Arnold Kling  

Disorder at the Border

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Philippe Legrain says,


Illegal immigrants are not the problem, they are the symptom of the real problem: immigration restrictions that are economically stupid, politically unsustainable and morally wrong. Far from protecting society, immigration controls undermine law and order, just as Prohibition did more damage to America than drinking ever has.

What I wrote in Order and Disorder would suggest that we would have more order if we were to use taxes rather than restrictions to limit immigration. Charge guest workers or immigrants a large fee, and eventually we will have order at the border.


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COMMENTS (10 to date)
Bill Stepp writes:

Good point by Mr. Legrain. And as Burton Fulsom and Steve Hanke have recently pointed out, the root problem is Mexico's statist economy, which impedes innovation, investment, and job creation.
Hence Mexican workers come to the U.S. and have a much higher standard of living, even considering the risks they bear.

A letter writer in the Oct. 1 issue of Forbes takes issue with Hanke's Sept. 3 column, "Labor Dumping," criticizing him for overlooking the fact that Mexico's economy is "based on agriculture, which is dependent on arable land, a fixed commodity." He claims that as population increases, they move to the cities or leave the country to find work.

But this proves Hanke's point, because the cities are hobbled by statist laws and regulations, as well as taxes, and can't provide the economic growth and employment opportunities they need. So the rural workers flock to agriculture or construction jobs north of the border.

TGGP writes:

Maybe you should tell Saudi Arabia that. Those goofy Arabs don't know what they're doing.

Seriously though, Eisenhower was able to effectively enforce the border without using a tax.

General Specific writes:

Might be worth a try. But tax too high, we have more of the same: attempts to circument it. Tax too low: open border. The latter is not palatable politically. And similar to the way companies don't have open walls, it's not clear countries should have open borders. Otherwise it's too easy for poorly performing countries to export their problems similar to the way Castro exported his prisons.

Generic commenter writes:

http://www.rapidimmigration.com/usa/1_eng_info_investor.html
The fee is a $500,000 investment in a minority area, which you can get back later with interest.

Simon Clark writes:

Why charge people who bring us a net benefit? Shouldn't we, if anything, be paying them to come here (or in your case: there, I'm in the UK)?

hameed writes:

I agree with the point that illegal immigrants are the symptom of a real problem. However, it is difficult to say that immigration restrictions are economically stupid
and a large fee is more or less a good solution.
On the one Hand they are economically stupid, but only if the “illegal” immigrant is somehow of value for the country’s economy he or she wants to immigrate to. Like in the case of a highly trained software expert or other badly needed expertise in the country because of a shortage. To me trained workers with special expertise are a key success factor and brain drain a challenge for an economy nowadays. Charging those guest workers a large fee would make the county uninteresting and facilitates the already mentioned brain drain, thus the larger fee would cause a higher damage to the economy than it can earn from the fee. The countries relevant industry would suffer from the shortage of valuable workers and would loose not only its competitiveness but also the chance to grow and expand.
On the other Hand, a larger fee could partly help having order at the border and limit immigration. Particularly, immigrating would be less attractive for a lot of people. A large percentage of illegal immigrants are not well educated and have problems to find jobs in their home countries. Supposing the fee is large enough, it wouldn’t be really worth it for the immigrants to leave their families and countries. Nevertheless, a lot of those not well educated people would do everything to cross the border hoping for a better life and especially making money which they can send to their families at home. For a country with a well developed social welfare system, too many immigrants, which are unattractive for the job market, would cause a financial problem like in Germany or France. Thus an immigration limitation would make sense, to a certain extend.

To sum up, I believe you have to distinguish who wants to immigrate. Economically speaking, you have to determine if an immigrant can really add value to the country or not. Assume an immigrant pays at least VAT Taxes and doesn’t make great use of the social care system. Wouldn’t it be better to keep him in the country? Of course there are many other factors like social reasons to think of therefore immigration issues shouldn’t be seen purely with the eyes of an economist. All in all, in my mind a larger fee is not the right solution and cannot really hinder illegal immigration.

PK writes:

The current immigration system is simply “survival of the fittest” with the policy of only granting visas to highly skilled workers. An economy full of highly skilled architects, engineers, doctors, and lawyers will soon become extinct without someone to raise food and cook meals for them.
Is a tax really the answer? No. There is no more risk to not paying the tax than there is of getting caught and being sent back. There is no equilibrium price in this market. No matter how low or high the tax is, people will take the risk and sneak into the US without paying any tax. Thus the immigrants’ demand for opportunities in the US will always outweigh the supply of only skilled workers the system is looking for, tax or no tax.

Lord writes:

Feel free to walk. There is no restriction on exiting. I am sure you can find a more amenable country to your tastes.

Lauren writes:

Kling has a rather interesting proposal to control immigration. If taxes were imposed on immigration rather than having restrictions - the act of immigration would become a service - in terms that a fee would be charged for entrance into the foreign country. Since we can reasonably assume that immigration would have a inelastic demand curve - based on the idea that so few substitutes (South American countries) are available. So even if tax rates were raised demand for entrance into the country would not be drastically effected. So although the idea may be interesting it may not work out in such a high demand market.

Mr. Econotarian writes:

Saudia Arabia is building a wall between it and Iraq.

But it should be kept in mind that Saudi Arabia has a population of about 27 million, but they have 9 million guest workers.

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