
Sitting on an Ocean of Talent - humbertomn
http://econlog.econlib.org/archives/2014/01/sitting_on_an_o.html
======
danblick
Caplan is making the argument that opening borders would bring huge economic
benefits.

In addition to the economic argument, I think there is a compelling moral
argument to opening borders. Why should we deny equal rights (the right to
work or move freely) to human beings based on their national origin?

If someone today told you the Jim Crow laws were _economically_ justified in
modern America - "we can't allow desegregation, blacks will compete with
whites for jobs" \- you'd see them as a disgusting, backwards racist. And yet
in the US, foreign nationals are denied basic rights that US citizens take for
granted. Does anyone believe these laws are actually just, or do we just
support unjust laws we (mistakenly) think are to our economic advantage?

~~~
jupiter90000
One thing that bothers me somewhat about immigration discussions on HN is that
the US always seems to be mentioned as unjust in terms of immigration policy
and rights of foreigners. However, I'm pretty sure there are plenty of other
'advanced' countries that have similar or worse policies (Japan comes to
mind). So the question I end up wondering about is, why do countries practice
this kind of stuff? It seems so odd to me that happening to be born somewhere
is a meaningful qualifier for anything.

~~~
dropit_sphere
It fulfills a social contract: the service you provide by being born is
carrying your parents' genes. There is a three-way transaction between
citizen, child, and state. This is a boon; it allows social contracts with
long time horizons to be made. Take away preference for native-born citizens
over foreigners, and you remove the incentive for citizens to leave a country
better than they found it. This is not an absolute---limited naturalization,
like we have, has not caused the world to fall down. But there is an effect.

~~~
jupiter90000
I hear what you're saying and it makes sense. What would prevent such
contracts from being a boon if we were all in one 'country'(the world),
though? Is it to hold onto something deemed of value that some may consider
arbitrary (speaking a particular language, celebrating certain holidays)?
Perhaps some of the values held in certain countries are the things folks want
to hold on to (personal liberty vs group cohesion, gun rights, etc). We humans
are sure interesting.

------
golergka
I'm buffled. On one hand, HN users love to upvote articles about how evil
companies in US lay off local workers for bogus reasons only to replace them
with "cheap labour" through H1Bs and outsourcing. On the other hand, this.

Dear average HN reader — I assume you're a software developer in US and often
from Bay area. You realize that after this happens, your wage will reduce, may
be twofold, right?

~~~
StudyAnimal
I am a software development manager from Europe. Right now we have to turn
down projects because we don't have enough people. If we have more people we
can start more projects and make more money. My wages will go up as I will
have a larger team to manage. The developers in the team already will get more
seniority as people come in from overseas "below" most of them. Their wages
might go up. Some of them that might not perform as well as the new arrivals
might get paid less. Overall, the market might not be as flexible as the labor
supply, so we might a reduction in wages over the mid term. This would be a
correction in my eyes. I think western workers are overpaid and third world
workers are underpaid, so it seems fair to see a natural adjustment here.

~~~
learc83
> Overall, the market might not be as flexible as the labor supply, so we
> might a reduction in wages over the mid term.

If you allow unlimited immigration, you will be flooded with _millions_ of
programmers. There will be a tremendous reduction in wages.

>My wages will go up as I will have a larger team to manage.

Why do you think you'll still have a job, surely in the millions of people who
are clamoring to come to your country there will be many who are willing to do
your job much cheaper. Managers aren't immune to competition.

>I think western workers are overpaid and third world workers are underpaid,
so it seems fair to see a natural adjustment here.

Do you think you are overpaid, or just the people working below you?

~~~
StudyAnimal
Those "millions" of programmers had work in their own countries I presume.
Long before a small fraction of these "millions" get around to leaving and
moving to the west, the market would have stabilized a bit. Wages would raise
there as the supply drops below demand. Eventually we will see "millions" of
western developers taking a small paycut to move to Romania or Maruitius or
wherever for lifestyle reasons. I hope someone will come here to replace my
job for much cheaper, I am sick of it. It would take them a while to train up
though, and by the time they are ready to take over, I will be ready to move
on to something else. All these new programmers will need someone to support,
train, manage, lead, and coordinate them.

