My wife and I just got back from looking around at yard sales and thrift stores. One thing that always strikes me when we do things like this is the mismatch between the problems of the world’s wealthy and the problems of the world’s poor. The poor are dying for lack of material comfort–food, clothing, and shelter. Meanwhile, those of us in the West are looking for ways to rid our houses of surplus junk and our waistlines of surplus inches.
A global free market in labor–i.e., an elimination of immigration barriers–would generate prosperity without at first glance looking like it is generating prosperity. We see a lot of immigrants at yard sales and thrift stores. It’s clear that their lives are improved because they have access to more, better material provision than they would presumably have elsewhere, and the sellers’ lives are better because they are able to clear out space and perhaps either save a little money on taxes or earn a few dollars selling stuff. None of this ends up in measured output because it doesn’t represent the transaction of final goods and services, but the improvements in human welfare are real nonetheless.
With free trade in labor, I would expect to see a few new occupations crop up; most interestingly, these new occupations would make the three pillars of environmentalism (“reduce, reuse, recycle”) more viable than they are today. First, the market for secondhand everything would grow explosively as things we currently throw away find their way into the market. Second, recycling would increase and we would save on the “inventory costs” of storing discarded resources in landfills (or on the shelves at Goodwill, if the stuff still works).
Perhaps you’ve had your heart torn by stories of starving people in poor countries picking through garbage dumps for anything they can sell. Giving them access to American “garbage” would be to give them access to an almost-literal gold mine. With open borders, I would expect to see the development of an thriving recycling industry fueled by new immigrants. As I explain in these videos, trade creates wealth and trade conserves wealth. Liberalized international markets for labor would allow greater specialization and net wealth creation.
Some of this might not be measured, but that doesn’t mean it wouldn’t be real. Indeed, as a lot of people have pointed out, it’s possible for the official statistics to get worse even though everyone is unambiguously better off (I’ve seen examples like this from Bryan Caplan and Lant Pritchett, I know). Imagine we open the borders and receive a flood of immigrants who have higher-than-average earnings in their home countries but lower-than-average earnings in the US. Per capita incomes in the sending countries will fall, and so will per capita income in the US. This, however, would be a statistical illusion that masks growing prosperity.
Economists take a lot of flack for not being able to predict precisely what will happen if this or that policy is enacted or for being unable to explain precisely and in great detail how to solve this or that social problem. We have sufficient evidence (both theoretical and empirical) that when they are given the freedom to search for solutions, entrepreneurs can and will figure things out. With a little bit of theory and a few facts, we can make some general-ish predictions about what free trade in labor might mean. How will it manifest itself specifically? I propose we try it and find out.
