Bryan Caplan  

Most Economically Literate Movie of the Year

Private Investment is Dangerou... Guest Blogger...

This is the season for giving movies their just deserts, but as far as I know there isn't a prize for Most Economically Literate Movie. Until now. The First Annual Prize in this category goes too...

A Day Without a Mexican

Inspired by the "magic realism" common in Latin American literature, A Day Without a Mexican is a modern fable in which all of the Hispanics in California vanish overnight. (Why not call it A Day Without an Hispanic? One of the film's recurring jokes is that Californians think that Mexico is the only country south of the border).

Much of the story traces the effects on California's economy. Agriculture, construction, personal services, restaurants, and more fall to pieces. Families even find their beloved nannies are missing.

The great 19th-century economist Frederic Bastiat taught economics largely through this sort of thought experiment. What would happen to the economy if we blotted out the sun? Candle-makers would hail the higher demand for artificial lights, but Bastiat objects that this makes society poorer by frittering away valuable resources to make what nature gives us for free.

A Day Without a Mexican makes the same point. Without Latin American residents - legal or not - a few special interests benefit, but society loses. Californian agriculture might implode. But even if it attracted replacement workers with higher wages, society would have to give up whatever those replacement workers used to produce. It is far better for everyone to focus on their comparative advantage: for the Ph.D. in computer science to hire a less educated but perfectly competent nanny from Guatemala to watch her kids so she can return to work.

Another theme straight out of Bastiat is the paradox that economically efficient policies are unpopular. For many of the Anglos in this movie, believing is seeing. They are so convinced that foreigners are destroying their economy that they dance in the streets to celebrate their absence - even though they now have to subsist on expired canned goods. Just as one of my favorite papers predicts!

Opponents of immigration will no doubt find this one-sided. But not all of the effects of the sudden Mexican absence are negative: Congestion is way down, for starters. Furthermore, many of the benefits of immigration are hard to dramatize. The movie doesn't even mention the fact that immigrants are already mitigating the impending fiscal crises of Social Security and Medicare.

Under Academy rules, only "peers" get to vote - actors vote for best actor, directors for best director. I don't expect the Academy to add an economic literacy category anytime soon. But if it did, I guess only economists would get to vote. And that's good news - I already know one other economist agrees with my nomination.

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The author at Hispanic Pundit in a related article titled Most Economically Literate Movie of the Year? writes:
    According to Bryan Caplan, Associate Professor of Economics at George Mason University, that award would go to A Day Without a Mexican. He explains why. Oh yeah, and Tyler Cowen, also a Professor of Economics, agrees. In addition, he argues that imm... [Tracked on January 18, 2005 1:23 AM]
The author at Remotely Interesting in a related article titled Immigration and Social Security writes:
    A lot has been said about Social Security reform this year. [Tracked on January 18, 2005 5:58 PM]
The author at The Club for Growth Blog in a related article titled Bryan Caplan is Guest Blogging... writes:
    …over at EconLog with its main proprietor, Arnold Kling. Caplan is an established economics professor at George Mason University. If you aren’t getting your free-market fix here at the Club for Growth blog, you should definitely check him o... [Tracked on January 18, 2005 6:05 PM]
The author at Division of Labour in a related article titled The Aviator writes:
    Bryan Caplan over at EconLog thinks that the award for “Most Economically Literate Movie of the Year” should go to A Day Without a Mexican. I haven’t seen that one yet, so I’ll nominate a different movie for the award:... [Tracked on January 19, 2005 10:53 AM]
COMMENTS (7 to date)
Burt inTexas writes:

I'm not what anybody would call a movie critic, or even movie buff, but this was actually a very entertaining movie.

If you are from the Southwestern part of the U.S. you may catch yourself nodding in agreement to this flick, acknowledging the real pertinence (and delicious irony) of many of the stereotypes and popular myths used to create the sometimes hilarious situations.

If you have any background in Economics you will easily follow the movie's depiction of the argument briefly laid out here by EconLog.

I think this movie does a nice job of putting to rest some of the popular misconceptions about immigration and immigrants (both illegal and legal) in the Southwestern U.S. But I doubt many folks w/ an anti-immigration bent would ever watch this movie, or one like it.

OTOH perpaps it changed some minds...

Ronnie Horesh writes:
...economically efficient policies are unpopular

I suspect much immigration into America is reluctant, and results from spectacularly inefficient policies. I refer, of course, to US trade restrictions and farm subsidies that make it difficult for third world countries to develop and prosper. It is policies like these that encourage so many of the best and brightest citizens of developing countries to abandon their homelands and in many cases their families. Some of them send remittances home, but wouldn't free trade be more efficient ...and more humane?

spencer writes:

The comment that it is better for a computer science type to hire a minimum wage type to
take care of the children reflects the low value we give to raising our children in this society.

Is working on the assumption that all the resources we need to allocate to raising childen is a minimum wage employee a really optimal allocation of resources? In our society teachers are really just one step above minimum wage employes. Would we be better off if we allocated more resources to raising our children?

Boonton writes:


Another well used analogy would be the world's greatest lawyer who is also the world's fastest typist. He bills at $500 an hour and can type a very long contract in just one hour. Should he hire a secretary to type the contract even though she will take 4 hours and cost $30 an hour?

Well freeing up 4 hours will allow him to bill $2000. The secretary will cost him only $120. If he types the contract himself he will only have time to bill 3 hours for $1500. Therefore he will be $380 better off hiring the secretary.

A price of something is determined by supply and demand, not its intrinsic worth. Child care is very important but there is a huge supply of people who can do a good job at it. Hence the cost of a good babysitter can be very cheap compared to the cost of a good programmer. (those in the business can correct me if I'm wrong, though, nowadays I thought programmers have taken a rather large cut from the Internet boom days)>..

spencer writes:

The reason that there is a big supply of baby sitters at low wages is because we do not make any demands on them to do anything more then babysit.

Cosnequently, every child that spends the bulk of its youth with a minimum wage employee rather than with his more intelligence and skillful mother is paying an indetermine price for the mothers freedom.

Bill Fellers writes:

As a person not educated in economics, but physics, this is a stupid thought experiment. Why? Because it's unrealistic and far too simplistic for such a complex situation. All the Hispanics will no more instantly disappear than they instantly appeared. Stick to the basics. This is no more than a game of the "What ifs".

Having a near-illiterate foreigner raise my children so I can work is one of the stupidest, most simplistic, ideas ever. This is economics at its worst. If Caplan actually thinks that this is an economic benefit, I'd rather read Marx (at least for the laughs).

Bob writes:

While certainly an interesting premise, I don't think A Day Without a Mexican does more than address a straw man. Many simply want the distinction about legal and illegal immigration brought back and current laws enforced. After all, what are the costs of inculcating a disrespect for the law? Others may want to see legal immigration curtailed, but I think you'd have a hard time finding anyone advocating the deportation of all Hispanic immigrants, whether legal or not. Portraying the debate over Hispanic immigration as a simple dichotomy of all or nothing, while entertaining, may not be as useful as you think.

From the WashPost article you refer to:

Donald Huddle, an economist at Rice University, estimated that undocumented immigrants paid $12.6 billion in taxes in 1996. He found, however, that such immigrants used far more in government services, such as education for their children.
Is there some reason we should discount this paragraph near the end of the article? If the government levies greater taxes because illegal immigrants are still a net drain, do they still have a positive economic impact?

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