Open Borders Are A Trillion-Dollar Mistake

Authored by Jack McKerrigan via ProgressivesForImmigrationReform.org,

Last month, Foreign Policy  ran an article, “Open Borders Are a Trillion-Dollar Idea,” which advocated for Open Borders. So for all those who say, “Oh, no one supports Open Borders,” here it is in writing! Every point made by author Bryan Caplan, an economics professor, is refutable, and, while the piece is long, we believe it’s important “for the record” to counter all of his points.

As I first read Bryan Caplan’s “Open Borders Are a Trillion-Dollar Idea” in Foreign Policy, besides disbelief, my thoughts were that this person must not get out much or must not read much. A quote from writer Upton Sinclair came to mind as well: “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

What is Just?

“Open borders are not only just but the most promising shortcut to global prosperity,” writes Caplan. This raises the question of who determines what “just” is? Just is not a defined term that someone can easily review (as Caplan seems to imply) and determine whether a particular policy is just or unjust. In fact, each individual probably has a different definition of what just is.

But in the United States, I believe the vast majority of citizens see Open Borders as a totally unjust policy. It is unjust because it is generally accepted that the population of a country has entered into a social contract with the leaders and government of a country. Under this contract, the population will follow the rule of law, and the government will pass and enforce policies that have beneficial impact upon the population of the country. There is no social contract between the leaders and government of one country and people who live in another country.

As an example from across the pond, the new Italian government recently released figures showing that the state will allocate €50 million next year, €200 million in 2021 and €300 million in 2022 to the Disability and Self-Reliance Fund of Italy. Some 2 million disabled in Italy rely on these state benefits, which work out to just 54 cents per day in welfare – insufficient for even a subsistence diet. In contrast, Italy is providing migrants €20 euros a day. Most Italians are likely to see this policy as unjust. Similar per capita spending differentials exist in funds furnished to needy citizens and migrants in the United States. That is also unjust!

What Missed Opportunity?

Caplan writes:

“To see the massive missed opportunity of which I speak, consider the migration of a low-skilled Haitian from Port-au-Prince to Miami. In Haiti, he would earn about $1,000 per year. In Miami, he could easily earn $25,000 per year. How is such upward mobility possible? Simply put: Human beings are much more productive in Florida than in Haiti – thanks to better government policies, better management, better technology, and much more.”

He continues:

“The central function of existing immigration laws is to prevent this wealth creation from happening – to trap human talent in low-productivity countries. Out of all the destructive economic policies known to man, nothing on Earth is worse. I’m not joking. Standard estimates say open borders would ultimately double humanity’s wealth production. How is this possible? Because immigration sharply increases workers’ productivity – and the world contains many hundreds of millions of would-be immigrants. Multiply a massive gain per person by a massive number of people and you end up with what the economist Michael Clemens calls ‘trillion-dollar bills on the sidewalk.’”

The real problem with this statement is that if you move a person from Port-au-Prince to Miami, you may be more likely to get a street person than you are to get a person earning $25,000. One of the policy suggestions in the U.S. and the world that is being floated by some U.S. presidential candidates and others is Universal Basic Income. This idea has arisen with technology leaving large groups unemployed (usually the most undereducated and unskilled of the population), among other reasons. If it is so easy for people to become and stay productive members of the U.S. workforce, then why would such a policy be proposed? Would it not be more likely that our Haitian immigrant would just accept this handout?

Another element missing from this argument is the need for capital both at the individual level and at the work level. An individual coming to this country requires capital to set up a residence, obtain transportation, put food on the table and pay for health care until he can get a job and start, if ever, producing. Those the writer would welcome to the U.S. would come to this country with barely the shirts on their backs.

Just as the individual needs capital, capital is required to put a person to work. This is true of even the most basic position – a ditch digger requires a shovel. But the U.S. does not generate many ditch digger positions. Instead, capital is required to establish a place for an employee to work, equipment for the person to use (be it a personal computer, a cash register, a harvester or a forklift) and training. This could run into tens of thousands of dollars per worker. During the last 10 years, there has been very little capital spending to expand capacity in the U.S. Accordingly, Caplan’s basic assertion is ridiculous. Any new immigrant who just crossed the border would require tens of thousands of dollars to get started. Without this, s/he will just become another street person wandering the streets of America.

Another issue overlooked by the author is that an individual earning $25,000 in Miami would not even be living at subsistence level. According to the Miami New Times, to simply pay for necessities, an average Miamian should make $38,529 a year; to live comfortably, a resident would need to make $77,057 a year. Thus, in actuality, Caplan either is advocating to dramatically increase the level of homelessness or the welfare rolls in this country.

