Sunday, December 10, 2017

Public Choice Economics in the Immigration Debate

This paper looks at Public Choice Economics, specifically in the context of how using Public Choice can shed more light on the immigration issue. To do so, it will cover the basics of Public Choice. Then it will explore the history of immigration in the United States, and from there the current attitude on immigration. The final section will look at the implications of using a Public Choice frame to look at immigration and the built-in assumptions to shine a light on Public Choice.

Immigration has become a contentious issue politically but came to a head when Donald Trump rode down his escalator and announced his candidacy for presidency in 2015. In that speech he said “When Mexico sends its people, they’re not sending their best. They’re not sending you. They’re not sending you. They’re sending people that have lots of problems, and they’re bringing those problems with us. They’re bringing drugs. They’re bringing crime. They’re rapists. And some, I assume, are good people.”1 A key aspect of his appeal was his readiness to demonize others who were not of his race or social class, and limiting immigration was a huge part of his stump speeches. What does Trump’s embrace of an anti-immigration platform and his election say about the United States? The reader will see that with a Public Choice framework the limiting of immigration is a logical conclusion.

The Basics of Public Choice
Public choice, also known as social choice, is an attempt to use the methods of utilitarian economics and apply those theories to the theory and practice of politics and government. Some of the things focused on include profit and loss, price, and efficiency. The focus is that people in the political sphere are just that – people. As people they have the same issue with bias in their dealings. Political actors, just like economic actors, act alone even if they are in groups and importantly they are self-interested.2
What this means is that in the theory, there can be a parallel failure of government just as there can be market failure, and thus the solution for market failure is not necessarily government intervention, but perhaps a look at how the market is designed.3
Further, the public choice theorist looks at public decisions as being part of a decision made between interest groups of varying power. This has numerous consequences within the theory. One of these is that in a political theory based on one axis of choice, the only way to receive the winning vote based on a simple majority is to appeal to the median voter, or the group in the middle.4 This means that the parties will cluster their choices in the middle. There are other consequences as well. For example, there is in the theory a concern over self-interested government officials. It is in their self-interest as bureaucrats to consolidate power in their offices in the form of growing budgets and reports in a way that heightens their own esteem and financial rewards in terms of pay and promotion.5
Public choice theory traces its roots to several thinkers in the eighteenth century. Adam Smith, writing in 1776 criticized the relationship between the state and businesses as well as worried about monopolies. Other thinkers worried about the best way to chose in a group amongst a variety of choices. The Marquis de Condorcet in 1785 looked at the problem of cycling. In cycling there is no one preferred choice amongst the group. An example would be to try and pick one overall winner in a competition between rock, paper, and scissors in the classic game of skill and chance. There is no one preferred choice between the three. Finally, Jean-Charles de Borda in 1781 examined that in elections that varying intensity of feeling amongst choices would create issues. To combat these varied enthusiasm, he proposed a ranked-choice system so that each competing choice would be ordered by overall preference.6  
The school really came into its own in the twentieth century. Thinkers such as Duncan black looked backwards and rediscovered the work of Condorcet and his contemporaries to expand the work.7 Aside from notable contributions like Black’s’ discovery of the median voter theorem were breakthroughs like Kenneth Arrow’s impossibility theorem which claims that there is in fact no possible democratic system that can guarantee the best choice based on group preference outside of a dictatorship –  all other systems have inherent flaws. For his work on this and other economic achievements, Arrow was the youngest economic Nobelist at the time of his award.8 Coming right on the heels of Arrow was Anthony Downs who in 1957 posited Rational Choice Theory, where parties want to meet their objectives of money, prestige, and power rather than any specific policy. Downs is most renown, though, for his idea of rational ignorance. With rational ignorance you look at the time it takes to learn about a policy a candidate supports and then you balance it against the chance that your own vote would be the one that would tip the election, the most rational choice is in fact not voting at all. Downs says the question is not why it is that, so few people turn out to vote, but why it is that, so many do.9
The true founders of the school are James Buchanan and Gordon Tullock. These two economists took the groundwork laid buy these previous thinkers and synthesized Public Choice into a concrete theory of its own. Their 1962 book The Calculus of Consent looked at the stage in which voting rules were chosen, point out that the act of choosing how to chose being as important as the choosing itself.10 The Public Choice School of Buchannan and Tullock is also known as the Virginia School of political economics based on Buchanan’s work at several university in the OId Dominion State. It is closely related to the Rochester School and the Chicago School, all noted for the conservative political leanings.11

