Thursday, June 6, 2013


I wrote a short essay on immigration for Hoover's "Advancing A Free Society" series. It's here, and reproduced below.  The whole set of essays in Hoover's Immigration Reform series is worth perusing.

Since writing it, and also reading Steve Chapman's good editorial on the subject (Chicago Tribune, Townhall) the e-verify system seems like an even bigger nightmare. Every employer in the country must check that every applicant has the Federal Government's permission to work before employing him or her.

Beyond the points raised in the essay below, it's an interesting coincidence that this e-verify is in the news at the same time as the IRS scandal. Congressional Republicans get the cognitive-dissonance award of the year for this one.

Surely, it will never happen that e-verify agents target selected groups for more careful scrutiny or slow processing, because they might want to vote one way or another, or because they have expressed unpopular opinions? Surely employers with unpopular political opinions have nothing to fear here?

Surely, with the technology in place, Congress will never expand the power to dictate who has the right to work and who doesn't? It won't try to deny work or work in certain industries to people convicted of crimes?  Especially people convicted of vague white collar crimes like say "consipracy?" Surely, it will never happen that people's right to work is blocked for getting in trouble with other federal agencies like the NLRB, EPA, EEOC, etc? Surely, this system won't be used to ensure that the victim of the latest SEC witch hunt can never work in the securities industry again?

Surely, Congress will never expand the system to make sure anyone who gets a job has paid up their health insurance, paid their taxes, and changed their lightbulbs to the new low-energy mandates? Surely, Congress and the agency will never use the system to deny the right to work to people accused of "hate speech" or other unpopular exercises of first-amendment privileges?

Surely. Your papers, please?

The Hoover essay:

Immigration Policy: Purpose and Unintended Consequences

The immigration policy discussion and legislative proposals suffer from a huge gaping problem: nobody can articulate what the point is. What are the objectives? People want to come to the United States, work, pay taxes, start businesses, buy houses, and join our society. Why are we keeping them out?

Well, obviously, people who don’t work and want to come only to receive government checks and other benefits are a drain. But our immigration policies and proposals are not crafted to solve that problem. And it’s easy to solve: require a payment at the border, or post a large bond, say $10,000, which is refunded after five years or so of paying taxes, having a job and health insurance, and staying out of jail. Obviously, we don’t want criminals and terrorists, but that desire hardly explains our laws or the proposals on the table.

The vague charge that immigrants will “take jobs” and lower American’s wages is not established at all in economics, and it doesn’t make much sense anyway. It surely doesn’t explain why we keep out people who want to start businesses. Our ancestors didn’t steal Native Americans’ jobs to get rich; they created new businesses and opportunities. Land and capital are plentiful in the United States, so why would we expect new immigrants to be any different?

Furthermore, whether an immigrant works in a US factory and produces a good which undercuts that good produced by a US worker, or whether the immigrant works at a factory in Mexico and produces the same good–probably cheaper–the effect on US wages is the same. By keeping the immigrant out, the factory just moves to Mexico.

Finally, even if keeping foreigners out boosted Americans’ wages, such a policy is a pure transfer. Would the US government send marines to Mexico, to steal a prospective migrant’s cow, or take his wages and send the cow or the wages as a subsidy to US workers? And then charge a sales tax on both the Mexican and the US product, raising its price and sending that as a subsidy to American workers as well? That’s exactly what restricting immigration to prop up wages accomplishes, as it is exactly what trade restrictions accomplish. We send foreign aid and development assistance to lots of countries (well, to their governments, but the intent is to help people). We then try to impoverish them to our benefit.

Political and social arguments carry a little more weight. Face it, many Republicans are anxious about immigrants because they fear they will vote Democratic. A thirteen-year disenfranchisement seems well crafted to exploit that worry. Stories of extremists who immigrate who live off welfare, and commit acts of terrorism stoke fears that the melting pot is broken. But if that were the genuine concern, our immigration laws should favor hardworking, entrepreneurial immigrants likely to adopt our culture. If we have so little faith in the power of our ideas, perhaps we should reexamine them.

