Category Archives: Politics

New Immigration Blog

Long time no see!

Just popping in to point toward a new immigration blog fresh on the ‘blogosphere’ (is that still a thing?). It’s infrequent, maybe a post a month it looks like, but it’s interesting because it’s a layman’s discussion of academic research on the subject that makes available some of the literature to a wider audience — that’s the idea, at least.

The two most recent blogs:

Do More Immigrants Mean Lower Wages?

In an interview with Ezra Klein, Bernie Sanders says,

What right-wing people in this country would love is an open-border policy. Bring in all kinds of people, work for $2 or $3 an hour, that would be great for them. I don’t believe in that. I think we have to raise wages in this country, I think we have to do everything we can to create millions of jobs.

It’s true that we’re usually taught that if you increase the supply of labor, wages will go down. But, remember, that’s if we assume all else is equal. Famous left-wing economist Paul Krugman might disagree with that assumption.

In his famous work on trade theory — what won him the Nobel prize —, Krugman argues that a larger population implies a greater demand for goods, and therefore labor, because…you know…there’s more people. So what does this imply with regards to wages? If industries, or the economy as a whole through the division of labor, can benefit from economies of scales, it means lower prices and higher real wages.

So, if Bernie Sanders were really interested in raising incomes, he’d be an open borders advocate.

Moral Authoritarianism

A moral order of free persons rejects appeal to the natural authority of some people’s private judgments over those of others. A social morality that allows the (self-appointed?) “enlightened” to make moral demands on others that as free and equal moral persons those others cannot see reason to acknowledge is authoritarian. Just as authoritarians in politics hold that they should rule over others who are too unenlightened or corrupt to see the wisdom of their laws, so too do these “enlightened” moralists hold up their “right reasoning” about morality as the standard that warrants their demands about how others should live, even when those others, exercising their rational moral autonomy, cannot endorse the imperatives to which they are subject.

— Gerald Gaus, The Order of Public Reason (Cambridge University Press: Cambridge, 2011), p. 16.

Haves and Have Nots

I received a chain email on “the America that works, and the America that doesn’t.” It quotes a diatribe launched by Bob Lonsberry — a “talk radio personality” — at Obama and the Democrats. It’s a response to the president’s recent speech on income inequality. Well, ‘response’ is misleading. Lonsberry takes the opportunity to rant about how inequality is caused by “inequality of effort,” and that the motivation behind social welfare is “envy” and “greed.” It’s too bad people take Lonsberry seriously, because he’s not only wrong, he’s ignorant. If that last sentence is off-putting, just humor me and keep reading.

The email distinguishes between an “America that contributes, and the America that doesn’t.” Between those that support themselves and those that don’t. Lonsberry says,

The president’s premise – that you reduce income inequality by debasing the successful – seeks to deny the successful the consequences of their choices and spare the unsuccessful the consequences of their choices.

And, if you support welfare you are advocating “a culture of dependence and entitlement, of victim-hood and anger instead of ability and hope.”

Only someone out-of-touch with reality could write that. Because, while there may very well be people who take advantage of the system, there are many more who have made the right choices, but were simply never presented the same opportunities as others. It’s not about working hard versus being lazy, it’s about having the fortune or misfortune of the environment you’re born into.

Lonsberry assumes that everyone has the same set of choices. Wrong. The average inner-city African-American does not have the same opportunities as the middle-class white boy living in the suburbs. Yes, African-Americans are less likely to graduate from high school and college, on average. But, it’s not about a lack of worth ethic. It’s about being born into an environment that makes school a lower priority; an environment that forces you to make choices that the middle-class white boy doesn’t have to face. Many people don’t have the option of earning a higher education, not because they’re lazy, but because their life path shut that door for them.

I’m a middle-class suburban white boy, but I was lucky enough to work a minimum wage job while I attended community college. I would be a fool to call any of my former colleagues lazy, because most of them were anything but. Some of them worked two, even three, jobs — those that could get them —; I guarantee that most of them work harder than Lonsberry does (it might behoove him to work harder to educate himself). My roommate works two jobs and attends school. Some days, he works over 12 hours, comes home and studies, then goes to sleep to start the process against the next day. Yet, he can barely afford the subsidized rent we offer him. He’s not lazy, he’s just unfortunate to have less options than many others do.

