From the Comments: who is the conservative or libertarian equivalent of Nancy MacLean?

Rick posed a great question about Nancy MacLean awhile back. I haven’t been neglecting it. I’ve been thinking about it. Here it is:

Question for those more abreast than me: do conservatives or libertarians have an equivalent of Nancy MacLean? All sides have irresponsible pseudo-scholars, but how often do the various camps launch one of them to undue prominence instead of just ignoring them?

Michelangelo suggests Murray Rothbard as one example, and I had that thought as well, but that’s almost too obvious, and he’s been dead for a long time now.

Libertarians today are pretty firmly divided by the cosmos and paleos, so undue prominence is hard to get. When was the last time you saw Jason Brennan or Bryan Caplan praising the work of Justin Raimondo or Lew Rockwell?

With that being said, I think libertarians nowadays tend to launch intellectual fads into undue prominence, rather than scholars. Stuff like Open Borders or signaling or my personal favorite, non-intervention in foreign policy, tend to hold a prominence in libertarian circles that I find ridiculous. If you don’t believe me, find your nearest Cato Institute scholar on Twitter and ask him (yes, him) if his pet policy project has any potential flaws in it…

Legal Immigration Into the United States (Part 6); Immigrants, Crime and Incarceration: Another Mostly Local Cost and a Causal Tangle.

There exists a widespread impression, deliberately fed by some conservative media and sometimes by President Trump himself, to the effect that illegal immigrants are especially prone to crime, and to violent crime. By extension, by illogical implication, immigrants in general are tarred with the same brush.

Immigrant crime agitates for different reasons that are not always disentangled from one another. First, there is the general social disorganization that any crime causes and the worsening of the quality of life it entails. Second, mostly youthful immigrants could have the power to reverse the general decline in crime that accompanies the aging of American society. They might be the agent of a step backward for American society. Third, capturing, trying, and incarcerating anyone is very expensive, more expensive than schooling, for example. Immigrant crime in general is especially apt to disturb emotionally because it seems to involve a kind of crass ungratefulness: I let you into my living room, or you enter while I am not paying attention, and you show your appreciation by stealing the silverware, and worse.

Belief in the criminality of immigrants as a group is not necessarily the result of a kind of emotional prejudice. Immigrants are predominantly young, ill-educated, and poor, all known ingredients of criminal propensity in any context. (To my surprise, current immigrants are not predominantly male, although maleness is a strong factor of criminality.) So, if immigrants to the US are like just about every population of the same age, income, and education ever studied, they should exhibit a higher crime rate than the native-born population that is, on the average, better educated, more prosperous, and, especially, considerably older.

It’s difficult to figure out the basic truths about immigration and crime because gross miscounting by partisan journalists is common. For instance, in his 2018 article in Reason on a report based on 2009 figures, Alex Nowrasteh shows how easy it is to make horrendous but simple mistakes of enumeration: Counting single events of incarceration as if they were individual immigrants, for example, as if illegal immigrants could not be repeat offenders. (“Restrictionists Are Misleading You About Immigrant Crime Rates.” Reason, Feb. 1, 2018.)

I explicitly do not accuse the authors cited below of such miscounting.

In his 2006 article in Liberty, Cox showed that about 2.6 % of inmates in federal prison and an astonishing 12% of people incarcerated in local jails and prisons were illegal immigrants in 2002. That’s 14.6% of all persons then incarcerated in the US. The highest estimate of the number of illegal aliens I could locate for any year is 15 million. With that estimate, conservatively, incarcerated illegal aliens would be about 5% of the then US population of 293 million. Roughly, illegal aliens, according to Cox, were thus incarcerated in 2002 at almost three times the rate of their occurrence in the general population. This rate did not include incarcerations for merely being illegally present in the US (which must have been a small number since that was only a misdemeanor). Cox’s study is based on figures for only one year for the whole country.