Yes I am overpaid on a global scale. Underpaid on a local scale heh. Now what
we need is millions of people here earning less than me.. That should put
prices down...

~~~
learc83
>Those "millions" of programmers had work in their own countries I presume.
Long before a small fraction of these "millions" get around to leaving and
moving to the west, the market would have stabilized a bit.

There was a poll recently that estimated about 30 million people from India
and China alone want to move to the US permanently (the number of people
willing to relocate temporarily is much higher).

Even with depressed wages, developed countries have many quality of life
benefits that will immediately attract many more people than you seem to
think. Yes millions may be a bit hyperbolic for your own country, but for US
that's likely accurate.

>Wages would raise there as the supply drops below demand.

Wages would likely not rise there because a huge fraction of software created
in developing countries is done as outsourced work from developed countries.
The demand for offshore work will dry up as wages drop in developed countries.
That will encourage even more workers to immigrate to developed countries.

>Long before a small fraction of these "millions" get around to leaving and
moving to the west, the market would have stabilized a bit.

You have no evidence for this. It's just wishful thinking.

>Eventually we will see "millions" of western developers taking a small paycut
to move to Romania or Maruitius or wherever for lifestyle reasons.

How long is eventually? There's no way to know, it could be decades before
labor markets stabilize.

>I hope someone will come here to replace my job for much cheaper, I am sick
of it.

That makes no sense. Why don't you just quit?

~~~
ricksplat
Point-by-point responses "in-line" is just just the type of engagement I'd
expect from a "business" type.

It's a style of small-minded nit-picking that shows a desire to defeat a
conflicting point of view at all cost, by pulling at threads, without really
engaging in the debate at hand.

It is quite a lot of effort to reassemble any relevant points and so to
respond in less disrespectful fashion.

I won't be doing that, but I will respond on your single position that the
parent post has "no evidence" for their postulation, and that it's "just
wishful thinking". TFA was entirely in such a vein (a fanciful pipe dream),
and your arguments in support are but notional, based on a wished for outcome
that would suit yourself.

------
oh_sigh
Open borders are scary probably because the upside is relatively limited for
rich countries, because we are already rich. We can either make ourselves a
little richer, or on the downside we can make ourselves _a lot_ poorer, by
becoming overcrowded with worldwide economic refugees.

~~~
humbertomn
It's a complicated topic but there were real world "experiments": In 2004 in
Europe:

"By allowing anyone in the eight relatively poor new members of the EU to come
and work freely, Britain, Ireland and Sweden are putting these claims to the
test. All seventy-five million people in Poland, Hungary, the Czech Republic,
Slovakia, Slovenia, Estonia, Latvia and Lithuania are now free to move to
Britain and work. Since wages in Poland are typically only a fifth of those in
Britain, Poles have a big incentive to come and work here. If opponents of
immigration are right, Britain should now be deluged with East Europeans and
unemployment should be soaring.... But it isn’t. In fact, only 427,000 East
Europeans have so far applied to work in Britain (many of whom were already in
the country illegally) – and most stay only briefly: net migration from
eastern Europe was only 48,000 in 2004.5 Unemployment remains at thirty-year
lows, tax receipts are up and jobs that British people no longer want to do
are being filled."

\-- Philippe Legrain

~~~
mahyarm
There is also a the income : cost of living balance and barriers of language &
culture.

Another thing I wonder if they can take advantage of welfare? Can a polish
person get UK welfare and NHS services indefinitely if they just move there?

~~~
kspaans
As a Canadian living in the UK on a temporary work visa I get to vote (LOL THE
QUEEN IS ON THE LOONIE), and am served by the NHS for emergency stuff but my
visa says "no recourse to public funds" which I'm pretty sure means I don't
get things like disability benefit.

Pensions on the other hand, I'm not sure about. I'm getting tax relief for my
pension contributions, but maybe there will be a withholding tax if I leave
without naturalising.

~~~
falsestprophet
European Union citizens who are habitually resident in another EU country are
entitled to receive welfare benefits. (The current UK government wants to
renegotiate this arrangement.)

------
learc83
We have no way of knowing what impact completely open borders would have on
global GDP, so to throw around predictions like doubling global GDP is just
ridiculous. Economies are complex systems and moving around tens to hundreds
of millions of people is such a massive change that you can't possibly
accurately model what would happen. I doubt the economies of developed
countries would react positively to an influx of tens of millions of people.

But the people advocating this usually aren't advocating for truly open
borders, they are usually advocating for more IT workers, so they can reduce
the costs to their companies.

Let's imagine for a moment what would happen if we allowed just the small
subset of unlimited immigration that people are really pushing for--an
unlimited number of immigrants who have CS degrees. What do you think would
happen to programmer salaries when 10 million new programmers arrive next
year?

~~~
DVassallo
> We have no way of knowing what impact completely open borders would have on
> global GDP

The impact on developed countries from the enlargement of the EU is probably
the best "open borders" experiment we can look at:

[https://en.wikipedia.org/wiki/2004_enlargement_of_the_Europe...](https://en.wikipedia.org/wiki/2004_enlargement_of_the_European_Union)

[https://en.wikipedia.org/wiki/Enlargement_of_the_European_Un...](https://en.wikipedia.org/wiki/Enlargement_of_the_European_Union)

~~~
falsestprophet
They're all European countries, which is not exactly a random selection of
countries.

edit:

European union countries share similar populations both culturally and
biologically.