Our parents’ standard of living tells us a lot about what kind of standard of living we can expect as adults. In other words, the environment you’re born into is a heavy determinant of your success, all else (e.g. race, work ethic,…) equal. 33 percent of children born to a top 1 percent family will make $100,000 by age 30; comparatively, only four percent of children born into the bottom half of the income distribution will make that income at 30. About 40 percent of people born in the lower income quintiles will remain there. Likewise, about 40 percent of people born in the top income quintile will remain there. Clearly, Lonsberry’s charge that if only the poor were less lazy they would be more successful is false — there are factors that will weigh down on the poor, even if they work harder than anyone else.

Consider, for example, the kind of education the average poor person receives. Assume, to focus on what matters, that the student works at a 100 percent work rate — laziness is not an issue. Schools in poorer neighborhoods perform worse than schools in wealthier neighborhoods. They don’t have access to the same public funding — the taxable income of those neighborhoods’ families are very low. Many of these institutions don’t offer advanced placement (AP) courses, and classes of similar quality. Teachers in poorer schools will be less well educated than teachers in wealthier schools, on average. Schools in less well-off neighborhoods can’t offer their students the same level of support services. The educational options available to the poor are much worse than those available to the rich.

Kids born into poorer families have parents who work more, because they need to work more to make a decent income (income effect — the more you make, the more leisure time you will choose to have, on average). These are parents who simply can’t afford to provide their children with the same kind of learning environment as wealthier parents. Children in these environments will not be pushed to the same degree to read, write, and learn outside of school. Further, because low income parents usually grew up with the same disadvantages as their children, they are likely to be less educated than wealthier parents.

The typical path to a higher income is education. But, the poor, on average, will receive an education that is much worse than the one wealthy children get. They can’t compete on that margin — they don’t have that choice.

Wealthier children have the option to work less as they reach adulthood. Their parents can afford to support them, and send them off to school. The poor oftentimes don’t have that option. They start working when they’re 15 years old — this will impact their education, because it reduces the amount of time they can allocate towards that end. In the worst communities, employment can be hard to find. That’s why some kids turn to the black market, including the drug trade. It’s not always about making bad choices. It’s about making lemonade with the lemons life gave you.

Neither is social welfare about “envy” or “greed.” It’s about compassion. There are many, many well-off people who are cognizant of their luck — the arbitrariness of being born into a well-off family, for example —, and who choose to vote for social welfare. Yes, those that don’t have that same compassion, and aren’t willing to donate to the poor, are forced to pay into the welfare system, as well. But, the political system compensates the well-off: tax write-offs (which are often regressive — the higher your income, the more you benefit), public services, property rights protection (regressive, since poorer individuals will own less property, on average — often zero property, at that), and other forms of compensation.

Lonsberry wants to paint the rich-poor divide as an outcome determined by good and bad choices. This is fantasy. The real world is one where someone can make all the right choices, and still be poor. The real world is one where someone can work twice as hard as another, but still be poorer. We don’t all have the same choices offered to us.There is plenty of data available; many, many smart people have researched the subject and published their findings. This information is widely available. Lonsberry obviously hasn’t read it, which goes to show just how much you should trust his opinion. (To be perfectly clear: you shouldn’t trust his opinion.) Not everyone is “born with a silver spoon in hand,” and no matter how much the poor work, they are still less likely to one day be higher on the income ladder than those already born into wealth.

Animals, Aliens, and the Universality of Rights

Why should animals have rights? What, or who, decides which rights they have? Are they the same as human rights? I don’t know the answers to these questions. Neither am I sure what most actual moral, or political, philosophers have to say. But, I do know that despite being stumped here, I don’t act as if I’m stumped when I actually make my day-to-day choices. Indeed, tonight I plan on eating a paella, with chicken, pork, and shrimp. In other words, when I actually make my choices, I don’t particularly care whether animals have rights — if they do, I’m not going to respect them, anyways. But, should I?

It is the year 2170. Technology has advanced quite a bit, and we are able to travel long distances across space. An alien race we were previously unaware of comes into contact with some of human-occupied planets on the frontier of the Associated Federation, an extremely liberal society — a very decentralized political system — which originated on Earth. What these aliens are like matters a lot, because it determines how they will treat us.

Consider the relationship between the cow and the human. The former can resist against the latter. Getting kicked by a cow hurts. If she hits you in the right place, like your head, you can die. Still, we don’t often hear about cow rebellions in the animal farms. The costs of their enslavement are low enough to make that choice attractive. Even if killing them damages us emotionally, we have machines that do the killing for us — we can also allow certain people to specialize in those industries; maybe they aren’t as affected. (Besides, I’m not sure how relevant the “emotional damage” argument is, since our prehistoric predecessors didn’t seem to care too much about having to kill their prey with sharp spears or rocks.)

