Milton Friedman’s Argument for Illegal Immigration

by Will Wilkinson on June 11, 2008

Yesterday at Hit & Run, Kerry Howley put up a brilliant post on Milton Friedman’s most misused utterance (riffing off Bryan Caplan’s also outstanding post) which I thought was more or less dispositive.

But in the comments, MikeP (this man needs his own blog, if he doesn’t have one) points to this immensely useful post containing a partial transcript of a much more considered and representative discussion of immigration by Friedman from a lecture titled “What Is America.” It really puts the wall-builders’ favorite Friedman quotation in its proper context.

You had a flood of immigrants, millions of them, coming to this country. What brought them here? It was the hope for a better life for them and their children. And, in the main, they succeeded. It is hard to find any century in history, in which so large a number of people experience so great an improvement in the conditions of their life, in the opportunities open to them, as in the period of the 19th and early 20th century.

[...]

You will find that hardly a soul who will say that it was a bad thing. Almost everybody will say it was a good thing. ‘But what about today? Do you think we should have free immigration?’ ‘Oh, no,’ they’ll say, ‘We couldn’t possibly have free immigration today. Why, that would flood us with immigrants from India, and God knows where. We’d be driven down to a bare subsistence level.’”

“What’s the difference? How can people be so inconsistent? Why is it that free immigration was a good thing before 1914 and free immigration is a bad thing today? Well, there is a sense in which that answer is right. There’s a sense in which free immigration, in the same sense as we had it before 1914 is not possible today. Why not? “

Because it is one thing to have free immigration to jobs. It is another thing to have free immigration to welfare. And you cannot have both. If you have a welfare state, if you have a state in which every resident is promised a certain minimal level of income, or a minimum level of subsistence, regardless of whether he works or not, produces it or not. Then it really is an impossible thing.

Look, for example, at the obvious, immediate, practical example of illegal Mexican immigration. Now, that Mexican immigration, over the border, is a good thing. It’s a good thing for the illegal immigrants. It’s a good thing for the United States. It’s a good thing for the citizens of the country. But, it’s only good so long as its illegal.

That’s an interesting paradox to think about. Make it legal and it’s no good. Why? Because as long as it’s illegal the people who come in do not qualify for welfare, they don’t qualify for social security, they don’t qualify for the other myriad of benefits that we pour out from our left pocket to our right pocket. So long as they don’t qualify they migrate to jobs. They take jobs that most residents of this country are unwilling to take. They provide employers with the kind of workers that they cannot get. They’re hard workers, they’re good workers, and they are clearly better off.

Friedman’s point about free immigration and the welfare state, then, was simply that if the U.S. is going to offer welfare payments to anybody who legally migrates, then we’re going to have to put a limit on legal migration. But because free migration is such an unmitigated good, limits on legal migration make both the immigrants and the natives worse off. So, illegal migration, which severs the fact of residency from welfare eligibility, is therefore desirable in the context of a regime that guarantees welfare eligibility to all legal residents.

Friedman’s considered view is that free migration without a welfare state is first best. Welfare for all legal residents makes first-best free migration impossible. In that case, a high rate of illegal immigration is the second-best solution.

Now, Friedman’s discussion would have been much clearer had he recognized the logical and practical possibility of severing legal residency from welfare eligibility. It need not be the case that all legal residents are made eligible for welfare. Indeed, there are many actual effective restrictions on welfare eligibility based on legal immigration status. In the 1999 ISIL interview, Friedman says of this possibility: “I don’t think that it is desirable to have two classes of citizens in a society.” And then he admits that he had never thought about it before. Well, if he had, he would have grasped that illegal immigration — which, remember, he thinks is pretty great — ensures a very stark separation of classes. Because tight immigration restrictions hinder pareto-improving mobility, create underground economies that encourage corruption and abuse, and do much more to create invidious structural inequalities than would a formalized guest worker system, Friedman’s own logic clearly leads toward opening up labor markets while restricting welfare eligibility. It is no accident that Lant Pritchett, an economist very much in the Friedmanite mold, argues for precisely that.

