Cowen on Immigration
By David Henderson
Tyler Cowen’s latest New York Times column, “A Profession with an Egalitarian Core,” is one of the best short pieces he’s written in the last year or so. HIs overall point is that economists have been on the forefront in caring about everyone’s rights and that we shouldn’t abandon that noble tradition today. Here’s something I hadn’t known:
At least since the 19th century, the interest of economists in personal liberty can be easily documented. In 1829, all 15 economists who held seats in the British Parliament voted to allow Roman Catholics as members. In 1858, the 13 economists in Parliament voted unanimously to extend full civil rights to Jews. (While both measures were approved, they were controversial among many non-economist members.) For many years leading up to the various abolitions of slavery, economists were generally critics of slavery and advocates of people’s natural equality, as documented by David M. Levy, professor of economics at George Mason University, and Sandra J. Peart, dean of the Jepson School of Leadership Studies at the University of Richmond, in “The ‘Vanity of the Philosopher’: From Equality to Hierarchy in Post-Classical Economics.”
Also, of course, Levy and Peart are the ones who uncovered why Thomas Carlyle called economics “the dismal science.” It’s because the free-market economists, who dominated economics at the time, strong opposed slavery. What a party animal Carlyle must have been.
Next, Tyler turns to immigration and lets out his inner Bryan Caplan:
One enormous issue is international migration. A distressingly large portion of the debate in many countries analyzes the effects of higher immigration on domestic citizens alone and seeks to restrict immigration to protect a national culture or existing economic interests. The obvious but too-often-underemphasized reality is that immigration is a significant gain for most people who move to a new country.
Michael Clemens, a senior fellow at the Center for Global Development in Washington, quantified these gains in a 2011 paper, “Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?” He found that unrestricted immigration could create tens of trillions of dollars in economic value, as captured by the migrants themselves in the form of higher wages in their new countries and by those who hire the migrants or consume the products of their labor. For a profession concerned with precision, it is remarkable how infrequently we economists talk about those rather large numbers.
Amen, brother Cowen.
Tyler then admits the problem of the welfare state, but points out that then we should figure out a work-around:
Truly open borders might prove unworkable, especially in countries with welfare states, and kill the goose laying the proverbial golden eggs; in this regard Mr. Clemens’s analysis may require some modification. Still, we should be obsessing over how many of those trillions can actually be realized.
Then this zinger:
In any case, there is an overriding moral issue. Imagine that it is your professional duty to report a cost-benefit analysis of liberalizing immigration policy. You wouldn’t dream of producing a study that counted “men only” or “whites only,” at least not without specific, clearly stated reasons for dividing the data.
So why report cost-benefit results only for United States citizens or residents, as is sometimes done in analyses of both international trade and migration? The nation-state is a good practical institution, but it does not provide the final moral delineation of which people count and which do not. So commentators on trade and immigration should stress the cosmopolitan perspective, knowing that the practical imperatives of the nation-state will not be underrepresented in the ensuing debate.
Or, as I put it in challenging the nationalism of one of Cowen’s fellow NY Times columnists:
There is one slide, though, that displays Krugman’s nationalism. On the third-last slide, he lays out the argument that there can be an optimal tariff if the country imposing it has the power to affect world prices. Krugman then gives the standard economist’s criticism of naively imposing this tariff. He writes, “This is optimal only if the foreigners don’t react. Unilateral optimal tariffs can lead to “optimal tariff warfare”, which makes both countries worse off.”
Notice what criticism Krugman didn’t make: he didn’t say that the optimal tariff is not optimal at all when you consider world welfare. It’s optimal only from the viewpoint of residents, considered as a whole, of the country whose government imposes it. Thus my statement that Krugman displays his nationalism.