Neither can cows really communicate with us. Sure, the lone guy trying to tip cows in the field might get the message when one of them kicks him to the ground. Otherwise, it’s not as if the cow goes to the boss’ office in the barn, and bargains, “Hey look, man, I know my meat is pretty delicious. But, I have feelings too. So, how about this. You spare my life, I’ll chew some grass, and I’ll compensate you with my throw-up — because, that’s pretty much all I can offer you, other than my meat and milk.” So, there’s no process of rule-building between cows and humans. (Which is not the same thing as setting rules concerning cows between humans.)

Or, think about hunting game — specifically, large cats, like tigers, mountain lions, or lions. We do as much a we can to make it impossible for dangerous animals to attack humans. Those that do often pay with their lives. The standard is asymmetric, though, because hunting game is generally legal. Even poaching is met a by a different standard of justice — imprisonment or a fine.

The rules that constrain us against animals are asymmetric to those that constrain us against each other. Further, they are asymmetric between animals. I treat my dog Roxy almost as if she were human. I couldn’t give a shit what rights that cockroach has, I’m still going to spray zap it with a can of Raid. The rules we extend to animals depends on how they convenience and inconvenience us. “Animal rights” are arbitrary — there’s nothing universal about them.

What does this have to with aliens? Think about the relationship between animals and people. There seems to be a difference of magnitude, so to speak, between them. They can’t communicate clearly; there is a clear and dramatic asymmetry in technological capabilities, and therefore their abilities to defend themselves; et cetera. Now, let’s suppose that the new alien race is a magnitude above us. That really doesn’t bode well for the human race.

If we can’t bargain with aliens, either because we can’t produce enough value to sway them, or we simply can’t communicate with them, there’s a higher probability that they’re going to choose to either (a) enslave us or (b) “eradicate the human race.” This is especially true if we can’t defend ourselves against them very well. That is, if the costs to them are low enough to enslave us, and harvest us for our meats — cows are to humans, as humans are to aliens —, that is probably just what they’ll do. There is no universal moral code that “obligates” them to respect the “universal rights” we think we have. Those rights are just an illusion; they are a convenience we create to help establish order within human society. (Just like animal societies have rules to establish order between them — rules that humans don’t follow, and for the most part don’t even know.)

Aliens are going to do what is convenient for them, and they can do whatever they want if they are on top of the food chain. It doesn’t sound too good, right? I mean, what about our human rights? We’re protected by the non-aggression principle, right? If you ever find yourself pondering this issue at dinner, you can ask your filet mignon about what kind of “universal rights” it had, at least when it was still part of a live cow. (Or, if you’re a vegetarian, ask those plants your food comes from whether they felt it when they were cut down and sent to a factory for processing.)

When Obligation is Weak, Enforce

Gene Callahan raises a point against what he calls materialist theories of morality. In this family of theories lies, for example, Hayekian spontaneous order, which predicts a competitive process where “successful” rules are adopted and “unsuccessful” rules discarded. Gene argues that these theories can’t explain why we are obligated to follow certain rules. First, even if this were true, is it really a problem? The reason enforcement exists, is precisely to constrain those who do not feel obligated to follow the rules. Second, why can’t there be subjective reasons to feel obligated to following some set of rules?

The theory of spontaneous order says that societies will adopt different rules (institutions) over time. Some institutions promote characteristics that further productive cooperation within societies, and others promote discoordination or unproductive coooperation (in the form of, for instance, an externalized cost). The latter kind of rules lead to less well-off societies, and the former to welfare gains. Thus, in theory, the better rules will gradually replace the bad and not-as-good rules. Progress is not necessarily linear, but, on average, we expect that the losses, or opportunity cost, associated with unsuccessful institutions will incentivize their abandonment.

Beliefs about how rules originate vary, and the true explanation is no doubt multi-causal. Hayek thought that most rules are implicit, and too abstract to understand explicitly. Once we become capable of understanding an abstract rule, and once we’re able to communicate it, then we can legislate it. The point here is that rule-making is not necessarily legislative. We form rules when we decide on terms to property rights, contracts, how we interact with each other, et cetera. Rules that promote coordination are adopted, because it is beneficial to do so. Again, the process does not have to be conscious, or planned; rather, rules can gain society-wide acceptance spontaneously, or through a process of decentralized decision-making.

