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immigration crisisThe immigration crisis on the U.S.-Mexico border these days is an odd one. Adherents of the party of free-enterprise, the Republicans, are opposed to the migration of free labor across the border, arguing that agents of the state should stop people and turn them away, if not submit them to government justice. Meanwhile, the party of big government, the Democrats, says live and let live.

Who knows what President Obama is up to in an episode that is perhaps reminiscent of the Mariel boatlift, all this swelling of migrant population into the U.S., in particular in south Texas. It’s probably of a piece with his fake talking up of Republican efforts toward impeachment. At this point in his failed presidency, Mr. Obama must want the opposition to look bad just like him, callous and weird.

The stupefying thing is how Republicans are prone to be led like lambs to the slaughter on this matter. The mass of newcomers to the United States across the Rio Grande and then the land border clear to San Diego gives rise to insistent, if not angry demands to “secure the border.”

If Republicans were true to their nature, they would certainly not be outraged at throngs careening across the border. They would assume that this is the natural course of things. America is the land of opportunity. Any outrage would be trained at forces within this country that did not conduce to a surplus of opportunity, specifically jobs, to meet and greet these people.

Of all the failures of the Obama presidency, the most characteristic, the one the president really owns, is the jobs crisis. Something like eleven million jobs have evaporated against the trend line since early 2009. At least that number of individuals work for pay and hours significantly less than they would like to.

ellistopx-topper-mediumThe proper outrage about the border crisis is that there is not an abundance of useful work waiting for people as they bound into the United States. This has, after all, been the standard circumstance of the great eras of immigration in American history, such as the heyday of the Statue of Liberty a hundred some years ago, when the point of this country was to soak up immigrants on account of all the great work to be done here.

The reason we have a border crisis is that we have a jobs crisis. Were there no jobs crisis (as there would not be had the government been modest with things like monetary, fiscal, and regulatory policy), all the newcomers on the border would slip into positions wordlessly, to the enhancement of the general prosperity, not to mention the culture. The dereliction of duty in this fiasco resides with the government. Not that it failed to secure the border (a phony concept), but that it prevented no less the American economy from achieving its fullness.

You might ask, why then are all these people bounding into Texas? Isn’t there a jobs crisis?

Well, no, not in the regions of this nation’s oil and energy patches. As has been touched upon in this space previously, the distended dollar policy of the United States of late has resulted in a surge in hedges against the dollar, the favorite of which is petroleum. Those regions of the country rich in such hedges have seen a fickle boom in their economies. Texas has therefore attracted the immigrants.

Only the government could have cooked up something this mad. First the United States causes an investment and jobs disaster by failing to care about maintaining the dollar as a criterion of value. This results in inordinate capital allocation into dollar substitutes, namely oil, the prime location of which is next to Mexico. Labor comes in from that country, and TV-watchers north of the border get outraged. The story is a comedy. The butts of the joke are two: the government and those who say it should do more.

In the most important article written on monetary policy since World War II, “A Theory of Optimum Currency Areas” (1961), Robert A. Mundell made the point that the natural area of a single currency is that where labor is generally mobile. If people are crossing point X all the time to work and trade, it would be economically inefficient to have different currencies on either side of X. The example Mundell used in his article (which prompted his Nobel Prize in 1999) was North America.

In an earlier era, Robert Mundell was a Reaganite hero (he did, along with sidekick Arthur B. Laffer, found supply-side economics), and conservative intellectuals like Robert L. Bartley of the Wall Street Journal made clear that a government committed to being limited must ease up on border security.

If the Republicans are the party of free enterprise, they should prefer the minimization of the state and the maximization of opportunity. With respect to the border, this would translate into a lesser federal presence on the Rio Grande and points west and to happy private transactions across the territory.

The funny thing about the U.S.-Mexico border is that its very rise and existence was a chief reason this country decided to have an income tax, that blasted thing. Previously, borders along the United States that were subject to traffic were seaports. The government relied on tariffs for most of its revenue, and these were easy to collect since seaports were few in number and obvious.

With the land border with Mexico (which the U.S. procured by war in 1848), and with the two more of equal length that Canada got busy making with the U.S. (the one against the lower 48 states and the other against Alaska) as it made its bid to go a mari usque ad mare to stave off American expansionism after 1867, it became ludicrous to stop “contraband” coming into the country. What are you going to do, police every merchant hoofing wares into New Mexico, let alone Montana?

