Nightcap

  1. Political capitalism Peter Boettke, Coordination Problem
  2. Even Utah has gone soft on pot Jacob Sullum, Reason
  3. The art of war Peter Miller, Views
  4. NAFTA – The “worst” trade deal ever Livio Di Matteo, Worthwhile Canadian Initiative

Eye Candy: Mexican election results (2018)

NOL Mexican elections
Click here for data

Yikes, the red team is a left-wing populist party (like the one that governs Venezuela). How did it come to this? Here’s a more optimistic take.

Mexican immigration and the Open Border: Mexicans Go Home and Mexican Kindness

I just returned from a two-plus weeks stay in Mexico for the second time in less than five months. A couple of comments to add to my previous essay on Mexican underdevelopment. Plus, some unrelated political sociology comments.

In 2009, my friend and I published a long piece on Mexican emigration to the US in the libertarian periodical The Independent Review. (Nikiforov and I are both immigrants to the United States.) The article is entitled, “If Mexicans and Americans Could Cross the Border Freely (pdf),” and the full text is available through a link on this blog. In that article, we argued that we would all be better off if the southern American border were open to crossing by citizens of both countries with no expectation of a change in citizenship for either.

Well, the politicians did not listen to us then and their inattention led to the recent Republican fiasco whereas, President Obama used an executive order to more or less legalize five million illegal aliens, most of them Mexicans whereas, the Republican Senate called him out and ended up caving piteously. (Do you remember or have you already forgotten? Stupidly, Republicans tried to use the threat to de-fund Homeland Security at a time when aggravated terrorism news fill the airwaves.) As often happens, the Republican leadership confused the issue of constitutional principle with the substantive issue of limiting immigration. Myself, I would chose total firmness on the first and flexibility on the second, for fear of ending up the A.H., no matter what the outcome. The Republican leadership lost the constitutional arm wrestling and still ended up the A. H. Congratulations, guys!

Our article was long and intricate as is normal for a scholarly piece. Here are two highlights from that piece on which I wish to comment after my two recent stays in Mexico:

A We argued that Mexicans – who constitute the largest immigrant group to the US – should be given special treatment over other aliens. Several reasons for this: They are our close neighbors; they have been joined to us through NAFTA for now 23 years, insuring that our lives are tightly enmeshed economically. Then, because of a long series of past interactions some may find deplorable, Mexicans tend to make very good immigrants. Two reasons for this superiority, in turn. First, nearly everyone agree that Mexicans (in the US) tend to be very hard workers. Even their direct competitors in the work place tend to assent to this judgment. Second, sociologically, Mexicans make good immigrants because they are astonishingly familiar with our society, including with our institutions, before they set foot on American soil. In particular, Mexicans don’t find perplexing our fundamental constitutional principle of separation of religion and government. (That’s, as opposed to immigrants from other areas I could name.)

Nikiforov and I argued that Mexican citizens should enjoy unimpeded passage into the US, and the freedom to take any job for which they qualify, all without any path to American citizenship because, Mexicans already have a citizenship, that of Mexico. We point out that the European Union has used this model for more than twenty years and experienced few downsides. (The current ferment in Europe about and opposition to immigration does not involve neighbors from the EU, with one single exception I will discuss if someone asks me.)

B We proposed that many Americans would find it comfortable to spend their last years in Mexico because of a specific aspect of Mexican culture, to wit, contemporary Mexicans tend to be sweet in general and considerate to older people in particular.

This is what I found in twice two and half weeks in Puerto Vallarta in the pas five months that is relevant to these issues.

First, on the matter of Mexicans wanting to work in the US but not necessarily wishing to live there, we were much more right than we thought when we wrote about this. The anecdotal evidence is overwhelming that this would work. Everywhere I went in Puerto Vallarta , I bumped into people who knew some English that they had learned in the US, mostly as illegal immigrants here working at undesirable jobs. None of those people had been expelled, deported. All had returned to Mexico under their own power after saving some money. Thus, they had chosen to go home because it’s home, just as we predicted in the article.

One middle-aged man sticks to my mind, a taxi driver. He had stayed in the US (illegally) for several years. He had refrained from visiting with his family in Mexico for stretches of two or three years at a time to avoid being unable to return to the US. You might say that he was trapped in the US for longer periods than he wished because of our immigration laws. He finally decided to go back to Mexico and to his family for good after he had saved enough money to build a house for each of his three daughters. He specified that only one of the daughters was of marriageable age by the time he had the three houses standing. To my mind, this is an exemplary story of emigration/immigration. On my query, the man declared himself satisfied with his choice and with his life since his return from the US.

