By Darrell Dow
In prior essays I’ve argued that mass immigration breaks down community, undermining social trust and giving rise to the Nanny State. In this brief post I want to discuss some implications of open immigration for the operation of markets.
Does a philosophical commitment to open markets and freedom of association necessitate a similar commitment to open immigration? Some libertarians answer the query with an emphatic negative. Hans Hoppe has written in defense of free trade and largely closed immigration. Hoppe follows in the tradition of Murray Rothbard who, late in life, concluded that open immigration is an assault on property rights and undermines ethnic and national identity. Lew Rockwell and Tom Woods also oppose open immigration. All of the above are disciples of Austrian economist Ludwig von Mises and many interacted with Paleo-Conservatives in the 1990s during the Buchanan campaigns.
Intuitively a theory of international trade is similar to the movement of persons. Free trade seems to assume the free movement of labor. But on a practical level, it can reasonably be argued that free trade operates as a substitute for immigration. Theoretically one could have factories in Mexico rather than Mexicans in the United States. Imperial Britain employed a policy of “splendid isolation” from Europe and combined free trade with almost no immigration. In short, though I personally favor protectionist trade measures I am not arguing that the issues are connected in an iron-clad way. Immigration restrictionists should welcome free-traders into the tent.
However, the majority report among libertarians and free-trade zealots in the Wall Street Journal orbit ties the open movement of goods and people together logically. As far back as 1984, WSJ editor Bob Bartley offered a five-word constitutional amendment: “There shall be open borders.” Another libertarian, Tom Lehman, writing for the Foundation for Economic Education, argued that open immigration is merely a corollary of free trade:
“Immigration policy should not be viewed differently than trade policy: free, unregulated, unpoliced, open borders, devoid of taxes, tariffs, or any other barrier to entry. This is the policy of freedom to which America owes her heritage. Unilateral free trade, free immigration, and free emigration, where individuals possess unobstructed and unregulated mobility and trade, is a cornerstone of a free society. In fact, the free movement of peoples is no less important than the freedoms of speech, expression, and association. Liberty is indivisible; the laws of economics apply equally to all peoples.”
Open borders are a moral issue, “the cornerstone of a free society” and as important as freedoms of association or worship because “liberty is indivisible”, says Lehman. The magical laws of economics “apply equally to all peoples.”
Also writing for FEE, David Boudreaux makes a moral case for immigration:
“Whether or not immigrants increase or decrease measured GDP or per-capita income is an empirical question that can be answered only by sound empirical research. (Economist Julian Simon has carried out much of this research; he finds that immigrants promote prosperity.) But the moral case for open immigration is paramount. That case is this: a geopolitical border is a grotesquely arbitrary reason to prevent people from dealing with each other in whatever peaceful ways they choose. “
Channeling John Lennon or Simon & Garfunkel, Boudreuaux says that borders are merely “arbitrary”? The apostle Paul and St. Luke would beg to differ. In Acts we read that borders are ordained and appointed by God (Acts 17:26). Then again, what does God have to do with economic ethics?
Lehman also dismisses those who’ve jumped to the wildly inappropriate, ridiculous conclusion that mass immigration could undermine the cultural preconditions of a free economy:
“Contrary to the anti-immigration position, the American traditions of limited government and free market economies are not based upon ethnic or racial origins. They are based upon ideas. Western cultures cannot suppose themselves to have a monopoly on the philosophy of liberty, nor can Americans argue that the political values of the limited state cannot be inculcated in non-American immigrants. The ideas of freedom that have created the American tradition can apply to any ethnic or racial make-up.”
Take note of the universalist and egalitarian presuppositions assumed by Boudreuaux and Lehman. In their view the free market is merely a universal abstraction or idea, written on the very heart of every man, divorced from ethnic or cultural considerations. One group of people can embrace it as readily as another. All that is needed is a ready supply of copies of “The Wealth of Nations” and the free market will spring fully formed like Athena from the head of Zeus.
How are intelligent men able to accept such folly? Markets are produced by particular cultures and are part of a broader social order. To quote Peter Brimelow, “The free market necessarily exists within a social framework. And it can function only if the institutions in that framework are appropriate. For example, a defined system of private property is now widely agreed to be one essential precondition. Economists have a word for these preconditions: the ‘metamarket.’ Some degree of ethnic and cultural coherence may be among them. Thus immigration may be a metamarket issue.”
Even an immigration enthusiast like Milton Friedman could see, though not grasp entirely, the issue. In an interview with Brimelow, Friedman said, “It’s a curious fact that capitalism developed and has really come to fruition in the English-speaking world. It hasn’t really made the same progress even in Europe–certainly not in France, for instance. I don’t know why this is so, but the fact has to be admitted.” If the esteemed Dr. Friedman was confused, let me provide an answer–culture matters; and mass immigration, the replacement of one people by another, necessarily undermines the cultural preconditions that make free markets possible. As Thomas Sowell has written, “The most obvious fact about the history of racial and ethnic groups. Is how different they have been–and still are.”
Among other problems, a diverse population increases “transaction costs.” Dealing with people who you don’t know and share little in common with or don’t trust yields the need for expensive precautions, laws, and regulations. It increases the cost of doing business.
Secondarily, capitalism generates inequality and therefore envy. Sowell has demonstrated throughout his work that cultural differences are persistent and pervasive for generations. Various ethnic groups—Chinese, Jews, Japanese, Germans—excel wherever they live. But because face-to-face relationships are comparatively more comprehensible than those of an impersonal nature, the “losers” in economic transactions are far more likely to employ the state as a means of “leveling” the playing field—and this is especially the case when the winners have alien characteristics. In short, the economics and politics of envy intensifies in a multicultural milieu.