Free-market economics is not an absurd philosophy: my response to Wim de Vriend

If the free-market, limited-government worldview is not valid “in the first place,” as de Vriend suggests, that merely raises the question as to what alternative set of normative first-principles are. The question is not whether or not it’s possible to have too much of something. The question is: what process arrives at a more socially optimal amount of that something, government bureaucrats’ political process or the market’s voluntary process?

It’s also not a question of having or not having an ideology. Those who think popular prejudice against immigrants is a valid basis for public policy don’t lack for worldview. Indeed this view of de Vriend’s has more in common with “the 20th century’s biggest mass-murderers” he refers to than the Lockean Liberal philosophy of the American Revolution that founded a country that thrived with open borders.

It’s telling that we had to wade through a fair amount of verbiage on trade from de Vriend before he got to immigration. The worldview that thinks government knows better than you do whom you should purchase products from is the same worldview that thinks it knows the optimal growth in the labor supply better than hiring managers.

Trade is also like immigration in that it’s on net tremendously beneficial, meaning that if government regulators intervene to reduce it, the costs of such action will be larger than the benefits. The existence of someone somewhere who can say he lost his job because of an import or an immigrant does not rebut the fact that there are significantly more people who have a better job precisely because of our greater integration with the global economy. What free trade then does is reduce the “long-term unemployment, factory ghost towns, social decay and domestic turmoil” that de Vriend referred to, from what it would otherwise be in a more closed economy.

It also improves our national security strength for three reasons. First, because an open economy is a stronger economy, the US can afford more military might that it would with a less efficient division of labor. Second, for open economies like the United States, there does not exist a national-security-critical input that we cannot import when needed. Steel is a good example. The production of steel is so geostrategically diverse, there is no plausible coalition of potentially threatening countries that could corner such a market. And third, the pacific effects of trade, it’s the very interdependence of our mutual prosperity with the rest of the world that makes war against anything other than poor, asymmetric insurgents and rogue states unlikely.

I certainly agree that we don’t want our immigrants to be motivated by a public assistance arbitrage, but that’s a problem that doesn’t much exist beyond the popular imagination. One way de Vriend indirectly admits it does not exist is by making his point with a methodologically challenged report from a reputationally challenged “think tank” called the Center for Immigration Studies. I put those two words in parenthesis, because unlike our own Cascade Policy Institute, they don’t have a reputation for honest analysis.

It’s probably worth it then for me to spend some time showing how the study he mentioned appears to be intentionally flawed, a classic case of cooking the numbers when the facts don’t support their audiences’ expected results. The first red flag was for CIS to use a data set that included all federal healthcare programs, but then their researchers arbitrarily chose to exclude CHIP, an expensive federal program heavily used among poor non-immigrants that’s mostly off-limits to non-citizens. Since CIS had to go out of its way to exclude it, it’s hard to imagine that was an accident. The redistributive aspects of Social Security and Medicare were intentionally excluded too, programs that are only available to US citizens. The SIPP data CIS used also features the disaggregation of households, an important feature given the high immigrant rates of intermarriage and cohabitation with poor non-immigrants. Why did CIS then choose to re-aggregate that data and inflate their numbers for immigrants when they did not have to? In so doing they deceptively included non-immigrant naturally born children. Finally and perhaps most importantly, CIS failed to control for household size, a fairly rookie mistake that seems unlikely to be an accident if they knew what they were doing. It’s similar to the way CIS fails to control for age and gender whenever analyzing crime data.

I could refer to non-peer-reviewed links too, to studies that show the opposite conclusion, but they would be from free-market think tanks that have a clean record of accuracy in contrast to the low-brow netherworld of the likes of CIS, FAIR, and NumbersUSA. I don’t have to, because the fiscal impact of immigrants has been robustly shown to be negligible by the scholarly literature.

Immigrants are excluded from most forms of American social safety net spending. That’s not to say they get none, but the amount they do receive is less than the GDP our immigrants’ labor creates. So their absence would cost us more.

It’s not clear what de Vriend is actually trying to conclude from the anti-immigrant sentiments of the KKK. Is he saying ethnic-nationalists had good arguments against our having too many Catholics and Jews, that maintaining what de Vriend called our “White Anglo-Saxon & Protestant” heritage was a good idea? Or is he simply saying the very presence of such views means we should close our country to the benefits that immigration brings? Either way, what’s missing is actual evidence the significant opportunity costs from having fewer immigrants among us will be smaller than whatever benefits de Vriend imagines.

There is a very important difference between today’s America and that of the one which passed the Immigration Act of 1924 and ended our founding fathers’ policy of open immigration. Our fertility rate back then was above the replacement rate. Immigrants began returning to a double-digit percentage of our population later in the 20th Century just when we needed them the most – as our fertility rate declined, insulating us from demographic costs that are more real than whatever it is de Vriend imagines.

Having a robust growth in our immigrant population has from the beginning been at the core of what America is, but now the United States’ future prosperity depends on immigration like never before. From raising the minimum wage to increasing federal spending, there are many bad things a populist America could do right now, but passing the RAISE Act, cutting our legal immigration in half ranks right up there with the worst of them that threaten rather than promote American greatness.

Eric Shierman lives in Salem and is the author of A Brief History of Political Cultural Change