”Dear America, please remember how you got to be the wealthiest country in history. It wasn’t through protectionism, or state-owned banks or fearing free trade. No, the formula was very simple: build this really flexible, really open economy, tolerate creative destruction so dead capital is quickly redeployed to better ideas and companies, pour into it the most diverse, smart and energetic immigrants from every corner of the world and then stir and repeat, stir and repeat, stir and repeat, stir and repeat.”[The Open-Door Bailout, By Thomas L. Friedman, February 10, 2009 ]Actually, protectionism played a huge part of the development of the American economy from the days of Alexander Hamilton until fairly recent decades. Immigration to the US was typically done either by conquering groups(i.e. the Scots Irish), as part of creating religious communities(i.e. the Mormon migration of folks from Northern Europe to Utah) or to benefit fairly small political/financial elites(i.e. the slave trade). US immigration has come in spurts in part because to the extent the US is a democratic country, there have been calls to restrict immigration periodically which prevent another spurt in immigration until folks forget just what some of the problems were.
In a world with voluntary immigration, it is pretty obvious that immigrants themselves at least think they are going to benefit from immigration. However, in recent decades the bulk of immigrants the US has been attracting have been from places that really aren't that desirable(i.e. Latin America or Asia). What really needs to be looked at is just how is productivity per worker and general living standards changing for Americans? It is clear the rich in America are experiencing growing opportunities-and many of the rich and their mouthpieces feel immigration is a factor in creating some of those opportunities-particularly when that immigration involves a tacit deal to continue financing of US trade deficits. The question is whether recent immigration is a positive sum game, or just a mining of the value of the citizenship rights of existing Americans for the benefit of the rich?
I can believe that many of the advertisers in the New York Times would benefit from the policies Friedman is advocating-as might the Harvard Hedge Fund. Money can afford to talk loudly-but when it lies too much, people will eventually stop listening.