Gene’s argument is that this family of theories, evolutionary or materialist morality, cannot explain moral obligation. More accurately, it undermines the rationale for feeling obligated. For example, if murdering someone is not truly immoral, it’s just socially beneficial, one could choose to ignore a rule against murder, because that person could care less about what is socially beneficial. He accuses the approach of explaining morality away. Indeed, rules are really no longer about just and unjust conduct, but about what promotes a more successful society. Gene makes a good point when he accuses materialist theories of “explaining morality away.”

But, doesn’t this criticism beg the question? It assumes that any theory ought to accept as fact that there is indeed a universal aspect to morality that must be explained. What makes the materialist explanation attractive to me is, actually, that it works without having to assume an objective, or universal, element. Because, we know that there is a broad range of moral ambiguities, where the division between right and wrong changes between societies, and even between individuals. This belief informs public reason approaches to liberalism — there are a variety of beliefs, and rules are informed by this heterogeneous set of opinion. Ideally, the rules chosen will minimize external costs, and will be Pareto optimal. Very similar to Hayekian spontaneous order, except a bit more deterministic.

Consider the relatively wide acceptance of slavery in southeast Asia, where middle and upper class families essentially enslave immigrant maids, sent from countries like Indonesia and the Philippines. (See, as a reference, Aihwa Ong’s, “A Bio-Cartography.”) Beatings, sexual exploitation, and wage exploitation are frequent complaints, but local governments have not done much to address the issue. There are clearly many people who do not feel obligated to follow moral rules that some people think are universal. With strong Hayekian overtones, Ong proposes that these issues should be resolved through local NGOs, who can use ‘local knowledge’ to inform their negotiations with local legal systems. The lines of justice are often asymmetric between societies. This undermines the “universalism” of moral claims.

How strong is obligation, anyways? If members of society really felt obligated to follow a set of rules, then enforcement mechanisms would not be as ubiquitous in our world. Rather than people trusting each other, because they all feel a strong obligation to follow some moral code, we have contracts that stipulate consequences, which are enforced via power. We have a justice system that actively seeks rule breakers (people who did not feel morally obligated). Society has institutions, being the product of human action, that create trust. These institutions arise, and are later reformed, through human action, and their path is contingent on many factors which are only historically relevant. Property rights, for example, evolve as people manipulate them in their particular circumstances, to make them convenient — Coase called this buying and selling property rights.

No doubt, obligation has always been empirically relevant. Consider religion. My theory is that part of religion’s survival is the fact that it created a culture of obligation. It could use the concepts of a God, an afterlife, reward and punishment, to enforce the rules it imposed on its followers. It was this enforcement mechanism that incentivized members to follow the rules. And, since religions usually promote good rules — at least, as far as civil society goes —, they survived. But, as a member you are also taught obedience, and that there are truly just and unjust actions. This is a culture that permeates modern societies, so it makes sense that philosophers interpret it as an important aspect of morality.

But, reality tends to be multi-dimensional, and humans are good at focusing on only one side. That’s why we have academic institutions: to establish and regulate communication between people who see the world from different angles. In any case, perhaps those who focus on obligation are missing the relevance of enforcement mechanisms. Maybe they have also lost focus of how moral rules have changed over time, and how this change has been informed by contingent — not universal — factors. Maybe an inability to give an objective justification for moral obligation is a strength, rather than a weakness, because it allows us to focus on more important aspects of rule-emergence.

Is morality, in the sense of what is just, an illusion? I think that many cultural factors that create a sense of obligation are largely illusory. I don’t like to steal, because I believe in karma. It’s an abstract emotion that informs my decisions, because it has been instilled in my nature by my parents and other social influences. But, if you asked me whether I believed in a mystical force that tracks our actions and punishes us for doing wrong, I’d answer “no.” Karma is an illusion.  We create stories that justify our decisions, beliefs, and opinions. We try to base them in our interpretations of reality, but interpretations can be wrong (or, more accurately, incomplete).

Nevertheless, this doesn’t mean the concepts of just and unjust are meaningless. It means that we decide what these categories are, and because of the heterogeneity of opinion, what is just and unjust is debated. This explains the broad area of moral ambiguity that characterizes the world. Over time, we come to resolve these debates, and we can agree to a common set of rules. These rules expand to encompass larger divisions of labor over time, and this process can be explained as Hayekian order. We construct institutions to facilitate the evolution of other institutions (rules), and these will be informed by various opinions on justice.

