The Fraser Institute has released a study on immigration policy, but there's not much point in telling you its conclusions: the questions they ask are not worth answering.
The cost-benefit analysis is organised along the following lines:
- Costs: Expenditures made by governments
- Benefits: Tax revenues received by governments
This is curious choice for a libertarian think-tank. A framework in which taxes are unambiguous benefits is not something that the Fraser Institute would ordinarily adopt for policy analysis, and no attempt is made to explain why it is used here.
More egregious is the fact that the biggest benefits – the welfare gains of immigrants themselves – appear nowhere in the analysis. Moreover, the recommended policy agenda involves a welfare transfer from immigrants to those who are already here. The only people whose interests seem to matter are those who are in a position to refuse entry to Canada. This is just crude nativism. Birth in Canada is not an accomplishment that confers special privileges; it is a winning lottery ticket.
The costs of immigration are real, and should not be neglected. But a framework that looks at all the costs and only some of the benefits does not add to the public debate.
Worthwhile Canadian Initiative 
Hear hear!
Further, I usually have little time for the Fraser Institute, mostly because I disagree with both their methodology and their conclusions.
As a point of interest is the NDP equivalent to the Fraser Institute the Canadian Centre for Policy Alternatives? I’m genuinely curious.
Oh my.
Shouldn’t this sort of thing look at the dynamic effects on the economy as a whole? After all, immigrants also consume and save, and that effects other parts of the economy.
Of course, if the goal was to foment anti-immigrant sentiment rather than to do economic analysis then what they have does the job pretty well.
Steve – this is a crucial point: “Canada’s immigrant selection process needs to be revamped to focus on admitting people with Canadian job offers…”
What does that mean?
Immigration Canada doesn’t select immigrants, employers do.
The amount someone would be willing to pay for the right to immigrate is the present discounted value of the gain to themselves/their children of being in Canada.
If a Canadian job offer guarantees immigration to Canada, then people will be tempted to create phony jobs or job offers, and make under-the-table payments. It would be hard to stop.
More likely, an immigrant will pay employers for the job/immigration offer by promising to work in an unpleasant job and/or in a cold and isolated part of the country for minimum wage (or below minimum wage) for a few years – the live-in caregiver was the first such work-at-crummy-job-at-low-wage-in-exchange-for-immigration program, but now the ‘provincial nominee’ class has expanded these programs.
This is the solution to the problem of jobs being outsourced (or reducing labour costs in jobs where outsourcing is difficult): bring low wage workers to Canada.
But perhaps, as Patrick has suggested, the Fraser Institute is just successfully fomenting anti-immigrant sentiment.
Frances: Yes, that’s exactly what I had in mind with the “welfare transfer from immigrants to those who are already here” bit.
It’s always a shame when a “free-market” organization supports regressive immigration policies. It’s such an ugly contradiction.
I hope this isn’t an early sign that Canadian conservatives are turning as crazy as Repiblicans.
I really hope not.
Fully agree. But just to be a stickler – what about the welfare losses of the countries from which they emigrated? In the end, a libertarian perspective ought only consider those who are parties to the trade, in this case only the immigrant. That actually seems like a good start.
“The only people whose interests seem to matter are those who are in a position to refuse entry to Canada. This is just crude nativism. Birth in Canada is not an accomplishment that confers special privileges; it is a winning lottery ticket.”
You seem to be under the impression that the goal of economic policy is to make the world a better place. I think the Fraser Institute is sensibly working under the much more popular assumption that the economic policy is purely about self-interest. Perhaps I’m just used to the way we do things in the US, but I don’t think a political party would win many elections by announcing that it would do what’s best for the world, rather than its own constituents. I think that assessment would hold true no matter where the voters fell on the political spectrum. Just imagine what would happen if Stephen Harper announced that because the residents of the Third World are poorer and more numerous than Canadians, Canada is wrong to choose policies that favor the rich few (Canada) over the poor multitudes (Third World). I think the right, left, and center would find themselves rapidly falling in line against the government. Am I wrong?
Blikktheterrible: But … who do they think is going to clean the toilets?
Two can play at the straw man game. Substitute “children” for “immigrant”. Children are clearly a huge drain on the welfare state and pay no taxes. So obviously we need to stop having children. Stop the madness!
