David R. Henderson  

Tear Down These Walls

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Is there some action a government of India could take that would lead the Indian economy to grow like Indonesia's or Egypt's? If so, what, exactly? If not, what is it about the "nature of India" that makes it so? The consequences for human welfare involved in questions like these are simply staggering: Once one starts to think about them, it is hard to think about anything else.
This is a famous quote from University of Chicago economist and Nobel prize winner Robert Lucas. It's so well done that I used it in my bio of Lucas in The Concise Encyclopedia of Economics.

I've been in Chiang Mai, Thailand for a week now, visiting my daughter. Normally, when I visit a relatively poor country, I enjoy the people, do my fun things, and go home. I'm doing all that here and am having a specially good time with my daughter and her boyfriend.

But something has switched for me and I think a large part of the reason is the way Bryan Caplan's thinking on immigration has changed my thinking. As an immigrant myself who, at one time, faced a deportation order from the U.S. government, and as an economist who thought he understood the importance of resources going to their highest-valued use, I've always favored a huge relaxation of the U.S. government's restrictions on immigration. At the same time, though, I've worried about whether the new immigrants would vote away the system that attracted them to the United States in the first place. My solution has been a 20-year residency requirement before one can become a citizen. I still favor that solution.

So I can't point to a particular policy view of mine that has changed. It's more that Bryan Caplan has changed my view of the urgency of immigration reform. It's like the Robert Lucas quote above: Now that I've started thinking about immigration, it's hard to think about anything else, within economic policy, at least. It is pretty clearly the most pro-growth measure the U.S. government could take and the biggest anti-poverty measure.

I've met a lot of fine people in Thailand, mainly young Thais, and I can picture so many of them moving to the United States and tripling their income within a short time by producing the Thai meals and massages that are priced so low here. And, of course, many of those Thais who moved would move to more-professional jobs and would also enrich the Americans they deal with.

It also helps that on this trip I read Robert Guest's Borderless Economics. That book filled in some of the empirical space in my thinking about the benefits of immigration for immigrants themselves, the people of the countries to which they immigrate, and the people of the countries from which they immigrate. So if it seems "politically impossible"* to "tear down these walls" right now, I think Americans would be surprised, mainly pleasantly, by how much more vibrant an already-vibrant United States would become with three or four times the current annual number of new immigrants.

* I put "politically impossible" in quotation marks because that is the title of the famous monograph (pdf) by my old friend and anti-Apartheid warrior, William H. Hutt.

HT to Bryan Caplan.


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COMMENTS (5 to date)
Luther writes:
My solution has been a 20-year residency requirement before one can become a citizen.

Everyone is for the "democratic" process until they are in the minority. Could it be that the immigrant (from a less free country) is more in favor of free markets than the man who "protects" his environment through the use of citizenship rules enforced by force?

Ken B writes:

I don't know that David's point is just about economic freedoms. Look at the incipient spread of formal and informal sharia zones in parts of Europe.

I rather like David's idea, and I like that it honestly addresses the concerns of those worried about immigration. The economic effects of immigration are overwhelmingly positive, but there are liberty costs, or potential liberty costs. Most immigration advocates overlook those; david does not, and has a concrete proposal.

(PS David, neither sarcastic nor sardonic. :>)

MikeP writes:

Now that I've started thinking about immigration, it's hard to think about anything else, within economic policy, at least. It is pretty clearly the most pro-growth measure the U.S. government could take and the biggest anti-poverty measure.

Looking at it from the moral side rather than the economic, immigration restrictions are the greatest rights abrogation the US perpetrates today.

It's true that once you recognize how mindbogglingly huge this theft of freedom is, it's hard to find anything else nearly as significant.

"Your big issue is that the state doesn't call your civil union 'marriage'? Fair point: it probably should. Hey, did you know that twelve million people have to hide from the state the fact that they even live here at all?"

Mr. Econotarian writes:
Look at the incipient spread of formal and informal sharia zones in parts of Europe.

You'll have to point me to the European country where the veil is legally required. (Actually I can point to one where it is basically against the law.)

That said, I suspect European social policy and labor regulation make it much tougher for second-generation Muslims to assimilate there than in the US.

But if people are that islamophobic, just make sure you allow one poor Confucian, one poor Hindu, and one poor Catholic in for every one poor Muslim. There are plenty of all four!

Ken B writes:

Mr. Econotarian writes:

Look at the incipient spread of formal and informal sharia zones in parts of Europe.

You'll have to point me to the European country where the veil is legally required. (Actually I can point to one where it is basically against the law.)

Actually I, whom you quote, can point to more than one. However leaving aside any backlash, I refer you to volokh.com where you can find several posts on this topic.
I agree with you about european polices, and would toss in european, certainly french, attitudes. But your flippancy does not make the issue any less important. Nor does your misunderstanding of 'incipient'.

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