If you moved the populations of Catalan, Cameroon, Kuwait, Cambodia, Korea and
Kiribati to the same geographic area, that would be a different experiment.

~~~
DVassallo
Yes they share the same continental plate. But:

"There is a significant variance for GDP (PPP) per capita within individual EU
states, these range from €11,300 to €69,800 (about US$15,700 to US$97,000).
The difference between the richest and poorest regions ranged, in 2009, from
27% of the EU27 average in the region of Severozapaden in Bulgaria, to 332% of
the average in Inner London in the United Kingdom. On the high end, Inner
London has €78,000 PPP per capita, Luxembourg €62,500, and Bruxelles-Cap
€52,500, while the poorest regions, are Severozapaden with €6,400 PPP per
capita, Nord-Est with €6,900 PPP per capita, Severen tsentralen with €6,900
and Yuzhen tsentralen with €7,200."

[https://en.wikipedia.org/wiki/European_Union#Economy](https://en.wikipedia.org/wiki/European_Union#Economy)

------
cb18
This whole article is so mindbogglingly dumb.

 _Under free migration, labor would relocate to more productive regions,
massively increasing total production._

He thinks it is a given that open borders would be overall beneficial, because
it would "massively increase total production."

So is he totally unaware that the basic commodity of human labor is rapidly
diminishing in value?

What massively increases total production, and what drives economic gains is
human creativity.

And for whatever reason, creativity, of the world changing sort is
concentrated in relatively small areas on the globe.

 _The knowledge that we 're sitting on an ocean of talent should haunt great
minds day and night._

What the hell? Where is the evidence of all this talent? Why would these magic
immigrants just start demonstrating this talent after they migrated? Why
aren't they demonstrating the talent in the countries they are currently in?

------
dropit_sphere
The author's main reply to standard immigration boogeymen are keyhole
solutions, which are admittedly a pretty cool idea. A keyhole solution is one
that tries to address the negatives of a policy _exactly_ , rather than
torpedo the entire policy because of a few problems. In the link from the
article, suggestions like: if worried about foreigners voting against the
interests of current citizens, don't allow foreigners to vote. If worried that
a specific market sector will be affected, compensate that sector. Basically:
pursue overall improvements, and compensate the losers or guard against
specific negatives.

This reminds me of a funny story. Bear with me.

My brother is about to graduate with a physics degree. In an interview with an
engineering firm, they asked, "You have a metal that expands/contracts with
heat according to such-and-such relationship. How do you keep a room at such-
and-such temperature?"

He answered, "Oh, just wire things up such that when the metal does blablabla,
it heats the room, and when it does the opposite, turn off the heat."

"Could you explain what you mean by "wire things up?""

"Oh, I don't know. That's an engineering problem."

My brother did not get hired, to everyone's (including his, ha) relief.

Keyhole solutions seem like bullseye-on-head clusterfucks of political
engineering. They are (by definition) complex and involve many interest
groups. Proponents (correctly, I think) point out that they are designed for
that environment, in that they may gain support from all parties, but for
different reasons. But is there any guarantee that the bill remains
integrated? What about a last minute addendum/removal of a clause? We can't
seem to stop SOPA and cousins; is anyone confident that the legislative
process is their friend?

I know, I know, it's a political engineering problem, not an economic one.
Hence the story about my brother. Sometimes you need an engineer.

~~~
cb18
_In the link from the article, suggestions like: if worried about foreigners
voting against the interests of current citizens, don 't allow foreigners to
vote._

Yeah, so just create a society with an underclass with no political power,
sounds like a great way to create a healthy thriving nation...

------
ap22213
Then why can't the talent be leveraged elsewhere? We all know that capital
moves around quite easily.

So, what makes some places more effective at turning talent into wealth than
others? Could be a lot of things, for sure. But, my guess is that it's mainly
'culture'. And, once all those new people come, that culture is no more.

~~~
kspaans
There could be other reasons too, like infrastructure. You probably can't
house a dev team in a small town far away from a major city where the internet
is slower. (To name just one type of infrastructure.)

Or perhaps it's human capital that can't be moved: customers and devs need to
be close, so putting the devs on a cheap tropical island with a good fibre
connection won't cut it.

~~~
knughit
Kansas City has gigabit, yet Silicon Valley still exists, so inter et
connectivity isn't the major factor.

------
falsestprophet
A more cautious approach would be to open boarders selectively to people who
have demonstrated whatever "talent" is deemed to be economically useful.

Of course, many wealthy countries do this already (including the United
States).

