There Is Still No Difference Between Immigration and Free Trade

At Cafe Hayek, Don Boudreaux posts his prepared remarks from a recent talk given in Atlanta. The whole thing is worth a read, especially if you want a quick summation of Econ 101.

However, I want to call attention to one point in particular, spoken by Don but also by my professor Walter Williams:

I here, at the last minute, add an eleventh point to the elemental case for free trade.  I was reminded of this point just this morning by an e-mail from my great colleague Walter Williams.  Walter asked me to remind you that countries don’t trade with each other; people trade with each other.  China doesn’t trade with America.  Individuals who reside on that part of the earth that we today call “China” choose to trade with other individuals who reside on that part of the earth that we today call “America” and who choose to trade with people in China. [original emphasis]

The concept that economics is just human action is vitally important to understanding.  All too often, people will make the mistake of forgetting this vital, yet simple, fact.  When people trade in goods, it is the owners of goods swapping.  In other words, people.  When people trade in labor, it is the owners of labor swapping.  In other words, people.

I hear far too often from many people who are nominally free trade that we can’t have free trade of labor (that is, free movement of labor across borders, not just within) because labor is people and people can corrupt (or be corrupted).  But this is no different than the false argument “demand analysis doesn’t apply to minimum wage because these people are workers not commodities!”  Both statements are wrong.  The owners of capital, people, are just as likely to subvert liberal values than laborers (who do you think calls for protectionist tariffs?  Subsidies?  Regulations?).  In fact, I’d argue the owners of capital are more likely to subvert liberal values because they, unlike immigrants, can actually vote and participate in the political process.

Does increased immigration run the risk of importing people hostile to liberal culture (or creating a “Trump effect” backlash against liberalism by natives)?  Yes.  But that danger is not unique to immigration.  It holds just as true for capital.  Economics is human action.

3 thoughts on “There Is Still No Difference Between Immigration and Free Trade

  1. “In fact, I’d argue the owners of capital are more likely to subvert liberal values . . . ”

    Exactly! And, if government has a lot of power, then the owners of capital will use their influence to subvert those liberal values. Without such government power, the owners of capital won’t be able to do much of anything other than sell their goods and services within the constraints that current and potential future competition permits them.

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  2. As I see it, the main complaint of the Right is that wetbacks pay less taxes than they take in, in welfare. This can be refuted by statistics and by noting that it takes a few years of “legally” being here before they are eligible for welfare. That means they must have been employed all that time before then. What an excellent test; something we should consider for those born here applying for welfare.

    But there’s one complaint that is hard to refute. Once they do become citizens they will add to the number of Democrats. I wonder if it would be prudent for philanthropic minded libertarians to establish a way to teach new citizens about economy and liberty.

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  3. Actually it takes 5 years of legally being here before becoming eligible to apply for citizenship, or for any type of assistance except for emergency medical care and public education for children, many of whom are US citizens by birth in any case. Those benefits are available immediately to anyone and everyone. I’m not sure whether public education in the US is a blessing or a curse, but it may be one of the primary sources of Democrat voters.

    I agree that a waiting period for welfare benefits would be a great test for citizens as well as immigrants, but I think the waiting period in both cases should be 50 years instead of 5.

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