Reply to Aretae on Immigration

“You don’t know, I don’t know. Glad we cleared that up.” — Aretae

I don’t even know whether the sun will rise tomorrow.
Yeah the above is obviously a dumb thing to say, just like yours was. We “know” things on a probabilistic stale. So yes, long-term prediction is an insane thing to
do. However, that should make us wearier when fiddling with the _present_ and the politicos have fucked with the present with the 1965 Immigration act.
So, we are obliged to try to analyze the situation.

So, here’s my shot:

Putnam showed that diversity reduces trust and solidarity. Some other folks showed that trust is negatively correlated with the amount of regulation though obviously its also negatively correlated with willingness to pay for welfare of out-groups.
We know that productivity (marginal product -> income) is strongly correlated with IQ, and a host of other positive things are as well.

Now, to take a break, let me pause and say that I completely agree with the purely economic (as opposed to political economy) analysis that you presented –
immigrants are mostly a net gain.

However, we are concerned not simply with wealth, but the ability to keep increasing wealth – in other words, THE SYSTEM.

So, how does the influx of diverse out-groups affect THE SYSTEM in regards to regulation, whether in terms of affirmative action payoffs, further reduction in
private property rights (to discriminate), reduction in trust perhaps leading to further social regulation (nanny statism, NIMBYism), and predictability in
enforcement of even bad rules?

I say all these things trend towards the negative when you reduce the percentage of American of European ancestry and increase the percentage of Mexicans.
So imagine a simple bell curve – wealth gains carry on with immigration – and then the economics is overwhelmed by the politics and wealth drops off due to
institutional corruption, ethnic hostility, increase in security infrastructure (check out South Africa), increase in the risk and insurance premia, which negatively affect investment which, by your own compounding rule matter IMMENSELY.

I don’t know how you can be so glib in completely ignoring this META programming of the SYSTEM to a _possible_ state detrimental to further wealth gains far into the future. I understand that you may be frustrated with and discount the viewpoints of immigration opponents who can’t seem to get their heads around Ricardian

comparative advantage and the empirical data on immigrants’ assistance to “the economy.”
However, the more sophisticated argument is meta. Now, of course you can wave your hands and say well, these things aren’t an issue if we don’t give immigrants the vote, and take away welfare. Sure, but this is massive, massive fraud. Why? Well, cause you are discounting actual asymptotic harm to Americans by promising some silly CAMPAIGN to weed out things which are around 130 years old – welfare, voting rights being harder to remove with Egalitarian morality as currently fashionable.

Here’s another issue – the current dispensation is not derived from an analysis like yours – its derived from a combination of
regular, commercial self-interest AND naked, cynical exploitation
of pure numbers to re-inforce a certain political coalition as the
expense of other coalitions. In simple words, Democrats did 1965
to execute exactly the situation RSF and I are warning about.

And another one – what possible chance is there to keep a no-voting rights
rule enforced (even if this was somehow achieved), when the market for
votes-not-granted keeps getting larger?

In short, you MUST solve for these possbilities. You can’t hand-wave it away.
That would be as misguided and criminal as enforcing regulations that reduce
the compound growth rate by 1% every year.

5 thoughts on “Reply to Aretae on Immigration

  1. Excellent points about the long term political consequences of immigration affecting economics.

    Aretae wants to focus on purely the economic aspects, but I don’t think he carries the day on that matter. The US has recently taken in more immigrants than the rest of the world combined, and yet with all these immigrants running around supposedly creating value, our economy still tanked as bad or worse than others.

    1. rsf

      Thanks for dropping by. From all I’ve read, its really hard to prove immigrants’ positive (or negative) contribution to the economy. So I rely on comparative advantage. This sets me apart from most immigration skeptics who usually tend to be anti-free-trade as well. I accept Aretae’s purely economic position on immigration. But the politics overwhelms the economics in the long run. Also, I’m not sure what “purely economic” means, economics started as the study of Political Economy – this analysis would be right up in there.

      Also, personally I don’t believe immigration has anything to do with recessions, or if they do, at least not this one.

    2. Just looking a bit at the big picture, we have Germany and China, relatively immigrant free, showing good economic growth, while America the Inviter less so.

      I’d say in general that recessions and immigration are not a linked issue. In the current instance, however, we had the dynamic of the housing boom inviting immigrants to build and buy houses, and all that flowing through the system, and then the downturn putting pressure on unskilled labor, so I would say that there is some linkage.

      Economics may have started as the study of political economy, but now many seem to just worship at the altar of GDP growth.

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