be redistributed so that no one section of society is worse off. This redistribution has to be done in a way that is economically efficient, otherwise the net gain from admitting one more immigrant could be lost. (Dmitry argues that this is the case for nations that are not “super-efficient”, like Finland).

    I believe that the minimum wage is an extremely inefficient way to redistribute gains, because it throttles businesses that would otherwise be profitable, as well as stopping one of the main benefits of immigration (cheaper labour costs).

    Much better to change the benefits system so that work always pays (e.g. instead of losing £1 of income support for every £1 you earn, lose only 40p). At £71, income support would stop once a 25 year old is earning £178/week.

    Then withdraw housing benefit at 50p in the pound (currently withdrawn at 80p in the pound).

    At a level where a typical housing benefit finishes, start taxation (i.e. fix the personal allowance at that level). Workers that are not renting (or renting cheaply, like a bunch of working people sharing a house), would then hit a “sweet spot” with no reduction in benefit and no taxation. Conversely, workers living in expensive rental accommodation would hit a rough spot, with taxation and benefit loss (but that’s their choice, right?)

    Taxation of those with enough income to pay taxes would have to be higher, obviously. But they would get many benefits – their would be fewer long-term unemployed, because of the better marginal incentives to do some work. This would tend to lead to less crime. If you abolished the minimum wage (or at least set it at a lower, per region PPP basis), costs (of everyone) would be less and income (of the rich) would rise, so the people paying the higher taxes would be no worse off. By aiming the extra taxes primarily at unearned income (capital gains, dividends and rental income), the economic efficiency of the system can be preserved.

    If you increased unskilled immigration but redistributed in this way, there would still be some losers (people displaced by immigrants from a full time job), but if they took some part time work instead, they would benefit from it. This would lead to a more flexible labour market, more opportunity for workers to try their hand at different occupations and possibly acquire new skills.

    Please note, I’m not saying we should allow only unskilled immigration, just that it is possible to allow more than we have at the moment, and benefit society as a whole without penalizing existing citizens.

    And no, Dmitry, I don’t have the mathematical analysis of this with figures to back it up, so I might be wrong. But if anyone wants to bring some figures to the table, feel free, but please provide links to the source.

  148. 148 148 Steve Landsburg

    Hamish Atkinson:

    Steven’s quoted marginal analysis only looks quantitatively at the effect on unskilled wages, so is incomplete – I agree with you that he has not backed his statement “the fact that our Mexican immigrant typically brings well over $3 worth of benefits to American” with any hard evidence.

    Steven – perhaps you could back this “fact” with some quantitative evidence? Do you know of any studies that analyze the indirect benefits and costs of immigration?

    I can do better! There’s a purely logical argument that says the total benefits of immigration (to existing citizens/residents) must exceed the total costs. (This argument, however, ignores such issues as how the immigrants are likely to vote, and the effects of those choices). Arguments like this, are, I think, far more convincing than empirical arguments, because anybody can check them, whereas with empirical work you’ve usually got to trust someone else’s data.

    If we accept the empirical estimate that one additional immigrant costs American workers about $3 per hour, then it follows from the logic that the offsetting benefits must exceed $3 per hour.

    You can find the logical argument in ##tbq, where it’s stated for free trade, but the exact same argument works for immigration.

  149. 149 149 Dmitry Kolyakov

    Hamish:

    “Much better to change the benefits system so that work always pays (e.g. instead of losing £1 of income support for every £1 you earn, lose only 40p). At £71, income support would stop once a 25 year old is earning £178/week.” – Fully agree. My agreement to most of what you’ve said before along the similar lines also stands.

    “Could this not have something to do with…” Sure it can. It probably does. I can not see why exactly that matters.

    In Germany, as I remember from Thillo Sarazin’s book “Deutschland schafft sich ab” the share of labor in GDP was around 64% but there was much more exports and imports, so the share of local labor will be not too different anyway.

    “Basically, instead of quoting selected figures that tend to prove your point, isn’t it better to do a marginal analysis on the costs & benefits of admitting 1 extra unskilled immigrant?” – I believe I was quoting “selected figures that tend to prove my point” exactly to complete someone else’s less than complete marginal analysis – is your perception different?

    “(In fact, when presenting statistics, can you provide a link to the source?)”
    So when we are told that “labor economics literature” tells us the harm to american workers is exactly 3 USD per immigrant – we can discuss it for over 140 comments, but when I quote share of local labor in the GDP you immediately demand a link? Please just google it if you do not believe my numbers (they indeed might be dated or not very accurate) that’s what I did, just googled them. However, the logic only ever changes if the share of local labor in locally consumed part of GDP is >100% – please let me know if that is what your research shows.

  150. 150 150 Dmitry Kolyakov

    I honestly think that all the arguments I made in this thread are no longer commensurate with the depth of the original argument and the willingness/capacity of the author to defend it.

    It sure makes sense to open your country with no restriction or tariff to foreign plywood if you think your country is better off focusing on something else then plywood. It sure makes sense to do the same with people if you believe your country is better off focusing on something else than its people.

    If all we are getting is “Do you have the data to support your claims? – I can do better, I have my book” on issue after issue (AKA “So why exactly do you think the God exists? – Just read the Bible”), my efforts with all my respect to the author are indeed better invested elsewhere.

    Sure, It took the author “a good 20 minutes and a help of 2 colleagues” (years ago and it was on a different topic anyway, numerous differences between these 2 topics were discussed here from a multitude of angles) to reach the ultimate truth… I can invest quite a bit of my time in a logical discussion and persuasion, but I am not in the business of proselytsing to the righteous really.

    If someone is happy to let the rest of his (high-quality) work be compromised by a couple of obstinate mistakes (or even potentially correct but not convincingly organized arguments) and let the krugmans of the world dominate the scientific discussion – that is (unfortunately) totally that person’s choice.

  1. 1 Immigration Followup « Daniel J. Smith
  2. 2 Some Links
  3. 3 Before It's News
  4. 4 20 work hours per week « Prosepetrose's Blog
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