Snow: Immigration and Unintended Consequences
by Nathanael Snow, Ph.D.
Markets are a mechanism for regulating the actions of producers of goods and services. Producers compete to sell to finicky customers, giving people what they want at lower prices. Interventions into markets are usually well-intentioned, though targeted to benefit some stakeholders at the expense of others. Some interventions are justified for cultural or moral reasons. However, there are no solutions, only tradeoffs, and justifiable interventions come at a cost, sometimes unintended.
A price control distorts markets, weakening the power of buyers to get what they want from sellers at good prices. A price control that keeps prices low will disappoint customers because fewer goods will be made, and they will be of a lower quality than what customers prefer. A rent-control law might intend to keep rents low but will result in less availability of low-price units, or neglect of maintenance by landlords. A quota has a similar effect, limiting the availability of goods and allowing sellers to increase prices for similar quality goods.
People find workarounds to price controls and quotas. Landlords required “key money,” essentially a very large deposit on a unit, to compensate for the regulated low rents. When automobile imports were controlled by quotas Toyota simply imported more Lexus models. Interventions create opportunities for people who are particularly skilled at avoiding the law. And interventions push law-abiding citizens into shady deals simply to get by.
It is wise to be skeptical of price controls and quotas in everyday transactions. These interventions stress legal institutions and give opportunity to lawbreakers. Enforcement of interventions simply exacerbates the costs. To prevent a landlord from requiring key money the legal system will have to monitor the dealings of many people, including those who are following the rules. The general public will face greater surveillance by law enforcement, and mistakes will be made.
Current quotas limit the number of people who can legally migrate into the United States from other countries. This is an intervention into the market for mobility. Interventions may be justified for cultural and moral reasons, but they have unintended consequences. Currently, around 675,000 individuals can legally migrate into the US per year. That quota is administered through a maze of rules and procedures.
Suppose 3 million people enter the U.S. annually (exact numbers are hard to come by), mostly without documentation. This demonstrates that people want to enter. But the current quota limits the number that can migrate legally. The quota pushes people who would like to migrate legally into shady deals with shady deal-makers. It is asinine to include simply migrating illegally among those called criminals. But criminal activity is increased. People who are skilled at avoiding the law find an opportunity: coyotes are paid well to smuggle people. Some of those people wind up attached to other crimes or beholden to criminals including as victims of sex trafficking. These are not consequences that can be avoided through stricter law enforcement. They are the natural results of the quota.
To enforce immigration laws requires more policing of the lives of everyday citizens, and encroachment on our privacy. Most immigration enforcement happens not at the border, but in the communities where law-abiding citizens live and interact with one another. Effective enforcement will require pervasive surveillance into everyone’s lives, surveillance that most of us would not tolerate in other circumstances.
A migration policy that respects the privacy of citizens, takes away opportunities for criminal exploitation, and invites more interactions into the light of day will protect our institutions, strengthen communities, and generate respect for the law. That will require a significant increase in the number of people admitted legally, a streamlining of the process for legal migration, and an increase in the number of officials involved in administering that process. Once admitted, new Americans will be ready to participate in society productively and legally, contributing their taxes, and raising their families.
As population growth among families with a long heritage in the U.S. declines below replacement rates, we can maintain population levels, especially for working age individuals and their children who can pay into Social Security, by admitting more people through the legal process. A quota in the neighborhood of 7 million people a year (less than a 2 percent increase in total population) accompanied by an increase in administrators sufficient to manage a streamlined caseload would benefit all parties involved.
Nathanael Snow, an adjunct scholar of the Indiana Policy Review Foundation, is Assistant Teaching Professor of Economics at Ball State University and Affiliated Scholar with the Institute for the Study of Political Economy. He researches the constitution of informal social groups the political economy of Archbishop Richard Whately, and the economic history of the abolition of slavery
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