------
theoapps
First you need a government/organization that can scale. How much
poverty/discontent/violence exists in the US today? How much are you willing
to accept as a possible cost?

~~~
sanxiyn
Why? If poverty is a problem, do not allow immigration of poor people. It's
about flipping the default, not about getting rid of all restrictions.

------
chime
I liked the overall thesis but disagree with the example:

> Getting Leonium is a great benefit for mankind, period.

I don't think it is good for humans to live longer. Sure, I'd love it if 80yr
olds were as healthy as 50-60yr olds. But I don't want 150yr olds hanging
around in any capacity, especially not the ones who own and control 95% of the
wealth of the world.

"Science advances one funeral at a time." \- Max Planck.

I don't want 2100 to be run by people who believe things discredited or
refuted in 1950.

~~~
knughit
There must be ways to deal with people you don't like, without _killing_ them.

------
strictfp
Extended lifespan for sale would carry an onslought of moral and social
problems with it. And this is why it's actually a good analogy, but not for
the reasons the author brings up.

------
ricksplat
I'd be fairly certain that if a trillion dollars worth of _anything_ were
discovered beneath the Empire State building, much of Manhattan would be gone
overnight.

------
StudyAnimal
As someone who did the completely normal thing of leaving one country to go
work and live in another, I agree completely and can barely understand those
who do not.

------
EvanPlaice
"I suppose it is tempting, if the only tool you have is a hammer, to treat
everything as if it were a nail." \- Law of the Instrument

All Economists are universally indoctrinated into the same basic classical
theories of economics. Using inaccurate mathematical models and pseudo-math to
map the world as one big series of supply/demand curves.

What's worse. They delude themselves into believing there's a divergence of
thought by using Keynes vs Smith as counter-examples. There's no divergence,
both schools of thought are minor variations of the same basic fundamental
concepts. Economic theory is -- and has been -- stunted for decades by Ivory
Tower theorists who gave up on self-reflection decades ago.

Supply/demand do a decent job of mapping basic short-term fiscal trends at the
expense of evaluating the impact of long-term trends and/or secondary/tertiary
influences.

For example. If immigration limits were eliminated, logic dictates that high
skilled labor would migrate en masse to developing countries with a low cost
of living. ie maximize profit gains by reducing costs of living.

In reality high-skilled laborers act contrary to Econ theory. The vast
majority of individuals who earn enough to cover their costs + future savings
are more likely to migrate to western countries where they have a less
purchasing power.

Social stability and professional opportunity present a value that transcends
the assumptions of traditional Econ theory. It requires a long-term
sociological investment (ie measured in centuries) to stabilize a multi-
cultural society enough to break down the barriers of tribalism, xenophobia,
caste, prejudice, etc.

Economists love to argue that the US recovered from the Great Depression due
to the increase in industrialization following WWII. I'd argue that the US
became an international super power because of the massive number of high-
skilled exiles who migrated the US in search of safety/stability.

Decreasing the limits on immigration will only increase the 'brain drain' from
developing countries. Further stunting their growth and competitive standing
in the international community.

On the lower-skilled end of the spectrum, people who can't match the high
standard of intelligence/talent will be priced out. For instance, I currently
live in San Diego not far from the border with Mexico.

Most low-skilled Mexicans that move here either: permanently survive with a
lower standard of living (ie for at least a generation); live here temporarily
and send money back to their family in Mexico; or commute across the border
temporarily for work.

I have a lot of respect those who sacrifice to stay permanently. The rest live
a parasitic, transient existence. It's sad to see but I can't really blame
them. Mexico is an unsafe, destitute, overpopulated, shithole; run rampant
with corruption and extreme economic inequality. Given the choice, I'd
probably do the same.

Illegal immigration doesn't hurt the US. We receive an abundance of cheap
labor freeing up citizens to pursue higher-skilled professions or work in
privileged positions managing low-skilled laborers. It hurts Mexico because --
by subsidizing their failing socio-economic structure -- we're delaying the
inevitable watershed effect that would happen when a poverty-stricken populace
is absent any alternative.

Instead of addressing the corruption, restructuring the government, and
focusing on developing policies that lead to a more safe/stable society;
Mexico defaults to a public policy of blaming the US for all of their problems
while exporting their poorest/underprivileged underclass as cheap labor to the
US.

The most intelligent and/or hardest working of those stay in the US, raise
kids who are born naturalized citizens, receive a good education, rise above
low-skilled labor, and prosper bringing more long-term benefit to the US
overall.

The rest go as the wind blows. When the US economy contracts, opportunities
for low-skilled laborers (ie construction, landscaping, etc) are cut and they
immigrate back go Mexico.

The hidden impact from looser immigration laws is the potential for
overpopulation. It's no good for anybody when a populace increases in size
dramatically over a short period of time. Cultural stability depends on some
semblance of identity.

