Bryan Caplan  

A Bettor's Tale

Madrid turns left - and Europe... Systematically Biased Beliefs ...
Here's a great yarn of betting and political irrationality courtesy of EconLog reader Mathieu Giroux, used with his permission.

My Uncle, like the vast majority of people living in North America, is not a fan of the idea of open borders. In fact, he's vehemently opposed. The first time I told him I favored the idea, his reaction was, well, a very hard to forget combination of incredulity and indignation. Free trade in goods was fine he maintained but to extend the idea to labor... madness!

We would debate the issue via e-mail and when we saw each other in person. During one such visit, he was telling me, as he had repeatedly, that support for open borders was just one hell of an out there idea. I normally responded by saying that an idea being outside the mainstream hardly meant it was a bad idea. After all, support for many things that are now sacrosanct in our culture once only enjoyed the support of a few articulate radicals.

However, at that moment, a different response came to mind. I knew that The Wall Street Journal had editorialized in favor of open borders under Robert Bartley. My Uncle, a fiscal conservative who works in the financial sector, surely could not deny that the Wall Street Journal was an impeccably mainstream publication. So I said "Is The Wall Street Journal crazy? It has editorialized in favor of open borders." He did not believe that the Journal would ever be so "out there." Knowing I was right, and inspired by Bryan, I suggested we bet to settle the dispute.

The terms were clear: 50 bucks would be owed to me if I could find an editorial by the Journal calling for open borders and 50 owed to him if I couldn't. A 30 second Google search later and there it was: an editorial by the Wall Street Journal endorsing my ultra-marginal, insane libertarian notion of open borders. The editorial even used the term "open borders." My Uncle was not happy. "This is from the 80s," he protested. "Did I say it was written yesterday? Come on Bob, the terms of the bet were clear. Any editorial from the Journal advocating this and you owe me 50."

I really didn't feel this was sneaky since it's not like the Journal has ever repudiated or even distanced itself from this position and has indeed written many editorials advocating policies consistent with the goal of ultimately opening up the borders completely. A few minutes later, I was 50 dollars richer and he was 50 dollars poorer. Since then, I have routinely suggested betting to settle disputes.No one else has agreed to bet which shows you that even belligerent partisans back off when there is a cost to being wrong.

Oh and in all fairness to my Uncle, he's a very bright, pleasant, and successful guy. I hope to be like him in many ways but, you know, without being terribly wrong on hugely important moral issues :)

P.S. I'd add that Mathieu's uncle is praiseworthy for betting in the first place.  As I've pledged before, "When I win a bet, I will not shame my opponent, for a betting loser has far more honor than the mass of men who live by loose and idle talk."

COMMENTS (16 to date)
patrick writes:

I'm with your uncle hence I call myself a mutated Libertarian. Intellectually I understand every argument and benefit of open borders. How can you not? My problems start when I take the blackboard into real life. Knowing as I do, if the polls are even remotely correct, that upwards of 70% of Mexico would cross the border in a heartbeat, I'm left with an idea I would not like. Mexico gets gutted and the US gets overwhelmed with good people who bring their ideas of commerce, government etc with them. Those are ideas I have not found to my liking judging from my years in Mexico. The Camp of The Saints continues to echo in my head.

On another matter, a selfish one. Putting all the supposed benefits aside I just don't want more people from anywhere. I liked Cali much better when it had 20 million vs today's 40 million. I like the fact that we would have a negative birth rate if it weren't for mass immigration. It would be nice to change our economic modeling that calls/demands for constant growth in population. A terrarium comes to mind! ;~)

Japan going forward may be just the experiment we need to see as its population continues to contract.

Charlie writes:

The bet served no purpose here. If Mathieu goes around trying to win sneaky point of fact bets, then of course no one will bet with him. The bet did nothing to move them closer or illucidate their views. If Matthieu thought the article would help him in the argument, he could have produced it. Likely he knew it was very weak supporting evidence for Open Borders being "in the mainstream." He doesn't even appear to believe Open Borders is a mainstream view (it isn't). So the con is basically pretending you're betting on one thing, "Is open borders mainstream?" And yet writing the terms to bet on something else,"In the entire history of the WSJ, has it ever editorialized in favor of open borders."

Bettors learn very quickly to watch out for such cons, thus very few bets get made and often lots of time is spent disputing the contractual terms. Considering all the time spent disputing terms on bets that are never made, betting becomes very costly.

Jon Murphy writes:

I find betting is the fastest way to determine how confident a person is on their position. Even if a person bets and loses, I have far more respect for them because they took the risk and were reasonably confident in the validity of their position, even if that validity didn't bare out.

IVV writes:

70%, patrick? Really?

If it's the case that over half of the Mexican polity wants to be in the United States, then wouldn't a vote for annexation of Mexico to the USA make more sense?

Of course, plenty of powerful people wouldn't accept that, but seriously, if it's that much of the population, you don't move the people, you move the border.

Massimo writes:

"Free trade in goods was fine he maintained but to extend the idea to labor... madness!"

If a father pays his son $5 to do a household chore, there are other less fortunate children who would do the same chore for less. It would be draconian to deny one child the right to live in the family household due to no fault of their own and grant such a huge privilege to another child due to no merit of their own.

Even the fact that you portray open borders as simply a free trade market in labor is madness. It's like portraying an open families model as simply free trade in household chore labor. Is it wrong to deny another child the right to take out the trash for $1? No, then the implicit follow on that biological families are draconian is obvious.

IVV writes:

Massimo, assuming the price for finding the child outside the family for doing the task, then yes, there is a very real deadweight loss in the transaction.

The question then becomes one of: Is loyalty to the family of the father to the son worth paying $4 for? You get the answer yes, it is.

