David R. Henderson  

Thoughts on the Caplan/Jones Debate

Bernanke on fiscal policy... The ADA seems to have failed...

I've long believed that the most interesting conflicts are not between good and evil, but between good and good. For that reason, I found the Caplan/Jones debate on immigration quite interesting. I know Bryan Caplan pretty well, though mainly at a distance. I know Garett Jones, less well, almost entirely at a distance. And I highly respect and like both of them. More important, I think they are both good people.

One of the most striking things about their debate is their honesty. Neither seemed to pull any of the standard debating tricks. I should add that, in the interest of getting this post done this evening, I didn't listen to the first 10 minutes of Bryan's opening statement, mainly because I know his argument so well and I wanted to focus my scarce time on his anticipation of Garett's argument. So it's possible that I missed 3 cheap debating tricks by Bryan. But, in the spirit of Bryan, I am willing to give 10 to 1 odds that I didn't.

Bryan has noted Garett's amazing admission: that the United States, which is doing well, would likely do better if it allowed over a billion people from China and to move here. I'm not even sure I, who is only somewhat more moderate than Bryan on immigration, believe that. But that kind of admission is one of the interesting kinds of thing that happens when an honest--and informed and bright--scholar like Garett is debating.

So I want to give some highlights, point out one area where I strongly disagree with both--and have the scars to prove it--and suggest, based on one of Bryan's admissions, a compromise proposal for immigration. I will hit the highlights, including my one strong disagreement, chronologically with the debate. The times I give below, as always, are approximate.

26:50: Jones says: "Rich countries are rare treasures."

30:30: Jones says: "We don't build our lives around the exceptions. [Pause]. We build our lives around rules." I like that. I hate it when people argue for policies on the grounds that we will be the exception.

35:50: Jones's slide says that with no restrictions on immigrants coming to the United States, in 100 years our GDP per capita would decline by 30%. But his words are very different. His words are much more careful than his slide. He states that GDP per capita in 100 years would be 30% lower than otherwise. OK. But with a growth rate of per capita of only 1% annually, which is lower than it has been historically, per capita income without that drop would be 270% of what is now. So a 30% decline from that would leave us with per capita income that is "only" 90% higher than it is now. That doesn't sound bad to me.

38:00: Jones says that if those Chinese scientists came here and voted, that would be good. Here I'm more skeptical than Garett. But he could well be right.

41:40: Bryan presses Garett on the numbers I discuss above in my comment on 35:50. Garett admits that yes, this is 30% below what it would have been, not 30% below today. I think Bryan was also trying to tease out whether a lot of that 30% was due to the immigrants who make less, thus bringing down the average. Think of the poor Mexican immigrant who mows your lawn. He is better off coming here and so are you because you got his services more cheaply. So your real income rose slightly, his rose a lot, and the average fell. But I wasn't clear on Garett's answer.

51:40: My big objection to both Bryan and Garett. Both stated that we have open borders for academics. The Immigration and Naturalization Service certainly didn't know that when I applied for my green card in 1977. Indeed, the INS tried to deport me. Yes, it all worked out, but that was nothing close to "open borders." And it hasn't changed that much, except probably a little for the worse.

57:00: I think Garett dodged the question about whether he would let people in from high SAT countries. (See Bryan Caplan's post for what SAT means.) I would have thought he would say yes, but he didn't. At times he claimed he wasn't even there to talk about what should be done but, Sergeant Friday style, to give just the facts. Yet, his tone here suggested that he would not allow them in. But maybe I missed it.

1:12:45: Bryan says that if one billion people came today with open borders, that would be bad. I agree. He goes on to say that it's unlikely, based on past experience, that one billion people would come to today and much more likely that they come over a century.

That leads me to my compromise proposal. One billion people immigrating over 100 years is 10 million people a year. The U.S. population, at about 320 million, is about one third of the total population of rich countries. So what about taking our pro rata share of 10 million a year, which is about 3 million a year? We could insist that they come only from high SAT countries. And we could ration with prices: auction off the 3 million annual slots and then devote the revenues to deficit reduction.

COMMENTS (15 to date)
Philo writes:

If Garrett Jones and Bryan Caplan were jointly deciding on U.S. immigration policy, it would make sense to offer a "compromise proposal," splitting the difference between their preferred policies. But in fact they are both nearly powerless, so what is the point of proposing a compromise between them?

David R. Henderson writes:

But in fact they are both nearly powerless, so what is the point of proposing a compromise between them?
To give them something they can agree on and pursue together. As you say, they are both relatively powerless, so you could just as easily ask them why they bother advocating anything.

