Immigration and the Liberal War on Success

Yesterday, isteve posted an article about Alan Greenspan endorsing more h-1b Visas. Like most articles on this subject matter it generated a lot of discussion, the majority expressing opposition to more visas. However, being a free market capitalist I wrote:

But if more high tech immigration isn’t allowed and retraining the workforce isn’t feasible due to limitations of IQ, that means economic regression is the only outcome. We cannot have it both ways. If we’re IQ realists we have to accept the majority of unemployed Americans won’t be able to meet the increasing cognitive demands of work, leaving immigration as the only alternative to fill the skill shortage.

Some responded the that majority of jobs being replaced don’t require a high IQ to perform.

I think, Grey Enlightenment, you (and other pundits) overestimate the IQ requirements for these jobs that Greenspan and Gates wish to outsource to India, China, and the Philippines.

Another thought immigrants were cognitively mediocre and would make America less safe.

Even if we assume your assertion to be true regarding the inability of Americans to meet the increasing cognitive demands of work, what makes you think the skill shortage (which would really be an intelligence shortage) would be met by importing foreigners? Most of the high tech immigrants who come here have fairly mediocre intellects. They just work for less. And if we changed our immigration laws to only allow the truly super smart to immigrate here, how do we maintain control of the country? Or would that matter to you?

To which I replied

Another option is to raise wages to attract American talent, but this is easier for larger companies with big budgets than smaller ones. Let’s say you run a small research company and you need a programmer to code a custom string theory or protein folding simulator (the most complicated job I can think of off the top of my head). Let’s say only one American has the qualifications but charges six figures but you found an Indian that will do it for five. You can verify both will produce the same quality of work. If you have only five figures in your budget, what choice do you have? The American can do it for five figures and have the job, but it’s not worth his effort and he will work elsewhere. That leaves the job unfilled and the economy cannot realize its full potential. Maybe that simulator holds the cure to cancer or the origins of the universe, but we’ll never know. Or I have a software company and I can hire a team of Chinese to make the program for $100,000 or Americans for one million. Now I have to raise my prices by 10x.

The issue here is a free market (which many readers on isteve profess to supporting) and immigration control are not mutually inclusive. Many of these readers oppose the fed, QE, and TARP on the grounds that those violate the free market, but oppose immigration initiatives, like raising the h-1b visa cap. But you cannot have it both ways. This is the same contradiction that caused Murray Rothbard to split from Patt Buchanan. By 1995, Rothbard had become disillusioned with Buchanan, believing that the latter’s “commitment to protectionism was mutating into an all-round faith in economic planning and the nation state”. If you support a free market meritocracy where the best and the brightest can get ahead, it behooves you to support immigration. To say that many jobs don’t require a high IQ to perform doesn’t mean they won’t in the future as the easier jobs become automated. The United States is only 1/20 of the world’s population. As job requirements become more complicated, employers will have no other option but to look outside of America to fill technical positions, simply because based on a normal IQ distribution, there won’t be enough smart Americans fill the spots. It’s just statistical reality. Let’s assume in my example a string theory simulator requires someone with an IQ of 200 to create (~1/million). That means only 330 Americans can do it versus almost 4,000 potential foreigners. That is an extreme example, but the point is that restricting labor options restricts innovation and the ability of the economy to reach its full potential.

Another rebuttal is that immigration makes America unsafe. This is countered with property laws, CIA, FBI, NSA and local police, which already exist. But the same group that is suddenly concerned about America’s safety want to end the NSA because it violates the 4th Amendment. Like oppositions to immigration, they are picking and choosing. They want a free market, provided it doesn’t impede high wages and full employment for all able-bodied Americans. They want the borders closed to thwart threats, but screening for threats contained in email, phone conversations, skype, or Facebook is strictly off-limits.

But what about Americans being turned away from buying allegedly inferior foreign goods? While many surveys show that Americans will pay more for ‘made in America’, what Americans say versus what they do are entirely different. Like professional wresting being fake, it’s an open secret that Apple manufactures all its popular electronics overseas. Has that hurt sales? Absolutely not. The left wants to believe that it does, but the empirical evidence suggests that Americans just don’t care where their stuff comes from as long as it works and it’s a good value. People prefer Apple products because they are superior to the alternatives. Many liberals and some conservatives like those on isteve and zerohedge believe that ‘made in America’ fulfills a non-pecuniary, egalitarian higher cause; in reality, it’s just bad economics and doesn’t reflect reality regarding consumer preferences. With regard to foreign made goods being inferior, Consumer Reports shows that US autos rank less than Asian manufactures in reliability and test scores:

lib

This is part of a broader theme of the liberal war on success. The left wants regulation when things are going well (higher wages for Walmart workers, for example) but ‘let em’ fail’ when things go badly (the banks in 2008). Let’s take Tesla, for example, which is being criticized over tax subsidies even though they account for 5% of the sticker price. Rich people are buying Tesla because it’s a great product. The subsidy only plays a small factor in the purchasing decision, if any at all. The liberal NYT has been smearing Tesla for years, most notably when reporter John Brody, during a test drive, ran the Model S battery down to nothing and proceeded to write a excoriating review, blaming tesla instead of his own malice/incompetence. Nonetheless, the stock has surged 400% since the story. According to the libs, Facebook is successful because they are benefiting from cheap labor at the cost of everyone else, not because Facebook provides value for a billion people. Small business also uses foreign labor, but because they aren’t as successful, they aren’t yet in the cross-hairs of the left.

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