But the important takeaway here is this: Friedman’s view is that a certain kind of unrestricted welfare state makes illegal immigration good, because it severs residency from welfare eligibility. Friedman is unequivocal about the desirability of free migration. Anyone really committed to Friedman’s stated view about welfare and immigration should by no means try to restrict immigration, but instead should try to enable illegal immigration. A devout Friedmanite should stand stoutly against every fence, every border cop, every increase in the INS budget, any proposed database check for a new workers’ legal status, etc. I think it makes more sense to argue first for a guest worker program. But if that is in fact impossible, then Friedman has it right: more illegal immigration is the best we can do.

  • http://www.peoplesrepublicof.com DWAnderson

    Re “A devout Friedmanite should stand stoutly against every fence, every border cop, every increase in the INS budget, any proposed database check for a new workers’ legal status, etc.”

    That might be true if the effects of those actions were limited to immigration. But the risk of encouraging a general disrespect for the law by such actions would not be trivial if such actions met with significant success. That would undermine one of the important institutions of a free society.

  • http://www.ssrn.com/author=410582 Matt

    Any decent guest-worker program will be better than illegal immigration (to the extent that the GW program largely replaces illegal immigration- if it's poorly enough made it will not.) But, there is something right in the idea that it's bad to have different castes of residents, especially when one group is a perpetual under-caste. For this reason a good guest-worker program will have to include some mixture of incentives for workers to return home and an eventual path to full membership for those who do not but who have contributed for a long enough period of time. I think such a thing is possible though of course it's at least in part an empirical question.

  • http://entitledtoanopinion.wordpress.com TGGP

    The problem is that the illegal immigrants will have children, who will in turn be legal residents entitled to welfare. Also, California tried to exclude illegal immigrants form welfare benefits and the Supreme Court ruled that unconstitutional. One of the events that distanced Rothbard from Cato was that the latter opposed the referendum that tried to do just that.

  • http://willwilkinson.net/flybottle Will Wilkinson

    TGGP, What are you talking about? The 1996 Welfare Reform Act basically barred most noncitizens from most welfare programs. Here's an account:

    Prior to 1996, legal permanent residents (LPRs) were generally eligible for federal benefits on the same basis as US citizens. States were not permitted to restrict access to federal programs on the basis of citizenship status. However, the Act instituted several restrictions that served to fragment the eligibility of the immigrant population for public benefits. All citizens, including immigrants who had naturalized, retained eligibility for federally funded programs. Most noncitizens, however, including previously eligible legal immigrants who had not yet naturalized, became ineligible under the new rules.

    With the exception of refugees and asylees, LPRs with 40 quarters of work, and those in the military, all noncitizens were barred from participation in most of the major means-tested federal benefit programs for which eligibility was based on need: TANF, food stamps, Supplemental Security Income (SSI), and Medicaid. For the TANF and Medicaid programs, states were given the option to use federal funds to serve immigrants who had arrived before the Act took effect.

    However, immigrants who entered the US after the 1996 Act was signed into law were made ineligible for any assistance using federal funding for their first five years of residence — a situation that remains today except for a restoration of food stamps to the children of legal immigrants regardless of date of entry.

    And birthright citizenship can be taken away just like that, too. If it would enable acceptance of a big guest worker population, I would favor a law that would only grant citizenship starting with children born in the U.S. of children of immigrants born in the U.S. That would help reinforce circular migration, I'd think.

    I don't know anything about Cato, Rothbard and the referendum you mention. Gotta link?

    Anyway, if you're right that limiting welfare to citizens is infeasible, then I'm with Friedman in thinking illegal immigration better than nothing. It's a great reason to be against e-verify, etc .

