Economics, Uncategorized

Immigration Points and the Fatal Conceit of Central Planning

(Please excuse the improper spacing in this piece. Weird glitch. Don’t know how to fix it.)

If you think Trump’s (or Canada’s or whatnot’s) points system for immigration is a good idea, you seem awfully confident in the government’s ability to engage in central planning.

 

Now, Trump is a mercantilist with little understanding of economics. But to my surprise, quite a few libertarians and supposed “free market economic conservatives” seem on board with his points plan. But here’s the problem:
Most of you recognize government is too stupid to plan shoe production. You need price signals and competitive mechanisms to tell you what, where, and how to produce. You can’t make a five-year plan for the whole economy because the economic problem constantly changes.

But many people who recognize that flip around say, “Oh, but no worries. We can figure out exactly how many and what kind of laborers the economy needs for the next five years using this artificial points scale.”

 

The best way to know whether “the economy needs an immigrant” is simple: If we allow people to hire the immigrant, do they choose to do so? If we allow people to rent houses or apartments to the immigrant, do they choose to do so? Let them do it, sit back, and let the market do its thing.

Now, granted, the government may have a legitimate worry about being able to afford certain kinds of welfare programs and publicly provided goods which immigrants might consume. But if that’s a worry, then find a keyhole solution. We don’t nationalize guitar production just because we worry about affording public schools for luthiers’ kids; similarly, we shouldn’t nationalize laborer production because of that worry.
Now, if you think the system improves upon the status quo, that’s fine. That’s not an argument that the system is good, just that’s better than what we had before.
  • Does the point system require that much central planning?

    Hard to know without more specifics on the Trump plan, but Canada’s point system doesn’t seem to require much in the way of competence from government. Basically, the only thing that the government needs to know is that people with X years of education (or Eng/Fre language skills) suffer from Y percentage points less unemployment. Even very wide bounds on the estimates X and Y would probably suffice to make informed judgement and build a reasonably effective point system for skilled immigration.

    Also note that Canada’s point system does take into account the market-based criterion that you propose: There are 10 points given for arranged employment in Canada. Now you could argue that the weight of this factor should be increased, but that’s not quite the point that
    you’re making in the post.

    At a gut level, the point system does not appeal to me, and I still haven’t seen a compelling moral case for it. Still, it seems like you’re fighting a straw man here.

    • Em

      “Also note that Canada’s point system does take into account the market-based criterion that you propose: There are 10 points given for arranged employment in Canada. Now you could argue that the weight of this factor should be increased, but that’s not quite the point that
      you’re making in the post.”

      It very much IS the point he’s making in the post. The 10 points for arranged employment or w/e is an entirely arbitrary number plucked out of thin air and there’s no non-arbitrary number you can come up with.

      Thanks for illustrating his point beautifully.

      • Vincent

        Oh yeah. The point allocation is totally arbitrary, for sure.

        My point was just that Canada’s set-up is a far cry from the dialogue in the post:

        “Oh, but no worries. We can figure out exactly how many and what kind of laborers the economy needs for the next five years using this artificial points scale.”

        (I know that was exaggerated for effect, but why attack a straw-man when the actual formula is public, transparent, and easy to criticize?)

        You seem to suggest that we should ignore all other factors, because any point allocation we give them would be arbitrary. I don’t know about that. I’m no specialist, but if your goal is to admit qualified workers, it doesn’t seem crazy to combine info from several good predictors of long term employment, rather than just one.

        Obviously, if some guy can secure an initial job offer, that’s a really good indicator that he’s “fit to work” in the destination country (whatever that means). But jobs don’t last forever, and job offer requirements can be “gamed” much more easily than language skills or education. If the objective is to admit people who are going to work, pay taxes, and not collect welfare, then you want a reasonable long run prediction model, and leveraging more information in that model makes sense.

        Plus, there’s the issue of balancing other societal goals (which some people care about, even if I don’t as much).

        But again, you’re right, the specific weights that Canada gives to each factor at the moment are arbitrary.

      • Jeff R.

        Is the Canadian point system more or less arbitrary than the current US system? I would argue less. Substantially so. The points awarded in the Canadian system may not be all that accurate representations of the potential productivity or desirability of a particular would-be emigre, but they are at least a recognition that such things are important considerations when allocating a limited number of immigration slots. Whereas the US system privileges familial ties and sets quotas by country of origin and not much besides, right? That seems…obviously dumber than the Canadian system, and not by a little bit.

        • Except that, in practice, the Canadian points system still enables most immigrants to be eligible for immigration. Why don’t all eligible migrants end up immigrating? Because the points system creates a queue at foreign embassies that functions as a quota for all intents and purposes.

          Locals never see this queue because most of them have never visited a US embassy in a developing nation. But I have. You should, too.

          This, of course, is not the only policy issue Canadians think they’ve “solved” by replacing something transparent with a queue. Health care is another notable example.

          • Jeff R.

            “Because the points system creates a queue at foreign embassies that functions as a quota for all intents and purposes.” How so?