In 1913, the United States punted and adopted the income tax, where American citizens would be directly taxed, since the border had gotten too much to handle. Weirdly, in that year we also got the Federal Reserve, which implied (pace Mundell) that the currency could be managed domestically, according to these artificial lines drawn on the map that corresponded to nobody’s way of doing business in real life.

These Republicans, these conservatives today who are up in arms about the new Mexican immigration had better check their bona fides. Proper free-marketeers love the sound of human capital. America is nothing—certainly not the best country in the world or the last best hope of earth or anything like that—without profound economic growth and a big openness to immigration.

Books on the topic of this essay may be found in The Imaginative Conservative Bookstore. Republished with gracious permission of the author. 

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18 replies to this post
  1. Well, this post has cleared up for me the question of the use of the word ‘conservative’ in the masthead. It is certainly bogus. What is meant by it, revealed in this authoritative post, is liberalism, more extreme liberalism than the democrats, altho they too are liberal. That is, this is classic liberalism, founded on the notion that freedom is an absolute good, and freedom when applied to economics is ecstasy. Yeah, buddy, let that immigration roll, let those human beings be human capital, let us by all means make all the money we can.

    Ah God that we had an alternative, a third party, neither socialist nor capitalist!

    Mr. Domitrovic, “free market” is a fantasy and a liberal fantasy, a condition that has never for one moment existed, but which has been used conceptually to strangle us and prevent us from exploring genuine solutions for the last five hundred years. And you ought not put T.E. Eliot on your list, he was a conservative in the truest sense, one who saw the fallacy of the secular state and wrote ceaselessly for the restoration of the traditional Catholic state with all the economic restrictions that involved, one of which most blessedly is, that human beings were not capital and the passage of stern subsequent laws that prevented them being treated as such. T.S. Eliot is no brother of liberalism, which you, sir, espouse and falsely call conservative.

  2. The illegals are not free labor. They use government services and benefits of which they don’t contribute to. If they were truly free labor, or more accurately unburdened labor, then they would be a huge net plus. From what I’ve seen they are a net wash, or nearly so. However in times of low employment levels such as we have been in for the past six years, they do take jobs away from our lower skilled citizens.

  3. Are welfare payments higher in Mexico or the USA? Have welfare states altered the economic equation from a century ago when you had to care for yourself wherever you resided? Does this author make sense, or will fluid populations flow until they, and wealth, equalise on both sides of a porous border? Please inform me.

  4. Thank you Janet Baker! My only criticism – Domitrovic is neither liberal nor conservative, He’s a progressive. They can wear any costume equally well.

  5. Ah where to start.

    Just a few fun facts here;

    1. Poor non citizens who live here are not our welfare dependency problem. In fact when compared to their American counterparts, they are less likely to use government programs and when they do utilize them, they take less money.

    2. To say there is a “jobs crisis” is a bit misleading. In many sectors there are. In some sectors there are not. American labor has traditionally gotten more skilled in the last 50 years. Which means more of the low skill sectors (agriculture, service, construction) are increasingly bereft of people who are attracted to a job with that wage level or conditions. Which means there is a demand, a demand that these folks fill, which is why they have a higher labor participation rate than Americans.

    3. re: Janet,

    The notion of a free market is not a “fantasy” due to the fact there is no perfectly free market anymore than safety or tranquility is a fantasy due to the fact that no place has total tranquility or safety. That’s just a non sequitur.

    Furthermore it is not contradictory to the notion of conservatism. In reality it is probably best to speak of conservatisms rather than conservatism. There are conservatives who are more pro-free markets (Locke, Kirk, Smith) and there are those who are not. In reality free markets is probably a more organic outgrowth of conservative thought due to the traditional emphasis on the right of property. (Also I find it ironic that you accuse the writer of backing a system that is neither socialism nor capitalism, when you want a system, as Eliot did, that is functionally just that)

    Lastly, I think you’ll find mighty few solutions in your quest for a “true conservative state” if you define it as a Catholic theocratic distributist-fascist utopia. You’ll lose pretty much most of your Protestant potential allies.