At any rate, Cox’s incarceration figures concern mostly illegal aliens. It’s not clear whether illegal immigrants’ propensity to commit crimes is similar to the corresponding propensity of legal immigrants, nor if their crimes are similar. Legal and illegals may come from different countries and regions. Even if they come from the same places, they may issue from different classes in their societies of origin. Even if from the same places and same classes, they may constitute different samples of the populations of origin from the standpoint of motivation and thus, of personal psychology. It takes different virtues to arrange for legal immigration via whatever path, on the one hand, and to swim the Rio Grande, or coolly to overstay one’s visa, on the other. These different virtues could easily be associated with different levels of different criminal tendencies. Finally, legal and illegal immigrants have different incentives to break the law or not, the latter being in a good position to not draw attention to themselves. That’s at least until the sanctuary movement.

A study published by the libertarian Cato Institute in February 2015 examined criminal conviction data provided by the Texas Department of Public Safety. It found that native-born residents were much more likely to be convicted of a crime than immigrants in the country either legally or illegally. For all crimes together, the legal immigrants’ score was less than one third that of the native-born. The difference in the likelihood of being convicted of homicide, specifically, was very large between legal immigrants and the native-born. The former were 15 times less likely to be convicted of homicide. Even illegal immigrants were only 70% as likely as the native born to be convicted of homicide. (“Two charts demolish the notion that immigrants here illegally commit more crime,” Christopher Ingraham, Washington Post on-line accessed circa June 28 2018.)

Note that the Cato Institute study is for one state only and for only one year. Cox’s figures cited above are also for one year only but for the whole country.

It’s not obvious how one should relate these contradictory sets of findings to one another. (There are many more such studies. I chose two researchers on my side of the political fence that seemed to me to have worked with seriousness.) First, figures about comparatively rare events such as homicide are notoriously unstable. The corresponding homicide figures for 2004 or for 2014 might be very different. Moreover, both sets of figures, Cox’s and Cato Institute’s use the heterogeneous categories “legal immigrants” and “illegal aliens.” To generalize from their findings requires making the silent assumption that the composition of both is stable from year to year. This assumption is unwarranted. Nothing regulates the composition of illegal immigration and little insures that the composition of legal immigration will be similar from year to year. The varying numbers of refugees alone could sway the legal figures one way or the other.

Here is a realistic scenario: For a period of a few years, both immigration flows consist mostly of rural, mountain Mexicans from rural areas where crime is scarce. In a subsequent and contiguous period, a large flood is added, through both refugee legal immigration and through illegal immigration, of urban Central Americans (thus, of people from some of the highest crime areas of the world). Both the frequency and the nature of immigrant crime may change swiftly as a result  of this sudden (and realistic) change in  the composition of immigration, legal or illegal, or both. The composition of legal immigration may change drastically in a single year because of the influx of refugees from a single location hitherto unrepresented in the US. The composition of illegal immigration may also change suddenly because of a disaster in a region that the American federal government does not recognize as a legitimate source of refugee status. It’s hazardous to extrapolate from one period to any other period. Hence both Cox’s and Cato Institute’s findings may be correct but, at the extreme, each of them for one year only.

It’s also risky to extrapolate from one domestic location, for example, Texas, to another, for example, the whole United States. Here is one reason among others why it is so: The (innocent) rural mountain Mexicans I mention above are likely to move to the Central Valley of California and to similarly agricultural areas in Florida. Crime-prone Central Americans, on the other hand, may seek their fortune in the more familiar big cities anywhere, including, Los Angeles, Chicago, and Houston. In this imaginary scenario, immigrant crime in Texas (Houston and Dallas, per chance) may be grossly unrepresentative of immigrant crime anywhere else in the US.

Finally, as Cox pointed out to me in a personal communication, the comparison category, “native-born” is itself heterogeneous with respect to crime. The rates for African-American  – most of whom are native-born – are several times as high as others’. Perhaps, the native-born would far better for incidence of crime if blacks were excluded from the comparison. I suspect this is true but I don’t know according to what theoretical principle, this exclusion should be made.

