Wednesday, June 11, 2008

Thoughts About Here and Getting to There

Sheldon Richman writes a punchy piece in Media With Conscience (HERE):

Independent Migrants, Welfare, and the Law


The division of labor

What the “economic” case against immigration misses is that there is always more work to be done than workers to do it. In a world of scarcity, our wants are limitless. At any given moment we can’t have everything we want. So whenever we can obtain things cheaper than before, we free up labor and resources for more and better things. If migrants are willing to work for less and competition drives down the prices of their products to consumers, more resources and labor will be available for new production. This is how economies grow and living standards rise.
The anti-immigrationists see the productive side of the newcomers (as though that were a bad thing), but they miss the consumption side. Immigrants buy things. New demand requires new supplies. That in turn creates new opportunities for entrepreneurs and workers.

If lower-wage workers coming to the country are a threat to the American people, then so are such workers who stay in their home countries and export their products to the United States. In other words, the anti-immigrant logic leads to economic autarky. But if anything is well established in economics and common sense, it’s that autarky is the road to poverty. The division of labor is the key to ever-increasing prosperity, but as Adam Smith famously wrote, the division of labor is limited by the extent of the market. If, as most people believe, a U.S.-wide division of labor (including free movement and free trade) is good, then a hemispheric division of labor is even better — and a global division of labor is best of all (until we discover other planets with productive beings).

One caveat: the American economy is not a true free market but a government-saturated corporatist system. In part that means taxes and regulations restrict competition, inhibiting new entrepreneurs from challenging incumbent firms. In such circumstances, the ability of the market process to create new opportunities for workers is constrained and the adjustment to new conditions is slower and more difficult. This is what gives surface credence to the anti-immigrationists’ economic arguments. But as we’ve seen, the fault lies not with migrants but with government intervention in the economy. What needs cracking down on is not poor people who freely move to where capital and opportunity are more abundant but politicians who think they can run an economy

Immigration is a contentious issue all over the world, including from one country to another, and from the countryside to the cities. Both are perceived to cause a lowering of the quality of life for those already resident in the country receiving the immigrants and those already resident in a city not able to accommodate a sudden influx of people.

Getting from here to where we think most things will be better is an imponderable problem with no easy – and maybe even difficult – solution.

Adam Smith wrote about Britain as it was and suggested many things that would make it a more opulent country, especially for the majority of the population whose labours supplied the bulk of what most people could afford with difficulty on their wages and a minority could easily afford without having to labour to earn their incomes, and an even smaller minority who could afford whatever they wanted but preferred for various reasons to better themselves by diverting their incomes from spending to saving and investment.

What stands in the way of all such would-be possibilities is what Smith called the unalterable prejudices of people guarding their bits of ‘privilege’ as they see it.

So what is more likely to happen is not much is going to change, at least quickly, or quickly enough, to avert disappointment.


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