  • http://www.ssrn.com/author=410582 Matt

    Will- what do you mean when you say, “And birthright citizenship can be taken away just like that, too”? If this is a claim about whether congress could take away birthright citizenship in a way similar to how the '96 law took away access to welfare benefits to some immigrants than this almost certainly isn't true since there's pretty good reason to think (it seems to be what the supreme court says, for example) that the 14th amendment establishes birthright citizenship and that this could not be eliminated via statute. If you mean a constitutional amendment could be passed, that's true in some sense but unlikely. (Proposals to change this have come up several times and gone absolutely nowhere, even at times of high anti-immigrant feeling.) Additionally, not granting birthright citizenship seems a pretty clear way to establish a perpetual underclass of the sort that's not likely to be acceptable on any liberal account. Even if you could argue that guestworkers bargain to have limited rights you can't say the same for their children. They, after all, enter society just as any of the rest of us do.

  • http://willwilkinson.net/flybottle Will Wilkinson

    Matt, You're right. It would probably take an amendment.

    Perpetual underclasses: You're making a common mistake, which is thinking that most immigrants want to stay here. There would be hugely more circular migration if migrants didn't have to worry about the militarized border. As it is, we just keep the underclass further under, in Mexico.

    But some people do come to stay, which is why I like the “Your grandkids can be citizens” rule.

  • http://www.ssrn.com/author=410582 Matt

    I'm not assuming that most immigrants want to stay here. (This is my main area of research and I know it fairly well.) Circular immigration is very common and often has been. (See Saskia Sassen's _Guests and Aliens_ for an excellent account of this.) But, some will stay and some of their children will stay. (This clearly happened in Germany, after all- it's not like people who say this are just making it up.) But the situation in Germany, where the children of guest-workers were born into the country, lived there, grew up there, and were in all important senses German but were unable to fully take part in society seems to me a pretty clearly unjust one and one that certainly cannot be justified on any plausible contractarian grounds. W/o birthright citizenship in some form that would happen here, too. You don't have to think “most” immigrants would stay to think that would be a moral disaster. (And of course if most don't stay then granting birthright citizenship isn't as costly as some might think, either.)

  • http://willwilkinson.net/flybottle Will Wilkinson

    Sorry. Shouldn't have assumed. Good points all, although I think “moral disaster” is way too strong. Not letting more immigrants in is the moral disaster, not intra-state cleavages in citizenship status. If the possible world in which Germans had had jus soli kept more Turks in Turkey, then the status quo is better.

    What do you think of 2nd Gen birthright idea?

  • dc wilk

    The problem with the welfare argument is that immigrants do get de-facto welfare through free healthcare via emergency room service. Also, isn’t it considered a type of subsidy, and hence welfare, if they don’t pay taxes?

  • shecky

    The benefits of illegal immigration are being increasingly documented, and the dangers have turned out to be overstated, often very much so. For a while now I've been an advocate of pretty much what we've been doing until very recently. Which would be mostly ignoring the “problem” of illegal immigration. Incarcerate and/or deport the troublemakers. Leave the rest alone. The reason I've advocated this idea is because it would be much preferred to any solution that has been proposed by actual politicians. It's realistic. And it is least invasive, and least costly. I realize the notion that the law be ignored for practical reasons seems to rub many folks the wrong way, but it's not without precedent. It seems a good solution until the issue can be dealt with in a rational manner.

  • http://www.ssrn.com/author=410582 Matt

    “What do you think of 2nd Gen birthright idea?”

    I don't see how it can be justified to categorically refuse citizenship to those born in the country because of who their parents are. (All sorts of small modifications can be made though they may be hard enough to administrate as to make them not worth it.) Children of immigrants enter society just as children of citizens do, it seems to me. Would you think it acceptable for the best off to negotiate with the worst off citizens now, to give them higher benefits in exchange for their children not being citizens and so not eligible for welfare benefits? What if we also cut a deal w/ Angola so that these non-citizens could go there if they wanted? I'd think that would be clearly unacceptable since parents cannot bargain away the rights of their children. But the children of immigrants are in the same situation. It would be small consolation for the children of immigrants that their grandchildren could be citizens.