Some of these institutions have promoted self-regulation through concepts of obligation: religion, nationalism, community spirit, et cetera. These institutions make sense within the “materialist” framework. They survive because they come with a set of good rules, and good rules tend to be adopted over bad rules. No objective justification is necessary. All the justifications are man-made; subjective.

There is a curiosity worth pointing out: most people implicitly agree with me, because they accept the logic when applied to other cases. Consider nationalism. A growing number of, mostly educated, people have rejected nationalism as an illusion. It’s a culture promoted by a state, that justifies certain non-universal moral claims (e.g. the right to territorial expansion). Now we question the state’s legitimacy. In the U.S., there are people who feel obligated — in some way — to the U.S. government, and there are others who don’t. People in Spain don’t feel obligated to the U.S., at all. Clearly, nationalist moral claims are non-universal, and they are historically contingent. Indeed, nationalist claims usually fade away, because realities — our means, ends, and constraints — change.

Is the inability to justify moral obligation a weakness for materialist moral theories? Not necessarily, because it allows us to explain other facets of moral rules that are ignored if you focus narrowly on obligation. Most rules, to be effective, must be enforced, and this implies that the strength of obligation is not that strong at all. The sentiment of obligation could very well be an illusion.

The Coasean State

One justification for property rights is dispute resolution: resources are scarce, and private ownership helps reduce conflict over them. By establishing an enforced system of rules that determine ownership of goods, we can create an environment allowing for the best use of resources (property rights allow for a pricing process — most likely an unintended result of early institutions of property). Who determines these rules? In part, they are determined spontaneously. We are implicitly shaping rules when we trade property rights in a division-of-labor. Oftentimes, however, trade through markets is made unattractive by transaction costs. Thus, we also need, for example, legal and political systems.

When discussing property right exchange, Coase was specifically addressing the problem of negative externalities: costs which are imposed on an unwilling party. A factory, for example, might pollute, damaging neighboring houses. Or, a cattle rancher may not be able to fully control his cattle, which graze on land which does not belong to him. These people are consuming resources which are claimed by others, causing a dispute. The Coase Theorem states that, assuming zero transaction costs, existing property rules are irrelevant, because the parties involved will flesh out their own rules for their own particular situation. But, when transaction costs are positive, disputes may have to be resolved in other ways.

When we think of property disputes with no Coasean solutions we turn to the legal system. At least, this has been the main application of Coase’s theory. When parties cannot privately resolve a conflict, they need someone to arbitrate between them (ignoring the possibility of outright violence). On what basis does the justice system solve these conflicts? Whatever the standard, legal systems are also built on rules — not just rules that minimize inefficiency and injustice within the organization, but also rules which help arbitrators reach solutions. These rules are not the best solution all the time, but we want the ones that maximize the probability of a “good” solution for each trial. But, what if there is a conflict that a court, or a private defense agency, or an arbitrator, can’t resolve?

When a dispute involves a few people, private solutions may be easy. The legal system helps extend the range of private solutions, but it can’t solve everything. While a court might order a factory to build a smokestack, it’s more difficult for a court to impose that ruling on every factory externalizing its costs on its neighbors. These other factories might one day also be brought to court, and the ruling may still usually be on the side of the victim, but the process can be long, expensive, and not very satisfying — and, there may be some factories that aren’t brought to court at all (maybe it’s too expensive, because the externalized costs are too widely dispersed). We may need other organizations, working with a different set of rules, to resolve issues that are too costly for Coasean solutions or the legal system.

One such alternative is the state. There are many kinds of states, so to keep things simple let’s assume we are working with an “ideal” representative democracy. What I mean by ideal is that a constitution, with more-or-less unanimous consent, binds (constrains) a set of institutions and organizations of governance. These may include, for example, a bicameral (multicameral?) legislature, a division of power within governments, a division of power between various local, regional, and national governments, et cetera. Different organizations, such as the House and the Senate, may have asymmetric sets of rules; different legislatures, for example, may have different voter sources, different rules of proceeding, and so on. Decision-making need not be unanimous, as long as there is agreement with the overall rules of the game.

We don’t need to narrow down property rights disputes to things like pollution, there are many social conflicts that an economic imperialist could classify as property disputes. Discrimination imposes costs on the discriminated — psychological costs, for example. Think of the costs to women — not only foregone wages and profits, but also potential psychological burdens — a biased, limiting culture may cause. The “right to discriminate” can come at the expense of the discriminated (which is why it makes dubious sense to believe in an absolute right to discriminate/disassociate). People may also want to impose certain “meta-rules” on other institutional sets, such as markets or the legal system, as well. For example, a division-of-labor may only fully agree to associate if there is a general rule to minimax the position of the worst-off.

