Open Borders
an Actually Good Idea
In 2019, George Mason economics professor Bryan Caplan published the book Open Borders: The Science and Ethics of Immigration, with illustrations by Zach Wienersmith of Saturday Morning Breakfast Cereal fame. In it, the professor broke down the various arguments in favor and against “open borders,” or essentially a system of minimal if any controls on migration between nations. This piece will be an overview of the arguments in the (very good) book, as well as a few thoughts of my own on the concept.
Introduction
In the world right now, there are both prosperous countries (like the United States, Britain, and Germany) as well as very poor countries (like Sudan, Haiti, and Syria). Despite vast, vast gains in standard of living for people across the globe, there is still much poverty regardless.
Countries such as Sudan and Haiti, despite seeing improvements throughout the years, are still decades behind replicating Western countries’ standard of living and economic well-being. This raises the question: why don’t people in poor countries simply move to rich countries, and improve their standard of living that way?
Well, they can’t, because most rich countries place strict restrictions that make it virtually impossible for people, regardless of their skill level, to migrate to the country. Caplan calls this a system of “global apartheid,” where people are effectively banned from pursuing a better life due to the location in which they were born, something that they had absolutely no control over.
With open borders, the world not only remedies this system of global apartheid, but in doing so unleashes an age of prosperity perhaps never seen before.
Philosophy behind Open Borders
Open Borders goes deep into different philosophical frameworks and their arguments leading to the title concept (I highly recommend reading through all of them, as well as Michael Huemer’s argument for open borders), but the two I want to focus on here are the egalitarian and libertarian arguments.
As mentioned earlier, the current system of restrictionist immigration policy is needlessly cruel, trapping people in countries and preventing them from moving to other countries that would offer them a better life. The egalitarian argument flows from this line of thinking — inequities should benefit those who are least well-off according to egalitarianism, but the system of closed borders does not do that. It simply reinforces poverty and injustice by preventing people from moving to where their skills would best serve them and where they would get the most freedom.
The libertarian argument for open borders is in quite the contrast from the egalitarian argument. Caplan notes, in contrast to certain “libertarians” that presuppose open borders implies that people should be allowed to live in anyone else’s house, that there are three positions:
You want to let someone into your house and the government prevents you from doing so. This is essentially the current system of closed borders — if a landlord wants to rent to a prospective foreign tenant, and the tenant wants to rent from that landlord, the primary thing stopping the contract from being carried out is the country the tenant was born in.
You let people live in your house so long as you consent, and the government does not have any say in the matter. This is essentially the system of open borders — any landlord is able to rent to a willing tenant regardless of their country of origin, or any home seller is able to sell to a willing home buyer, regardless of their country of origin. This is essentially the libertarian view — rather than the government dictating the terms of a private transaction, it stays out of this transaction.
People live in your house regardless of your consent. This is totalitarianism.
The ideas of Nozick (libertarianism) and Rawls (egalitarianism), despite being in near direct opposition at times, are still united in their support for open borders. It is a philosophically sound argument — we should be free to carry out contracts with who we please regardless of their country of birth, and people should be able to move from their country of birth to a place that suits them better, financially, politically, or personally.
Economics of Open Borders
Aside from the pure philosophical arguments, a strict cost-benefit analysis shows the vast, vast gains that can be made via open borders. Michael Clemens’s paper, “Economics and Emigration: Trillion-Dollar Bills on the Sidewalk?” makes the case that if we removed all barriers to migration, global GDP would grow between 50% and 150%. In the least optimistic scenario, removing migration barriers would be the same as having an extra half an earth’s worth of economic activity, and in the best case, an extra one and a half earth’s worth of economic activity.
It’s worth understanding why just allowing people to move to higher income countries would grow world GDP by such a value. Clemens et. al. in 2008 quantified the so-called “place premium.” That is, all other things equal, what is the wage premium for a worker in the United States versus in their home country, and found some pretty staggering results. A Haitian worker with similar skill level commands 10x the wage in the United States than in Haiti, while a Nigerian worker commands 15x the wage in the United States than in Nigeria.