Wow, I’m impressed that the Fraser Institute is asking the exact questions I want answered! It is up to the immigrants to better their own lives, if they don’t expect to do so by moving to Canada, presumably they won’t. The government of Canada has a duty to its own citizens (which is why they have the right to vote for it), looking after the welfare of the rest of the world is far beyond its responsibilities. Certainly it shouldn’t go around destroying other countries like the United States does, instead it should make mutually beneficial deals with other governments tasked with looking after the welfare of their own citizens.
At the Fraser, the time they gain not going to peer-review is considered a gain in efficiency. And still, they look serious compared to the Institut d’économie de Montréal…
Whatever Harper will propose, here in Ottawa Mother Nature is weeping at the thought he is installing his new gang ( oups Council of Ministers)
“The costs of immigration are real, and should not be neglected. But a framework that looks at all the costs and only some of the benefits does not add to the public debate.”
You couldn’t be more wrong. The message that immigration is always a ‘great’ idea is constantly shoved down canadian’s throats. Rarely, if ever, are there any reports about the downsides or negatives of canada’s [offensive expression deleted] immigration policy. The Fraser institutes’ report is MOST welcome!
“Moreover, the recommended policy agenda involves a welfare transfer from immigrants to those who are already here. ”
Wow, an astonishing concept don’t you think? A canadian government in modern times turning its focus and concern to people who are already in the country. The second coming of jesus must be on the way.
“Birth in Canada is not an accomplishment that confers special privileges; it is a winning lottery ticket.”
Are you kidding me? Thanks to immigration housing prices are not affordable for the “lottery winners” born in this country who want to own their own home. MSP was once free but that changed in the 90’s (and the cost continues to rise) at the same time as when immigration numbers started ramping up. I could go on.
You people don’t have to worry about the government suddenly (or even subtly) reducing immigration numbers. All one none white group has to do is utter ‘racism’ and the government will immediately pump those numbers back up. The irony of it all is that it likely wouldn’t be an ‘ethnic minority’ group making such a statement. Nope, it would be rigid doctrine possessed segment of caucasian canada making that call.
Mitch: “Thanks to immigration housing prices are not affordable”:
Sounds like that pisses you off. But I bet the people who own houses that appreciated are pretty happy!
Given Canada’s dismal long term demographic outlook, it behooves all the anti-immigrant crowd to ask this question: who is going to pay for your health care in 2050? Unless you imagine that your kids are going to find a way to be an order of magnitude more productive than you, then you might want to reconsider. Keep it up and it’s they who will have to bend over and say “ahhh”.
Anyway, bad research confirming your prejudices is still bad research, regardless of your affinity for the conclusions. The point is that it’s stupid to define cost and benefits so narrowly. Yes immigrants consume gov’t services. Tell us something we didn’t know. But they also spend money and save. Some bring capital and businesses with them. They also provide a pool of labour that will do jobs ‘native’ Canadians simply will not do. And given the preference for selecting high skilled immigrants, they also provide a pool a high skill labour to fill jobs that otherwise couldn’t be filled because there aren’t enough ‘native’ Canadians qualified to do them. They also have children, who grow-up to be native Canadians who work, start businesses, pay taxes, consume and save. The Fraser institute publication doesn’t capture the effect of any of this. It’s propaganda designed to foment anti-immigrant sentiment, pure and simple.
Mitch: “Thanks to immigration housing prices are not affordable”:
Sounds like that pisses you off. But I bet the people who own houses that appreciated are pretty happy!
Even though i own my home with no mortgage you bet it pisses me off. Nice to see you don’t care about your fellow canadian. How Typical ‘baby boomer’ you are, just thinking yourself about how much money you can fleece from the ‘oh so helpless’ immigrant so that you can turn around and breath a sigh of relief since you never put a sufficient amount of money away for retirement.
“Anyway, bad research confirming your prejudices is still bad research, regardless of your affinity for the conclusions.”
You seem to think the Fraser Report is some final statement on policy. It isn’t, it’s a report that helps give perspective to all the blind overbearing ‘feel good’ reports on immigration.
“The point is that it’s stupid to define cost and benefits so narrowly.”
Ahhh it’s ‘stupid’, i see. Learning the truth no matter how ugly is just ‘stupid’ eh?
“The Fraser institute publication doesn’t capture the effect of any of this. ”
Again, if you want documents to support your rigid doctrine beliefs then canvass the G&M archives.