[Editor’s note: In case you missed it, here is Part 5]

Josh Barro and the Gold Standard

A few days ago, when it was announced that former Cato Institute president John Allison was under consideration for treasury secretary, Josh Barro of Business Insider dismissed the man as a “nutcase”. Why? Because Allison believes that the Federal Deposit Insurance Corporation (FDIC) generates a moral hazard that contributes to financial crises (a statement I agree with).

This slur irked one of the economists at Cato, George Selgin, who took to twitter to challenge Barro. In the exchange, at one point, Barro indicated that the desire of libertarians to return to the gold standard confirms the “nuttiness” of libertarians and the people at Cato.

And here, Barro allows me to make a comment on the gold standard. The sympathy towards the gold standard is not sympathy towards gold per se, but rather sympathy for reducing the capacity of governments to exercise discretion. Basically, each time you hear some academic economist mention the gold standard, what that economist means is rules-based monetary policy.

The gold standard era (1875-1914) was not an image of perfect monetary policy. It is not a lost paradise that we ought to strive to. However, the implicit rules imposed by the system did favor more stability that would have been the case with discretion during that era. In fact, the era of central banking with the Federal Reserve has not been that great relative to the gold standard era (and in the world of central banks, the Fed is pretty good). A lot of the scorn that the gold standard era has received had to do with regulatory policy towards banks (notably regarding restrictions on branch banking which forced more volatility) or with the role of changes in international demand for assets (see here). Thus, in spite of its many flaws, the gold standard was not that bad (but it was not* gold per se that was helpful – it was the shunning of discretion by governments).

To be sure, I do not favor a return to a gold standard era. What I do like, and what I think John Allison likes as well, is the return to rules-based monetary policy. Josh Barro should have been intellectually generous and understand this key distinction. By not making that distinction, of which he must be aware given his background, he debased the debate over monetary policy.

“Voice, Exit, and Liberty: The Effect of Emigration on Origin Country Institutions”

That’s the title of this short piece (pdf) by Michelangelo, which was just published by the Cato Institute. Michelangelo, by the way, just got his MA in economics and is now in a doctoral program at UC Riverside’s political science department. Get reaquainted with his bio.

Hopefully he has a little bit of time now to work on NOL‘s soon-to-be-world-famous foreign policy quiz…

A Quick PSA: Putting “boots on the ground” in Syria is still a dumb idea

Readers might be mistaken into thinking that I am some kind of statist or rabid interventionist because I often put forth arguments that are nowhere to be found at the Cato Institute or the Mises Institute when it comes to American foreign policy.

I have argued that the federation of countries would be a good idea. I have argued that multilateralism is of the utmost importance when it comes to solving problems. I have no problem using IGOs like the UN or the IMF to bolster diplomacy. I have entertained the notion that the US should take a back seat in hot spots in order to better bait autocratic states into committing blood and treasure to the said hot spot, and then unleashing hell. Sanctions are dumb and never work, but building closer trading ties with an adversary’s enemies is a underdeveloped path.

Statist AF, right?

Wrong!

I am trying to put forth alternatives to “boots on the ground.” I understand that military interventions are a bad thing. I don’t want “boots on the ground.” I understand that the costs far outweigh the benefits. I understand that war is the health of the state. What I don’t understand is how “doing nothing” is a libertarian position. Dogmatic slogans made us lazy a century ago. We lost our claim to the title “liberal” because of it. Dogmatic slogans made us lazy a century and a half ago, and we lost our claim to the title “internationalist” because of it. What will our laziness cost us today?

Boots on the ground? We should be so lucky.

Which countries are of US interest?

