Even people who are passionate about free markets in labor can become indifferent about immigration once redistribution comes into play. Some people like to quote Milton Friedman’s famous (or infamous) quote.
“It is clear that free immigration and a welfare state are not possible.”
According to this view, immigration would be fine under a completely free market system, but in today’s world with abundant government-provided benefits, immigration restrictions are justified to protect taxpayers from the additional costs that may arise if immigrants consume these benefits. But this conclusion is too hasty, and even Friedman’s position is more nuanced than people on both sides of the immigration debate realize.
The first point, however, is that concerns about the fiscal costs of immigration are overblown. One reason is that most welfare spending in the United States goes to either the very young or the very old. In contrast, immigrants are disproportionately reaching working age.
That aside, Friedman’s own view was not that immigration itself was harmful. He argued that legal immigration is the problem because it allows immigrants to receive government benefits. In contrast, he considered illegal immigration beneficial. He says: “It’s good for illegal immigration. It’s good for America. It’s good for the people. But it’s only good as long as it’s illegal.” Friedman’s reasoning was that while illegal immigration enables mutually beneficial market exchanges, it limits immigrants’ access to government benefits.
Many fiscal conservatives are now second-guessing Friedman’s recommendations. In other words, if legal immigration is the problem of over-consuming government resources, the solution is to encourage people to break the law. While I understand this reaction, I admit that I don’t share it. In my opinion, whether it’s good for someone to do something doesn’t depend on whether a legislator gives written permission. For example, did you know that it’s against the law to drive on Cape Cod National Seashore beaches if your car doesn’t have a tire pressure gauge?However, I have no moral objection to driving on the coast without a gauge. This is just a peaceful activity that does not violate anyone’s rights, whether government officials approve or not.
Maybe you disagree with me. Still, as others have suggested, there is another way to accommodate Friedman’s general idea. It recognizes immigrants as lawful permanent residents but limits their access to certain government resources. Economists sometimes refer to this as a “keyhole solution.” If the problem lies in the consumption of benefits by immigrants, design policies that narrowly target that problem rather than restricting immigrants’ freedom completely.
The main objections to this kind of policy seem to be moral rather than economic. In fact, Friedman himself, when asked about this, said that he did not find the proposal appealing, in part because “it is undesirable to have two classes of citizens in society.” That’s a good point. It is unfair for the government to give tax-funded benefits to some citizens and not to others. When two people live, work, and pay taxes in a country, government officials should treat them equally, and that includes giving them equal access to government resources.
Note, however, that restrictive immigration policies treat nationals and prospective immigrants differently. Access to domestic labor markets, private institutions, educational opportunities, etc. is given to citizens, not immigrants. So the principle of equal treatment seems to actually mean open borders. If Friedman rejects this option, the challenge becomes identifying the next best solution. (Also, it is not clear whether Friedman could express his opposition to the keyhole solution by supporting illegal immigration, which would likely create two classes in society.)
Why do you think policies that open up immigration while restricting access to benefits are better than outright exclusion? Simply put, conditional admission offers better treatment to potential immigrants than exclusion. Policies that open up immigration while restricting benefits at least give people the option of immigrating, and it’s hard to see how giving someone a new option could make their life worse.
Let’s take an example here. Suppose John is entering the job market. One employer offered him a job with health insurance and a retirement plan. The next day he received another offer. This offer has no benefits, but a much higher salary. Even if you think he should take the first job, it seems perfectly fine to offer him the second job. John isn’t bad because he has another option. If you do not want to receive it, you can simply decline it. And if you prefer a higher salary without benefits, it’s clearly a good idea to have that option.
John’s case is similar to that of prospective immigrants who expect to earn more by moving to a country with limited access to government benefits. You can decline to immigrate if you would rather take advantage of the wider benefits provided by the government in your current country than have a higher income but fewer benefits in your new country. In this case, it’s not bad because she has a choice. But if she wants a higher income with fewer benefits, she will be better off with that option. Just as it is permissible to provide additional options to John, it is also permissible to provide additional options to prospective immigrants.
It is also worth highlighting another important aspect: restricting migrants’ access to benefits, rather than restricting their movements completely. Recognizing immigrants as lawful permanent residents eliminates the threat of deportation and other risks associated with illegal entry. Even if you agree with Friedman (as I do) that the keyhole solution of allowing immigrants with limited access to benefits is not entirely fair, it is still fairer than denying future immigrants the option of safe movement altogether.
