Immigration Advocates Must Consider Virtue, Not Just Economics

Benjamin Powell and Alex Nowrasteh entitle their book Wretched Refuse? The Political Economy of Immigration and Institutions. Yet at no point do they define or explain what they mean by “institutions,” a topic which social scientists have long debated. Nor do our authors acknowledge that despite invoking the label “political economy,” their analysis relies on the same tools and methods as standard neoclassical economics. And while they address broad concerns about the relationship between immigration—past, present, and future—and topics such as corruption, terrorism, and cultural change in America, the fundamental thrust of their argument is, as the title of their second chapter suggests, “An Economic Case for Free Immigration.”

After reading Powell’s responses to Somin, Kaufmann, and myself, my question is: what exactly are he and his coauthor purporting to demonstrate? Is theirs an analysis of the broad impacts of unrestricted immigration on the political economy, as their subtitle and much of their book suggest? Or is it a narrower and more straightforward examination of the economic implications of a “free immigration” regime?

I begin with Powell and Nowrasteh’s understanding of “institutions.” Unfortunately, as just noted, they fail to elaborate or explain what they mean by this term. I am left to assume that as with most economists, an institution here is any on-going set of relationships or rules (whether implicit or explicit) by which individuals opt to come together to achieve specific ends.

What our political economist authors fail to acknowledge, however, is that for many other social scientists, perhaps especially political scientists, institutions are distinct from mere organizations.

Indeed, both the eminent sociologist Philip Selznick and the distinguished political scientist Hugh Heclo define an organization as merely a means or tool of accomplishing a given task or set of tasks; whereas an institution entails a seriousness of intention and purpose toward goals and objectives whose attainment points toward higher aspirations, even moral imperatives. Of course, such a perspective implies a non-positivistic social science; but isn’t that what the authors presumably aspire to when they invoke the label of political economy? Yet that term implies a much broader lens through which to assess the impacts of immigration than the single criterion of economic freedom, which is the only one the authors systematically explore.

Powell and Nowrasteh measure economic freedom across five domains: size of government; protection of private property rights; sound money; freedom to trade internationally; and regulation of businesses, labor markets, and credit markets. By examining this composite variable and its relationship to migrant influxes, they report substantial increases in economic freedom associated with unrestricted migration levels.

Powell and Nowrasteh also spend considerable time and effort exploring the non-economic impacts of mass migration. But unfortunately, they fail to reconcile the one set of findings with the other. For example, they allude to Thomas Jefferson’s concerns about the negative impacts of “the principles of the governments” that immigrants leave behind or of the “unbounded licentiousness” these newcomers might subsequently indulge in. But surely, Jefferson regarded these traits primarily as threats to republican virtue, not economic growth. How are such concerns about immigrants today evaluated and reconciled with the authors’ findings about increased economic freedom? The authors never say.

Similarly, Powell and Nowrasteh offer as instructive examples of free immigration the effects of exogenous migration shocks on Israel and Jordan. Indeed, they cite very positive impacts on economic freedom in these two cases—without adequately addressing the fundamental difference between these two cases and anything one might possibly infer about opening up U.S. borders to unfettered immigration (or anything even approximating such a policy). I raised this point in my initial remarks, but I am still waiting for a response.

In the same vein, Powell and Nowrasteh raise the intriguing issue of the impact of large numbers of socialist immigrants during the period of unrestricted immigration to the United States that ended during the 1920s. Their evidence, based on records of the Socialist Labor Party (which was founded in Germany in 1876 and then continued here), indicates that in one cohort of such immigrant workers, three-quarters failed to remain in the party once in the United States. Intriguing, yes. But does this indicate, as the authors suggest, that the overall impact of immigrant socialists on America has been—counter-intuitively—to advance economic freedom and slow the growth of government?

Such a claim would not impress either critics or admirers of Walter Reuther, the son of German immigrant socialists, who went on to lead the United Auto Workers, the Congress of Industrial Organizations, and the AFL-CIO, as well as play a significant role in the civil rights movement. Nor would it impress historically literate civil libertarians, who could justifiably point to how America’s openness to violent anarchist and syndicalist immigrants contributed to the post-World War I reign of terror that led to the creation of the FBI and launched the dubious career of J. Edgar Hoover. Overall, the broad historical claims made by these authors are only suggestively, not convincingly supported by their statistical analyses.

This is undoubtedly why Powell and Nowrasteh also present persuasive evidence that in the past unrestricted immigration resulted in an ethnically, linguistically, and religiously diverse mix of newcomers whose heterogeneity retarded their coming together for collective action. Here again, the authors appear to assume—but do not specifically support—the notion that any such collective effort necessarily threatens economic freedom.

This leads to my final point. If the United States were to take Powell and Nowrasteh’s advice and move toward unrestricted immigration, why should Americans assume the resulting mix of new arrivals would lead to an overall beneficial outcome? Relying on elaborate statistical analyses and models, our authors argue that terrorist risks would be minimal. Even if I were persuaded by such analyses, I doubt the American public would be. But more broadly, why should we assume that such an open immigration regime would have benign results only? Even if such a policy resulted in significantly enhanced economic growth as well as increased economic freedom, it might also have negative social and cultural impacts that under a “free immigration” regime could be neither predicted nor controlled. These are the kinds of questions inevitably raised by the authors’ hypotheticals, but that they fail to address—certainly in any convincing manner.

Also from this issue

Lead Essay

  • Looking specifically at immigrants’ effects on economic institutions, Benjamin Powell finds little to be concerned about. Natural experiments in Israel and Jordan in particular suggest that immigration does not lead to reduced economic freedom, and historical data from the United States corroborates this. Though the matter isn’t open and shut, the evidence needed to establish a likelihood of harm appears so far to be lacking.

Response Essays

  • Suppose that immigration skeptics are right, and that higher immigration levels threaten American institutions. That threat need not always come to fruition; in particular, if we suspect that it’s coming, we can prepare for it. Not only that, but economists have observed that higher immigration levels translate to substantially more wealth for both the immigrant and the host country. Ilya Somin argues that we can and should spend some of this new wealth on sustaining the institutions that help to create it.

  • Eric Kaufmann explains the mechanism by which immigrants degrade a host country’s institutions: Because they are of a different ethnicity, immigrants cause mistrust; labor unions in particular are weakened. This results in a relatively free market for labor, which lowers living standards for the working class. Beyond a certain level of fragmentation, even political parties come to be dominated by ethnic concerns, and ethnic parties corrode a society still further. The way to address these problems, says Kaufmann, is to limit immigration to the rate at which immigrants can assimilate to the host society.

  • Peter Skerry questions the relevance of Powell and Nowrasteh’s analysis to the United States, because the “quasi-natural experiments” they highlight—two large but discrete migrant flows in the Middle East—differ drastically from the prolonged U.S. experience of mass immigration, legal and illegal, that began in 1965 and has ramped up to the present day. More lax enforcement than explicit policy, this American “experiment” has led to an entrenched undocumented population of 10-11 million and provoked a backlash exacerbated by five aspects of the contemporary debate: 1) a rhetorically convenient but operationally simplistic distinction between “good” legal immigrants and “bad” illegal ones; 2) a deliberate blurring, by advocates, of the distinction between immigrants and refugees; 3) post-Cold War, globalist rhetoric of a “flat” and “borderless” world; 4) organizationally debilitated political parties that do not seek to assimilate newcomers as they once did; and 5) a media-driven politics that portrays immigrants, especially Hispanics, as having the same problems, and needs, as the poorest and most marginalized black Americans.