The reason that a Nigerian or Haitian worker commands a higher wage in the United States than in their home country is not because bosses are “nicer” in the US than in Haiti or Nigeria — it’s that workers are more productive in the United States. As Henry George put it in his work Protection or Free Trade back in the 1880s:
That low wages mean inefficient labor may be seen wherever we look. Half a dozen Bengalese carpenters are needed to do a job that one American carpenter can do in less time. American residents in China get servants for almost nothing, but find that so many are required that servants cost more than in the United States; yet the Chinese who are largely employed in domestic service in California, and get wages that they would not have dreamed of in china, are efficient workers.
The primary difference between the United States and Nigeria is not the greed of bosses in the respective countries, but that technology in the United States is much more advanced than in Nigeria. Better technology means that a worker can be far more productive in the United States than in Nigeria — since wages are the marginal product of labor (in an ideal world, at least), workers in America no matter their skill level command higher wages.
In this light, immigration isn’t a “charity” that rich countries give to people in poorer countries that get the chance to immigrate — it’s an immense economic boon not just to the people who immigrate, but to the country that receives the immigrants and society at large. The question shouldn’t be “can we really handle these new immigrants,” it’s, “how can we get as many immigrants to move here as possible.”
Some may say that immigrants can end up reducing wages for native born workers — this idea is most likely false. Card 1990 found that during the Mariel Boatlift, a mass migration event where the labor force of Miami increased by 7% in just one year, the effect on both wages and unemployment was negligible. Maia over at Some Unpleasant Arithmetic has written a piece elaborating on more of the studies that show the negligible effect that mass migration events have on unemployment and wages.
Some opponents might insinuate that a mass immigration event would reduce average wages in a country meaning that immigration is a bad thing, but this is a fallacy. As Caplan explains in the book:
Imagine you’re in a room full of NBA players with average height 6’7”.
Suddenly, a class of preschoolers bursts into the room. As a matter of arithmetic, the room’s average height plummets to 4’10”. Would anyone sensibly respond, “Oh no! We’re shrinking!”?
Of course not, preschoolers don’t make NBA players shorter.
The lesson: when the makeup of the population is changing, averages are deeply misleading. The average can easily fall, even though everyone is better off!
A common response to the idea of open borders paired with social welfare policy is “immigrants are mostly poor and they will be a fiscal burden on the country, we are better off financially without them.” Milton Friedman famously said that you cannot have open borders and a welfare state. However, there are a few problems with this argument.
A sizeable chunk of government spending is non-rival — it would theoretically cost the same amount of money for national defense of a country that is 300 million people as 500 million people. When it comes to rival spending, it’s important to note that the primary recipients of such spending are not the working age poor, but rather senior citzens (through Social Security and Medicare) and children (through education funding). The current immigrant population is heavily working age in comparison to the native population (though this is slightly skewed by the fact that children of immigrants are counted as native born).
Studies that have calculated the net present value of the long term fiscal effects of immigrants (essentially, whether immigrants are a net gain or net loss to the public treasury in the long run), and have found them to be positive for most immigrants. Some of the values calculated by the Congressional Budget Office are:
$59K per immigrant for currently existing immigrants
$259K per immigrant for new immigrants under current policy
$279K per immigrant for new immigrants assuming a deficit reduction & current policy
$239K per immigrant with a high school degree who immigrated at a young age
$25K per immigrant with less than a high school degree who immigrated at a young age
The only times where an immigrant’s net present value was negative were for old age immigrants with high school degree or lower.
However, despite these pretty clear signs that open borders would be a net gain to the public treasury in all but the most marginal of cases, the supposed incompatibility between the welfare state and immigration looms large in public imagination. The consequences of a country’s fiscal irresponsibility stemming from badly designed welfare policy cannot be overstated, but immigrants are an easy scapegoat rather than the cause of such problems.
I don’t think that the United States has reached the point where we can realistically discuss the effects of a fiscal crisis; immigration to America is very much a positive both to the economy and the public treasury, so we can safely assume a great expansion of immigration does not serve many downsides at the moment.
Caplan’s book goes into detail about a number of other objections and possible “keyhole solutions,” solutions that satisfy the objections to free immigration while still allowing as many people to immigrate. If I covered these solutions, then this piece would probably be too long, so I’ll refer you all to a great resource about the book and on other information regarding open borders: the website openborders.info.
The ideas of open borders resonate primarily because my primary interest, housing, is intrinsically linked with labor markets. Just as open borders is necessary to free the global labor market from the arbitrary lines of country borders, it’s also important to free the labor market inside the United States from arbitrary lines that cordon off neighborhoods, cities, even states based on one’s income, wealth, or age.