We can look to Sweden as a good example of how migration has increased unemployment. Even though Sweden has thrown substantial monetary support to migrants, unemployment is among the highest in the European Union. In some towns, upwards of 80 percent of migrants taken in have remained on welfare. Instead of large positive economic impacts, Sweden has encountered significant financial costs and negative impacts creating financial crises in some municipalities.

Unification Compared to Migration – There is a Significant Difference

In a rather confusing manner, Caplan attempts to equate current migration to the unification of Germany.

“Many European countries – most notably West Germany during the Cold War – have swiftly absorbed much larger inflows in the past.”

German unification was not a mass migration, but instead was the combining of two separate countries which 45 years earlier had been a single country.

Unification is not equivalent to the migration issue. In addition, understand that people from Eastern Germany did not show up without assets. They brought a whole country with them, which included farmland, schools, universities, homes, factories, roads and infrastructure. Certainly investments needed to be made to upgrade these assets, but it was not as though East Germans showed up with only the clothes on their backs.

Further, the people of East and West Germany shared the same language, the same culture and a few thousand years of history. Many people in West Germany were related to people in East Germany, and the people of East Germany were highly educated.

All that said, the unification was extremely difficult and expensive. And today a large rift is growing in Germany, with the Grand Coalition run by Angela Merkel and the two centralist parties bifurcating into the left led by Die Linke, the remnant of the East German Communist Party, and the right led by AfD, the new face of anti-immigration and fiscally responsible Germans.

Crime

Caplan next downplays the amount of crime due to migrants, stating:

“Native-born citizens also frequently worry that immigrants, supposedly lacking Western culture’s deep respect for law and order, will be criminally inclined. At least in the United States, however, this is the reverse of the truth. The incarceration rate of the foreign-born is about a third less than that of the native-born.”

This is an untrue statement. For example, in Arizona, according to a study by the Federation for American Immigration Reform, an illegal alien is four times more likely to be incarcerated for a crime than a legal resident or a citizen. In New Jersey, illegal immigrants are incarcerated five times more often than legal residents and citizens, and rates of incarceration of illegal aliens on the West Coast are triple that of legal residents and citizens.

According to a 2004 article in City Journal, in Los Angeles (a city where illegal aliens represent approximately 23 percent of the population), illegal aliens accounted for 95 percent of all outstanding warrants for homicide (which totaled 1,200 to 1,500). Up to two-thirds of all fugitive felony warrants (17,000) were for illegal aliens. Can the situation be better now in 2019, in what is now officially a sanctuary city in a sanctuary state?

Again, looking abroad, in Sweden, the last government report that collected statistics on immigration and crime was a 2005 study by the Swedish National Council for Crime Prevention (Brå). It found that people of foreign background were 2.5 times more likely to be suspected of crimes than people with a Swedish background; immigrants were four times more likely to be suspected of lethal violence and robbery, five times more likely to be investigated for sex crimes, and three times more likely to be investigated for violent assault. The report was based on statistics for those “suspected” of offenses. The Brå said that there was “little difference” in the statistics for those suspected of crimes and those actually convicted.

Further:

“According to Dagens Nyheter in 2017, at least 90 percent of all murders and attempted murders through gun violence in Sweden were performed by either immigrants or those with at least one immigrant parent and according to Expressen, 94.5 percent of all members of career criminal gangs in Stockholm, Sweden, are either immigrants or have at least one immigrant parent. The share of foreigners admitted to the Swedish Prison and Probation Service increased from 26 percent in 2003 to 33 percent in 2013 according to its statistics. In its 2017 report on organized crime in Sweden, police stated that in most areas of Sweden with the highest crime rates (sv: särskilt utsatta områden) population share of immigrants is around 50 to 60 percent. In recent years some of these areas have experienced riots such as 2008 Malmö mosque riots, 2010 Rinkeby riots, 2016 riots in Sweden and 2017 Rinkeby riots. Immigrants have also been associated with a series of highly publicized crimes, including the 2015 Ikea stabbing attack, 2016 Sweden asylum centre stabbing and the 2017 Stockholm attack.”

Politics

Caplan then goes on to discuss how migrants impact the politics of a country:

“Native-born citizens of developed countries have a long track record of voting for the policies that made their industries thrive and their countries rich. Who knows how vast numbers of new immigrants would vote? Indeed, shouldn’t we expect people from dysfunctional polities to bring dysfunctional politics with them?