He was earning, driving a taxi, about 1/5 or less of what he earned in the US doing unpleasant work. He liked his job; he enjoyed returning to his family every evening; he liked the schools; paradoxically, he liked Mexican schools. (This is paradoxical because daily life in Puerto Vallarta, including in the schools is much more relaxed, much more genteel than what prevails in the US except in the most elite neighborhoods. In that part of Mexico, the bloody drug traffic-based blood-thirsty banditry is found strictly in the newspapers. It is not at all apparent in daily life. The quality of this daily life is at the antipodes of the impression of Mexico reaching us through the US media. Gangs are not in the school unlike in Salinas, California, for example.)

On point B, the attractiveness of Mexico to older Americans, I find that I tend to censor myself anytime I write about the topic because I fear appearing to be gushing like a teenage girl. During my last stay, of two and half weeks, I did not meet a single Mexican man, woman or child who was not completely pleasant except two. One was a taxi driver and he was morose but, that’s because he was drunk. (Nobody is perfect.) The second was a female merchant who acted displeased because I tried to bargain down an item in which I was interested. Another merchant – from whom I actually bought and whom I befriended – told me later that my bargaining had been reasonable and that the woman was undergoing a painful divorce. Mexico is not perfect and I may have looked like the woman’s soon-to-be ex-husband. You never know; these things happen.

Absolutely everywhere, my gray beard drew the kind of respectful behavior I don’t expect in the US. (And that I don’t deserve, to be honest!)

I can hear the snickering from here: “Of course, he stays in a tourist ghetto were everyone is occupationally obligated to appear nice.” No, I did not spend all my time there; I was forced to go out and I liked to go out. I found that everyone smiles a lot, including at each other, even among perfect strangers, that everybody ceded passage, that waiting lines are always orderly. Being a formerly great social scientist, I yielded, of course, to the temptation to conduct verbal experiment. Unfailingly, I made everyone I wanted to laugh at the drop of a hat. I mean small children, old ladies and adults of all sexes. (Yes, my Spanish is that good. Eat your heart out or learn to conjugate irregular verbs! Those are your choices. There are no others.)

Issue A and B are joined in the strangest way within my latest short stay in Mexico. Puerto Vallarta in the winter is swarming with Canadians. Their flight from the cold may have a great deal to do with this fact but it has a virtuous side-effect. I suspect many flew in to warm up and ended up warmly loving Mexicans for the reasons I depicted above. They beat Americans at it, in that city, at least. Oh, and the only sullen faces around Puerto Vallarta all belong to them. It became a game of pop-sociology for me: guessing from afar who was American and who was Canadian. It soon become embarrassingly easy: The Americans are the loud ones who say hello and who laugh easily. (Besides, I think the presence of Canadians explains much of the bad food there.)

After this last experience, I am very tempted to start a new racist fad: Speaking ill of and persecuting Canadians. It could be fun and they are not (yet) a federally protected minority.

Why not world government? Part 1

Since I joined the Notes On Liberty symposium Brandon Christensen and I have had a series of playful back and forth on the issue of world government. I initially intended to offer a comprehensive response on why I disagreed with Christensen, but after reading through older posts and comments I’ve decided that it would be best to clarify what we mean when we mean by world government. The point of this back and forth is not to have a ‘winner’ after all, but to better understand one another’s concerns and hopefully come to agreement after hashing out the details.

By world government I am referring to a polity that has jurisdiction over the practically inhabited universe. If humanity inhabited Mars, the Moon, Earth, and a few asteroids then a government that had jurisdiction over only Mars would not be a ‘world government’ despite it clearly controlling the governance of a planet. Conversely a monopolis needn’t cover a whole planet; the Roman and Chinese empires were both near-monopolis that controlled much of the practically inhabited world at their respective times. I understand that this might be confusing so I propose the term monopolis, “single city”, to refer to this concept.

A monopolis does not necessarily have to be ruled in a given manner. A monopolis could be an intergalactic feudal monarchy, such as the government of the Padishah Emperor and the Landsraad in the Dune series. Or it can be ruled as a decentralized federation of planets such as the Foundation in its title series. For our purposes we are dealing largely with a federal-monopolis, where several smaller polities exist as part of the larger federation that assures a minimum degree of individual rights are enjoyed by all federal citizens and that a reasonably free movement in goods (and people!) exists.

