Economists’ Best Advice

Ramone:

I am a proud resident of Fairfax County, in the U.S. state of Virginia. Today, I want to warn my fine fellow Fairfax folk: we interact too promiscuously with outsiders! For example, we are allowed to buy things made outside Fairfax, and leave the county to travel or work. Fairfax firms can even choose outsiders as investors, employees, and suppliers.

Such promiscuous interaction risks polluting our precious purity with uncontrolled contamination! Surely we choose to live in oh-so-fair Fairfax because we believe in Fairfax exceptionalism, in our exceptional mix of climate, culture, attitudes, laws, personalities, etc. Yet we allow any of us to risk corrupting this exceptionality via unrestricted mixing with outsiders. For example, we let outsiders move here who might vote for politicians who also don’t share our political values. And lets not forget that terrorists might slip in.

Much of this mixing surely also hurts Fairfax locals who compete with outsiders. Fairfax residents who drive to other counties to eat restaurant meals take business away from Fairfax restaurants. Fairfax firms that hire workers living in other counties take jobs away from Fairfax workers. Fairfax people who read books and blogs written by outsiders take readers away from Fairfax authors. Sure, sometimes we benefit from mixing with outsiders, and sometimes enough to compensate for losses to locals. But no one can prove that this is always the case, or even usually the case.

So, dear fellow Fairfax folks, we simply must be more careful! I’m not saying we should never interact with outsiders, but we must be more selective. There must be oversight – we can’t just let any of us decide for themselves how much they’ll pollute or harm the rest of us.

Convinced? No? What if Ramone had talked about Virginia, instead of Fairfax – would he have made sense then? If not, then why would the same arguments make sense when applied to the United States? Sure clever folk can think up arguments that apply better to nations than to states or counties, just as they can think up reasons why it is better to let in goods or investments than workers. But it seems quite unlikely that such arguments are actually the main reason most people more easily accept exchanging people between counties and states than between nations, or accept outside goods and investment more than workers.

It seems far more likely that people are invoking ancient classifications and fears, regardless of their appropriateness for today’s world. We probably habitually see the invasion of people as more threatening than things, and see workers from other counties and states more as “us”, relative to “them” from other nations. So to believe that our barriers to immigration are for the best, you have to believe in a lucky accident.

Bryan Caplan recently posted on a Michael Clemens article which mentioned: economists typically estimate that eliminating barriers to moving workers would roughly double world GDP, a far bigger gain than eliminating barriers to moving goods or capital! For this reason economists disagree with the public, and favor open immigration:

[In] a questionnaire sent to 210 Ph.D. economists randomly selected from the American Economic Association, … few economists believe that current U.S. immigration levels are too high (16.7%)—although many (29.5%) are neutral on the matter. (more)

Question: “Please tell me if you think it is a major reason the economy is not doing better than it is, a minor reason, or not a reason at all. (0 = Not a reason at all”; 1 = “Minor reason”; 2 = “Major reason”)” Mean answers: Public: 1.22, Economists: 0.2 (more)

We economists tend to expect open immigration to increase overall wealth and value (and liberty), and to reduce inequality. Furthermore, this seems to be the biggest gain we consistently identify. You might not always listen to or believe we economists, but if you can ever be persuaded by us, please let it be on this, economists’ strongest recommendation: open those borders!

Added 7p: Fairfax County is the third richest county in the U.S., and the richest large (>.4M pop) county, and neighbors the two richer but smaller ones.