If we worry about culture wars, and voting citizens who do not have the basic command of US history, political philosophy, legal and social traditions, that battle was lost, and should be won, in the disastrous public schools, not by keeping entrepreneurs on the doorstep.

Rudderless policies are even more prone to unintended consequences. Under the proposed e-verify system, all employers are supposed to verify the work eligibility status of all employees, including domestic works, in a gargantuan national database.

The result is fairly predictable. The only way to get around the e-verify system would be to make the worker fully illegal. So, rather than have a worker with illegal immigration status, but in the social security system and withholding taxes, we would move to an under-the-table cash economy. And once the company moved to accommodate some illegal workers, why not avoid taxes, regulations, health insurance penalties, and all the rest of it by paying the Americans in cash as well? The immigration law has a huge hole in it: How do people who want to come to work in the United States in the future come here legally? Even if the current illegal immigrants are allowed to stay, if we keep denying entry, new ones will keep coming, and we will be back in the same mess all too soon. You can tell that this must be the plan, because otherwise we wouldn’t need to talk about e-verify. If everyone who wants to come and work can, you don’t need to do fancy verification. You only need that if you conceive of a new, large stock of people in the country trying to work and being barred from doing so.

Immigration law should be like drivers’ licensed law or passport applications: setting out the procedure by which anyone who wants to move to the United States can go about doing so.


  1. In the public's view "immigration reform" means "How do we keep out people who come here for the transfer payments?" I haven't heard many people object to having more doctors immigrate.

    History tells us that trying to stop tidal movements in populations doesn't work and just causes distortions. The whole "stealing jobs" issue was how we ended up with disasters like Davis-Bacon. Back then the upstart population was the African-Americans.

    Certainly the problem immigrants are not stealing jobs mowing lawns, mopping floors, or picking fruit. When I see those guys out in the hot sun mowing lawns I have to admire how hard they work. I want people like that here. Central America can have all our Octo-Moms. We are ejecting the wrong people.

    Every wave of immigration causes cultural frictions. Ask any Native American. Recall the "No Irish" signs of the 1800s. The first clashes over school prayer happened in the 1800s when Catholic immigrants objected to their kids reading Protestant Bibles in schools.

    The new people do jostle the current residents for elbow room. No doubt about it. But I think eventually people integrate at the interpersonal level. Do you even give an interracial couple a second look? I remember seeing segregated water fountains and bathrooms.

    A few years ago I attended a wedding. The groom was Jewish and the bride was Mexican. It was outdoors and rather warm. On both sides of the aisle I saw a lot of women wearing fur coats and I thought, "This will all work out. We really aren't that different."

    The Zero Population Growth movement finally got its wish and now we have a serious demographic problem with too few young people paying for too many old people. This is playing out all over the developed world. We should be fighting over who gets the immigrants.

    My only quibble is please learn English.

  2. One problem in this debate is a fundamental disagreement about whether it is legitimate to extend the notion of property rights from the individual to the collective. We know the left doesn't care too much about property rights. But even many libertarians think property rights are important only for individuals or groups of individuals (for example a company, or a gated community), but they will not accept that the idea that the US is a giant gated community owned by US citizens, who are perfectly entitled to decide if it is in their interest to share some of this property with (certain) outsiders.

    The other problem is that the debate is completely stifled because we cannot talk frankly about human (bio)diversity (see James Watson, Larry Summers, and most recently Jason Richwine). The current prevailing intellectual climate is radical egalitarianism. The idea that (for example) Mexican immigrants may never catch up socioeconomically (and will therefore disproportionately impose externalities) is a crimethought. Screening immigrants on desirable characteristics would be discriminatory, and as we all know, discrimination is evil.

    Anyone who cares about notions of limited government should be especially worried about immigration. American conservatism is a unique combination of ideals and ideas, shared by very, very few people around the world, and people don't change their political ideology easily.

    Sorry for posting anonymously.