“But they also spend money and save. Some bring capital and businesses with them. They also provide a pool of labour that will do jobs ‘native’ Canadians simply will not do. And given the preference for selecting high skilled immigrants, they also provide a pool a high skill labour to fill jobs that otherwise couldn’t be filled because there aren’t enough ‘native’ Canadians qualified to do them. They also have children, who grow-up to be native Canadians who work, start businesses, pay taxes, consume and save.”
You see your hypocrisy? You only focus on the positives without giving ANY negatives a second glance. I never said i was against immigration but you immediately assumed i was because your rigid thinking prevents you from even considering the ‘other side’ of things. I am all for better controlling the numbers and ensuring life in this country doesn’t turn sour too quickly. We can make better decisions if we have all the FACTS, no matter how uncomfortable the facts might make us feel.
“who is going to pay for your health care in 2050? Unless you imagine that your kids are going to find a way to be an order of magnitude more productive than you, then you might want to reconsider.”
I’ll be paying for my own health care in 2050 thank you very much.
Really Mich? Are you rich now? What makes you think you’ll be rich in 2050? What about those who are not?
BUT the idea that government policy should primarily help and reflect the personal interests of the majority of people who are citizens is basically a cornerstone of democracy that neoliberal economic thinking ignores. It corrupts democracy when policy is not made on that basis. So the correct basis for defending liberal immigration policy is the benefit to existing citizens, which I believe exists.
So in that sense this criterion from the Fraser Institute is surprising, since they’re usually shills for policies that actually hurt the majority of citizens. In this case, however, they’re dressing up a harmful perspective as a populist and nativist one, which indeed signals a turn in the right-wing from Randroid-tinged neoliberalism to dangerous nativism, and not in the “aboriginal” sense of nativism.
“Really Mich? Are you rich now? What makes you think you’ll be rich in 2050?”
Amazing to see that when someone makes good financial decisions for themselves they are suddenly perceived as “rich”. Have you ever read the book ‘The Wealthy Barber”? Perhaps a good starting point for you.
“What about those who are not?”
It’s never too late to get a sound financial game plan in order. But no doubt what you really want to hear is that immigrants will be the ones who should offset the ‘local canadian’s’ financial foolishness.
While determining the fiscal costs and benefits of immigration is a noteworthy objective, this particular study is flawed. It omits certain direct contributions that immigrants make to the Government of Canada, and wrongly glosses over and dismisses certain benefits. Its policy recommendations also reveal a glaring lack of understanding of Canada’s current immigration policies. The proposal presents as radical new ideas things that already exist.
You can read more on my blog here. http://bit.ly/jESFkk
Mitch: First of all, you need to hold a civil tongue in your head if you want to discuss anything with me.
I never said there weren’t losers. My point is that there are also winners, and the Fraser institute’s lousy study doesn’t even come close to doing a good job adding them up.
You need to ask yourself why this gets you so angry. Unless you are of Aboriginal decent, someone in your family was once an immigrant. Why would you deny the benefits that accrued to you upon winning the birth location lottery to others? What specifically has you so riled-up?
I don’t get what your point is about housing and immigration. It suggests you’re worried about the lower mainland. But what’s the big deal if indeed immigrants from Asia with money are driving-up prices with demand for property. That’s kinda how markets work. Demand increase, supply stays constant in the short run, so prices go up. Big deal. Would it somehow be more acceptable if it was moneyed Newfoundlanders rather than people from Asia? What about Germans or Australians. Would they be more acceptable?
According to current projections, it would take more than mere good financial decisions to be able to afford state-of-the-art health care in 2050 for most people, especially old and (therefore) uninsurable people who are otherwise well-off.
Really? I mean, there’s the rub, right. What about those that did not? Should someone who made bad decisions all their lives suffer and die from cancer as punishment?
I’m of course ignoring the massive role that capricious Providence rather than individual merit has in our actual financial fates. Some people were born on third base and think they hit a triple…sorry, “worked hard and earned their wealth.”
Patrick: First of all, you will need to refrain from trying to frame me as some immigrant hating racist if you want to continue our discussion.
“I never said there weren’t losers. My point is that there are also winners, and the Fraser institute’s lousy study doesn’t even come close to doing a good job adding them up.”
I think they did a great job. I expect more greatness along these lines to come out so we as a society we can make better informed decisions.
“You need to ask yourself why this gets you so angry. Unless you are of Aboriginal decent, someone in your family was once an immigrant. Why would you deny the benefits that accrued to you upon winning the birth location lottery to others? What specifically has you so riled-up?”