          • Employees at the Canadian embassies abroad determine for themselves who gets to the front of the queue. Thus, it becomes an arbitrary system of greasing embassy employee palms and networking with the right people. This is a criticism of what you’ve said because, knowing the full story behind the impact of the Canadian points system, it turns out that it is not, in fact, “obviously” better than a more arbitrary system such as the US system.

          • Jeff R.

            Ah, well that makes more sense. Thank you.

            Still, I am not sure I agree. If the point system whittles the queue down to the more desirable elements, how is that not still a win? Suppose you owned a popular restaurant and there was a strong demand for reservations. You only have so much capacity: wouldn’t it be nice to know ahead of time who plans to order a bottle of wine, who’s going to order a dessert, and who doesn’t tip very well, so you can set priorities? How’s this different?

          • The points system in theory should select for “desirable” immigrants (I’m for open borders, so I don’t really agree with this notion, but I’ll play along). In practice, though, the bar is set too low. Imagine a rule that says, “Prospective immigrants must be in possession of an endocrine system.” This is only theoretically a filter, since everyone who would ever immigrate already has an endocrine system. In that case, the ones who control the queue are free to determine for themselves, using any of their own, personal, arbitrary preferences, who moves to the front of the queue. In practice it would be equally as arbitrary as an “officially arbitrary” immigration rule.

            That’s my implication, at least.

  • Jeff R.

    Now, granted, the government may have a legitimate worry about being able to afford certain kinds of welfare programs and publicly provided goods which immigrants might consume. But if that’s a worry, then find a keyhole solution.

    We’re all ears, Brennan.

    • Sean II

      That’s just the point. Every keyhole solution which gets proposed in this context is a trick our society obviously cannot perform.

      They all come down to some version of “admit but deny X right of natives”. Usually it’s denial of the right to vote and/or draw public assistance. But none of it is ever gonna happen.

      Franchise denial can never last because one party stands to gain too much by enrolling the newcomers. Plus our culture is built around semi-religious reverence for the civil rights movement. No way a piece of paper is gonna stand against that analogy when it has political self-interest at its back. And besides, voting is not the only form of political action. Indeed it’s one of the least important. Anyone who tries to answer the political change objection with “okay, don’t let them vote” is just being silly.

      Benefits denial is even less plausible. It can be undone by a few judges, and here again one party has too much to gain by enrolling everyone. They will make sure it happens, soon or late.

      The only responsible assumptions in this game are: 1) people who get here, stay here and 2) people who stay eventually get full citizenship rights and a voice in our culture and politics.

      And of course this is why “let the market decide” doesn’t work for immigration policy.

      Because the market is not deciding who gets to work at this or that particular job, it’s deciding who gets to live here forever, drawing benefits, voting, having kids who vote and draw benefits, and so on.

      It’s hard to think of a bigger externality than that. And there’s a name for people who keep saying “let the market decide” no matter how massive the externalities get. We call them fanatics.

      • Jeff R.

        At least Brennan is at the stage that there might at least be some externalities to his preferred policies. Unfortunately, his plan to deal with these externalities is, it seems, to come up with a plan. When your plan is to come up with a plan, you must continue to endeavor to persevere.

      • Theresa Klein

        Franchise denial can never last because one party stands to gain too much by enrolling the newcomers. Plus our culture is built around semi-religious reverence for the civil rights movement with voting as sacramento numero uno.

        SO, you’d be cool with a society where there was a permanent underclass of disenfrachised residents? Were we wrong to let black people and women vote? I mean, all it did was make more Democrats right?

        • Sean II

          QED

          • Theresa Klein

            Ahh, so because people hold principles like “equal justice under law” sacred, they must be wrong.

          • Sean II

            Read the thread, please.

            Jason brought up “keyhole solutions” as an answer to common concerns about immigration. For people familiar with the debate, that means making arguments like: “Okay, if you’re so worried about immigrants tipping the balance of our politics, let them in but don’t let them vote.”

            That’s supposed to be the “keyhole” part – i.e. choosing the least invasive means of solving a problem. Gaining entry without franchise is better than gaining neither. It’s a common argument for more immigration.

            I pointed out this won’t work because Americans simply will not tolerate a large disenfranchised sub-population defined by race or ethnicity.

            Then you show up talking about how intolerable it would be to have a large disenfranchised sub-population defined by race or ethnicity.

            See the problem?

            You’re hurting Jason’s case and helping mine. You’re proving my point that keyhole solutions can’t work because they are plainly incompatible with our broader political culture.

            Proving my point and then some, actually. It seems voting rights are such a sacred totem that the mere mention of them has interfered with your ability to read clearly.

            You just jumped into an argument so fast, you didn’t even notice you were joining it on the anti-immigration side. That’s pretty amazing.

    • SamChevre

      I’ve actually proposed a keyhole solution; I haven’t yet seen any interest from the pro-immigration side, though.

