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 
Frances: “that’s self-interest, not ethics.”
Are the two mutually exclusive, can’t self-interest also be ethical? It seems to me that that conflates a universal altruism, or perhaps simply universal untilitarianism, with ethics. If you accept those (somewhat limited) ethical frameworks, you’re right, but I’d suggest to you that few do.
Indeed, I see to recall one of the greal moral philosophers of the 18th century have some thoughts on the ethical obligations of mankind:
“The administration of the great system of the universe, however, the care of the universal happiness of all rational and sensible beings, is the business of God and not of man. To man is allotted a much humbler department, but one much more suitable to the weakness of his powers, and to the narrowness of his comprehension; the care of his own happiness, of that of his family, his friends, his country: that he is occupied in contemplating the more sublime, can never be an excuse for his neglecting the more humble department; and he must not expose himself to the charge which Avidius Cassius is said to have brought, perhaps unjustly, against Marcus Antoninus; that while he employed himself in philosophical speculations, and contemplated the prosperity of the universe, he neglected that of the Roman empire. The most sublime speculation of the contemplative philosopher can scarce compensate the neglect of the smallest active duty.”
Moreover, on your formulation of ethics, I’d suggest that that would render pretty much all government policy profoundly unethical. For example, the decision to spend x dollars on, say, breast cancer research (to choose an obvious and loaded topic) rather than on an alternative (but more efficient) means of saving lives, say, spraying DDT in the developing world or providing mirco-nutrients to poor children is profoundly “unethical”, because it only takes into account the wellbeing of the beneficiaries of the chosen treatment rather than the well being of the possible beneficiaries of the alternative. And we do that, not because we’re unethical, or because it’s too difficult to measure the benefits of the alternative (since, in that example, the benefits of the alternative are well known), but because we care more deeply about the possible beneficiaries of breast cancer research than the beneficiaries of DDT spraying and micro nutrients (presumably because our friends and loved ones are more likely to be in the former group than the latter). It’s a comment on our preferences (which are, presumably, shaped by our ethical beliefs), not our ethics per se.
“Amazing to see that when someone makes good financial decisions for themselves they are suddenly perceived as “rich”.”
Yes, because the defining characteristic of rich people is that they have a lot of money.
“Rich people suffer and die from cancer; middle class people suffer and die from cancer.”
But, lest we forget ourselves, poor people suffer and die from cancer much more often than either.
“In evaluating immigration policy in canada, the only gain and benefit (ethical or not) should be of canadian’s [sic]”
Indeed, and so the question we must ask is – which Canadians? All Canadians, present and future, should have their ends taken into account. This would include immigrants to come after us.
Craig:
Immigration as an optimal stopping problem? Interesting
I should get the US nationality. My benefit would be very very high. They should let me.
There is a problem here…
Frances and Stephen:
You should ask Kevin Milligan to comment on this if possible. Most of his papers does what bob suggest for other policies. I know he comments from time to time here…
For someone who study econ policy, it is very hard to conceive something else than what Bob suggest….
It is the rational way to measure it…
“Indeed, and so the question we must ask is – which Canadians? All Canadians, present and future, should have their ends taken into account. This would include immigrants to come after us.”
That assumes the answer to the policy question the paper is trying to resolve. If you accept immigrants into Canada, you should take into account their preferences, and therefore you should accept immigrants into Canada. But, conversely, if you don’t accept immigrants into Canada, you don’t need to take into account their preferences, and so you shouldn’t accept immigrants into Canada (assuming, of course, that immigration isn’t beneficial to existing Canadians and their descendents – not a proposition I’d uncritically accept). As John said, there’s a problem here.
As a practical point, the only interests that will be taken into account are those of current Canadians and their descendents, because they’re the ones who choose current policies and who determine who will be future Canadians. Policies which don’t maximize their welfare won’t be chosen.
No, I don’t think the notion of ‘ownership’ works here, and certainly not the analogy of a private house.
More fundamentally, I understood the role of government was to protect its citizens (the people who voted them in). On that basis their electorate’s interests should come first over those from other jurisdictions.
M:
“More fundamentally, I understood the role of government was to protect its citizens (the people who voted them in). On that basis their electorate’s interests should come first over those from other jurisdictions.”
No role should ever take precedence over acting morally. It is immoral to put any “duty” ahead of morality.
