Open Borders and Institutions

I am 100% in favor of open borders and damn proud of it. Aside from the humanitarian aspects (of which people far smarter than I have talked about and I may touch on again), and the libertarian “freedom of movement prevents tyranny” argument, there is an economic argument I’d like to discuss.

Proponents such as I will often argue that an increase in population will increase the economic pie because the labor resource of a country is increased. A typical opponent quip is “if these people are so productive, why aren’t they helping their own countries?”  This quip ignores the importance of institutions.

Allow me to explain with a parable. Where is a baseball bat more effective: in my hands or Bryce Harper’s?  Bryce Harper is one of the best hitters in all of baseball.  I am an overweight nerd who can barely hit a baseball out of the infield. In my hands, even the greatest baseball bat ever invented would look like a dud.  Only in Harper’s hands would it achieve its full potential.  That is because only with Harper are the conditions right.

This is the same with countries. Despite all its problems, the US is still a market-based economy. Mexico, on the other hand, is considerably less so.  It is far easier for a resource  (and labor is a resource) to be utilized in a productive fashion in the US than Mexico because the institutions are present.  And this, in turn, leads to increased wealth for all.

8 thoughts on “Open Borders and Institutions

  1. Exactly. And for the most part, that’s why people bring their resources (labor) to the US where it will be used more productively. A very difficult argument to make at CD.


  2. Banging rocks on the slab and snorting it is almost as American as baseball. As somebody who feels laws should left to the free-market I agree as well that it’ll also be a good thing for human traffic to increase thought the Americas as well. may the free-market gods be with us as will strike down those who differ from us.


  3. I’m not sure your baseball story works to highlight the importance of institutions. Rather, the baseball story is more analogous to observing that corn planted in Iowa will have a higher yield than will corn planted in northern Montana. It’s not institutions that explain the difference.


  4. With All due respect, Jon:

    I mostly agree with what you’re saying, but the baseball parable is full of holes and Bill’s got you on the ropes. Sports analogies never work. I remember a few years back a popular conservative rhetoric against the minimum wage was that a “team isn’t going to pay a guy $10 million to sit on the bench.” Yeah, just don’t tell that to the New York Yankees, or any major sports team nowadays. (Don’t even get me started on Man U!) It just doesn’t work.

    Sports and entertainment are a completely different monster to the labour world. And until the day American style free agency hits the average working man, and he/she has an agent searching for work and arguing the qualifications of their client for higher wages, they should never be compared.


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