Chang-Tai Hsieh and Enrico Moretti found that, all else equal, if the level of land use regulation in just Greater NYC and the Bay Area was brought down to the median level of land use nationwide, the average American would have earned $8,000 more per year in income in 2009. Imagine if we not only reduced land use regulations in just those two areas, but across the entire country, and in doing so provided one of the best opportunities for people inside the United States to move to where they were most productive. The wage effect of moving from rural Ohio to NYC may not be as large as moving from, say, India to Britain, but it is substantial and very much worth promoting if a country wants to increase its residents’ economic well being.
Open borders, within and with the United States, isn’t a radical thought — one of the most important features of the United States from 1790 up until the early 1900s was that it was not only a large free migration zone within the country (as is still the case), but with nearly the entire world (save China because people were racist). America wasn’t some anemic backwater during that period of time, it became the superpower of the world by the end of World War 2, all with near complete freedom to move to the United States regardless of your country of origin.
However, just as removing nearly all residential land use regulations (a move that would greatly increase housing production and reduce costs) wouldn’t lead to everyone moving en masse to the major metro areas overnight, neither would removing most migration barriers to the United States lead to mass migration events a la the Mariel Boatlift.
Caplan draws on the example of what happened when the United States effectively became an open borders zone with Puerto Rico — at first, very few Puerto Ricans came to the U.S., only 2000 between 1900 and 1910. As more Puerto Ricans came to the U.S., however, more Puerto Ricans wanted to come to the U.S., which snowballed until the point where now, most people of Puerto Rican origin live in the United States. Most people, even if they are living in poor countries, don’t want to simply uproot their lives and move halfway across the world in hopes of higher wages.
A common objection to open borders is the “brain drain” argument. I covered this a little in my “Why Build Here” article, but there are a couple reasons why this idea is bogus:
Policies should be aimed at helping people, not places, because people are mobile and change where they go all the time. No one who claims the brain drain argument is particularly worried if a doctor in Guatemala chooses to live in the capital versus in the countryside, why should we be worried any different if that doctor chooses to come to America instead of stay in Guatemala?
Part of the current problem of brain drain is that most countries in the developed world allow for only high skilled immigration, barring extreme circumstances. If we allowed more low skilled immigrants, then that would help even the playing field.
The economist Lant Pritchett described so-called “zombie” and “ghost” economies. In both cases, a town, state, or country experienced a “large and persistent” drop in labor demand, but in the “ghost” economy, people were allowed to move to where labor demand is strong (such as the case of people emptying rural villages and moving to big cities). In the case of the “zombie” economy, though, the drop in labor demand didn’t lead to people moving to where they would be able to get work, but rather it simply led to lower wages. Preventing people from moving doesn’t stop large and persistent declines in labor demand, it just traps them in a place with lower wages than they would otherwise get.
What prevents zombie economies is not trapping people where wages are lower, but rather allowing people to move to higher wage places — in the period from 1930–1990, vast swathes of the United States lost a substantial part of their population, yet that period was not one of poverty in America, it was one of mass prosperity, primarily because the people who left the areas in economic decline were able to move to the dynamic big cities of the time.
The long-term effects of big cities’ backlash to development has not been to stop or reverse migration into metro areas, but merely to spread it out into farther and farther exurbs that are worse for livability and the climate — no one who could afford a house in LA with a $400K budget would choose to buy a similarly-priced house in Lake Elsinore, but they are effectively forced to by NIMBYs in LA that block new housing.
Similarly, the effects of migration barriers aren’t to the desire to migrate to an area, it merely increases the cost and danger of doing so — does anyone really think that people would pay so much to coyotes to take them across the Sonoran Desert if they could drive or walk up to San Ysidro and get processed and come to the United States? If people really do care about illegal immigration, the simple solution is to just make more immigration legal, not to put up ever more expensive migration barriers that do nothing to satisfy the desire to migrate.
Do I think open borders will ever be achieved? No. However, it is still an Actually Good Idea; one that common practice throughout the world and one that will not only deliver justice for people who deserve to be able to migrate to a country that protects their rights, but will also free global labor markets, leading to an immense reduction in poverty and an era of dynamism that was once unimaginable.