Does immigration enrich us?

Larry G. writes:

I’ve read your article “Exposing the Open-Borders Arguments”, and I think I found a flaw in part of your analysis.

In the first section, where you refer to the views of “economystics,” you are basically saying that doubling the size of an economy through immigration or natural growth will double the agregate economic output, but because the number of people will also be doubled, the per capita income will remain the same. This is true for the workers, but it is not true for two classes of people: business owners and investors.

If Widget Industries doubles the number of workers and thus produces and sells twice as many widgets into an economy double the size, the workers each earn the same amount of money (or less if they are immigrants). But because the number of business owners and investors in Widget Industries does not increase, they have twice the amount of money in profits to divde among the same number of people as before.

Not coincidentally, it is the business owners and the Wall Street Journal investing class that is agitating for open borders and infinite population growth. Not only can they insulate themselves from the downside of population growth and immigration suffered by the middle class workers, they also directly benefit from the increased agregate economic output. I suspect they are the only ones who so benefit.

If I am correct, then we can see why the Senate, which is filled with multi-millionaires well-connected to industries who wish to employ cheap, illegal labor, sees it in their interest to amnesty the illegals (as well as the companies violating current law): They receive direct and indirect economic benefits through those business ties which more than offset the possible loss of their political offices should the affected voters actually remember what they did come the next, distant election. While being voted out of office is a possibility, the economic return is a sure thing.

LA replies:

This is a very interesting point that had not occurred to me. However, when the promoters of open borders tell us that immigration increases the wealth of the country, they are not saying that it only increases the wealth of business owners and investors. They are saying it increases the wealth of the country as a whole. Therefore (as far as I can tell) my critique of their argument remains valid.

Posted by Lawrence Auster at August 01, 2007 04:08 PM | Send