I was reading my news stream when I noted a blog post from the Cato Institute discussing the silliness of adding Montenegro to NATO. I don’t disagree per se. I certainly don’t see the value of adding Montenegro to NATO, if the purpose of NATO is to protect the US. Nor do I disagree with the general US-libertarian belief that the US has over extended itself in terms of military alliances.

I do wonder though what countries US-libertarians should desire to maintain a military alliance with. A North American military alliance, ranging from Canada to Panama and including the Caribbean, makes sense to me. The Atlantic and Pacific Oceans are our greatest defenses, but I welcome military cooperation from our geographical neighbors.

Beyond there though it gets tricky. Western Europe is certainly rich enough to protect itself. The main reason I am hesitant to leave NATO altogether is the nuclear question. France and the UK are the only European powers with nuclear weapons, but several others are part of NATO’s nuclear sharing program. Should the US leave NATO would these countries seek nuclear weapons for themselves? Would the UK/France provide substitute weapons? Ending military ties with Europe would likely be the easiest option in terms of cutting down on allies.

Japan and South Korea are likewise rich countries, but here too the nuclear question arises. Japan has a cultural aversion to nuclear weapons that I do not see it overcoming in the foreseeable future. South Korea may be willing to use nuclear weapons, but its strained historical relationship with Japan leaves me concerned about the future possibility of a Korean-Japanese alliance to counterweight China PRC. I believe that Japan should be encouraged to modify its constitution to allow its military greater freedom in action and to consider acquiring nuclear weapons of its own. Other nations in the region, such as the Philippines, are outmatched in conventional weaponry or, in the case of Australia, too far away geographically to be of much use in restraining China PRC’s influence in east Asia.

I am hopeful that within my lifetime China PRC will transition to a liberal democracy, but till then I am skeptical about allowing it free reign in east Asia. For the foreseeable future it is hard for me to consider an east Asia without a significant role for the US. Nor would I be particularly against offering South Korea and/or Japan statehood in a United States of the Pacific.

Thoughts? I admit that international politics is not my area of expertise and I more than welcome other’s thoughts on the matter. I also admit that I am not viewing these issues from a pure libertarian perspective but with a splash of nationalism.

As readers may know our own Brandon is playing around with creating a NOL foreign policy quiz similar to the Nolan libertarian quiz.

How does emigration impact institutions?

Hello everyone. As usual I’ve come to ask for feedback on my latest research. I can’t emphasize enough how much it helps to blog it out, if only because it forces me to sit down and try to summarize things in a few hundred words.

My current research is looking at the effect emigration has, if any, on institutions. Institutions come in various forms. The state is an institution, but family, religion, and even organized crime are too. Broadly speaking institutions are those rules that govern society, both formal and informal. Institutions have increasingly been acknowledged as being one of the key (if not the key) determinants of a nation’s wealth.

Despite the importance of institutions, we know relatively little about them. By no means is this due to a lack of trying, and in there have been some earnest attempts to tackle the issue. Acemoglu’s Why Nations Fail is one such attempt.* For the time being the goal in institutional studies is to properly explain how and why institutions form.

My goal is to neither explain the origin of institutions or to measure their impact on economic well being. I take it for granted that good (and bad) institutions populate the world. Instead I am interested in how different institutions interact with one another.

My former boss at Cato has looked at how immigration has influenced a destination country’s (the USA) institutions. He finds little effect. In my project I try to look at the problem from the opposite end – how does emigration influence an origin country’s institutions. To measure the impact of emigration I use remittance data.

Remittances come in two form. There are monetary remittances, which are cash transfers from emigrants to their family members and friends back home. There is a broad economic literature on the former and its affect on development outcomes. There is however little (if any- I haven’t found any at least) economic work on social remittances. Social remittances is the transfer of ideas from emigrants to their family members and friends. In general the economic remittance literature has not yet attempted to connect itself with the institution literature despite both being part of the larger development literature.

Most work on social remittances has been done by sociologists. Thus far though most of the work has been qualitative and/or focused on how social remittances tie migrant communities with their origin countries. There has been little work on how this communication translates to changes in institutions.