      Anyone who can get sponsorship can immigrate. Sponsors post a bond, or otherwise demonstrate, that they can pay, and are responsible to pay, any costs to the public from the immigrant or their dependents, for 20 years. Costs to the public are defined as: average per-capita government spending, less taxes paid plus cash benefits received. So, if you sponsor an immigrant, and they have two children, you, as sponsor, are responsible for 37.7% (US spending as a proportion of GDP–OECD) of $57,466 (US per capita GDP) times 3 (immigrant and two dependents), less any taxes paid, plus any direct benefits received, per year. So sponsorship would require demonstrating that you can pay $1.3 million, over the next 20 years, if the immigrant is not supporting their own costs.

  • j_m_h

    Seems to me the above misses the fact that people are just inherantly different than things. The relationship the people of a society have with guitars is not like the relationship that that develop across multiple levels and area when you talk about new people coming into the country.

    The other thing is the underlying view that somehow the productiotn of guitars is totally unplanned and only driven by “market” mediation of individual interactions without accknowledging that market is simply not separable from the underlying legal and regulatory system and operational rules or the culture of the society in which the market exists. In other words there really is no escaping the “central planning” as at least part of the total nexus of economic activity. This is really the question area for the bit about immigration policy and it’s not clear it’s a binary let goverment control or hands off.

    As a simple aside, the “let people hire immigrants” is a bit simplistic and largely ignore the problem of knowledge — as in something of an assumption of perfect information in the market by all participants. But it’s not the case. Those here have much better knowledge of one anther than they do about those outside comng from a difference culture.

  • Theresa Klein

    This is a really important point.
    The thing is that the vast majority of unskilled laborers aren’t here on employment visas at all. It’s already nearly impossible to get a legal employment visa unless you have at least a college degree in a STEM field. Most of the poor immigrants people object to, who they feel are abusing welfare, come on family sponsorships or refugee and asylum visas. They aren’t here because an employer wanted to hire them.

    The elephant in the room is that the regulations governing employment based immigration have long since been captured by domestic labor, and nobody dares touch them. Almost all of the immigration debate revolves around this fact – illegal immigration is unskilled labor bypassing rules designed to protect domestic labor. Nobody proposes legalizing the immigration of unskilled laborers – they just want stricter enforcement. Enforcement which protects domestic labor from competition. This “points” system is mostly a reorganization of the rules governing the immigration of skilled labor – nobody who doesn’t have a college degree is going to get past the points system. The only difference is that instead of employers deciding who to hire, the government decides who gets in.

    • M Lister

      “It’s already nearly impossible to get a legal employment visa unless you have at least a college degree in a STEM field.”

      this is at least over-put, as-is. Lots of academics not in STEM fields get employment visas, as do lawyers, people in business, etc. Many of the most common sorts are related to science/tech, but there are lots of them in other fields, too.

      “Most of the poor immigrants people object to, who they feel are abusing
      welfare, come on family sponsorships or refugee and asylum visas.”

      It’s relatively difficult to get access to welfare via a family sponsored visa. To even sponsor someone, you must be able to show that you make (or have access to) 125% of the poverty level for a household of the relevant size. Then, the immigrants are strictly prohibited from accessing means-tested welfare benefits for 5 years, and until the time the immigrant becomes a citizen (in practice, at least 4 years for most, and for many much more than that) access to means-tested welfare benefits is limited by the fact that the income and assets of the sponsor are “deemed” to be available to the immigrant. Some go on to get welfare benefits after this point, of course, but it at least takes a long time to even become eligible. Trying to access them before this point is grounds for removal. Asylees and refugees are eligible for welfare benefits for 5 years and then are cut off, unless they become citizens by that point. But, refugees and asylees make up a really pretty small percentage of immigrants to the US. People on less generous forms of relief, such as Temporary Protected Status and Withholding of Removal are not eligible for means-tested welfare benefits.

      I might quibble with some of this, but the basic idea seems largely right to me. No doubt that a large number of people are confused about this, though, and partially base their confused views about immigration policy on these mistaken thoughts.

      • Theresa Klein

        Well, it’s easier if you have an advanced degree in any field, but if you have ONLY a BS, unless it’s a STEM degree, very unlikely. Since law degrees and MBAs are advanced degrees that helps.

        • M Lister

          You only need a bachelor’s degree or equivalent for a H1-B visa, and sometimes get labor certification. There are various numerical caps, and this does make it easier for some (academics first – no numerical limits, essentially no oversight on whether non-citizen workers are “needed”, some tech people second – higher, special caps) than others, but not because immigration officials are carefully looking at the specific qualifications of applicants. that’s not how it works. (I’m an immigration lawyer, in addition to being an academic. This isn’t my specialty area in immigration law, but I have a fair grasp of it.) The big problem for most people is the relatively low cap for most applicants (about 60K a year.) But, within that cap, it’s first-come first serve for people who can get labor certification if needed, without an special weight given to the degree or the like.

          (There are also a fair number of other migrant worker categories – NAFTA treaty trader, inter-company transfer, executives, etc. that ask nothing at all about degrees, even leaving aside the completely screwed up unskilled worker program the US has.)

  • Peter from Oz

    Libertarains have one major thing in common with old school Marxists: everything is based upon economics.
    Immigration isn’t about economics. But many people both for and against immigration like to pretend that it is is, because it is much easier to argue about economics than civilisation oe culure. But immigration is about both of those things.