  6. Hello all, The Eliot point (and all of these) is certainly interesting. We must agree that the overwrought notion of citizenship in today’s big-government state is not near the realm of “imaginative conservatism.” The Southwest of the US and Mexico is a coterminous civilization–this is perfectly clear in a place like Houston, as it is in San Diego, Santa Fe, and surely places on the other side. Agents of a massive state waving a bloated and incoherent legal code (let alone avant-garde weapons) has zero to do with conservatism.

    I prefer not to let Marx (or Piketty) claim “capital.” It comes from “head,” of course, and the composite of head (intellect) and corpus is the whole of human capital, a fine idea indeed.

    For a more just economics we need the proper culture and governmental institutions more in tune with subsidiarity. I might even suggest some clues lie in the Viceroyalty of New Spain, whose demise the generation before was the pretext of the US’s pursuit of the Mexican cession (and of the Texas Rev) in the first place. These events of 1836-48 can be misinterpreted as breaking that coterminous civilization, which of course they did not.

  7. I have two views on this. One, a country that has no borders and/or refuses to control them isn’t a country but just a piece of land. An extreme example would be if Israel abandoned its borders and let the millions of Palestinian “Refugees” return to their “Homeland”, then Israel would cease to be “Israel” and become just another Arab state with some Jews living in it (until the Palestinians killed them all).

    On the other hand, I don’t much like some of the harsh rhetoric that has come from some “Conservatives”, most notably Pat Buchanan and his ilk, who openly use words like “Invasion” and “Invaders” to describe illegal immigrants. They don’t seem to get that the illegal immigration “Problem” is a compliment to America, after all, there are plenty of countries that no one wants to immigrate to.

  8. In many cases the outrage has nothing to do with markets or labor. The outrage is directly linked to organizations like MeChA and La Raza. The economic factors go way beyond simple stuff like labor and markets. The Southwestern United States is not azlan. If the disloyal immigrants want to improve relations they can stop waving Mexican flags when ever they choose.

  9. People who want an expansive and expensive government appartus erected solely for the purpose of excluding poor Latin American immigrants from being able to legally work and live in the US are hardly traditional conservatives. For those who fear a “no borders” state, let us consider America’s traditional immigration policy. From 1790 to 1924 there were almost no immigration restrictions and very few naturalization restrictions (beyond the racist exclusions of Asian immigrants starting during the Progressive Era).

  10. Over the years I’ve been on both sides of this issue. I can understand the polight of the illegals. But the deciding factor for me is that ultimately they are breaking the law and taking the place of some other legal immigrant. They are by-passing the system. My brother married a Peruvian woman in Peru and it took him a year and I don’t know how much money just so he could get a visa for her to come in to the country. Crossing the border illegally is not just to those that work through the system.

    • Manny,

      That’s not really how immigration works. Someone living here without the government’s say so is not “taking the place” of a legal immigrant. Even if they were given legal status, it would not bite into our visa quota system. It’s just not how the immigration visa regime works.

      • Joe, technically you’re right. I thought I had made the intellectual point, but I guess it wasn’t complete. I didn’t finish the story. After the visa more paperwork and dollars were required for her to get legal alien status, including paying for an immigration lawyer. And, may I add, when she got sick one day and needed a hospital emergency room visit while my brother didn’t have health insurance, he had to pay the whole bill out of his pocket. I doubt most illegals that use the ER pay out of pocket. There is no question that illegal immigration is unjust.

        I can’t see how any conservative can support illegal immigration. They are breaking the law and by-passing the system. No conservative should support open borders. That’s Libertarian. That is not to say Mexicans should not be allowed to immigrate. Of course we need an immigration policy, and I can see the argument of how Mexicans should get the largest share of immigration quota. There is a continuity of culture between our borders. But the immigration system should be orderly, subject to due process of the law, and limited in number to the needs of the United States. There is no place for illegal immigration.

        • I think you seem to think that those who defend the humanity of undocumented/illegal immigrants and those who call for a policy that would remove (most) restrictions on immigration, in particular low skill immigration are “defending illegal immigration.” Nobody wants illegal immigration. An overburdensome and expansive state visa system creates a system in which millions of people disrespect and disobey the law in order to about their daily business and even save their lives and in the meantime there is a population who is afraid to go to the police, afraid of authority and is ripe for exploitation.