Historical and Contemporary Policy Debate
The United States has been a nation of immigrants before it was a country. From Jamestown in 1609 on, waves of people have come to settle on the land. The native population was subdued, murdered, and displaced to make way for successive groups coming to the land to escape the land they lived on for fear of religious persecution like the puritan pilgrims who settled the Massachusetts Bay area in the seventeenth century to the Irish coming over in the nineteenth century to avoid famine.12 Traditionally, there had been plenty of land out west as the frontier was pushed further out and the railroads came, and people could settle the land. Many newcomers still settled in the city in nationalized enclaves, but the expectation was that eventually they would lose their former nationality identity and instead take on a new identity as an American as the national ideal of the “Melting Pot” took hold. The idea was that though the people on the shores between the Atlantic and the Pacific came from many places originally, they were to become Americans over time
The ideal has not always been the historical actuality. Mainly welcoming of the right sorts of Europeans based on who held economic power, successive panics led to the implementation of the 1882 Chinese Exclusion Act to keep out the Chinese, particularly on the west coast in the name of protecting workers who were already American.13 This is not to mention that those workers deserving protection came in under various laws which were dictated by the states because there was no federal immigration station until the opening of Ellis Island in 1892. This led to the welcoming of generations of eastern Europeans as the quota system privileged those from Europe over immigrants over those from other areas on the globe.14
Currently, according to the left-leaning Center for American Progress, “Approximately 43.3 million foreign-born people live in the United States.”15 This is a quadrupling of the foreign-born population since the relaxation of the immigration quotas, but it also includes naturalized citizens’, lawful permanent residents, those on temporary visas, as well as unauthorized migrants. Though these numbers represent all-time peaks, as a percentage of the population it is below the total of foreign born right around the time of the opening of Ellis island in 1890, when 14.8 percent of the US population was foreign born.16
The most recent presidential election shone a spotlight on immigration, with the presidential Candidate Donald Trump making illegal immigration a centerpiece of his campaign. One of his central promises was to build a wall on the entirety of the southern border with between the US and Mexico, and to make Mexico pay for the construction of the wall. As we close in on one full year of now-President Trump’s first term, little actual progress on the building of the wall or foreign finance.17 The issue of immigration has been conflated with illegal immigration despite several important facts. The first is that of all unauthorized people in the country, it is only a quarter of all foreign-born individuals. The second is that after the crash in 2008, in-migration from Mexico turned negative. More people were returning to Mexico than were entering the United States Illegally. Finally, in percentage terms the greatest growth comes not from the Latin American population, but from Asian in-migration. From 2010 to 2015, there was a 17 percent increase in the number of Asian American or Pacific Islanders in the US.18 These facts have not quieted the most vocal of those opposing immigration, as the white “native” population was strongly drawn to the Trump campaigns’ economic nationalism covering both trade and immigration policies. Once the wall was in place, there would be less competition for low-wage jobs at the bottom of the wage ladder, and the return of American manufacturing would open America and allow it to return to its former greatness. And this narrative discounts the coded and uncoded racism against the foreign born presented in the national discourse by Trump and his surrogates. 
However, even with the subject in the news, the overall desire of Americans to further limit immigration has been trending down. Gallup, in reporting a poll this year, notes “Though preventing illegal immigration was one of the president's key campaign promises, the general desire to decrease immigration is near its historic low in Gallup's trend over more than half a century.”19 The current number of people polled who want to see less immigration is at 35%. This is lower than the number who are happy with the current level, 38% but more than the number of people who want to see more immigration at 24%, though this later number has been growing over time. The graph below shows the trends where after hitting a peak in the late 90s and then spiking directly after 9/11, the story of America’s feelings about immigration has been one of more permissiveness.20

