The Laissez Faire Approach To Immigration

The American population is obsessed with the immigration issue as of now. Firstly, they have elected a very unconventional President to the office. Many observers are of the opinion that the anti-immigration sentiment amongst the common people is one of the biggest reasons why Donald Trump is in office. Secondly, they are rallying against the H1B visa. Highly educated people in cities like San Francisco have started campaigns to get the H1B visa repealed. The intensity of public emotions is palpable. Politicians like Donald Trump are smartly using these emotions to increase the scope of the government.

Their answer to every problem is increasingly higher government intervention. This is completely opposed to Ronald Reagan who once famously said that “Big government is not the solution to the problem. Instead, big government is the problem.”

Hence, to really solve the problem of immigration, other alternatives need to be explored. It needs to be ensured that these alternatives do not propose more government intervention.

Some of the problems related to government intervention in immigration policies have been listed in this article:

Free Trade and Immigration

The problem with anti-immigration campaigns is that most of those campaigns are also opposed to free trade. The problem with this approach is that it is counterproductive. If one country is prosperous and its immediate neighbor is not, then immigration is a natural result. If goods and services are not allowed to cross the border then migrant workers will! Building a wall or deploying the army to stop the immigration is futile. Instead, free trade should be allowed. If free immigration is allowed, the prosperity of countries like Mexico will increase. The average Mexican worker will have employment opportunity within Mexico. They will not have to cross the border in order to move up the economic ladder. This will stop immigration more effectively than an army or wall would. People from impoverished regions do not illegally migrate to prosperous regions because they want to. Instead, they migrate to these regions because it is an economic necessity. Hence, if the government just stopped interfering in free trade, they would be of more help in reducing immigration.

Free Trade and Outsourcing

It is the very nature of entrepreneurs to make the best use of their capital. This means that they will go to any lengths in order to ensure that they are able to obtain cheap labor. Restricting immigration pushes the cost of labor upwards. When entrepreneurs realize that they can hire labor cheaply in other parts of the world, they move the capital equipment to those countries. This is how outsourcing has started. The minimum wage laws and immigration controls that seem to be designed to protect the American workers are actually working against them. Once these jobs move to other nations, the taxes that are paid to the government also get reduced. If more immigration was allowed and no minimum wages were set, people from other countries would be moving into America in order to work. By artificially restricting efficient combinations of labor and capital, governments have unwittingly given an impetus to the process of outsourcing.

Free Trade and Criminals

Average people are forced to hire criminals when they want to illegally cross the border. For instance, if a Mexican worker gets a decent job at a factory nearby, he/she would not want to immigrate to another country. However, border taxes that have been artificially imposed reduce the job opportunities of the Mexican worker. It then becomes necessary to cross the border.

Since several people want to cross the border every day, there are criminals who start specializing in this trade. Hence, average people are forced to deal with criminals. Also, the entire market of “human smuggling” is created because of government regulations. Once these criminals establish routes for “human smuggling”, they start smuggling other contraband like drugs.

In a free market, human smuggling would be a redundant profession. Anti-immigration laws create criminals. These are the people that President Trump refers to as “bad hombres”. The best way to get rid of these bad hombres is by reducing government regulation and not by increasing it.

The Root Cause

People who believe that the economy is a zero-sum game are the same people who believe that immigration is bad for the economy. The zero-sum assumption is the root of all anti-immigration rhetoric taking place in America today. Free trade economists do not believe that a prosperous Mexico somehow threatens America. They are of the opinion that a prosperous Mexico is good for America. This is because prosperous Mexicans will have more money to buy American goods and services which in turn will make the American economy better off.

Arguments based on the zero-sum game are killing the American labor market:

  • Firstly, prohibitive rules have been laid down for hiring and firing employees
  • Secondly, extremely high minimum wages have been legislated into action
  • Now, the anti-immigration wave is further pushing the entrepreneurs away from America

The only reason companies want to stay in America is because it is a huge consumer market. If bigger markets like China and India become more developed, Americans may well be the ones waiting in line to immigrate to other countries.

Free will cannot be stopped using legislation. If there are people willing to work at lower costs, capitalists will find a way to either bring in the workers or to relocate their businesses.


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