Angry? No. I am trying to help you Patrick, and people like you, to open your eyes. All too often people only want the clean ‘feel good’ data and cry foul when the negative stuff comes out. Perhaps you should ask yourself why negative immigrant data frightens you.
“Why would you deny the benefits that accrued to you upon winning the birth location lottery to others?”
Oh really? Where did state I wanted to deny rights to immigrants Patrick?
“I don’t get what your point is about housing and immigration. It suggests you’re worried about the lower mainland. But what’s the big deal if indeed immigrants from Asia with money are driving-up prices with demand for property. That’s kinda how markets work. Demand increase, supply stays constant in the short run, so prices go up. Big deal. Would it somehow be more acceptable if it was moneyed Newfoundlanders rather than people from Asia? What about Germans or Australians. Would they be more acceptable?”
You see you keep trying to play the racist angle, why? Is that all you got? My point is the cost of housing is now unreachable for most. It’s a flow control issue. Canada let’s more immigrants in than any other develop country in the world. Not a specific race issue. Do you understand now?
You are obviously completely oblivious to how the market has played out in the lower mainland. It obviously doesn’t bother you that young people today are disillusioned by the fact that they either have to rent or move far out into the ‘burbs with long commutes and big mortgages. Prices just haven’t gone up a little Patrick…they have exploded such that they are totally not congruent with people’s incomes (Read: there isn’t sufficient industry paying people really good salaries to compensate for the price increases).
But of course without the immigrants giving you large sums for your overpriced home how would you retire? And how would you pay for your allegedly “expensive” health care in 2050? Right?
Remember the Chinese government has already taken steps to curb real estate speculation in china to prevent exactly what’s happening in Vancouver.
Nothing alleged about it. Even just-behind-state-of-the-art chemo or stroke care or … is prohibitively expensive for people on average incomes at the ages they most need it if paid at cost…
…oh, wait, I forgot, we can all be richer than everyone else. Carry on.
Mandos:
“According to current projections, it would take more than mere good financial decisions to be able to afford state-of-the-art health care in 2050 for most people, especially old and (therefore) uninsurable people who are otherwise well-off.”
So what you’re really saying is that today, year 2011, the health care system is already broken and that we might as well dump it for a free market private system…exactly like the real estate market.
“Really? I mean, there’s the rub, right. What about those that did not? Should someone who made bad decisions all their lives suffer and die from cancer as punishment?”
LOL! Rich people suffer and die from cancer; middle class people suffer and die from cancer. Oh and Mandos my neighbours dog died from cancer last summer, poor thing.
No, what I am saying is that doctors need to be cost-controlled via more effective central planning so that everyone can afford care—but the next best thing is our current forced monopsony, which already makes it affordable for most people to get care. Without that monopsony, the indigent would suffer more than they are.
Forgive me from leaving out the word “untreated” after “die from cancer”—I thought it would be understood. What I really meant was “die in agony in the gutter, with Mitch casually stepping on the faces of the undeserving.” However, I get your point and commend you for your honesty. I for one would be very happy to appropriate all your “alleged” wealth iwiin order to pay for the care of undeserving strangers. Yes, your wealth, Mitch, not mine, yours. Just so we have it straight.
“Nothing alleged about it. Even just-behind-state-of-the-art chemo or stroke care or … is prohibitively expensive for people on average incomes at the ages they most need it if paid at cost……oh, wait, I forgot, we can all be richer than everyone else. Carry on.”
It’s alleged because we’re only in the year 2011 and your fear is based on current projections. Obviously many factors will come into play in the next 39 years.
Carry on indeed Patrick, carry on.
I’m still not getting what the problem is. OK, so the Fraser Institute is philosophically libertarian. But you can be a libertarian and a nationalist (rather than an internationalist).
Is natural citizenship in Canada a matter of luck? Yes. Is the mandate of the Canadian government to serve the citizens of Canada, also yes. Does the Canadian government have any particular responsibility (constitutional, legal, or whatever) it owes to potential citizens? Not really. One can certainly make a moral argument that it’s good to add Canadian citizens because it increases welfare in the world, but a government of Canada takes that argument to the people (or not) and it will stand or fall on its (essentially political) attractiveness.
Moreover, that argument seems neither especially libertarian or anti-libertarian.
Indeed, the argument the FI actually makes is defensibly libertarian, not because they’re pro-taxes (and indeed, libertarianism isn’t ANTI-taxes, just in favor of minimizing taxes, services, and laws to some fuzzily-defined minimal level), but because they’re pro-inexpensive services. Given that, saying that you want to attract immigrants who will use few services and pay their own way seems quite libertarian.