Figure 121

Potential Position of School in Policy
Ultimately it seems that with the policy of open immigration a unanimous constitution would ideally have a vote for everyone in the voting unit to ask if a member should be allowed to become a member of the group. One thing that is holding back potential immigrants is that we use the constitution as the final arbiter of the exact meaning of the law – and that is divined through the Supreme Court.
There is no phrasing in the original document about who specifically can be brought in. Article I speaks of “Representatives and direct Taxes shall be apportioned among the several States which may be included within this Union, according to their respective Numbers, which shall be determined by adding to the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons.” In section 2 and then prohibits Congress from making rules against immigration of free or slave people until 1808.22 The original document was more favoring a federalist form of government structure where more power was devolved to the states. This form held strong for the first eighty years until the contradiction between the free north and the slave-holding south could no longer be tolerated in a single state. The constitutional amendments that came after the war could be a citizen of the south as an imposition. These amendments, specifically section one of the fourteenth amendment was drawn broadly to include all members of the once enslaved peoples: “All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.”23
The United States’ constitution is the one we have inherited, and as such, as a naturalized or born citizen it is the choice structure that we have, based on representative democracy. Within a Public Choice context, it does meet the goals of being limiting and lasting,24 but where it fails is that the individual citizens have inherited it without choosing it. As a structure it has changed and evolved over time. Very few would vote to accept the constitution and its amendments as given. In fact, the only people who do actively make a positive choice to be governed by the rules of the constitution are those who make the choice to be immigrate to the United States. So, with a broad public choice lens the group that is doing the choosing did not assent to the laws governing the structure, but the status quo is to not grow the members of that group.   
What we can see now with the framework of public choice economics is that the design of the choosing method ties the hands of the majority. Looking at the stats in the previous section, we can see that a great majority of the participants in the poll wanted to see immigration growth in total to be the same or the current level than we now have it (the polling did not specify the composition of the preferential kind of immigrants). With the electoral college and the de facto first past the post constitutional system, the parties are beholden to the loudest groups within it, and in this case one of the key planks was to forcibly limit immigration in the guise of making in-migration from the southern border more difficult, as well as punishing those brought here at a young age and changing the visa laws for other immigrants. This means that the wide, dispersed group whose preferences are the status quo or greater will have their voices drowned out by the loudest of the minority – true tyranny, that.
The Public Choice framework can show us how there is a delicate balance between the way things are and how we make choices is structured by the choosing mechanism. America has two parties with a strong executive in terms of driving the party agenda. There are many issues that get grouped up under the party banner. Many times, there are conflicting interest groups in the parties. In the issue of immigration, the republican party has both economic nationalists and free marketers, but they stick together because of their collective priorities at this juncture are more important than what they see the collective priorities of the other party, which is itself a bundle of contradictions. Were each issue to be voted on in a preference poll with a single axis or limited group of choices like the Gallup poll in immigration above, then there would be no reason to join parties. Alas, politics, just like economics, is about making the most of limited resources and weighing the costs over the benefits in an infinite round of trade-offs.