Anonymous writes:

An argument in favor of open borders rather than your compromise, even in light of the problems it might cause but which Bryan thinks unlikely: it's much less complicated. Once you start making compromises like only letting in immigrants from certain countries and auctioning off a certain number of slots, you're shooting for a much trickier target, and you're adding much more of a system to be gamed.

On the other hand, I expect a less radical proposal would have more support.

AS writes:

I don't know why residence permits are NOT auctioned off already. If one believes immigrants bring negative externalities, simply set the price equal to the externality. Or, if one desires monopoly profits, price it even higher. And being a resident need not entail citizenship and voting rights, so there's not even a voting externality. Problem solved. All sides win.

Tom West writes:

We could insist that they come only from high SAT countries.

I think there's an enormous long-term cost to this sort of thing that is only rarely noted.

Once you put official policies like this into place (as opposed to policies rating *people* that might produce comparable results), the majority of people inevitably slide into the "people from low SAT countries are defective". And, of course, this plays out against discrimination against people who have such countries anywhere in their background.

Of course, there's a fair bit of this belief already, but adding government imprimatur legitimizes such beliefs to a huge extent.

Thomas Sewell writes:

I've suggested this before for immigration policy, but this seems like the perfect topic to mention it again, even if it is the closest my preferred policies come to a sort of central planning.

In brief:
Every immigrant posts a bond as a condition of entry. The bonding company (including reinsurance, etc... to ensure eventual payment) is responsible to pay for any net negative impacts from that immigrant over 20-30 or whatever number of years, including crime, welfare payments, schooling costs, infrastructure costs, but also offset by wealth building employment, taxes, donations, etc...

Build the structure and let the market price the bonds and very quickly not only will we see how much net positive, negative a particular immigrant is estimated to be, but if someone is at high risk of being a large net negative (potential terrorist, etc...) then the extreme financial pain of missing that will drive the bond markets to price accordingly.

My suspicion is that (bringing it back to the original point of the topic) high SAT country immigrants would end up with lower bonding costs than someone from Syria, for example. Women may end up costing less than Men.

Overall, the cost would ultimately be lower than perhaps the anti-immigration folks would suspect, but maybe not. Either way, maybe we can all agree on the mechanism and then let the market demonstrate what the reality is over time.

Tom Church writes:


Becker and Lazear proposed your idea a while back.

Jon Guze writes:

If we auction off immigrant visas, won't they mostly go to gangsters and kleptocrats?

Philo writes:

"[Y]ou could just as easily ask them [Jones and Caplan] why they bother advocating anything." They are providing reasons in support of the claim that this or that policy would be optimal (perhaps subject to certain constraints); in other words, each of them is making a theoretical point. On the other hand, *compromise* is a *political* maneuver, one which seems inappropriate in the present context. You say nothing to show that your proposed policy wsould be *better* than either Jones's or Caplan's: you have given them no reason to agree on it, as a theoretical matter; nor does there seem to be any practical, political reason for them to embrace it (which there might be if they were jointly deciding the matter).

Miguel Madeira writes:

"My suspicion is that (bringing it back to the original point of the topic) high SAT country immigrants would end up with lower bonding costs than someone from Syria, for example."

By curiosity, Syria is a low or an high SAT country?

Daniel Kuehn writes:

They are more or less right on academics. It's a cap exempt H1B category, with an unlimited number of visas. Of course that wasn't around when you came.

It is much easier to come if you are educated, and just a matter of paperwork if you've got an academic appointment, which is a huge problem with the US system. We make it the hardest for the people who need it most and easiest for the most educated and wealthiest.

Bedarz Iliaci writes:
the United States, which is doing well, would likely do better if it allowed over a billion people from China and to move here

How could he possibly know that? Isn't is an instance of the fatal conceit that afflicts

with no restrictions on immigrants coming to the United States, in 100 years our GDP per capita would decline by 30%.

Again, how can one possibly know this?

Khodge writes:

Per your observation that the most interesting conflicts are between good and good, one of the footnotes in the book Superforecasting, reviewed by Bryan, was to an article by Kahneman and Gary Klien: "Conditions for Intuitive Expertise: A Failure to Disagree."

Floccina writes:

[Comment removed. Please consult our comment policies and check your email for explanation.--Econlib Ed.]

Thomas Sewell writes:

@Miguel Madeira, re: SAT of Syria....

That's a much tougher question than it first seems. There is a lot of "good" SAT-ish history in Syria, but as a result of the relatively frequent conquest, reconquest, wars, divisions after wars, etc... affecting what is modern day Syria the current inhabitants are a mishmash of folks from just about everywhere except "original" Syria.

I'm not sure the information is available to say for certain the actual original origins of the many peoples in Syria, other than they are predominantly Arab Muslim, which covers a lot of ground.

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