    (The sorts of modifications we might try, if they didn't prove to be too expensive to administrate, would be things like the 'conditional' birthright citizenship found in Germany where those who have citizenship in another country via their parents must choose at 18 which they will keep, or a program where, if someone would also have citizenship in another country, she must 'avail' herself of the laws of the US for some time before turning 18 to retain citizenship. This would prevent citizenship from being granted to people who had no connection to the US except being born there, though it might be too costly in intrusiveness and investigation costs to enforce.)

  • Phil

    The population of the world has gone from 1.6 billion to 6.5 billion since 1914.
    Overpopulation, enegy shortages, pollution, running out of natural resources
    were not cosiderations in 1914.
    Economist only measure progress in by the size of the GDP and nothing else.
    Friedman was probably getting old and senile when he made the immigration comment.

  • JER MYNOR

    THERE ARE TWO SIDES OF EVERY STORY. IT SEEMS ON THIS PAGE THE MAJORITY SEEM TO THINK THAT ILLEGAL IMMIGRATION IS OK.

    HOWEVER, ON THE OTHER SIDE OF THE PAGE, YOU WILL FIND MANY STRONG POINTS THAT ILLEGAL IMMIGRATION IS TERRIBLE.

    THE MAIN REASON IS THAT ANYTIME A DEMOCRACY HAS THE FREEBIES, OR 'GIMME' ATTITUDE….IT IS SHOWN THAT IN THE YEARS BACK, THIS TYPE OF DEMOCRACY BECOMES DESTROYED IN AROUND 200-250 YEARS….

    AMERICA IS NOW IN ITS 232 YEAR, AND EVERY ONE THINKS PAYING FOR UNFORTUNATES IS MORALLY NICE, BUT IN REALITY ,IT IS SURE DEATH.

    THE ECONOMISTS AND HISTORIANS HAVE PROVEN THIS FACT VERY STRONGLY AND STATE THAT UNLESS AMERICA GETS ITS ILLEGAL PROBLEM HANDLED WITHIN 4 YEARS…THIS COUNTRY IS SERIOUSLY DOOMED.

    THIS NATION IS NOW OVER 9 TRILLION DOLLARS IN DEBT, BORROWING 866 BILLION FROM ONE OF OUR FRIENDS(?) CHINA TO STAY AFLOAT…..
    ADDING MORE TO THE WELFARE ROLES, OR THOSE UNDER OUR OWN POVERTY LEVEL, AND THE AMERICAN TAXPAYER IS AT ITS END WITH HIGH GAS PRICES,HOUSING LOSSES, OUTSOUCING JOBS TO OTHER COUNTRIES, AMERICA IS AN INCH SHORT OF TOTAL BANKRUPTCY……

    AND IN A SHORT 4 YEARS , BRINGS US CLOSER TO THE HISTORIANS WARNING THAT DEMOCRACIES ONLY LAST FOR A CERTAIN LENGTH OF YEARS, AND THEN CRASH AND BURN…..

    I FAVOR RETURNING ALL ILLEGALS OUT OF THE COUNTRY, ( IT REALLY CAN BE DONE ) AND RESUME IMMIGRATION AS IT WAS CONTROLLED BEFORE WE WERE INVADED BY THESE ILLEGALS AS WAS ROME….!!!

  • mghertner

    Painful to read.

  • Greg N.

    I have a sinking feeling that a hell of a lot more people think the way “Jer” does, and not the way Milton Friedman did.

  • http://finn.beststoriessite.com/socialsecuritylimit.html social security limit

    [...] most misused utterance riffing off Bryan Caplan??s also outstanding post which I thought washttp://www.willwilkinson.net/flybottle/2008/06/11/milton-friedmans-argument-for-illegal-immigration/Social Security urging use of debit cards The News JournalFor millions of Americans, accessing their [...]

  • http://lanekenworthy.net/2008/06/30/links-june-2008/ Links: June 2008 « Consider the Evidence

    [...] Milton Friedman’s argument for illegal immigration, by Will Wilkinson [...]

  • ignacio pijije

    Why don't discourage immigrants' reproduction, as it was done with slaves? The cost of reproduction is much greater than bringing new young, healthy, ready-to-work immigrants. In fact, illegality, by restricting welfare to immigrants does just that: makes it more difficult for immigrants to reproduce. I think it is a wonderful idea, encouraging illegal immigration. It just honors Friedman's legacy.

