Dave Smith: A Reply to a Reply to a Reply

Dave Smith recently took the time to respond to my last article, which was a reply to an episode where he discussed immigration.

My primary goal in the article was to show that some other value or principle besides simply upholding property rights should be acknowledged as a part of libertarianism. I argued that, while libertarianism ought to be limited to only legal/political questions, property rights are not enough to cover every legal or political issue. A number of times, Dave expressed disagreement on this point. He maintained that everything can be boiled down to upholding property rights. However, I think he is really appealing to 2 separate values.

Dave explains that when there is not private property due to government-imposed public property, we should support “less initiation of violence against peaceful people, or […] a policy that is closer to how it might work in a private property-based system.” Dave contends that both “…still come from property rights and the non-aggression principle.” In a sense they do, but surely he would admit there is a distinction between not aggressing against people, and supporting policies that we predict a private owner might enforce. After all, these 2 things have plenty of potential to conflict. It is only the fact that a private owner legitimately owns his land that makes enforcement of his rules not aggressive. These are really 2 separate values that Dave is appealing to.

Predictions

For one thing, we can’t really know what private owners would do. This is part of the reason markets are so important. We need those private actors with their decentralized knowledge operating with the feedback of profit and loss in order to allocate resources effectively. So, this principle is problematic, to begin with. On the other hand to suggest, as Rothbard does, that open borders “really amounts to a compulsory opening by the central state”, contradicts the evidence we have and economic reasoning regarding discrimination. If Dave does want to embrace the principle of mirroring predicted private property owner decisions in regards to government immigration policy, open borders seem to be a close approximation.

The one major factor that presumably encourages more migration than there otherwise would be is welfare. But there are many other things that would encourage more migration in a libertarian society. Even now, it’s impossible to ignore that the wages of immigrants from underdeveloped countries increase dramatically when they move. Mexicans with similar work experience and education average 250% higher real wages merely by residing in the U.S. For Bolivia and Ecuador, it’s a 5-fold increase. Haitians experience a 1000% gain, and some African countries, like Egypt and Nigeria, are higher still. Combine this with the fact that foreign-born have a relatively high labor force participation rate (especially foreign-born men: 77.9% vs 67.3% for native-born men), and it seems like the tremendously higher compensation in the U.S. must be an important motivation for migrants. The other stark difference between the United States and many South American countries is the rate of violent crime. On average, immigrating from Mexico decreases the chance of being murdered by 80%. Some countries are more than that.

I think it’s safe to say libertarians agree that without local NIMBYism, rents would be lower, without all of the numerous interventions in the economy, including an inflationary currency, real wages would be higher, and with fully privatized security and criminal justice, crime rates would be lower. If true, then high wages and low crime become even more pronounced as motivations for immigration. Further, imagine how much more appealing the U.S. becomes if there was actually a free market in healthcare, housing, education, and every other industry.

This still leaves open the possibility that property owners could exclude foreigners. Sure, some might. I agree with Dave that residential areas would probably be more restrictive, while commercial areas would be more open. The most important question though is what owners of major roadways would do. As long as major highways allow foreigners to travel, then an immigrant will have access to countless private businesses and housing units, of which at least some will undoubtedly be willing to engage in mutual transactions.

Discrimination Is Costly

It’s difficult to imagine a profit-seeking firm that manages a highway discriminating based on country of origin. Discrimination in business is costly, as is the enforcement of discrimination. A highway that did screen for nationalities would tend to be outcompeted by others that did not. The former not only would need to invest in more enforcement mechanisms, but they would also lose revenue due to excluding a significant number of customers.

Even in the Post-Reconstruction South, when the culture of racism was endemic, there was widespread opposition to segregation laws by businesses. Just as racists needed to utilize the power of government force to impose discrimination, the exclusion of immigrants from the country requires that same top-down force. While there is some cultural opposition to immigrants, it does not come close to the racism present then. Again, plenty of property owners could still exclude foreigners, but as long as some don’t, the result would be similar to open government borders, where generally speaking, immigrants would be allowed on roadways (or trains or airports) and able to travel to private property whose owners welcome them.

Finally, Dave says our last requirement for choosing government policy is that it shouldn’t be a “fuckin disaster.” Agreed. This is more or less what I meant by libertarians should “generally support as little government regulation as possible“. Yes, a heroin addict in a classroom seems like a disaster. Foreigners in the country do not.

For starters, immigration creates jobs by extending the division of labor and increasing consumer demand (this paper estimated each “immigrant creates 1.2 local jobs for local workers”), and even immigration critics recognize immigrants raise the real wages of natives (by about 0.2 percent) and increase economic output (by about 36 billion in the year 2010).

Overblown Fears

Dave’s primary fear seems to be the potential votes of immigrants. Judging by current immigrant views, this fear is overblown. First-generation migrants’ answers to questions about taxation levels, welfare spending, and government aid to the poor are statistically insignificant compared to later generations. Perhaps this is due to what Bryan Caplan calls “status quo bias.” Most people don’t like to rock the boat. Regardless, immigrants vote at much lower levels than native-born anyway. Legal immigrants vote around 10% less often than natives, while illegal migrants vote at very low levels. If voting Democrat is what bothers you, immigrants have favored different parties throughout the years so that is not a permanent fact. And given that immigrants have views similar to the average American, their influence on the Democratic party, if anything, is to pull it away from the extreme socialist left and toward the center. In the interest of keeping the length here manageable, I’ll link to a past piece where I’ve addressed other common fears, like crime and welfare use.

While problems can arise, immigration is far from a disaster. And I think the burden of proof rests on whoever thinks that it will be such a disaster that we need government interventions. So far, I’m not convinced. Further, if mirroring what private property owners would do in a privatized society is our goal, it appears that open borders would be more accurate.