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Externalities Arguments Must Be Used With Great Care

Here’s a reply to a thoughtful e-mail correspondent:

Ms. Aubrey Goens

Dear Ms. Goens:

Thanks for your note.

You describe yourself as a “realistic free enterprise conservative” who understands that “the economics of externalities” warns against more open immigration into the U.S. “if we have a welfare state.”

You’re correct that the welfare state unjustly allows some people to gain at the expense of other people.  However, even this narrow argument against immigration isn’t as clear-cut as you suppose it to be.  See this short essay.

More fundamentally, I’ll bet that the economic reasoning that you accept as “clearly” supplying a sound basis for restricting immigration is reasoning that you reject in other contexts.

If you’re like most free-market conservatives (and libertarians), you believe that government has no business dictating people’s diets and engaging in other nanny-state intrusions such as mandating the use of seat belts and motorcycle helmets.  And you likely do not become a supporter of such nanny-state intrusions when someone argues (as someone always does) that government “must” govern such personal behaviors because government has socialized so many health-care costs – costs that will become excessively burdensome to taxpayers if government does not regulate and punitively tax the likes of smoking cigarettes, drinking Big Gulp sodas, and driving without being buckled in.

If I’m correct in guessing that you reject the argument that government socialization of health-care provision justifies government’s restrictions on people’s diets and driving habits, why do you not also reject what is logically the identical argument used to justify restrictions on immigration?

Donald J. Boudreaux
Professor of Economics
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University
Fairfax, VA  22030