Outside of the executive suite, most positions within a company are fairly easy to fill. Filling engineering positions are difficult because not only does the person have to have the right technical chops, but he/she must also be a good fit for the organization. This is why engineers make more than finance, sales (excluding B2B field account executives), marketing, and operations.
If VCs and companies could flood the market with engineers, regardless where they are from, it would make hiring one much more cost effective. In medicine and law, there are barriers to entry to prevent this type of flooding to occur (i.e. education, licensing exams). This keeps wages at decently high level for those participating.
My suggestion for engineers is to quietly and deliberately create barriers to entry. You could leverage licensing exams, college degrees, and even citizenship requirements. Otherwise, within 10 years, you will find it a significantly different employment environment.
His second argument is that if the US won't let in great programmers from around the world, some other place will, and the US will lose its tech lead.
His 3rd argument is that imported programmers have higher than average costs.
I fail to see any of these arguments reasonably answered in this article.
This is how it works now (except for H1B).
What PG suggests is that in this situation, the benefits should accrue to the investors in the other companies - which just serves to concentrate wealth.
He's concerned HE and HIS industry will lose their tech lead because some superstar programmers end up getting paid millions a year (like top bankers) and become independently wealthy without bringing PG et al along for the ride.
Re argument #2 who cares what country "leads the world"? I don't want to see individual programmers taken advantage of at the expense of VCs (or other groups) and told "but its for the greater good of the country"
Re argument #3 they don't have average higher costs -> see many articles on h1-b abuse http://www.businessweek.com/stories/2008-10-08/high-rate-of-...
The author, Larry Salibra, does not imagine what the US stands to lose, he goes on talking about equal rights, citing lawyers. Yet who wants to hire experts in a foreign legal system? Very few. Likewise doctors do not form thriving multinationals worth trillions to the US. And construction workers do not show the differences in value programmers do. All his examples are flawed.
So Larry Salibra is a dangerous fool who thinks Paul Graham can't think straight. He'll gladly walk the US to its doom.
I've never had anyone before suggest I have the power to walk the United States to its doom. I am both humbled and honored! Thank you!
BTW... don't you think the "doom" thing is a bit over the top? I certainly do.