    1. Although I share your opinions about the Thought Police I find the rest of your thesis lacking in substance.

      There are no racial or ethnic genes. Races are the product of certain combinations that evolved regionally. If you shuffle the deck the racial characteristics disappear. You also get awesome results like Halle Berry. Sometimes you get Barack Obama. No system is perfect.

      Ah yes, James Watson, who described the "historic curse of the Irish, which is not alcohol, it's not stupidity. But it's ignorance."

      I forget - which chromosome carries the ignorance gene?

      Why should anyone think that Mexican immigrants can't "catch up"? Carlos Slim is welcome here any time he wants to immigrate.

      Even if there are differences between ethnic or racial populations it's not as if the curves don't overlap. If there is a 10 point IQ difference between two populations on average, the bell curves would have to be narrow indeed for the two populations to be entirely discreet. In the lower-scoring Group A you'll find people smarter than many members of the higher-scoring Group B.

      Your descendents got here first. Now you want to pull up the ladder using pseudo-science.

      "Giant gated community". An interesting concept but I've never seen a gated community that hassled you about putting some of your money into another gated community, insisted on charging association fees even if you stopped living there, secretly went through your phone records, or claimed the right to kill you.

  3. "Why should anyone think that Mexican immigrants can't "catch up"?"

    see, for example:

  4. "Our ancestors didn’t steal Native Americans’ jobs to get rich [...] Land and capital are plentiful in the United States, so why would we expect new immigrants to be any different? "
    The settlers killed the natives, that's why land was so plentiful.

    "If we worry about culture wars, and voting citizens who do not have the basic command of US history, political philosophy, legal and social traditions, that battle was lost, and should be won, in the disastrous public schools, not by keeping entrepreneurs on the doorstep."
    Shouldn't an economist think on the margin?

    "If we have so little faith in the power of our ideas, perhaps we should reexamine them."
    You seem to have an implicit theory that correct/valuable ideas should be more powerful. I think Bryan Caplan was closer to the truth in "The Myth of the Rational Voter".

  5. Anon, you can't go by a cherry-picked blog article. Note that the original data were collected in 1965. Then according to the claims of the blog you cited) "The original respondents and their adult children were interviewed". I suppose that's enough for a shallow analysis as presented on the blog.

    Do you see a tiny little problem with that - such as tracking down all those people 33 years later could be a bit problematic? This is a common problem with long-term cohort studies that must be accounted for statistically.

    Actually that was the case. Of the original 1576 people, they re-interviewed 684 - less than half. Maybe the upwardly mobile ones got up and out. I call BS on this study unless someone can account for the other 892 people. For all we know they are hedge fund managers with houses in the Hamptons.

    1. The work done by George Borjas at UCSD also shows a decline in the rate at which more recent immigrant waves have achieved parity with natives in terms of education and income. This is not necessarily evidence in favor of restricting immigration but does suggest need for further analysis. Maybe there is some relationship between immigrant achievement rates and the expansion of the welfare state.

  6. I agree with much of what Cochrane writes but on this particular subject and in this particular post he clearly made a terrible, but revealing, analogy. European immigrants did not take the jobs of Native Americans. They took their land & property, defeated them militarily and gave them an offer they could not refuse to live on remote camps in the American West.

    The simple answer to Immigration is to offer the same proposition all immigrants used to have: You are welcome to come to America but when you get here NO ONE owes you anything. Until that old standard becomes the new political reality there will be no immigration solution.

    1. I'd like to restrict benefits to citizens, holders of green cards and people with work visas. And no anchor babies. That's just an inducement to have more children that you can't support..

      Teddy Roosevelt had an interesting perspective on the Indians:

      As regards taking the land, at least from the western Indians, the simple truth is that the latter never had any real ownership in it at all. Where the game was plenty, there they hunted; they followed it when it moved away to new hunting-grounds, unless prevented by stronger rivals; and to most of the land on which we found them they had no stronger claim than that of having a few years previously butchered the original inhabitants.

      Theodore Roosevelt, Hunting Trips of a Ranchman 1885

  7. Interesting article on the founders of Fortune 500 companies. Over 40% were founded by immigrants or their children, including Apple and Amazon.


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