  • http://clubtroppo.com.au/2008/06/12/missing-link-daily-82/ Club Troppo » Missing Link Daily

    [...] Wilkinson plays the Milton Friedman card in arguing for a more open US immigration policy (sans social welfare entitlements – he must have been taking notes from John Howard’s wildly [...]

  • http://clubtroppo.com.au/2008/07/20/the-rise-of-welfare-feudalism/ Club Troppo » The rise of welfare feudalism?

    [...] Will’s solution to is to allow foreign workers access to the labour market, but deny them access to welfare entitlements. And if that isn’t possible, then he argues that the next best solution is to promote illegal immigration. [...]

  • ida b

    what i don't like about the illegals the women have babies to get benefits here and they gey benefits they would not be here if they wasn't getting government help they gets welfare and social security, while many american citizens names are put on backlog list who apply for social security,and ssi benefits i am one of those person who social security and medicaid are not helping yet they won't hestiate to give big fat checks to the illegals they gets foodstamps, wic, medicaid, free housing, and schooling and this is wrong.

  • Greg N.

    Oh, Ida. You are a gift that, hopefully, keeps on giving.

  • Shannon

    Will, this is an interesting article. I would be curious to know how you would define a Guest Worker Program.

    Almost all proposals for Guest Worker Program that I have seen do not allow free and competitive markets with respect to labor (by contrast free labor markets do exist with respect to the illegal immigrants). In other words, all of the proposals for such programs have details about length of stay, wages, taxation, etc. Some have even insisted that an immigrant under a Guest Worker Program would have to be paid the same as a legal American citizen. With such restrictions the employer no longer has the same incentive to hire the immigrant. So it is still the case that the employer and worker are better off operating outside of the legal framework. Another downside to a GWP is that a bureaucracy will have to be created to administer it.

    I wonder if we are just better off just ignoring the problem of immigration for jobs so long as we have a welfare state.

  • andrew

    what many forget about 'illegal immigrants' is that prior to the tightening of immigration quotas most of the 'illegals' were coming to america legally yearly as seasonal workers and so on. has it ever occurred to the 'anti-immigration' folk that perhaps something being a law doesn't make it right? perhaps the immigration laws are unjust or illegitimate, as friedman would view the laws that established the federal reserve as unjust and illegitimate. please, think outside the narrow confines of your prejudices, and be consistent! if you're for free markets you can't be for it only in some cases, but all. otherwise, you're just a hypocrite.

  • DWAnderson

    Gee, I'll try to think outside the narrow confines of my prejudices! Obviously the some unjust laws aren't worth of respect, just because they are laws. Perhaps less obviously (to you) some unjust laws are not SO unjust that they merit disobedience.

  • http://www.club-penguin.org/ Club Penguin Cheats

    There is something right in the idea that it's bad to have different castes of residents, especially when one group is a perpetual under-caste. For this reason a good guest-worker program will have to include some mixture of incentives for workers to return home and an eventual path to full membership for those who do not but who have contributed for a long enough period of time.

  • http://www.city-data.com/forum/illegal-immigration/832585-positive-illegal-immigration-articles.html#post11887254 Positive Illegal Immigration Articles – City-Data Forum

    [...] | Chron.com – Houston Chronicle The Daily Cougar – Illegal immigrants good for US economy Milton Friedman’s Argument for Illegal Immigration Benefits of Illegal Immigration Offset Costs on the U.S. Economy – Associated Content – [...]

  • http://spiritofmoderation.com/2010/05/23/the-pyramid-of-misrule-and-the-still-under-appreciated-beauty-of-the-exit-option/ The pyramid of misrule and the (still under-appreciated) beauty of the exit option « The Spirit of Moderation

    [...] result, I am very, very sympathetic to the ideas of Paul Romer, Patri Friedman, Lant Pritchett, and others who think the most important thing we can do to improve human well-being in the immediate future is [...]

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