Is world government anti-libertarian? As a libertarian my knee jerk reaction is to view any government with deep suspicion, with an appropriately larger knee jerk as the government in discussion is larger. That is to say that I distrust the United States federal government more than I distrust the city government of my beloved Los Angeles. Christensen has written on this habit of libertarians to fall into this habit before. I agree with Christensen fully that his knee jerk reaction can be troublesome when it leads libertarians to reject large government policies as a matter of principle without further inspection on the details.

For example the North American Free Trade Agreement (NAFTA), the World Trade Organization, the Trans-Pacific Partnership, and others are ‘large’ government policies that I think all libertarians should support because they promote greater trade liberalization. By no means are any of these agreements about genuine free trade, and they contain several trade restrictions, but overall they have led to a reduction in trade barriers across the world.

I disagree with Christensen, or at least disagree in a matter of degree, in that I don’t think this knee jerk reaction is unwarranted. Individuals have less control over government affairs over as the government unit grows in size. I can go find my local councilman and harass him about my city’s poor budget with relative ease, but doing the same with my federal House of Representative is almost impossible. This lack of accountability to their constituents sets up incentives for public officials to indulge their private preferences. On occasion the private preferences of public officials align with the interests of constituents, hence the existence of things like NAFTA. However the latter is an exception, not a rule, in large governments.

In summary; most libertarians view monopolis as being inherently anti-libertarian. I do not believe that monopolis are inherently anti-libertarian and concede that a monopolis could in theory adopt libertarian public policy under specific institutional arrangements that aligned the interests of public officials and their constituents. I am however skeptical about how likely it is that this can be achieved. Christensen is apparently more optimistic on the matter than I.

A monopolis does not necessarily have to allow constituent members to leave freely. A monopolis could very well have arisen as a product of conquest. For our purposes though we assume that the monopolis allows constituent members to leave freely through some sort of referendum process. Christensen has discussed this in his latest post on the issue.

A monopolis has an over-arching form of ‘citizenship’ that guarantees its individual citizens a minimum of liberties. As I discussed in my last post, I prefer local citizenship, but I am willing to imagine a monopolis where an individual has a federal citizenship in addition to sub-level citizenships.

A monopolis in short:

  • Is a government that has jurisdiction over the practically inhabited universe,
  • Not necessarily organized in any specific manner, but for our purposes we assume a loose federation,
  • Not necessarily anti-libertarian in its public policies (but not necessarily libertarian either!),
  • Not necessarily the product of conquest, but not neither is it necessarily the product of members voluntarily joining,
  • And offers a form of federal citizenship that guarantees a minimum degree of liberties.

I ask that Christensen responds on whether he is willing to accept this definition of a monopolis, or world government, or offer his counter-proposal for a definition before we continue further.

What Would A Political Union of the EU, the NAFTA States and Japan-South Korea Look Like?

I’ve known about the relative poverty of Western Europe compared to the United States for quite some time now, but it’s always nice to see this little tidbit get some love in the national and international press. Fraser Nelson, a journalist at the Spectator (in the UK) gives us the run-down on the numbers. According to Nelson, the UK is poorer than any US state save for Mississippi. Over at Forbes, Tim Worstall points out that the UK is actually poorer than Mississippi, too. Poor Mississippi!

Both men are calculating wealth with GDP (PPP) per capita, which is what I use as well. GDP (PPP) per capita means Gross Domestic Product (Purchasing Power Parity) per capita. Worstall explains how and why social scientists like using GDP (PPP) per capita to gauge a society’s standard of living:

Just to explain PPP for you. Prices vary across places. In the US food is generally cheaper than it is in Europe, medical care generally more expensive. So what we try to do with PPP is work out what exchange rates would need to be in order to make prices of all of these different things the same in the different places. It’s not an exact science, more of an art. But if what you’re trying to measure is living standards then it’s somewhere between useful and essential as a part of your workings.

It isn’t just the UK that is poorer than the poorest US state, either. Economist Mark Perry did these same calculations using 2010 data back in 2011 and pointed out that only Luxembourg and Norway would be in the Top 30 states were Western Europe and the United States to meld into one federal republic. The rest of Western Europe is on par with the living standards of the American South (which is considered to be the poor, culturally backwards region of the US). Be sure to check out Perry’s 2010 data and compare it to Worstall’s and Nelson’s 2013 data, too.

Careful readers will notice extremely small differences in the calculated purchasing power parity of all three authors (the IMF’s is also a little different), but each data gives us a similar approximation for standards of living in each country and each US state. Suffice it to say here a political union between the United States and the wealthy countries of Western Europe would significantly diminish the GDP (PPP) per capita of the US overall. A political merger with Japan, South Korea, and Mexico would also diminish the overall purchasing power parity of the average US citizen. Canada might (might) make the Top 40 for US states (somewhere between Michigan and Ohio – states of the Rust Belt).