Bob:
“Moreover, on your formulation of ethics, I’d suggest that that would render pretty much all government policy profoundly unethical.”
I agree 100%. That is the single most significant statement I have seen on this blog in a long time.
“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.”
I agree.
“No one criticizes (or defends) the Bank of Canada’s monetary policy on the grounds that it’s bad (or good) for foreigners.”
SOMEONE probably does, but no one I know. More people should, though.
“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).”
Not effective, but morally right.
I think we’re talking past each other. Here are a few different questions that posters have been trying to answer:
1. Do voters usually vote for the policies that they think are best for them and those they know?
2. Should economists and political scientists assume that voters vote based on self-interest?
3. Do voters have the right/capacity to choose policies that favor themselves over others?
4. Do economic policy endorsements need to be built on solid ethical grounds?
5. Is it morally justifiable for voters (or anyone else) to choose what is best for themselves over what is best for humanity overall?
Most of the commenters have focused on questions 1, 2, and 3, while I have focused on questions 4 and 5. I shouldn’t speak for Stephen and Frances.
I think essentially every poster would answer “yes” to the first 3 questions. I don’t think those are the questions that Stephen was trying to address with this post. I could be wrong.
My argument has been primarily concerned with the last 2 questions. My claim is that the answer to question 4 is “yes” and the answer to question 5 is “no”.
I hope I have correctly summarized the relevant points.
“My claim is that the answer to question 4 is “yes” and the answer to question 5 is “no”.”
Well, two points. First, its a fair position to say that good economic policies (or proposed economic policies) should be based on solid ethical grounds. But ethical analysis engages a different set of skill sets than economic analysis, so it isn’t reasonable to to expect most economists (with the possible exception of some of the true greats) to engage in that sort of analysis, or at least not on any meaningful level (just as I’m not sure we want ethicists engaging in economic analysis – see the “Should Economists be licensed” post).
Second, with respect to your position on question 5, that’s a fair position to take, so long as you recognize that it is an extremist position in the sense that (a) outside of, perhaps, Mother Theresa (and I say “perhaps” because I’m not sure if Mother Theresa would accept that a failure to live up her saintly standards is immoral), no one will accept it as being correct (certainly no one governs their lives on that basis and I’m pretty sure that most people think of themselves as being moral creatures), and (b) it is a position that is inconsistent with the ethical norms of pretty much every major religion/philosophy in the world (while all emphasize a role for empathy and caring for others, none demand, impose or expect a sacrifice of the self for the well-being of mankind that you suggest – at least in the Christian tradition, such sacrifices are left for the son of God).
Moreover, it’s a position that runs up against a practical problem. I can judge what is best for me or mine, I cannot judge what is best for humanity overall, so on what basis can I made the choice you propose? Again, I come back to the Scotish Professor of Moral Philosophy: “The administration of the great system of the universe, however, the care of the universal happiness of all rational and sensible beings, is the business of God and not of man. To man is allotted a much humbler department, but one much more suitable to the weakness of his powers, and to the narrowness of his comprehension; the care of his own happiness, of that of his family, his friends, his country”.
are you bob smith the labor economist?
So I have to chime in again. Maybe I talk with different economists and different people, but the #1 argument in support of generalized free trade and environmental policy is the explicit benefit to non-Canadians. Case in point, “Fair Trade” commodities are able to charge a premium precisely because they claim to provide a benefit to the producer – at a cost premium to the consumer. The logic that that the immigrant’s benefit does not matter is a violation of the premium applied to Fair Trade goods.
All market transactions are founded on the principle that the Consumer has perfect knowledge of their own utility function and can rationally substitute the resources they have for the resources they desire. Adam Smith’s great insight is that given “the narrowness of his comprehension” the Consumer does not need to toss and turn about whether or not the price is fair to the producer; he can sleep soundly knowing the producer would not have sold if the price was too low. It is implicit that the Consumer cares about the welfare of the Producer.
It is conceivable that if every immigrant applicant was put to a referendum vote, Canadians would only accept refugee children with chronic illnesses from regions with natural disasters.
ps – Bob, I disagree with your comment on religious expectation. I think the Christian faith does expect a sacrifice of the self as demonstrated by Christ. I think this was part of the problem that the thinkers of Smith’s era were struggling with. How does one support the poor without being in need of support themselves?