(I’m not really a libertarian, more of a crypto-libertarian paleoconservative, but you still seem quite wrong.)
If the set of immigrants pay more in taxes than they require in services (on average, and as a result of picking +EV immigrants), then the net result is a smaller per-capita tax burden for all the current citizens. To make the argument more explicitly libertarian, immigrants are allowed to become Canadians as long as that looks like a good bargain for current Canadians.
Conversely, potential immigrants who are unlikely to be net payers into the federal and provincial coffers are a fiscal drag on current taxpayers and the public budget.
To view it one more way, a strictly libertarian immigration policy might be that ANYONE could come to Canada as a landed immigrant, as long as they accepted no resort to subsidized public services (welfare, education, health care) for some period of time, or paid a bond/head-tax to gain entry (and if the idea of an immigrant head tax brings up the obvious ugly memories, well, the immigrant investor class is pretty much a straight trade of an $800k investment/bond for a fast-track to Permanent Resident status.)
That was me, not Patrick.
“I for one would be very happy to appropriate all your “alleged” wealth iwiin order to pay for the care of undeserving strangers. Yes, your wealth, Mitch, not mine, yours. Just so we have it straight.”
Yes let’s get it straight Mendos, the so called “poor and undeserving” (your words) are already getting a piece of my wealth through taxes and government programs (which i supported through the power of voting) of all kinds.
Maybe what you’re really saying is we’re not paying enough taxes to cover all the broken people in our country. Do you want a tax system like a Scandinavian at %50+?
Also you seem to be trying to shift the burden of moral/ethical responsibility from those individuals who tried and failed, or didn’t try at all, onto those who didn’t.
“What I really meant was “die in agony in the gutter, with Mitch casually stepping on the faces of the undeserving.”
You’re trying to guilt me, and others, with your self-deluded ‘moral high ground’ in making statements like that.
Basically, sure. Graduated progressively to promote economic equality.
If you want to put it that way, sure, yes, exactly.
More specifically, though, and to give you something on which to hang your hat, I don’t believe that the successful are so because they tried and succeeded more than that they won a very complicated lottery.
Same with immigration, to bring it back on topic. There’s no inherent reason why someone in Ethiopia shouldn’t come to Canada tomorrow. You and I are Canadians because we got lucky at some point. But the government must be responsible to its citizens, ultimately.
Is it working? Do you feel guilty? It’s just putting the truth in the plainest terms possible.
“Basically, sure. Graduated progressively to promote economic equality.”
How can you make a statement like that and then support successive governments who only allow immigrants with large sums of cash to enter the country? Not very equal is it? The revenge is those immigrants with wealth congregate in a couple of places in the country and then drive up prices. Not very equal is it?
“ I don’t believe that the successful are so because they tried and succeeded more than that they won a very complicated lottery.”
Unbelievable, I can’t believe I keep reading about this ‘lottery’ and that people are just plain lucky to be in this country and lucky to have lead a successful life. Do you not believe at all in the power of hard work, education, networking and learning from mistakes just might make wealthy person or two?
You’re obviously a communist as you want everyone to be the same. Wake up it’s 2011, communism failed.
“Is it working? Do you feel guilty? It’s just putting the truth in the plainest terms possible.”
Not at all, because you obviously missed the >self-deluded< part of my comment.
“There’s no inherent reason why someone in Ethiopia shouldn’t come to Canada tomorrow.”
People from Ethiopia do come to canada.
“You and I are Canadians because we got lucky at some point.”
No, i am grateful to have been born in canada, but i don’t feel “lucky”.
I don’t see what the problem is. This all seems pretty straight forward.
Libertarians want to increase the size of government, so they want more tax money. And libertarians think that cost/benefit analysis should supersede people’s natural right to contract (ie: for a canadian employer to hire a foreign employee), so we should prevent immigrants from coming here if it doesn’t increase the size of government. Well funded libertarian think tanks only exist to promote abstract principles, not the interests of their donors. Also, all Cretans are liars.
“But … who do they think is going to clean the toilets?”-Patrick
Perhaps slaves? Would that provide a better surplus value for Canadians?
Sir John Colborne (colonial Lt. Governor said “A man cannot steal himself” and made Canada a haven for runaway American slaves) just rolled over in his grave.
I have to say I’m a little depressed with the comments so far. I’m relatively new here but some of the other threads have been very thoughtful. This one… well not so much.