Reference List:
1. Posted By Ian SchwartzOn Date June 16, 2015. Trump: Mexico Not Sending Us Their Best; Criminals, Drug Dealers And Rapists Are Crossing Border. Video | RealClearPolitics. Accessed December 10, 2017.
2. Butler, Eamonn. Public choice - a primer. The Institute of Economic Affairs, 2013:21-24.
3. Butler, Eamonn. Public choice - a primer. The Institute of Economic Affairs, 2013:40-44.
4. Munger MC, Munger KM. Choosing in groups: analytical politics revisited. New York: Cambridge University Press; 2015: 88-92.
5. Butler, Eamonn. Public choice - a primer. The Institute of Economic Affairs, 2013:88-93.
6. Butler, Eamonn. Public choice - a primer. The Institute of Economic Affairs, 2013:30-32.
7. Butler, Eamonn. Public choice - a primer. The Institute of Economic Affairs, 2013: 32.
8. Arnold L. Kenneth Arrow, Youngest to Win Nobel for Economics, Dies at 95. Published February 21, 2017. Accessed December 10, 2017.
9. Butler, Eamonn. Public choice - a primer. The Institute of Economic Affairs, 2013:32.
10. Butler, Eamonn. Public choice - a primer. The Institute of Economic Affairs, 2013:33.
11. Butler, Eamonn. Public choice - a primer. The Institute of Economic Affairs, 2013:114.
13. Staff. U.S. Immigration Before 1965. Published 2009. Accessed December 10, 2017.
14. Staff. U.S. Immigration Before 1965. Published 2009. Accessed December 10, 2017.
15. the CAP Immigration Team and Michael D. Nicholson. The Facts on Immigration Today: 2017 Edition. Center for American Progress. Accessed December 10, 2017.
16. the CAP Immigration Team and Michael D. Nicholson. The Facts on Immigration Today: 2017 Edition. Center for American Progress. Accessed December 10, 2017.
17.  Johnson J, Sullivan S. From 'build that wall' to kick the can: Trump's border promise might be hard to break. The Washington Post. Published April 26, 2017. Accessed December 10, 2017.
18. the CAP Immigration Team and Michael D. Nicholson. The Facts on Immigration Today: 2017 Edition. Center for American Progress. Accessed December 10, 2017.
19. Gallup I. Overall U.S. Desire to Decrease Immigration Unchanged in 2017. Published June 27, 2017. Accessed December 10, 2017.
20. Gallup I. Overall U.S. Desire to Decrease Immigration Unchanged in 2017. Published June 27, 2017. Accessed December 10, 2017.
21. Gallup I. Overall U.S. Desire to Decrease Immigration Unchanged in 2017. Published June 27, 2017. Accessed December 10, 2017.
22. The Constitution of the United States: A Transcription. National Archives and Records Administration. Accessed December 10, 2017.
23. The Constitution: Amendments 11-27. National Archives and Records Administration. Accessed December 10, 2017.
24. Ginsburg T. Public Choice and Constitutional Design. Research Handbook on Public Choice and Public Law. doi:10.4337/9781849804899.00016.

Heroes for a New Age: On "The 'S' Word" by John Nichols

When I was in college, a friend let me borrow a copy of Zinn’s people’s history. In those pages I learned about Columbus treating the Arawak Indians worse than his dogs, but I also learned hope in the words of Eugene Debs and the millions that voted for him over several years.

It was part of history that just wasn’t part of the history they teach, the gloss over where in high school I wrote dates of things in my notebooks from sheets on the wall, or projections on the overhead. There was less about history as a dynamic process but a procession of dates that led to the end of history about 1993. Of course, I graduated high school in 2000 so there was triumphalism – the only global conflicts were based on figuring how to break apart the Soviet Bloc.

There is another history, and they have been deliberately forgotten from the pages of the history books that we use to teach the kids in school. Books like Zinn’s and Nichols’ are remedies for the History of the Victors. This book is for all the kids who look around and see injustice and inequality and ask what they can do to make it better. This book gives heroes that you may have read about on one line of text. Or you may even have spent a week with Tom Paine’s “Common Sense” in school, but you never knew he was a true revolutionary and his influence has ebbed and flowed, waxed and waned, and been misappropriated by those who want to grab his name and hide behind it. This book also gives you new heroes Like Victor Berger standing up for real free speech in times of fear when dissent was punishable by imprisonment. It also shines new light on heroes like Lincoln, and we can trace how his party went from a radical party of the people to receding to being a party of the powerful.

The only real drawback is that the book feels as if it was written for a time of socialism in ascendancy – Bernie Sanders gets positive notice here, but it predates the 2016 election and Bernie’s ultimately unsuccessful run for the presidency and Trump’s eventual election. This puts the movement on a different, more defensive footing reacting to the whims of the Tweeter-in-Chief. No matter. For every dusk there is dawn. We can look for hope in the rise of the DSA and leftists in real opposition and not quited by uncomfortable support of the capitalist party that is closer to the ideals of the left.