7.5.17

THE ETHICS OF MARSHALLIAN IMPROVEMENTS.

Welfare economics is relatively easy when we're discussing a Pareto improvement, with the greatest challenge arising when the new allocation makes the best-off people better off, and that becomes something to analyze as an ethical proposition.

But many economic changes are Marshallian improvements.  A William and Mary philosopher (via Daily Nous) contemplates the ethics of immigration.
For example, suppose it turns out to be the case that, as some economists predict, if we increase immigration to a large degree, certain lower-skilled American workers will see their wages drop. But it could also be the case that the immigrants who come to work in the United States will see their incomes double, triple, quadruple and so forth.

Economists, sociologists, political scientists can’t tell us what the right way to make that tradeoff is. Can we accept, morally speaking, say a five percent drop in the wages of some American workers in exchange for a 400 percent gain in the incomes of immigrant workers? That’s a question for philosophy. That’s a question for ethics.
Let's bring some new perspectives into Hicks-Kaldor compensation, for starters.
Similarly, even if you believe that the United States government has special obligations to native born workers, I think the gains to the world’s poor by being allowed to immigrate to the United States are so great that they outweigh whatever losses are suffered by American workers. And I also think that there are better ways of addressing those losses than restricting immigration. For instance, if the worry is that some American workers will see their wages drop or lose their jobs, the solution is not to block immigrants from coming into the American labor market. It’s to address the problem directly, maybe offer the workers wage subsidies, unemployment benefits and so forth.
The kicker, though, is in the final sentence.
For one, increased immigration tends to be good for the economic well-being of Americans. It makes us richer.

Second, immigration restrictions infringe on the freedom of native-born Americans in important ways. Suppose I have a friend who lives in a foreign country, and I want them to come live with me in Virginia. Immigration restrictions prevent me from doing that. So immigration restrictions not only restrict the liberties of immigrants, they restrict the liberties of Americans as well.
That last is a normative proposition, but it is a normative proposition in favor of individual agency rather than collective conformity.

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