I’ve been enjoying Tim Lee’s post on international apartheid and mostly pro-apartheid and weak responses and am happy to see that the Free Exchange post cited by Lee calls ending international apartheid “perhaps the biggest and most controversial idea in development circles.”
The most interesting, anti-apartheid, and strong response came from Kerry Howley in Reason, throwing throwing cold water on the idea that the option to leave is bad for poor areas:
Health care workers who immigrate to the United States may never have acquired those skills were immigration not an option.
Exactly. As I’m fond of saying, brain drain means increased returns to education.
Howley’s post makes another nice analogy:
Applied domestically, the alternate policy would be rather like forcing people to stay in undeveloped inner city ghettos. It would mean telling the children of poor parents that they could never leave the economically backward neighborhood they happened to be born in, even if that neighborhood offered no education or employment opportunities. It would entail prohibiting suburbanites from inviting inner city residents onto their property to perform an economic service.
However, my favorite recent post on this subject falls outside the above conversation — Nathan Smith on The Hawley-Smoot Border Policy:
One factor in the downturn has been little noted: immigration. The Feds have, alas, been getting nasty lately, sending out letters to employers warning them about “no match” Social Security numbers. That started in August. Lower immigration expectations naturally reduce house prices, since part of the price of a house comes from capitalized expectations of its future value, which is a function of demand, which is a function of, among other things, immigration. Rising house prices have done much to sustain the boom in recent years, as people’s rising net worth has spurred them to spend. Current house prices probably reflect the market pricing in immigration expectations. In that sense it could be justified; but an immigration crackdown could turn it into a bubble and deflate it. Falling net worth could create more credit crises, and would surely reduce spending.
Now, there’s a certain justice in people who agitated for deportation seeing their home prices collapse, or — still better — for getting evicted. What they have desired to do to others has been done to them. But here’s the problem: lots of people who are innocent of animosity against immigrants are being punished too. That’s the problem with big government programs: we’re all in the same boat, and wise dissenters have to pay for the stupidity and wickedness of others.
The general economic disruption caused by apartheid enforcement goes well beyond housing, even ignoring (as usual) the direct and tragic loss of utility suffered by enforcement targets.