If we frame the state in the context of property rights, it no longer seems so alien. Humans develop rules that govern their claim to property, including their claim over each other. Some of these rules are flexible on a very simple level. Some property rights can be defined with a simple exchange between parties. But, costs to these types of transactions make alternative organizations and rules, such as the legal system, attractive. Like the legal system, governments have their own asymmetric set of rules, and they have a comparative advantage when resolving certain property disputes.

It might be worth thinking beyond “property disputes.” Just like property is one way of resolving certain conflicts, maybe there are other ways, or other kinds of conflicts that can’t be resolved through property rights. And, just like there are “private” solutions to these other conflicts, there are “public” solutions as well.

China: Future Migration Hotspot?

China is still a sending state, more migrants leave than come in. According to the World Bank, about 1.5 million people emigrated from China in 2012, on net. I am not sure how much of that includes emigration to Hong Kong and Macau. Still, compared to the United States, which received, on net, 5 million immigrants, China does not seem like a major attraction to migrants. But, will China always be a sending state, or will it soon begin to receive net immigration? Immigration is already an important facet of the Chinese economy, and there is reason to suspect that China, like Western Europe and the United States, will, down the road, become a receiving state.

Historically, China has always been a sending state. The World Bank measures net migration as the number of immigrants minus the number of emigrants. China has had a negative figure since 1962, which is when the data I have starts at. But, net emigration does not imply no immigration, and, as their economy continues to grow, with a growing demand for labor, immigrants have turned into vital means for growing productivity. While the amount of net emigration remains significant — although, the data includes emigration to Hong Kong and Macau (two important net recipients of Chinese migrants) —, the number has been steadily decreasing since the early 2000s: from 2.2 million immigrants, on net, to 1.5 million.

The country, however, is going through a structural change. It is going through a process similar to that of the U.S., between 1820–1910. Industrialization has brought with it one of the largest internal migrations in the world, as large amounts of people move between provinces. This includes movements from rural areas to the cities, and movement from poorer (typically, rural and agricultural) to wealthier regions. While there are not always known opportunities for higher paying jobs in the cities — migrants are often displaced by a falling demand for labor in the rural areas —, it is true that Chinese industry is a sponge, in need of a growing labor supply.

Domestic labor is not always enough, especially given China’s low population growth rate (0.5 percent, in 2012). If the demand for labor increases, and the labor supply is more-or-less stable, we should expect higher wages. According to the “neoclassical” theory of migration, where changes in relative wages cause migration between countries, we expect rising Chinese wages to attract migrants. This does not necessarily mean, though, that immigration will occur up until wage rates between countries are equalized — in fact, emigration to China may push wages up, inviting even more immigration.

If there are economies of scale, larger populations mean higher real wageMonopolistically Competitive Markets. As population grows, all else equal, so does output. This lowers the average cost and price, raising the real wage. Larger population also means a larger amount of firms, greater product diversity, and the accompanying welfare gains to the consumer. This result was formalized by Paul Krugman, in his work on trade theory.

Trade, or the movement of goods and capital, creates the same effect as an increase in population: an increase in the division-of-labor. But, if trade is restricted, or if bad policies elsewhere leads to low growth and high unemployment, the movement of labor may replace the movement of goods. Consider some of the “stylized facts” of sending states: history of low growth, extractive political institutions, and relatively low wages. Sending states each have a division-of-labor which is significantly isolated from the world’s. While China’s political climate may still be unattractive to many, the economic factors may grow in relevance. The country is surrounded by many others which are worse-off, and growing Chinese wage rates will become increasingly attractive.

Other factors, besides relative wages, that determines migration are “linkages.” Think of a linkage as a shared history. For example, many Indians migrated to the United Kingdom, because India is a former colony. Similarly, Spain attracts a disproportionate amount of South American migrants, because of their shared history. Countries with linkages are more likely to be involved in a migration pattern than countries without them, all else equal. China has shared histories with not only its neighbors (many of which, however, are also growing and/or prosperous), but also with populations one might at first suspect. The Chinese have invested heavily throughout Africa, and many Africans have migrated to do business in China. As African networks in China grow, this might attract larger flows in the future.

