Mises Wire

Only the Private Sector Can Determine the “Correct” Number of Immigrants

The current terms of the debate over immigration might as well be a full-employment plan for government planners. From both sides, the talk is constantly of either taxpayer-funded barriers to immigration, or of government subsidies employed to promote immigration.

On the left, we repeatedly find demands that immigrants be provided with every manner of taxpayer-funded amenities, from schools, to health care, to income supports, and more. Even those who merely wish to limit tax-funded freebies — while leaving the borders themselves more or less open — are denounced as intolerant monsters.

On the other side of the debate are calls for more taxpayer-funded walls, more government agents, and more federal power. Those who oppose these measures are denounced as anti-American or as tools of a corporate elite “exploiting cheap labor.”

Rarely mentioned is the fact that both types of intervention distort markets, and end up putting economic planning in the hands of politicians in Washington, DC. After all, what is the “correct” number of immigrants? What are the “correct” countries or origin? To think that government agents can answer these questions is akin to assuming that governments can properly determine the correct number of automobiles or tomatoes or personal computers. Government bureaucrats often attempt to answer these questions, but for reasons explained by Ludwig von Mises, they consistently fail in the process. 

Only individuals acting in the private sector can determine the correct amount of goods and services (including labor) by demonstrating their preferences through their own actions. This, in turn, forms the basis for prices which tell us how goods and services are valued. Government regulations, on the other hand, involve arbitrary “policy goals” and reflect only the preferences of certain interest groups and government officials. 

Those who have already made their peace with government planning, however, will have no problem with telling us what is the proper number of workers or immigrants or anything else. The bureaucrats will compile some government statistics, produce some studies, and then turn to “public policy” to impose a one-size-fits-all solution on every one of the 320 million inhabitants of the United States. A government quota will then be said to be the “correct” number of immigrants. 

Unfortunately, the economic hardships imposed by this type of government planning will be carefully ignored.

Immigrants are Heterogeneous

At the heart of the calculation problem in this case is the fact that immigrants are not homogeneous. This should be obvious, but public policy is written with the assumption that people fit into convenient categories.

The assumption of the government planner is largely that people are interchangeable. While there is some attention given to a handful of characteristics such as criminality (i.e., felons should presumably be refused entry), no type of government evaluation can even begin to really address the sheer diversity in skills, backgrounds, and personal characteristics that make each person unique. 

Fortunately, we already have a mechanism that allocates resources — such as housing and employment — to immigrants based on personal relationships and individual characteristics. This mechanism is called the marketplace. In the marketplace, individual owners and households will distribute resources in a manner that owners think will best serve consumers or be acceptable to neighbors and the community overall. Each customer or employee is evaluated individually. 

Government bureaucrats, on the other hand, view immigration “planning” in terms of quotas and regulations. Government regulations will then dictate to employers and owners who can be hired or housed in accordance with arbitrarily selected numbers and types of immigrants. 

Naturally, these interventions get in the way of allowing consumers and property owners the ability to decide for themselves which immigrants will be able to be successful in a new country by obtaining income, housing, and other essentials. In a society without either government subsidies for immigrants or government barriers to immigration, it would be fully up to property owners and employers to determine whether immigrants can find employment or live within the community. Private families or charitable organizations would, of course, also be free to offer housing and amenities to family members and sponsor other immigrants who may not, for whatever reason, be able to support themselves financially. Owners and households would be free to refuse to do these things as well. 

Decision-making would thus be decentralized and up to the local community members to determine who will be able to reside there. 

The Effects of Market Interventions: Picking Winners and Losers

Similarly, if a landlord wishes to rent or sell property to immigrants, but is prohibited from doing so, this distorts markets while impoverishing property owners. Owners will be unable to legally sell or rent to their preferred customers (who may be the highest bidders), and the overall effect will be to artificially reduce the demand for the owners’ goods, and thus the price will fall. The landlord is made poorer to satisfy the government planners and their supporters. 

As with any government intervention in the marketplace, regulating and/or subsidizing immigration benefits some people at the expense of others.

In the case of subsidies for immigration via government benefits, the taxpayers are punished while the receiving immigrant benefits. Certain employers will also benefit in this case since the subsidies allow households to subsist on lower wages, thus allowing employers to negotiate lower wages. 

On the other side of the equation, prohibitions on immigration benefit domestic workers while punishing consumers, employers, and entrepreneurs. This is why Cesar Chavez was vehemently in favor of government restrictions in immigration. The restrictions benefited his unionized farm workers while punishing the employers Chavez opposed politically. A side effect, however, was an increase in the price of food for consumers. 

People Are Punished for Peaceful Exchanges

Government’s interventions in the marketplace are often glossed over by supporters of regulation, claiming that they are “common sense” laws or “democracy in action” or some other innocuous-sounding term. In fact, any law or regulation that is enforced by sanctions relies on violent interventions such as fines and jail time.

When combined with government subsidies of immigrants, taxpayers, property owners and others are then hit with a double sanction. They’re forced to pay to subsidize immigrants on the one hand, and then, should they find some immigrants with which they choose to do business, they are punished a second time for not doing business exclusively with the special government-approved variety of immigrant. In his article, “The Tragedy of Immigration Enforcement,” Lew Rockwell noted the reality of these regulations for many ordinary people:

The owners of Chuy’s Mesquite Broiler in Phoenix and 13 other locations around western states have been kidnapped from their popular restaurants and dragged to jail. This will be followed by trial, and certain personal bankruptcy. They could face 80 years in prison. In the raid, “Homeland Security” stole their computers, their accounting and employment records, and walked out the door — just like a gang of thieves. The only difference is that these thugs operate under the cover of the law.

And what evil did these restaurateurs do? Were they poisoning people, stealing customers’ wallets, secretly running an assassination conspiracy, sending in the predator drones against people they hate, or what? To lock anyone away for life is a shocking sentence, so surely the punishment must fit the crime. Psycho sniper murderers have gotten less.

What they are alleged to have done is to hire people who don’t have the proper bureaucratic forms filled out for them.

And why are these bureaucratic forms necessary? Because many Americans have embraced the idea that it is perfectly legitimate for government agents to decide for themselves how goods should be produced, who should be employed, and how businesses should be run, all without any ability to evaluate the nature of the work or the nature of the employees.

The Link with Free Trade

Everything said here about the movement of labor applies equally well to the matter of restrictions on the movement of goods. Like workers, goods are heterogeneous and government agencies are in no position to dictate which goods should be used, how goods should be used, or by whom. When governments intervene in these markets, they enter into the business of picking winners and losers while creating bubbles and distorting markets.

Markets are then cut off from innovations while peaceful and efficient entrepreneurs, managers, and ordinary people are punished with government sanctions for engaging in unauthorized trade.

And yet, those who advocate for more government intervention insist that the economy and even society in general can be planned and manipulated by government bureaucrats to reach an arbitrarily selected outcome. On the other hand, those who actually produce the wealth, who know first-hand the realities of labor markets and prices for goods, are simply expected to obey.

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