I never claimed that people are failures if they do not act in a perfectly moral way all of the time. I’m just saying that any particular action is either moral or isn’t. Any time I do not do what I think is best for the world, I am acting immorally.
I’m not asking anyone to give up all of their possessions. I don’t think that would be the moral thing to do because I think it would limit our wealth and economic power to a self-defeating degree. I think the moral path requires a certain degree of self-care. There’s nothing wrong with wanting to be happy. Happiness is the most important thing in the world.
I have only one moral rule:
Always choose the action that will maximize the average level of happiness in the world.
Of course, I fail at that sometimes. Those are real, serious moral failures on my part, but they don’t necessarily make me a bad person. I’m not perfect and I’m not asking anyone else to be perfect. At the same time, I don’t think it’s hard to distinguish between ethical reasons for choosing something and unethical reasons for choosing it.
peter,
name me one economist that think it is the number one argument in favor of free trade….
that is ridiculous
Apologies John, I concede that “#1” is hyperbole.
It is not the number one argument presented by economists; I think it is very important in public opinion.
Ricardo is one economist who argued that trade benefited both the wealthy developed country and its less developed neighbour – even if the wealth country had an absolute advantage in production of every good. Arguing the merits of trade with countries who have low-labour costs often turns into an argument of “exploiting cheap labour” vs “comparative advantage allows both economies to benefit by trade.”
Bah – I might be further mistaken. Did Ricardo develop the global production frontier or is it Mill? Also, the benefits from trade are distributed between the two countries, the distribution of which depends on the bargaining power of each country.
Furthermore, if the means of production are freely transferable do the benefits of trade collapse? That does not make intuitive sense to me but if the product and the means of production can be freely moved, wouldn’t an equilibrium occur where trade (or the desire to emigrate for that matter) is not necessary?
Blik: “I have only one moral rule: Always choose the action that will maximize the average level of happiness in the world.”
And that’s a perfectly reasonable moral rule, it’s just not one shared by many people. I’m not a theologician, but I doubt any of the great religion/philosophies of the world would accept you concept of “immoral” behaviour. Certainly that isn’t a popular conception of morality.
Peter, I can’t say I agree with you re: Fair trade – I’ve never heard an argument for free trade based on Fair Trade principles, it’s usually an argument against free trade (particularly when ‘Fair Trade’ is redefined as being “trade policy that is beneficial to us” a-la- Canadian Auto Workers). Indeed, as an aside, query whether “Fair Trade” (generally understood) actually benefits people in the rest of the world – a higher price doesn’t neccesarily translate into greater welfare if, for example, production costs for ‘Fair Trade’ products are higher, as they invariably are due to the requirements to be certified as ‘Fair Trade’. Moreover, do people buy fair trade coffee, for example, because it makes third-world producers better-off (if, in fact, it does) or because it makes them feel better about themselves? Let’s face it, people pay a premium for BMW’s, but not because it improves the welfare of German auto-workers.
But you may well be right that the number one argument in Canada favour of certain environmental policies (notably global warming) is that it is globally beneficial. That’s probably the number one argument in favour of controlling greenhouse gases, but only because its hard to make a compelling case that controlling greenhouse gas emission is beneficial to Canadians alone, Canada being both a large consumer and producer of energy and a country that would arguably be less affected by global warming. Moreover, even if one accept that claim (and I don’t want to get into THAT debate), the fact that global warming policy has gone nowhere in Canada over the last decade and a half (under both Conservative and Liberal governments, and is looking to go nowhere fast any time soon) is a testament to fact that Canadians do not, generally, take into account global welfare in choosing policies.
Yves, I’m Bob Smith, the tax lawyer.
“More egregious is the fact that the biggest benefits – the welfare gains of immigrants themselves – appear nowhere in the analysis.”
So, isn’t the point of a governent to first look after the interests of its citizens?
Isn’t any altruism towards non-citizens really something to be considered as part of foreign policy? What, for example, if each immgrant costs the Canadian government X dollars, which creates a welfare gain for that one person of Y, whereas spending X dollars in foreign aid, on disease prevention, produces a gain greater than Y?
Funny thing to see economists are arguing for altruism instead of Canadians keeping their lottery ticket to maintain/maximise their economic gains, instead of giving away tickets and diluting the value of each ticket. I have an idea Stephen, adapt me as part of your family so i inherit a share of your house when you die, i bet your family would love that!