Now, if I had my way, the calculation standards for non-US countries would be the same as they are for US states. That is to say, I think a better way of measuring standards of living would be to break up the countries I’ve mentioned and measure the GDP (PPP) per capita of the administrative units that operate just below the national governments of these states. So, for example, instead of measuring the GDP (PPP) per capita of the Netherlands, I’d measure the GDP (PPP) per capita of the 12 provinces that make up the Netherlands.

Then, in my libertarian utopia, the 50 US states would join together politically with the various administrative units of Western Europe, Canada, Mexico, Japan, and South Korea. Instead of 50 administrative units (the US states) there would be hundreds, maybe even thousands, of them. Talk about decentralization!

Given that a political (and therefore economic and social) merger between Western Europe, the NAFTA states, and Japan-South Korea would diminish my PPP, why should I support such a proposal?

Update 8/30: Some commentators on Facebook have been clamoring for a map, and I found a great website that has devoted lots of time to creating maps based solely on administrative units. The name of the site is Kelso’s Corner and they have a great blog post on the “Natural Earth Vector,” which is the project that maps out administrative units.

It doesn’t have detailed maps of the Anglo-Saxon world or Mexico (presumably because these are so well known), but I found a couple of great maps of Western Europe and Southeast Asia.

This is what the European Union would look like, politically, if it were to be more libertarian in nature.
This is a map of South and East Asia’s administrative units.

Imagine if all of these units were to send representatives and senators to Washington (or a new geographic equivalent): Decentralized political power and integrated markets and cultures would be the new norm for much of the world in a political system based on Madison’s federal republic. I reckon that, in a libertarian utopia, the world would look like this map and be united under Madison’s minarchist federal government:

All thanks goes to kelsocartography.com

I understand that my utopia is not much of a utopia (people will still die and there will be plenty of conflict), but I think this is actually a strength rather than a weakness.

From the Comments: Liberalization is about much more than just the economy

Andrew is skeptical of NAFTA’s achievements:

NAFTA isn’t the only major factor at play, although you’re right that it has provided Mexico with some huge economic benefits. This is especially true in the factory towns along the US border, which are able to absorb a much larger absolute amount of surplus labor from poorer, less developed parts of the country today than they could a generation ago. That said, I’m still ambivalent about NAFTA on account of the severe short-term economic and social dislocation it caused, e.g. to US factory workers who were undercut by Mexican competitors and to small Mexican farmers who were undercut by major US agribusinesses. It strikes me as a hastily and abruptly implemented policy change that caused a lot of needless collateral damage in the short term. Whether this damage was worthwhile in the long term depends a lot on one’s role in the North American economy at the time. On the whole, I’d say NAFTA has been a mixed bag.

This, I think, is in response to the 2003 academic paper (published by three economists) that I cited in defense of NAFTA’s success. It is a paper that only focuses on economic indicators (such as per capita income or total factor productivity). Here is what it found: NAFTA has not had a discernible effect on the US or Mexican economies. The displacement of US factory workers and Mexican farmers that Andrew mentions had been going on long before the implementation of NAFTA. Basically, NAFTA merely reduced the amount of paperwork associated with the changes in both economies. It has not hastened the changes.

Similarly, it appears that the growth of Mexican and American purchasing power parity are simply part of a hemisphere-wide trend that has also been going on for decades. In short, economists have found the economic effects of NAFTA to be negligible. So why do they continue to overwhelmingly support it?

My answer to this question can be found, I think, in Andrew’s keen perception of the changes in Mexican society:

Over the same time that NAFTA has been in place, Mexico has also become much more Protestant and nondenominational in religious affiliation, better educated, and, as I understand it, somewhat better governed and administered. Maybe I’m mistaken, but I have no reason to suspect that the religious shift had anything in particular to do with Mexico’s improving economy or trade liberalization. “Church-planting” missionaries of the sort that have evangelized Latin America don’t look for a particular economic or policy profile in a country before imposing themselves on it, although they do generally appreciate a certain amount of poverty and dysfunction, as long as they’re reasonably reasonably safe in country, since people in economically healthy, well-governed countries are less receptive to their pitches. This is a very cynical analysis, but the cravenness in “mission field” circles can be mindblowing.

