Thursday, May 31, 2007

Rich in spite of ourselves

The immigration debate has always revealed the anti-market bias of many U.S. liberals as well as conservatives. Dan Heninger (in today's WSJ, excerpted below) elaborates.

Denying market forces is about as useful (and bright) as denying gravity. People will cross borders, no matter what, in pursuit of a better life. They will even risk drowning, dehydration, and other horrors -- as boat people and many others do all over the world all the time. So the best that can be done is a flexible set of policies that implement reasonable monitoring (as with legalizing drugs, prostitution, etc.). But that does not get votes.

Bryan Caplan hammers this home in his wonderful new book. (And to think of all the years that I had taken "rational ignorance" seriously.)

We are rich in spite of ourselves.

How About Amnesty for the Market?
Dan Heninger
WSJ, May 31, 2007; Page A14

Several years ago, a think tank called the Migration Policy
Institute produced a digital map of all the counties in the U.S., depicting
where the foreign-born population lives. In other words, the immigrants, not
only Hispanic but all ethnicities. The map is color-coded -- with deep purple
and navy-blue counties holding the largest raw numbers of foreign-born people,
from 23% to 50% of total county population (the U.S. county average then was

When your eyes fall on the map, they are drawn immediately to
a long strip of deep blue and purple counties running from the southern tip of
Texas and northwest along the border and deep into California. Undeniably, it is
difficult to go nearly anywhere in California -- its cities or its smaller
farming communities -- without realizing that the state is under pressure from
the influx of Latin American migrants. Then more deep blue spreads into Nevada
and Arizona. And of course southern Florida.

The map also shows the swath of immigrant-dense areas around
New York City and northern New Jersey and, less publicized, around Chicago on
the southwest shore of Lake Michigan. Though heavy with Hispanics in their
midst, neither New York nor Chicago produce the nightmarish accounts of social
destruction from this in-migration.
In raw numbers, according to MPI's
tables, six states over time have held far and away the largest number of
foreign-born people, with California's 9.6 million as of 2005 overwhelming
runner-up New York at almost 4 million. Texas and Florida each hold more than 3
million with Illinois and New Jersey at about 1.6 million.

However, the percentage increase from 2000 to 2005 shows a
different picture. California's growth rate, at 9.1%, ranks 40th. In fact save
for Florida (ranked 25th by growth rate), all the other states with large
immigrant populations experienced growth below the national average of

The state with the highest percentage growth of immigrants in
those five years was South Carolina, at 47.8%. Rounding out the top 10
high-growth immigrant states, all up more than 30%, are New Hampshire,
Tennessee, Arkansas, Delaware, Alabama, Georgia, Nebraska, Kentucky and North
Carolina. (If you really want to get away from it all, head to Wyoming -- dead
last with about 11,000 foreign-born and 49th in growth with a -5% rate.)
that list of states with high rates of in-migration tells me is that immigrants,
legal or illegal, go where there's work. They constitute what in one of the few
felicitous phrases in economics is called "labor-force

A study last September by the Pew Hispanic Center tracked
migration flows back to 1990 and found that the most notable factor affecting
the rise and fall of total migration numbers was the state of the U.S.

What this in turn suggests is that the best way to stanch the
flow of illegal immigration would be to drive the growth rate of U.S. GDP back
toward zero.

But of course no serious person would propose any such thing.
Labor-force participation is as American as apple pie. This country, as the
saying goes, was built on work. And that may be precisely why Congress is having
a hard time passing an immigration bill.

Notwithstanding all the calls for enforcing the borders and
obeying our laws -- unassailable as ideas -- one is still left with the
legislative challenge of transforming several million people who are going to
work every day into a national "problem." Not for nothing has this congressional
effort turned into the most amazing Rube Goldberg contraption -- a point system
to measure a worker's worth, a $5,000 fine for working here, a go-home
requirement and a system whereby the boss has to conclusively prove that José
and Maria are kosher.

No wonder it's hard to pass a bill. It's hard because Congress
is trying to elevate one American value, respect for the law, by demoting an
American value that up to now has been an unambiguous, uncontested ideal --
respect for work, for labor. The tension here is especially difficult for

Conservatives and liberals will fight unto eternity over whose
notions of the law, society and justice are right. But the one idea owned by
conservatives is the market.

For many Democrats in politics, the market -- the daily
machinery of the private economy -- is a semi-abstraction. It's a barely
understood thing that mainly sends revenue to the government, without which the
nation is incapable of achieving social good. Liberals happily concede the idea
of salutary "market forces" to their opposition. For them, markets are for

Why, then, would Republican politicians and conservative
writers want to run the risk of undermining, perhaps for a long time, their core
belief in the broad benefits of free-market economic forces in return for a law
that hammers these illegal Mexicans?
If I'm a liberal or progressive
Democrat, I'm gleeful to see conservative foes who have preached "the market" at
me since the days of FDR now arguing that these millions of workers are an
artificial, "unskilled" labor force whose presence merely prevents "the market"
from replacing them with machines.

Conservatives also argue, with considerable force, that any
conceivable path to citizenship or guest-worker status for these workers -- no
matter how long or arduous -- would be "amnesty" and so make a mockery of the
rule of law. But so massively setting aside years of principled, market-based
argument -- the environment, pharmaceuticals, labor, antitrust -- to thwart
these movements of immigrants is a risky proposition.

The massive migrant flows across the states described earlier
-- into the private industries of construction, restaurants, agriculture,
food-packaging, hotels, health and landscaping -- is irrefutably the result of
powerful, lava-like free-market economic forces.

No matter how principled conservatives may think themselves on
this issue, the fact remains that at crunch time they sent the market to the
back of the southbound bus. Sounds much like the extra-market case their
opponents make for the Kyoto Treaty. It also sounds like an argument for sending
a $2,000 contribution to Hillary Clinton, so the country can be run by people
who truly believe in managed economies.