Foreign Exchange 101
May 22, 2006
I hear often argued that “Mexican immigrants don’t contribute to our economy; they’re only here to send money back to mexico.” Note that this argument is often applied to legal immigrants as well as the “illegal” variety.
First and foremost, they come here to work, which translates to providing us with goods and services - an abundance of which indicates an affluent society. So there is certainly a beneficial effect to the immigrant contribution. But this overlooks the obvious: their labor is their contribution, and the money that they “send back to mexico” is their proper recompense. It is their property, to dispose of as they please. Any claim to some sort of obscenely nationalistic sovereignty, which overrides the rights of anyone who earns an income is anathema to freedom for all men, regardless of origin. Whether the Dollars leave the confines of these United States in the pocket of a wealthy, world-travelling retiree, or in an envelope postmarked for Baja is really inconsequential. Money is fungible, and your dollar is no different than one earned by the immigrant gardener you employ.
Currency exchange controls, neo-mercantilism, arguing that money must remain within our borders to do us any good - this argument doesn’t even approach validity, and is indeed only a few steps removed from total economic isolationism. Insofar as the dollars are “removed” from the US, or otherwise “hoarded,” this can only serve to increase the relative purchasing power of the remaining dollars in circulation. And eventually that money does find its way back; money facilitates exchange - exchange that ultimately ends up back in the United States. The dollars may be circulated round the world, but they may only do so on the expectation that at any time they may be redeemed for something of intrinsic value.
If the dollar stops being treated as such, we’ll have much bigger fish to fry. At that point, no number of dollars could ever hope to repair the situation. Germany, for example, during the interwar period was literally printing Reichsmarks by the quintillion. Yes, it’s a real word. No, it didn’t help.
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