Growth, however, does not always mean less emigration. The evidence shows that growth may actually lead to increasing emigration rates, below a certain threshold per capita income,

Emigration Flow to GDPPC

In early stages of development, other factors may dominate the marginal increase in relative wage. Since the poor are typically credit constrained, rising incomes will help them finance migration decisions. Networks in other countries may also attract large emigration flows. If early flows were restricted by asymmetric information, where potential migrants were simply unaware of the opportunity, growing networks in receiving states will correct this asymmetry and increase the flow of migration. Changes in relative income are important to consider, too. If early growth raises certain incomes disproportionately, the relative wage rates between countries for the non-affected income groups remain the same. Maybe this explains, in part, why China attracts high-skilled labor from South Korea and Japan, but exports low-skilled labor.

But, China’s GDPPC (GDP per capita) is just about at the threshold in the data. According to the World Bank, China’s 2012 GDPPC, in current U.S. dollars, was about $6,000. Net emigration has fallen since the early 2000s, and real wages in China continue to grow. Is China poised to become an important receiving state in the future? This will bring with it interesting problems. An immigration shock provokes hostility amongst a homogenous local population, leading to civil rights issues — issues the Chinese government will have to deal with. It will also have a significant effect on the global economy. The U.S. became a major industrial power in large part thanks to immigration. But, the U.S. started out with a relatively small population. China is already the largest country on Earth and there is still a growing demand for labor, despite the already large labor force. How will the Chinese government approach the “immigration problem?” How will this affect the United States and Western Europe? By 2070, or sooner, we might see large communities of American workers in Beijing!

Explaining Religion’s Survival

One challenge to atheism is: if belief in God is so wrong, why has religion survived for as long as it has? Why have humans been religious, for as long as we know? I have a Hayekian theory. If you are religious, and my theory offends you, assume it applies to every other religion except yours.

I was thinking of a situation where the morally dubious option is very attractive, but something external to me makes it unattractive. For the record, I am for all intents and purposes an atheist. Also, your moral intuitions may differ from mine, but to interpret my point try to step into my shoes. Suppose you are given two options,

  1. You can continue with your current life, but you will not fulfill your most valued dreams. Your current life includes a healthy, loving relationship with your wife.
  2. You can re-start your life, with the guarantee that you will be able to fulfill your most valued dreams. For you, let’s assume, that means being a famous football player, able to sleep with the most beautiful women in the world.

What would make me say “no?” I find it morally dubious to abandon my wife, even if it turns out that she would never be aware of anything. I have a commitment to my wife (or, I would, if I were married), and it just seems wrong for me to abandon her — even if she would be ignorant to it (her alternative life would exist without me ever being in it) — so that I can sleep with dozens of beautiful women in my alternative dream life.1 But, when I was thinking about it, this wasn’t the intuition that made me choose option (1). Rather, I had a feeling that I would be judged, and that I would pay in some way for choosing (2). I am an atheist, but I felt that I would be judged by God. I have never been religious, but that feeling of being judged by some spiritual being did not evolve endogenously; it had to be imparted to me culturally.

“Don’t cheat on your wife” is not the only value religion imparts on believers. In fact, there were probably many religions that did not stress monogamy, and there were probably even religions that valued polygamy. But, most religions do try to instill certain values, and most religions ask for peace between members. The religions that have survived — the most popular and most robust religions — tend to require strict adherence to some set of values. Greek mythology, for example, is partly designed to teach people certain moral rules. These rules might not have religious origins, but rules without religion usually don’t have an omnipotent, omniscient enforcer.

The belief that you are being judged by someone who you can’t evade, who knows your motivations, and will unflinchingly apply the rules by which He commands you to live your life is very powerful. It makes getting away with morally dubious behavior impossible. To get around this constraint, you have to have a very strong belief that there is no spiritual enforcer. I am very skeptical of the existence of God.2 Yet, for whatever reason, having a sense of an omniscient, omnipotent enforcer strongly weighs on my moral intuitions.

Let’s take a step back and move in another direction, that will loop back to the question of why religion has survived. In Rules and Order, Hayek lays out the foundations for a theory of spontaneous order. The set of rules that govern entire societies/communities aren’t designed by a single mind, rather they emerge over time and are selected based on their survival value. It’s easiest to explain Hayek’s argument through an example. Suppose we live in world where there are various communities, each with its own set of rules. Over time, one community develops the heuristic “do not murder,” probably because they notice how much more well-off they all are if they can trust that their neighbors will not murder them. That’s the thing: this rule makes this community better off relative to others, so the probability of the rule being adopted by others is high. Alternatively, a rule that promotes disorder is likely to be abandoned, because societies that employ it will be relatively less successful than societies that don’t (all else equal).

