no third solution

Blogging about liberty, anarchy, economics and politics

On Immigration: The Good Stuff

May 31st, 2007

The video I watched last night says that the 1990s saw the biggest population boom in U.S. History. This is undoubtedly true. What NumbersUSA does not tell us, is that this is in strictly nominal terms. Sure, the country’s population grew by more persons during that decade than in any other decade in history. But is this the relevant metric? I submit that it is not. Furthermore, does NumbersUSA present that information in a useful format? Again, the answer is no.

The relevant metric, first and foremost, would be population growth as a percentage of population. To the latter point of contention, the numbers are not readily comparable unless they are measured over standard intervals. The video that razorgator submitted for my viewing pleasure presented population growth – as a raw mean over the following intervals: 40 years, 25 years, and approximately 10 years. The first interval includes the Great War, and the Great Depression. The second interval includes the Second World War, and although the third interval does include the Vietnam conflict, it is free of any major, worldwide catastrophe that even approaches the same significance. It is meaningless data presented in useless context. I will present the data in 25 year intervals, from 1900 through 1999. I also include the growth as a percentage of the population over 25-year, 50-year, and 100-year intervals.

First, the theory:

Immigration is a human action aimed at alleviating a perceived discomfort, a disequilibrium. Labor (people) may be abundant and capital (land) scarce in one area, and labor relatively scarce and land abundant in another. Basic economics tells us that, when free to choose and left to their own devises, labor will immigrate from an area where it is relatively abundant to an area where it is relatively scarce, bringing the two factors into (or closer to) equilibrium.

It cannot and it will not go unchecked. Immigration is severely constrained by numerous factors, not the least of which is the financial inability for a great number of the world’s population to leave wherever they are, and go to wherever they’d rather be. But those people whose transaction costs are the least – the industrious and those in close geographic proximity – will be able to migrate elsewhere. A second serious constraint is scarcity: each new wave of immigrants reduces the opportunities available to those who have not yet immigrated. The marginal immigrant will no longer move, his opportunity cost being greater than his potential gain. Concomitantly, land becomes increasingly scarce: each new piece put to use is of less value than the previous. These factors must naturally stem the flow of immigration. But I do not believe that we’re even close to maxing out our capacity. Take a drive through Northern Michigan. Oklahoma. Idaho. Wyoming. Texas. Land – as far as the eye can see is uninhabited.

Moreover, immigration is a form of prohibition. And like any form of prohibition, it distorts incentives. It artificially increases the potential gain, by artificially reducing the number of people allowed to benefit thereby. These incentives do not go unnoticed by the potential immigrants: their potential income is artificially propped up by legislation, so the number of people who want to immigrate is higher than it otherwise would be. Another unintended consequence is the rise of black markets to exploit the higher-margin opportunities, financed and operated by bad people – good people are either able to make an honest living another way, or unwilling to risk the penalties they may incur.

Now, the numbers (Spreadsheet in .xls):

According to the census bureau, immigration as a percentage of population peaked in the decade preceding 1910, at 10.4%. Since then, it has never been over 6% for any 10 year period, whereas most of the 19th century saw population growth between 6 and 9%. But let’s look at overall population growth.

Population growth
1900-1924 ………………49.96%
1925-1949 ……………….28.80%
1950-1974 ……………….40.44%
1975-1999 ……………….26.17%

1900-1950 ……………..196.06%
1950-1999 …………….178.96%

1800-1900 …………….1,433%
1850-1950 …………….656.57%
1900-2000 …………….358.11%

From 1800 through 2000, the population of the United States increased 51-fold! During that period, for all intervals measured except 1950-1974 (the baby-boom generation) population growth was generally declining. The population is only 3.6 times bigger than it was 100 years ago, at which point it was over 14 times larger than it was a century earlier. Clearly, population growth appears to be slowing, which is nice, because theory indicates that it will do just that. It is also important to consider that the population was growing at its fastest 100 years ago, when people were even dumber and poorer than we are today – and they had far less technology with which to work. Had NumbersUSA commissioned their study in the middle of the 19th Century, they would’ve predicted we’d never make it to the eve of the 20th; just as now they are telling us we can’t sustain the growth we have.

And as testament to the effects of immigration – which is only a part of population growth as a whole, we live much better lives now than we ever have in the past. The poorest among us have luxuries unattainable to the middle classes a generation ago, and to the wealthiest two or three generations ago. Immigration and population growth have not made us poorer in any appreciable sense, quite the contrary, we now enjoy lifestyles that were until very recently, unimaginable.

More people – to a point – equals more work, which gives rise to more productivity, which is the sole creator of wealth. Immigrants are only a handy scapegoat for the fact that we will never reach Eden, a world of superabundance. There will always be scarcity, but if it were possible to create a localized superabundance, any decent man, genuinely concerned with the plight of the poorest among us, would wait a little bit longer to get there, so that others could feast at that table, too.




no third solution

Blogging about liberty, anarchy, economics and politics