          Let’s solve the real problem. Illegal immigration is caused by overburdensome restrictions. Let’s remove them, create a permanent path to legal status/naturalization for low skill workers and you’ll see illegal immigration dry up.

          On a side note, illegal immigrants are interestingly enough spending 55% less than Americans on healthcare while simultaneously being far more likely to pay out of pocket. This is because they avoid most healthcare with the main exception being childbirth, which accounts for 82% of health care expenditures.

          • @Joe

            Who says anyone is offending “the humanity” illegal immigrants? They need to go back and come through in a legal orderly manner. That is the just thing to do. Yes, let’s create a path to naturalization, but they have to get in the back of the line and pay whatever fine is deemed just for breaking the law.

          • Read comments on any populist “conservative” website or comments from members of the House of Representatives, and you’ll see absurd xenophobic bashing of people whose main crime was being poor, being born on the wrong side of the line and wanting a better life.

            I totally agree. Again, no one here is “defending illegal immigration” but rather wanting immigration to be like how it was traditionally, simple, easy and legal. Today it is neither simple nor easy, and thus it will be illegal until said line is actually created for people to go back to.

  11. I wondered if this topic and Janet Bakers’ comment would not provoke the libertarian strain amongst us. Russell Kirk wrote with some praise of a libertarian strain as “intellectual descendants” of the classical liberal who make common cause with the conservative against “democratic despotism and economic collectivism;” of these he had “little quarrel.” But he also wrote of “ideological libertarians” who “are not conservatives in any true meaning of that term” (The Politics of Prudence, pg.159). Of these he wrote, “What the Constitution established was a higher degree of order and prosperity, not an anarchist’s paradise. So it is somewhat amusing to find some old gentlemen and old ladies who contribute heavily to the funds of the libertarian organizations in the mistaken belief that thus they are helping to restore the virtuous freedom of the early Republic. American industry and commerce on a large scale could not survive for a single year, without the protections extended by government at its several levels” (Ibid pg.161). When topics such as immigration, morality, or economics are discussed the sharp lines between various factions of the so-called right appear.

    Janet Baker, I would ask that you not condemn this website in whole. Do a search here for Ralph Ancil and read some articles that may be more to your liking.

    Mr. Domitrovic, on the income tax, you make the problem of collecting tariffs at the border to be a chief reason for the coming of the income tax. Actually the tariff and taxes on luxury consumption goods like alcohol and tobacco were pretty successful in paying for national expenditures. It was only when state budgets became stressed in providing “services the people want” that state politicians favored national government involvement. It was then that you had Democrats describing the tariff as the “mother of trusts.” Rather then, it was the idea of “social justice” that led to the income tax, particularly as certain regions of the country saw the tariffs as being protectionist for monopolistic industrialists and they saw their own taxation as overly burdensome compared with those who had “intangible personal property.” The economic depression of the 1890s served as a backdrop to new calls for “social justice,” and it’s not as though demagogic politicians would overlook an opportunity. Wisconsin, home of Robert LaFollette, was the first state to institute a progressive income tax in 1911, while other states, particularly those heavy with industry, were slow to do so particularlywhen they saw a slowing in economic investment in Wisconsin. Then of course came the national income tax of 1913. Nice try though at blaming the border for the coming of the income tax, something most dislike or at the least believe needs reform.

  12. “Let’s solve the real problem. Illegal immigration is caused by overburdensome restrictions. Let’s remove them, create a permanent path to legal status/naturalization for low skill workers and you’ll see illegal immigration dry up.”

    I’m sorry, but “Open Borders” really means no borders and therefore no country. No other country behaves this way, including Mexico.

    • “Open borders” doesn’t describe it accurately so I guess I’m glad for the quotation marks. In reality many countries have actual “open border” agreements and have yet to cease their existence or legal sovereignty.

      Furthermore if market based, simple and easy immigration (i.e lowering barriers and restrictions on the movement of labor) means that “no country” exists, then I guess the US didn’t really exist until 1882 and didn’t truly exist until 1924.

      Seeing conservatives rush to defend a bloated government apparatus designed at micromanaging local communities, created during the Progressive Era is beyond me.

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