Religion can impart rules that promote disorder, such as a willingness to wage war against non-believers, but these rules usually guide inter-, not intra-, community relations. Rules that do promote intra-community disorder usually die out over time. Implicit antisemitic rules in Christianity, for instance, have mostly died out, because communities that promote religious tolerance and cosmopolitanism are typically more successful than those that do not.

Order-inducing rules can emerge without religion. In fact, most rules that religion codifies probably emerged independently. They were adopted, because they make sense and are order-promoting. But, there is an advantage that religious rules have over non-religious rules, and it’s that religion promotes a kind of self-regulation. Non-religious rules can be enforced by secular institutions of governance, but this is easier today than it was 200+ years ago. If it wasn’t for self-enforcing rules, society may not have advanced to the point where it’s at today. A fear of God (or, the gods) is a powerful enforcement mechanism. So is the vaguer, but related, notion that there is a spiritual enforcer that will make us pay for our morally dubious decisions, even if everyone else is ignorant of our choice.

There is a strong impulse to spread religious values (although, not in all religions — Judaism is remarkably insular). If religious values promote peace, and if these values are “self-enforced,” it will be good for society to spread religion to non-believers, so that they too will be constrained in the same way. There are other motivations behind spreading religion, of course. But, a religion that relies entirely on conquest will not be very successful. Roman and Greek religion, for example, did spread through conquest, but the strongest reasons for accepting certain deities were probably cultural. And, Roman and Greek religion did not survive for long when superior alternatives were made available, even when these alternatives were oppressed (as was the case during the Roman Empire).

If there is no God (or no gods), why has religion survived for as long as it has? Or, if there is a God (or gods), why have false religions survived? Because religions impart order-promoting values, and the idea of an omnipotent, omniscient God that judges all of our choices is a powerful mechanism of self-enforcement. Religious societies were probably simply more successful than non-religious societies, which is most likely the reason why non-religious societies did not exist (or were very rare) prior to the growing secularist movement. Even in increasingly secular societies, there is still an implicit notion of a final judge that we can’t avoid — this is still the same mechanism of self-regulation. One thing that does seem to follow from my theory — and this might make some uncomfortable — is that as superior alternative processes of enforcement arise, religion will become less relevant.



1. There is the additional fact that I would rather be with my wife than with any other woman, but this isn’t a particularly strong feeling for many men, and it was even weaker historically.

2. But, it’s important to me that I cannot be certain of God’s non-existence.

To Know How Government Fails…

Hayek once wrote something along the lines of, “To know where markets fail, we need to know how they can work.”

I’ve written quite a bit about governance these past two weeks. A long post would be repetitive, so I’ll keep my point short and sweet. I’m motivated — or, at least, reminded of this — by Daniel Kuehn’s brief critique of Bob Murphy’s recent article on space exploration. He thinks that some libertarian economists don’t take externality arguments seriously enough. They aren’t willing to concede the a priori possibility of the existence of a public good. I certainly see where Daniel is coming from, and I agree to some extent or another. But, I think there is another, related problem.

Most economists, libertarian or otherwise, probably do agree that there are such things as externalities, information asymmetries, et cetera. The reason they do think that these do not call for public provision of the affected goods and services is because they assume, a priori, that government can’t fulfill this task without creating more inefficiency than we originally started out with. I think this is certainly a possibility, and is definitely true regarding some (probably extensive) range of goods and services. But, it doesn’t necessarily have to be true.

Libertarian economists also probably overstate the case against government. Or, maybe they don’t. But, I don’t think there is any set of theory out there that can tell us for sure. Actually, there is — The Myth of Democratic Failure (?), “Voting as Communicating,” The Calculus of Consent, “The Allocation of Goods by Voting,”… —, but it doesn’t usually inform libertarian policy prescription and there is probably a lot of room left for research. Libertarians rarely ask themselves, “How do institutions of governance communicate local knowledge and coordinate disparate plans between agents to provide order?” But, to know where government fails at achieving order, we have to understand the process by which it reaches the order it does. If we have no theory about how exchange-based governance works, how can we comment on what the proper role of government is?

This is a theme I’ve been pushing on this blog, because I don’t think most libertarians take it seriously enough. Before we can say how governments fail, we have to know how governments work.