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Upsidedown Luddism: The Case of Immigration

Mises Daily: Tuesday, October 03, 2006 by

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Stephen Cox, editor of Liberty magazine, recently wrote a well-received article opposing the allegedly suicidal policy of open borders ("The Fallacy of Open Immigration," available online here). Cox aimed his article at libertarians who understandably think that the only acceptable position is to insist that the federal government takes no action in hindering the passage of foreigners into the United States.

Following the pioneering work of Hans Hoppe, Cox argues on the contrary that it is perfectly consistent for a libertarian to oppose "open borders."

Cox's article is lengthy and covers many different points. I agree with him (and Hoppe) that there is no such thing as a "right" to immigrate into a country, and thus advocates of open borders should stop using this silly language.

Having said that, I disagree with virtually every other point in Cox's analysis. In the present essay, I focus largely on his economic arguments.

Immigrants: Taking the Jobs No One Else Wants?

A standard (and rather weak) argument for immigration is that the poor newcomers will "do the jobs Americans don't want to." Cox rightly notes that this statement is only true for a low range of wages; if you paid them enough, even snotty white teenagers would clean toilets and pick vegetables. (Still, the main point is valid: Eager immigrants are willing to do these undesirable jobs for less than most natives would be, and hence lower the prices of vegetables and other goods for the American consumer.) Cox then goes on to make a strange assertion:

If all immigration suddenly became legal, immigrants would enjoy the same wage scales as native-born workers. They would compete for the same jobs, join the same labor unions, and be subject to the same labor laws and the same rates of taxation as everybody else. In short, their wages would rise, and there would no longer be any work that "Americans won't do."

The situation is far more complicated than Cox's quick analysis suggests, and I for one am not at all convinced that his conclusion is sound. Cox seems to be arguing that, say, Mexican immigrants don't really have a higher willingness to do certain "dirty" jobs than the average US citizen; it's only because their labor is off the books and hence unregulated that this happens. But wait a minute. By itself, the fact that their labor is untaxed, that they can't (as easily) sue for workplace injury or harassment, and so on, makes these workers more desirable to employers. So this condition wouldn't explain why such Mexican workers get paid so little.

Now it's true, we can't stop the analysis here. When an employer hires an illegal alien, he subjects himself to the risk of hefty legal ramifications if he is caught. This is partially offset by the "under the table" nature of the contract. It might seem, however, that the illegal must still be willing to work for a lower wage (given his productivity) than the typical US worker, because otherwise the employer could just as easily hire Joe Smith under the table and reap all the advantages of hiring an illegal. The fact that the employer doesn't do this suggests that the illegals really are willing to do the same job for less.

But wait, there's yet another complication. It's much more likely that an employer will get prosecuted for labor law violations if he hires a US citizen who speaks fluent English (and whose dad is a lawyer). In contrast, an illegal alien would be much more reluctant to report any abuses, since he would run the risk of deportation. So we could interpret Cox to be saying that if you take away this threat, then the stereotypical hardworking immigrant would be just as picky when choosing a job as the current citizen is.

Alas, Cox's case still falls apart. With no federal restrictions on entry into the US labor market, workers from all over the world would continue to flock here until the wage rates in particular occupations were pushed so low that the remainder of foreigners preferred to stay in their original countries.

Although Cox may be right that the simultaneous removal of both the threat of deportation (to the employee) and the threat of legal penalties for hiring an "illegal" (to the employer) would on net raise the wages of currently illegal workers, it is nonetheless true that new floods of low-skilled workers would push the wages in certain occupations down once again. We would still see low-skilled immigrants (now perfectly legal) taking jobs for wages that native-born Americans would consider unacceptable.

Capital or Labor Intensive?

One of Cox's sillier moments occurs during his discussion of the baneful effects of low-skilled workers:

[T]he existence of a large and growing supply of unskilled workers tends to reduce prices — especially the price of lawn mowing, Tyson's chicken, and certain kinds of fruits and vegetables. But if you think that the more unskilled laborers we have, the larger and more dynamic the economy will be, you have a strange idea about the production of wealth. When I have my car washed, some of the work is done by unskilled labor, but as much as possible is done by machines. If more human squirters and swabbers were available, I'm sure that the price of their labor would go down, and at some point the machines would be completely replaced by muscles … I don't believe, however, that a low-wage, labor-intensive economy is preferable in any way to a machine economy, paying high wages to well-educated people. If you believe that, you belong in the pre-industrial age.

All Cox has done here is reverse the standard "curse of machinery" argument. Rather than worry about machines throwing people out of work, Cox takes the novel tack of fretting that people will throw machines out of work! As with the more usual fear, this one too is baseless. If low wages make it more profitable to use people rather than machines to dry off cars, then the resources that formerly went into the production of those machines can now make something else (either other machines, or consumer goods). In any event, the rest of the population is necessarily richer in material terms, because more total stuff can be produced. (As always with these situations, particular groups might be poorer — such as the guy who is wonderful at building car wash machines but is terrible at every other occupation — but per capita output is still higher.)