Political scientists are currently taking the lead on the question. Earlier this year Abel et al. published a paper looking at how remittances affect democratic transition. They find that increased monetary remittances decreases voter turn out and thus weakens the political base of populist-based autocracies. Another recent paper by Miller et al. find that emigration increase the possibility of civil war by giving opposition parties an external funding source.

I think Abel and Miller’s work the best thus far in seeing how emigration affects institutions. My biggest concern with Abel’s paper is that he looks at democratic transition events, but there is no reason why democracy must lead to better institutions. Hong Kong and Singapore alternate as the most economically free states in the world, but neither is a bastion of democracy. India is the world’s largest democracy and by most metrics has awful institutions.

Miller’s work on the other hand looks at how the probability of civil war increases, but civil war in itself is not always bad. On occasion war is necessary for the improvement of institutions**.

To remedy my concerns I look at how remittances marginally influence institutions. I use the Fraser Institute’s Economic Freedom in the World summary index as my measure of a country’s institutions. My regression tables are found below. All observations are for north American (including central America but excluding the Caribbean) countries from 1994-2012.

Column 1 is a simply regression between a country’s EFW score and remittances as a percent of GDP. Initially we find a negative correlation between the two – a 1 percentage point increase in remittances is associated with a 0.01 point decrease in its EFW score. Is this a sign that brain drain, the emigration of high skilled migrants, is reducing the institutional qualify of origin countries? Not quite – it’s simply caused by the lack of control variables. At this point remittances is a proxy for a country being undeveloped.

Columns 2-4 are me playing around with various control variables. The interaction of phone subscriptions with remittances is my attempt to proxy for social remittances. Presumably emigrants are more likely to call back home, and exchange ideas, if their family members and friends have a phone to be contacted at. The 1 year lagged EFW index symbolizes the ‘stickiness’ of institutions: in the short run institutions do not drastically change.

Column 5 is simply column 4 re-run using clustered errors and country fixed effects. Country fixed effects, for those of you who have been spared endless hours of statistical classes, is a technique that allows us to account for unobserved characteristics of a country that do not change across the observed time span. This is usually done to account for such things as culture or geography.

In this final iteration we find that a one percentage point increase in remittances increases a country’s EFW index score by 0.05 points. This is a marginal effect, but its not irrelevant. See the Cato Institute’s interactive map of economic freedom. The difference between the United States and Russia is about one point despite the former presumably being a bastion of freedom.

Thoughts?

*Why Nations Fail has been discussed on NOL several times before, see here and here.
** But let me emphasize that this is rarely the case and war should be the last option. We really do need to make our own NOL foreign policy quiz.

(1) (2) (3) (4) (5)
VARIABLES EFW Index EFW Index EFW Index EFW Index EFW Index
Remittances as a percent of GDP – Fraser EFW -0.01* 0.04*** 0.00 0.01** 0.05***
(0.01) (0.01) (0.00) (0.01) (0.01)
Fixed telephone subscriptions (per 100 people) 0.03*** 0.01* 0.01
(0.00) (0.00) (0.01)
Remittances * Phone -0.00 -0.00 -0.00**
(0.00) (0.00) (0.00)
EFW Index 1-year lag 0.81*** 0.78*** 0.54***
(0.04) (0.05) (0.05)
Income Per Capita in 000s, Constant 2005 dollars. 0.00* -0.00 -0.01
(0.00) (0.00) (0.05)
Constant 7.39*** 6.60*** 1.33*** 1.50*** 3.04***
(0.06) (0.06) (0.28) (0.32) (0.45)
Country Fixed Effects No No No No Yes
Observations 134 134 110 110 110
R-squared 0.03 0.66 0.91 0.91 0.93

Standard errors in parentheses in columns 1-4. Robust errors in column 5.

*** p<0.01, ** p<0.05, * p<0.1