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Immigration Quandary

December 11, 2000

Tags U.S. Economy

Mention immigration to Austrian economists and other free-market economists and you will hear a cacophony of opinions that range from "completely open the borders" to "completely close the borders."  It is hard to imagine a more divisive subject among those with libertarian philosophical and economic bents, and it plays out in the political arena with strange bedfellows, including folks like Harry Browne and Patrick Buchanan, both of whom have widely publicized and differing views.

Added to the mix is an article by Hans-Hermann Hoppe, who applies a private property rule to immigration, saying that in an anarcho-capitalist society, legitimate immigration can occur only when the lawful owners invite "foreigners" onto one's property.  And as one examines the different libertarian opinions on immigration, it becomes difficult to find common ground.  Thus, I take on this divisive and thankless task myself.

Those who prefer open borders say that people are no different than products.  If one believes in free trade, and the freedom to bring capital over international borders, then one should have no problem with labor also passing unmolested from country to country.  Since labor is a factor of production, it would seem hypocritical to allow all other factors to freely cross borders, but then block labor.

The open borders advocates also can easily attack the Patrick Buchanan argument that immigration lowers wages for domestic workers.  While it may be true in some instances that newly arrived immigrant labor indeed can depress wages, the same argument can be made for any other factor of production.  For example, libertarians do not believe that the current sugar import quota program is legitimate just because more sugar imports would push down prices of U.S.-grown sugar.  In fact, libertarians argue that forcing up the price of factors of production, be they labor or commodities, is blatantly anti-consumer and ultimately harms the economy.

Furthermore, the presence of immigrants does help ease severe labor shortages in some areas of production.  Fruit and vegetable prices would be much higher, one can argue, if the immigrant workers--both legal and illegal--were suddenly deported and domestic workers were left to pick the produce themselves.

Indeed, it is difficult to make an economic argument against open immigration.  The social and political scene, however, is a different story and many libertarians are missing the important point that what happens in the social and political spheres matters in every way.  It is not difficult to declare that open immigration into the United States has the real capacity to ultimately destroy what is left of our free market economy and our freedoms themselves.

I write this as the grandchild of immigrants from Sweden and Scotland.  My ancestors came to this country in search of a better life and they found it.  What they did not find, however, was a complete cradle-to-grave welfare system as currently exists in the United States.  While I can say, "They came here to work, not to seek handouts," I must temper my remarks with the reality that the government did not make such "handouts" available to them.  Had there been a welfare system as we have now, I cannot say with certainty that my ancestors would not have taken advantage of it.

For all its glorification by the left, the welfare system is nothing more than the forced transfer of wealth from taxpayers to those who spend wealth to benefit themselves.  Our current rule by judges takes the welfare state even further, as court after court has ruled that public schools and public and private hospitals must take in all comers, including those who might be in this country illegally and have no ability or proclivity to pay for the services they receive.  Such rulings have severely burdened taxpayers of Southern California who voted overwhelmingly to limit public services to immigrants in the now-infamous Proposition 187.  Of course, the leftist media painted those who voted for Prop 187 as vicious racists who approved the measure only because of their inordinate hatred of dark-skinned minorities.

Once it becomes apparent to certain groups, ethnic or otherwise, that they can have special services and privileges available to them, they will leap to take advantage of them.  I use the example of immigrants from eastern and southern Europe and their role in organized labor.  Areas where these immigrants and their descendants live tend to be highly unionized, especially in the cities of the Northeast.

Because of their special government-protected status, unions are part of the welfare state.  Granted, unionized workers are expected to punch a clock, but their benefits are gained by the covert (and sometimes overt) threat of violence, all of which is approved by government.  Indeed, unionism has appealed to many in those and other ethnic groups because they can appeal to their "status" as an "aggrieved minority."

Ultimately, all of this is reflected in the political sphere.  Welfare state politicians are able to garner votes from immigrant groups on the basis of the "wronged minority" appeal.  The political message is that such groups have lower economic and social status than majority (read that, white males) groups because the majority groups have conspired to keep them poor and uneducated.  Therefore, the welfare political classes say, elect us and we will give you "justice."

As one can see from recent voting patterns across the USA, the welfare state message has an enormous appeal to immigrants.  Counties and municipalities that have large numbers of immigrants vote in those same large numbers for politicians who wish to expand the welfare state by raising taxes on productive citizens and giving them to those who are less productive.

While the social and political ramifications of the current policies of immigration are bleak, it is by no means easy to limit this new wave of humanity crossing our national borders.  While Buchanan's demand to build a large fence and concrete ditch the length of the U.S. border with Mexico may sound appealing to some, it could never come to pass.  First, as a construction project, it would be extremely costly and would certainly require a stiff tax increase.  Second, not only would vast amounts of resources have to be diverted from other productive uses to build the wall, the labor force needed to man the border barrier would be huge.

If this barrier were built and effectively cut off immigration (which I suspect is a doubtful outcome), then most taxpaying Americans would find their taxes increasing and consumers would have to pay higher prices for many commodities and services now produced by groups dominated by immigrants.  Therefore, I believe it would be difficult to be able to sell this proposition to most Americans.

That does not mean, however, that I believe our current status of immigration is a good thing. Any group of voters that can be commandeered to help expand the welfare state and to disrupt peaceful, productive economic activity poses a threat to a free society. It is not that Mexicans and other immigrant groups are actively seeking to end economic and political freedom as we have known it. Rather, they ultimately become the pawn of political classes who would like nothing more than to control the lives of those free and productive citizens who now are beyond their reach.

There are no perfect solutions but dramatically reducing the availability of public services, decentralizing political decision making, and making it impossible for voters to vote themselves goods and services at others' expense will take us most of the way. Advocates of a free society cannot afford to ignore these issues as they seek strategic means of beating back the forces of statism.

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