Is loyalty to the nation by the employer worth paying $20K per employee per year for? That's less cut and dried.

AMW writes:

Massimo, a nation is not a family. And even if it were, there is no law preventing a father from hiring poor children to do chores for him instead of his children. We trust him to make that decision for himself. But the federal government does not trust employers, landlords or shopkeepers to make those decisions.

Jeff writes:

I agree with Charlie above. This was not a particularly good example of betting as nudging the irrational to be less so, seeing as how the bet rested on a pretty obscure fact: the WSJ had once published an editorial on a particular subject 25-30 years ago. What does that really tell us about anything? If you ask me, the uncle was right to object to the age of the editorial. What is mainstream opinion in one era may not be in another era, clearly. American attitudes on lots of subjects have changed since the 1980's.

Massimo writes:

@AMW, a nation is not an identical unit to the nuclear family, but nations have operated as extended families. The US is one story, but consider nations such as Japan, Israel, France, or Italy. Their entire existences are predicated on being extended family, tribal states.

It's generally not controversial or "madness" to see parents voluntary choose to adopt non-biological children or hire neighbor children to mow a lawn or babysit. Likewise, if the people of Japan, Israel, France, or Italy were overwhelmingly in favor of demographic transformation, it would not be considered madness. Israel very purposefully orchestrated mass immigration of ethnic Jews and continues active solicitation of further immigration, this was widely supported by the people without any coercion, and this is generally not remotely controversial or "madness". What is controversial is when political elite and academic op-ed types can coerce unpopular migrations, target cities/states/communities that don't want to be demographically transformed and do not benefit, humiliate anyone who protests, and defend it up with completely spurious economic rationale.

Pointing to a developed country and insisting that they are obligated to open borders and undergo foreign demographic transformation based on finding a willing renter and employer to the absolute horror of much of the rest of the country is madness. Consider the parallel with a nuclear family: what if a father gives his son $5 for some household chore and does not want to adopt a foreign child. The smirking smart aleck son invites a foreign stranger to live in the family home in exchange for performing the chore for $1 against the wishes of the father. A credentialed economist could write trendy op-ed articles with supply and demand graphs that show how all parties benefit and objections are draconian, outdated, and arguably racist. The father could object, saying he doesn't care about the $5 chore and all the extrapolated economic theory, he wants his family!!! Specifically, his traditional, nuclear, completely biological, 100% exclusive family, no matter how draconian or outdated or racist the op-ed types proclaim that to be.

The open border argument is completely analogous to the open family concept. Every open border argument translates completely literally over to an open family argument. Dr. Caplan hand waves this away with the arbitrary exemption that humans are intensely biologically wired to be biased in favor of immediate families, and the biological wiring for extended ethnic groups or nationalities is much weaker and easier to argue away. This is just a spurious, arbitrary line of reasoning. Additionally, it falls completely outside of the bounds of economic credentials and expertise. I know Caplan advocates the broad view of economics, where he explores whatever subject interests him, but I would argue that he is completely in general op-ed territory, and his academic credentials and expertise may make him a better speaker and give him a broader audience, but they really shouldn't lend extra weight to his op-ed style thoughts and opinions beyond those of anyone else.

AMW writes:

The uncle's big mistake was betting on something that happened in the past, rather than something that will happen in the future. Since the future is unknowable there is less likely to be an informational asymmetry between you and the proposer of the bet. Or, as Sky Masterson puts it in Guys and Dolls:

One of these days in your travels, a guy is going to show you a brand-new deck of cards on which the seal is not yet broken. Then this guy is going to offer to bet you that he can make the jack of spades jump out of this brand-new deck of cards and squirt cider in your ear. But, son, do not accept this bet, because as sure as you stand there, you're going to wind up with an ear full of cider.
Underwriterguy writes:

I'm never certain whether an author differentiates between open borders and immigration. It seems reasonable to open borders to labor (with screening for criminals, etc.), but not encourage unrestricted immigration with a path to citizenship.
Is open borders equivalent to guest workers?

Daniel Kuehn writes:

I agree with Charlie that it's not clear what purpose the bet serves for clarifying anything important.

Bets are fine but they seem limited in use. Either it's something trivial like this (but perhaps still fun to bet on) or it's something relatively unconditional (like DH and RM's inflation bet) which doesn't really settle anything.

It does limit cheap talk but it can't differentiate (I don't think) between cheap talk (bad) and thoughtful lack of certainty or conditional claims (good)

Jesse Connell writes:

I am worried that a majority of Central/South American immigrants will immediately bite the invisible hand that feeds them. People don't ALWAYS attribute the USA's wealth to its historically free market economy, and often times people benefit from it while actively disdaining and working to destroy it.

Increased centralization and regulation are likely to accompany the demographic changes we are about to see. Increased trade would then have to be netted against increased regulation, exchanging individual freedom for "collective freedom", etc.

If we weren't near a tipping point where we lose nearly all of our individual rights, I'd be very welcoming of free labor/trade/borders. (I suspect many share this sentiment.) Are we not near such a tipping point? If we are, is this not a real risk inherent in open borders?

Philo writes:

[Comment removed for irrelevance.--Econlib Ed.]

patrick writes:

IVV, whether it's the border or the people that move is it your contention, should either happen, that the politics, government, view of life etc would not change in the current US? And should you acknowledge that a change would take place is it your belief it will only be for the good vs some version of the current state of Mexico or Latin America in general?

It goes without saying I lean towards it would not be good. You take your head wherever you go, as the saying goes. Now might, after several generations, these good folks come around to the "American way" of doing things? Perhaps. But what of the possibility they don't? Then what? What if bad money drives our good?

IVV writes:


I'm Mexican-American, am gainfully employed, and have an engineering MS and an MBA.

People who are given an honest opportunity to excel will do so.

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