In an effort to restart, why not drop the FI report altogether and go back to the basic question of what are the costs and benefits of an immigration policy? I would suggest that dollars are the least important criteria.
If the ruling government “announced that because the residents of the Third World are poorer and more numerous than Canadians, Canada is wrong to choose policies that favor the rich few (Canada) over the poor multitudes (Third World)” and therefore is opening the doors to 10x the number of immigrants currently allowed, is that a bad thing? Environmental and trade policies are routinely implemented with the explicit promise of benefit to poorer nations.
It is possible that the global and possibly even national Total Utility is increased with every American who willingly becomes a Canadian. The decrease in the average Canadian’s utility preference (assuming utility is negatively related to population density) is offset by the increase to the American’s. At some point they will cross-over and the benefit to the Immigrant is less than the “cost” to the locals. Considering that some immigrants increase local utility (e.g. my wife’s beneficial impact on me) this is a tricky calculation and I’d be willing to accept some proxies.
Aside from questioning the global value of Vancouver’s property and who appreciates living there more, I haven’t seen much discussion along those lines.
blik: that was me being flip – usually FI types are all for immigration of low skilled labour – makes it cheap to find someone to clean the loo and the pool. Sorry if that wasn’t clear.
My serioua posiiton is that it is complicated. Some win and some lose and the FI study has no insight to offer on that front.
You guys are not talking like economist on this subject…
From a policy perspective, they evaluate the impact of immigration on naitive and thats fair. A big part of the academic litterature does just that…
To me, it is not clear you should include benefit from immigrant themself.
you guys need to talk to labor economist. really… or read a bit more on the subject…
You guys should read oreopoulos paper (AEJ econ policy, 2011) and skuterud and aydemir (CJE, 2005) paper. Immigrants struggle in Canadian labor market… Something needs to be done…
Btw, I don’t think FI say to their authors: come up with X results, the authors here are serious people with good background. Just saying…
Pat’s certainly correct that no one told the authors of this report to come up with these results – they’re pure Herb Grubel (who, for what it’s worth, is no fool).
Frances said: “More egregious is the fact that the biggest benefits – the welfare gains of immigrants themselves – appear nowhere in the analysis. Moreover, the recommended policy agenda involves a welfare transfer from immigrants to those who are already here. The only people whose interests seem to matter are those who are in a position to refuse entry to Canada. This is just crude nativism. Birth in Canada is not an accomplishment that confers special privileges; it is a winning lottery ticket.”
Well, that really depends on whose perspective you’re looking at the issue from, doesn’t it? If you’re looking at it from the perspectives of existing Canadians (i.e., people, whether they were born here or previously immigrated here, who are already in Canada), then why would you take into account the benefits to the immigrants? They, quite reasonably ask, what’s in it for me. And while you’re right, being born in Canada shouldn’t grant you a moral entitlement to privilege, let’s face it, we’re not behind the veil of ignorance here, we know “we” are Canadians and “they” are not.
More importantly, existing Canadians are the ones who are making the decision as to what their immigration policy should be (although, since the right to vote in Canadian elections is every bit as much an outcome of a lottery as citizenship, would you suggest we should allow universal suffrage?). As Ryan points out, the Government of Canada makes it its business to, first and foremost, advance the interests of Canadians and so from that perspective, the FI’s question is not wrong (although, I’d probably agree that looking only at immediate government costs and benefits might be too narrow a focus). To characterize that perspective as crude nativism is to suggest, at the end of the day, that no country should have an immigration policy. In any event, I don’t think the characterization of the argument as “crude nativism” is accurate (nativism is generally characterized as an opposition to immigration regardless of the costs/benefits and often based on racial or cultural dislike of the “other” – any analysis based on costs/benefits is inherently not nativist) or helpful.
Moreover, why would immigration be any different from other policy areas.? No one defends free-trade on the grounds that, hey, it increases the incomes of Chinese workers. Certainly, that’s not likely to be compelling defense to critics of free trade who, correctly, lament the impact it has on, say, low-skilled workers in the developed world. Are union leaders also guilty of “crude nativism” (since the economics impact on their members of free-trade in goods are likely to be identical to the impact of free-trade in labour), or are they, quite fairly, focussing on advancing the interests of their members? We’re all just members of the great union that is Canada.