Adding more laborers wouldn't reduce the amount of capital goods in the United States. If anything, adding more workers increases the marginal product of capital. But for those readers who are still favorable to Cox's viewpoint, let me ask the following questions. If all the seeing eye dogs, as well as all mules, horses, and other beasts of burden disappeared, would that make the US economy more productive? (After all, those animals provide some of the most uneducated and unskilled labor around!)

If 90 percent of the workers in Bangladesh suddenly died, would that country become "capital intensive" and hence richer? If, in storybook fashion, elves began making shoes, TVs, cars, and other goodies in the middle of the night for the shopkeepers to discover every morning, would that depress wages and cause a horrible recession? Would we leave notes for the elves, demanding that they keep their cheap labor to themselves?

Now that I've addressed some of the more striking economic errors in Cox's article, I'll spend a few moments on other issues relevant to a libertarian audience.

One Big House?

Cox's collectivist worldview is quite obvious when he writes, "[I]s a nation really like a house? Can the people living in a nation properly decide to keep other people out of it, as a householder might decide to keep strangers out of his bungalow? Yes it is, and yes they may."

I feel funny having to point this out to the editor of Liberty, but NO it isn't, and NO they may not. As the owner of my house, I can declare "lights out" at 10 p.m., and I can forbid my guests from smoking. Does that mean utility rationing and cigarette bans are libertarian after all?

Cox's grasp of rights theory is all the shakier in the following quotation:

The fact that your grandmother, or great-grandmother, or you yourself, originated in some foreign clime … what exactly is this supposed to establish — that there should be unlimited immigration for all time to come? When I moved into my present neighborhood, the population was scant and prices were low; that's why I moved in. Then the population increased, prices went up, and it became very difficult for people like me to do what I did in 1986. Is that a moral problem? Should I try to pass a law guaranteeing that people like me should always be able to move in here?

The confusion here is simply shocking. Cox is right that there is nothing immoral about the situation in his neighborhood, but it accords perfectly with the stance of his opponents. Open borders libertarians don't want to pass a law that foreigners should be able to move in; they simply oppose laws preventing people from moving in.

So to go back to Cox's anecdote, it would be as if he moved in back in 1986, and then didn't like the people that moved in afterwards and so got his city council to pass a law preventing further newcomers, even though they could afford the rents and weren't violating any of the contractual provisions signed by the previous owners. And yes, if that's why people weren't moving in to his neighborhood, it would indeed be immoral.

Is There a Problem? Call the Feds!

Cox and other advocates of federal border patrol commit the same mistake that so easily hoodwinks other supporters of government action. Cox fears millions of unwanted foreigners overrunning communities, and he assumes that the federal government is the proper agency to address his fears. He then argues as if anyone opposing him must be for the "nightmare" scenarios he envisions. Yet this is just as baseless as the left-liberal Democrat who accuses the libertarian of being against education or the poor.

As Cox's own anecdote illustrated earlier, there are plenty of market mechanisms for "sorting" people into different neighborhoods, most notably real estate prices. All the open border libertarians are claiming is that the politicians shouldn't be able to overturn the voluntary arrangements reached between foreigners and particular land owners (and employers) in the United States.

Let's Be Realistic

Finally, let me deal with the strongest argument that Cox musters: Even though most libertarians would agree that ideally there would be no federal intervention in the flow of people across (admittedly arbitrary) borders, we must admit that there is a gigantic Welfare State that seriously distorts such "voluntary" transactions. Worse, many immigrants are not versed in Thomas Paine and so will only add to the problem in the voting booth. Therefore, a pragmatist must abandon the dogmatic position and favor an immigration policy that will avert national suicide.

The obvious response to this type of argument is that it could be used to justify just about any violation of rights. For example: Who are we kidding? We're not going to get rid of government-funded health care anytime soon, so we might as well save the taxpayers money by imposing seat belt laws and excise taxes. (Yes I know, one could argue that smokers etc. actually cost taxpayers less because they die earlier. But is that really how libertarians want to anchor their argument?)

The plumbline
But beyond this, we have to ask: What's the purpose of our little argument? Whatever we libertarians decide, it's certainly not going to affect national policy. It would be one thing if Cox, or you dear reader, for some reason had the power to decide whether the nation would have federal border patrols or not — and at the same time lacked the authority to alter any other federal policies.

But that's not the situation. We aren't going to convince politicians on immigration, just as they ignore us on taxes and minimum wage legislation.

That's why the purpose of libertarian writing is to provide the general public with a consistent and beautiful vision of a free society. And in that free society, we certainly wouldn't have pre-teen Canadian children — whose father had just gotten a high-paying white collar job in Michigan — being forced to withdraw from their US school in April when they got caught on the other side of the border during an elevated "terror alert." [1]

Rather than argue about the optimal policies that the federal border police should use — as if they'd listen to us anyway — we libertarians ought to convince everyone else of why it would be better to live in a society without a federal government.


Robert Murphy is the author of The Study Guide to Man, Economy, and State and the headmaster of the Mises Classroom. Send him mail. See his articles. Comment on the blog.

Notes

[1] As the reader might guess from my tone, this happened to personal friends of my wife and me.