RedStateEclectic : Immigration and Freedom (1/10) - The Economic Consequences of Immigration

I. Why I Am Interested in Immigration

Obviously, there are many good reasons to take an interest in the issue of immigration. Presently, I am interested in immigration as an example case allowing me to study

the manner in which public discourse and policies in a free society respond to and shape a highly conflictual issue.

Among the criteria by which we identify freedom one that captures the farthest range of consent within and beyond the circle of liberalisms and their derivatives is

the idea that free human beings are entitled to express and act upon opposite and conflicting views concerning desirable political outcomes affecting the entire society.

From the standpoint of someone investigating the role of freedom in modern life, I feel that far too little attention is being paid to the fact that one polar function of liberty is to

tolerate,

encourage, and even

organise ongoing mass dissent, a discursive process of trial and error and a resultant competition of permanently contestable policies.

In fact, mass dissent is one of the most important, if not the most important, guarantor of those robust conditions of freedom that define the difference between

a closed access society, in which both the exercise of power and the formation and the policing of permissible views is largely confined to a small hegemonic elite, as opposed to

an open access society, where civil society thrives thanks to a high level of autonomy of the individual and the associations that she is allowed to form without permission by society's specialists of governance.

A free society is one in which people find themselves empowered to develop very different views of the world and their place in it, while at the same time enjoying the right and being able to draw on an unprecedented range of self-directed options to pursue their specific notions.

My thesis is that freedom has evolved to create a balance between

centripetal forces of social cohesion (manifested by a resilient web of peace, personal autonomy, and high levels of productivity and wealth) counteracting the

centrifugal forces of conflicting multiplicity naturally generated in a civil society and finding expression in a citizenship that is politically involved to an unprecedented degree.

Another hypothesis of mine that I wish to look into more carefully asserts that conventional accounts of freedom, especially in the tradition of classical liberalism and its various branches, are not likely to grasp the full picture of freedom's functions in an open access society, as

their ideological mission is to advertise the liberal vision as the uniquely preferable variant of the good society rather than relativising the liberal voice as a mere tributary to the open-ended genesis of civil society.

The liberal proclivity to underestimate and hence neglect the inseparable connection between pluralism, democracy, and freedom is fuelled by a strong tendency to believe in autonomous spheres of freedom - essentially spheres thought, or hoped to be made, free from the contestation of liberal precepts by opposing political actors -, of which the free market provides the master pattern.

In trying to come to grips with immigration, one has got to start somewhere, and it may be just as well to look at its economic consequences. It is moot in this context, and, I admit, perhaps even unfair to Julian Simon, an economist, to wonder why he would confine himself to economics when treating of an issue that is streaked in important ways by non-economic aspects. Perhaps an echo of the libertarian habit of looking for the economic sphere as the master pattern of freedom?

II. The Economic Consequences of Immigration

The Economic Consequences of Immigration by Julian L. Simon is the last book to be submitted by him before his untimely death in 1998. Below, I shall summarise Julian Simon's findings, whose data sources pertains exclusively to the USA. His account provides an entry into many of the vital issues involved, giving a preliminary structure to what I intend to take a closer look at. At this stage, I will refrain from evaluation. For the time being, I collect impressions of what people seek to know about the subject of immigration and, thus, the kinds of propositions that sustain a lively nationwide contest of pros and cons. Simon's conclusions are presented at the end of the second part of this article.

11 Findings on Immigration

1. Trade Theory Does Not Apply to Immigration

Arguments based on gains from trade as identified by modern trade theory cannot be transferred to immigration. In international trade consumers (in country X, buying at a lower price than domestically possible) and producers (in country Y, selling at a higher price than domestically possible) both enjoy gains. That is due to transferring goods produced in one system with lower relative prices to another with higher relative prices. You cannot usually achieve this effect by transferring people. An Indian taxi driver can offer you a very cheap ride in Calcutta, but she cannot "take that cheap ride with her" by transplanting herself into the structure of relative prices prevailing in Lincoln, Nebraska. Higher wages (consonant with relative prices in Nebraska) benefit the immigrant into Lincoln, but not the local consumers.

2. Size and "Quality" of Immigrant Population

By historical standards, the contemporary influx of immigrants into the USA is not exceptional (1901-1910 - 9.6%, 1961.1980 - ca. 2%). In 1910, 14,6% of population foreign-born, 1980 only 6% (1 in 17). Smaller share of foreign-born than Great Britain, Switzerland or France.

[I]n contrast to the older US population, immigrants tend to arrive in their 20s and 30s, when they are physically and mentally vigorous, and in the prime of their work lives. Immigrants have about as much eduction as do natives, on average, and this was even true at the turn of the century. [They] are disproportionately professional and technical persons. A great benefit to the US."

Simon, J. (1999), The Economic Consequences of Immigration, The University of Michigan Press, pp. 366 - 367

3. Behavioural Characterists

Compared to natives, immigrants elicit a higher rate of participation in the labour force, save more, apply more effort during working hours, have a higher propensity to start new businesses and to be self-employed, they do not commit more crimes and their fertility rate is not higher.

4. Effects on Public Coffers

[C]ontrary to common belief, [in average] immigrants do not use more transfer payments and public services than do natives; rather they use much smaller amounts in total. [N]atives are enriched each year through the public coffers for each additional immigrant family[, who contribute more to them than they take out].

5. Use of Physical Capital

[T]he negative effect of immigrants upon natives' incomes through capital dilution [use of capital not paid for, hence either reducing capital available for natives or forcing the latter to pay for capital to equip immigrants], mostly for demographic capital [schools, hospitals etc. previously paid for by natives], is about one fourth the size of the positive effect through taxes-and-transfers. [For more, see here.]

End of Part 1, continued at Immigration and Freedom (2/10) - The Economic Consequences of Immigration - Julian Simon (Part 2)

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