What I find hilarious about this whole discussion is how much it conflicts with stereotypes about economists. The standard line is that economists are completely amoral in their analysis, but Stephen’s whole point is that a good economist MUST provide unprejudiced analysis. That’s the issue, as I see it. The reason Stephen is outraged is that the Fraser folks are violating the implicit morality of the economic profession by giving analysis based on amoral self interest. In economics, as Stephen and I see it, people are people and there is no place for nationalism. That’s something that people don’t get about economics.
Life would be easier if there were no nationalism intervening in analysis or discussion. But as long as people wish to include it in their reasoning, we must take it into account. Scientists deal with the hand they are dealt.Chemists might wish that water be H3O but H2O it is and they go with the flow.
It shouldn’t deprive us of our moral sense but we should appply it at the right place. We should judge economic by whether it is good or bad economics and politics by whether it is good or bad for the people and the polity.
stephen comment was quite terrible for an economist… actually economist should be rational and stephen was not…
I usually agree with Frances on most of her post but was disapointed here. I suppose on some issues it is hard to be objective.
bob smith summarized above what a labor economist would say about this…
Birth in Canada is not an accomplishment that confers special privileges; it is a winning lottery ticket.
Tino Sanandaji has discussed these issues in depth lately:
“The difference is ownership rights. Swedish citizens, regardless of gender and race, are collective and equal owners of Sweden. This type of ownership is as legitimate and as absolute as private ownership. It developed in the same way as private property, organically through the formation of spontaneous order.
The rights associated with citizenship are equivalent to ”acquisition of title” associated with private property rights, as discussed by Nozick. They are legitimized by Swedes and their heirs ultimately having created Swedish society, again parallel to how we tend to derive private property rights.
Similarly private homeowners decide who gets to enter their home and who doesn’t, but they don’t have the right to kick out other owners living on the same street if they feel their presence is detrimental. Corporate shareholders get to decide not to bring in a new partner for any reason they like, but they can’t kick out a pre-existing owner, barring really extraordinary circumstances.
Swedish citizens therefore have the right to take the fiscal costs of immigration into account when deciding which foreigner to invite, while no Swedish citizen can be denied her rights and deported based on fiscal considerations. There is nothing strange or paradoxical or hypocritical about this.
Modern liberals and libertarians get confused when discussing immigration because they do not acknowledge that Sweden and the United States are associations owned solely by their respective citizens. This is ironic, since libertarians are obsessed with private ownership, which is a (useful) social construction, just as the concept of citizenship is. Without a theory of citizenship and the nation, immigration becomes hard to discuss.
Our unwritten social contract stipulates that we should organize the state around the nation, as the nation is the entity in which the sense of fellowship is the strongest, which makes it the optimal level of collective decision making. This is true for Sweden and virtually every other country.
Classical liberal theory is quite clear about the issue of national sovereignty, citizens have the right to make decisions about the nation based on their self-interests. It is modern left-liberalism and left-libertarians, influenced strongly by cultural Marxism, which has deconstructed the nation and citizenship. Adam Smith would not find anything strange in affording Swedish citizens rights of control over Sweden ahead of foreigners, but Adam Cwejman does.
More importantly, this view is one of honesty. If Adam and other Swedish intellectuals don’t believe that Swedish policies should benefit Sweden, and want to base policies on the welfare of the entire world, they have the responsibility to communicate this very clearly to voters. Intellectuals and politicians have been delegated their power and influence by the public, they have no god-given right to make decision over the collective welfare of Swedish citizens based on their private ideology.”
http://super-economy.blogspot.com/2011/05/who-owns-sweden-nine-million-swedish-or.html#comments
This earlier post is also interesting:
“Limits on free migration is not just an arbitrary state construct, it is necessary to uphold ownership rights imposed by owners (citizens), just as a fence is necessary to uphold private property. Organizations such as condo-associations who produce social externalities for their members and make decisions about collective matters always limit membership. Since we have chosen to organize ourselves in a nation-state and grant some rights over our lives to fellow citizens, we need to restrict who has coercive power over us. Borders are limits on expanding the necessary-evil which coercion through voting represents.
Voting rights of citizens over common decisions and collective assets should therefore best be viewed in this context as form of property. If you accept this premise, abolishing borders in a modern welfare state is a form of socialism, just as abolishing fences would be. Note that both private property and citizenship rights evolved gradually through the spontaneous order and were not “created”, that both serve to increase societal efficiency, and that both are common to all modern societies. Libertarians should remember that that private property also limits free mobility. This theoretical view confirms with reality, where the consequence of unskilled immigration to the welfare states such as Sweden have been an expansion of government and a reduction of the freedom of the existing citizens.