What’s happened in much of Latin America in the last decade or so is that these evangelism programs have hit critical mass. They’re now self-sustaining operations being run mainly by Latin American evangelists pestering their own countrymen, or sometimes people in nearby countries. Gringo missionaries are still working in Latin America, but they’re no longer critical to the growth of evangelical churches there. (Besides, there’s much more street cred to be had in evangelizing a recently restive Muslim village in Northern Ghana, or, as my relatives and everybody at their church called it, Africa. I bless the rains….)

Liberalization is about much, much more than economic growth. The decline of Catholicism in Mexico, for example, is an incredibly good trend. This is not because Catholics suck, but because Mexican society is becoming more diverse. Liberalization means opening a state’s political, economic and social institutions to the world.

Undertaking liberalization thus exposes a society to changes. Sometimes societies may have a tough time with changes, especially if there are deeply entrenched political structures in place. Most often, though, these changes tend towards more political liberty (see “1994 Mexican Elections: Manifestation of a Divided Society?” and “Institutionalizing Mexico’s New Democracy,” both by Joseph Klesner, and be sure to read between the lines), more social diversity and, yes, more economic growth.

Of course, with new and overall positive changes come new challenges. The differences between the old challenges and the new, however, are cavernous. Politically, gridlock supplants revolution. Socially, vice replaces desperation. And economically, policy replaces cronyism.

Now, this is a broad view, but I think it is a concrete one nonetheless. There are two major objections to liberalization that I would like to briefly discuss.

The first is my assumption that diversity is, in and of itself, a good thing. Some people simply cannot stand diversity, whether it be of the ethnic and linguistic variety or of the intellectual variety. The former form of intolerance is often to be found among conservatives; the latter in Leftist circles. However, the fact that people I don’t like disapprove of diversity is not a good excuse for being a proponent of diversity.

So what follows is my concise defense of diversity. Diversity opens individuals up to higher degrees of tolerance. It gives individuals more choices. Its very nature makes people smarter by exposing them to more points of view. Added together, these benefits are a recipe for wealth and stability and peace.

There is a tendency, however, for diverse organizations (including societies) to have more conflict. It is this conflict that conservatives and Leftists alike point to as proof that diversity is an undesirable plague. Yet, under the right framework, conflict from diversity produces immeasurable amounts of wealth (see also this paper by economists Quamrul Ashraf and Oded Galor). This framework revolves largely around well-protected property rights and the protection of a handful of other rights (free speech, free press, etc.).

It is this framework that, conveniently enough, allows me to segue into the next most common objection to liberalization: that it doesn’t work and often makes things worse for a society. The data in this regard is not much clearer than the data on NAFTA’s effects on Mexico. That is to say, there is not enough evidence to prove conclusively that trade liberalization leads to economic growth. However, data over the past 30 years or so does suggest that states which undergo liberalization efforts tend to have economies that grow steadier, polities that oppress less and societies that adapt to cultural change more easily. If you can find evidence that you think may refute my argument (“that the rough overall trend of liberalization is beneficial to mankind”), you know where the ‘comments’ section is.

From the Comments: Open Borders, Immigration and the Sociology of Gradualism

Dr Delacroix takes issue with my woefully inadequate summary of his work on open borders in the Independent Review. He writes:

Small yet somewhat important correction: In our piece in the Independent Review, Nikiforov and I argue for somewhat more than a guest worker program and our reference is not a to a EU “guest worker program.” (I am not sure whether there is one.) Rather, we argue that little harm would be done and, as we see now, much harm avoided, by simply agreeing that citizens of Canada, the US and Mexico (especially Mexico) can freely move across the common borders of the three countries. including for the long term. What we have seen in the EU for now more than twenty years shows that there is no reason to attach this free movement principle to citizenship.

That you may work, open a business, pay taxes in Mexico does not logically imply that you may vote in Mexican elections. That you may not does not deprive you of any “rights.” As an immigrant into Mexico you knew what you were doing. You moved under your own power. It’s unlikely anyone even invited you. If you crashed the party, you have no moral right to complain that the food is not kosher (or hallal, you decide).

Several years later, I think that the only reason for this insistence on tying residence to citizenship is the Democratic Party’s totalitarian aspirations. Observing the drift in the Obama administration toward non-legality clarified the picture for me, personally. (I am not speaking for my co-author, here. He just spent three years in Russia; I will ask him.)

Historical precedents matter, and a preference for gradualism may make it desirable -in this country- to transition through a somewhat familiar “guest worker program” rather than directly decree open borders for the citizens of the three NAFTA countries.

I am for whatever works but we must keep concepts distinct from each other: A tomato is not really a fruit, not really.

PS I am glad Notes On Liberty publishes my essays (and even my stories) and that it links to my blog. When I grow up, I want a readership like Notes’ readership!