“These are fine questions, but the answers are not alarming. At least in the U.S., the main political division between the native- and foreign-born is engagement. Even immigrants legally able to vote are markedly less likely than native-born citizens to exercise this right. In the 2012 U.S. presidential election, for example, 72 percent of eligible native-born citizens voted versus just 48 percent of eligible immigrants. Wherever they politically stand, then, immigrants’ opinions are relatively inert.”

This is really a nonargument. What has been true in the past about the percentage of eligible immigrants voting is not necessarily going to be true in the future. In addition, this is a case of lies, damn lies and statistics. If the above referenced 48 percent of eligible immigrants vote mostly one way, which they probably do, then it can tip the scale significantly away from the long-term voting track record of native-born citizens of developed countries which made their industries thrive and their countries rich.

Do No Harm

Caplan wraps up his article by referencing his book:

“In Open Borders, I have the space to address many more concerns about immigration in more detail. What I can’t do, I confess, is address the unmeasured and the unmeasurable. In real life, however, everyone routinely copes with ambiguous dangers – ‘unknown unknowns.’ How do we cope?”

It is difficult to understand exactly what Caplan’s point is here. Is he trying to say, “Well, we really do not know what the impact would be from Open Borders, but, what the hell, let’s do it and see what happens!”

If that is what he is saying, that is a reckless approach considering it could impact the lives of more than 300 million people in the U.S. alone. This is an issue that should be studied to death before any decisions are taken. The ramifications of failure are just too catastrophic to consider.

In the petri dish of life there are several real world examples of failure of these ideas. In Sweden, the ex-CEO of a major company recently said the country is on the edge of civil war over its immigration policy. Neighboring Norway has put its military on the Swedish border to prevent incursion from immigrants located in Sweden. Other countries experiencing unrest over immigration issues are Germany, Italy and the Netherlands. One country which is not having problems is Switzerland which is taking a measured approach to immigration.

Looking back in time, Argentina provides lessons to the negative impact of mass immigration. Argentina is a country gifted with a large amount of natural resources. Prior to WWI, Argentina was looked upon as a superior place to emigrate to over the U.S., with Buenos Aires earning the moniker of the Paris of South America. During the 1870s and up until WW1, Argentina experienced an economic boom.

“The scarcity of labor and abundance of land induced a high marginal product of labor,” per Wikipedia.  European immigrants  (chiefly Italians, Spaniards, French and Germans), tempted by the high wages, arrived in droves. The government subsidized European immigration for a short time in the late 1880s, but immigrants arrived in massive numbers even with no subsidy.”

In general these immigrants were low skilled and poorly educated. The population grew from 1.9 million in 1870 to 15.9 million in 1947. During the same period, Argentina allowed in 6.6 million immigrants, with most of these people settling in the cities, even though the country had an economy driven largely by agriculture. A side effect of the high immigration levels was the importing of ideas such as labor unionism, anarchism and other forms of popular organization.

The Great Depression caused the economy to turn down, and within a few years there was high unemployment which resulted in labor unrest. This led to political instability, and a military junta began running the country in 1943.

In 1946, Juan Perón came to power on the backs of the descamisados, or “shirtless ones.” Perón basically ran on a socialist program leaning towards corporatism (similar to Mussolini fascism) with several five-year programs implemented (similar to communist USSR).

Per Wikipedia, “Beginning in 1947, Perón took a leftward shift after breaking up with the ‘Catholic nationalism’ movement, which led to gradual state control of the economy, reflected in the increase in state-owned property, interventionism (including control of rents and prices) and higher levels of public inversion, mainly financed by the inflationary tax. The expansive macroeconomic policy, which aimed at the redistribution of wealth and the increase of spending to finance populist policies, led to inflation.”

It should be recognized that the translated name of the Peronist party, or Justicialist Party, is the Social Justice Party. It has governed Argentina most of the time since Perón  assumed power in 1947. The backbone of the Social Justice Party was the millions of poor and uneducated immigrants who settled largely in Argentina’s cities from the mid-1800s through 1943.

Open Borders is not the only reason that Argentina has experienced continuous financial crises since the 1940. However, it was a major contributor and indirectly contributed to bringing in the ideas of socialism and corporatism to Argentina which severely damaged Argentina’s economy. To date, Argentina has defaulted on its debt eight times, more than any other country. The IMF is preparing for a ninth default in the near future since the Peronists returned to power late in 2019. Argentina has been an economic basket case for the last 70 years. In a discussion with an executive living in Argentina a few years ago I mentioned that I was worried that the United States might go the way of Argentina. His response was, “May God have mercy on you!”