Classical Liberals should take after Hayek, Friedman and Nozick and think deeply about these issues. The discussion should take real world empirical patterns into account and use a richer model than the simple neoclassical model with assumes away voting, the public sector and social externalities. We have to first have a theory of what a nation-state is, what citizenship is and what voting rights are, before we propose to abolishing these rights through open borders.”
http://super-economy.blogspot.com/2011/04/open-borders-and-welfare-state.html
No, I don’t think the notion of ‘ownership’ works here, and certainly not the analogy of a private house.
Bob Smith – “Frances said: “More egregious is the fact that the biggest benefits – the welfare gains of immigrants themselves – appear nowhere in the analysis.””
Actually, Bob, that was Steve, not me. I generally try to stay away from discussions of the ethics of immigration policy – way too hard!
I do too, but a study that makes the leap from noting the effects of immigration on the government budget balance to making policy recommendations is pole-vaulting over a set of ethical arguments that should be made and defended first.
stephen wrote:
”I do too, but a study that makes the leap from noting the effects of immigration on the government budget balance to making policy recommendations is pole-vaulting over a set of ethical arguments that should be made and defended first.”
Why include an ethical argument in an economic analysis? I have never seen it in any academic paper.
This is such an important question. It must be approached rationally. I just can’t understand how one can read an analysis like bob smith above and not agree with it…
John: “Why include an ethical argument in an economic analysis? I have never seen it in any academic paper.”
It’s not possible to do cost-benefit analysis without making ethical assumptions – the classic paper on this is Jean Dreze and Nick Stern “Theory of Cost Benefit Analysis”. Costs are costs to someone. Benefits are benefits to someone. Any weighting of costs and benefits must make trade-offs between the well-being of gainers and the well-being of losers. These are intrinsically ethical judgements.
Frances: fine.
I just side with bob’s argument though. In evaluating immigration policy in canada, the only gain and benefit (ethical or not) should be of canadian’s.
thats what the litterature does in labor econ… from early work by Card (mariel boatlift) to recent paper like Borjas…
My apologies Frances, I’ve done you wrong.
Stephen said: “I do too, but a study that makes the leap from noting the effects of immigration on the government budget balance to making policy recommendations is pole-vaulting over a set of ethical arguments that should be made and defended first.”
Fair enough, although query whether that is the role for which economists have any special expertise (granted, the intellectual imperialism of economics has allowed it to gradually take-over the territories of the other social sciences – notably sociology – but as a discipline it still hasn’t made the leap across the boundary into the humanities).
In any event, the ethical assumptions implicit in the FIs argument (i.e., that governments should be concerned primarily with the well-being of their citizens/residents) are implicit in pretty much every discussion of jurisdiction level economic policy, and are not generally challenged or questioned, so it’s not clear why the FI should be called out for not doing so here. No one criticizes (or defends) the Bank of Canada’s monetary policy on the grounds that it’s bad (or good) for foreigners. It wouldn’t be an effective defense of Ontario’s minimum wage policy to argue that it might be beneficial to workers in other jurisdictions (Quebec, for instance). And, I think a defense of the city of Toronto’s business tax policy based on the positive implication’s it has had for Toronto’s suburbs would be dubious in the extreme.
A thorough examination of those discussion (hinted at by some of the posts above) would be interesting, but I can see why a policy paper wouldn’t include it.
John: “In evaluating immigration policy in canada, the only gain and benefit (ethical or not) should be of canadian’s.”
John, I don’t see how one can ethically justify not caring about the well-being of people outside of Canada – and about non-citizens within the borders of Canada, and about the well-being of people in the future as well as the well-being of people right now.
You might respond: “But I only care about Canada”. This seems a bit altruistic for someone reading an economics blog – me, I care about my kids, my spouse and myself. When it comes to evaluating immigration policy, the gain/loss I care about is the gain/loss for my kids. But that’s self-interest, not ethics.
Now taking into account the global impacts of Canadian citizenship policy now and in the future is impractical. Which is another reason why people just look at the here-and-now. But that’s expediency, not ethics.
(This is not a defense of Steve’s position. As others have pointed out, a truly ethical assessment of immigration would take into account the impact of immigration on the origin countries, as well as on Canada, and would probably weigh gains/losses to the least advantaged more than gains/losses experienced by the most advantaged).