In my column for the May 12, 2010, edition of the Pittsburgh Tribune-Review I dissented from Milton Friedman’s famous claim that the welfare state and open immigration are incompatible with each other . (I was unaware, when I wrote this piece, that – as Shikha Dalmia explains  – Friedman did not really say what he is commonly alleged to have said. [See also Jim Peron’s comment at the bottom of the link to my Trib column.])
You can read my column beneath the fold.
Sorry, Milton: Let ’em in
The recent furor over Arizona’s new attempt to curb illegal immigration has ignited another heated debate on the merits and demerits of a more-open immigration regime.
I have long been a proponent of opening America’s borders much more widely — say, the way they were until the 1920s. Such borders would not be totally open. Rather, immigrants would come in the same way they did for most of America’s history: Those who were not carriers of communicable diseases or who weren’t known violent criminals were allowed in. They were unimpeded, save for a relatively brief inspection at ports of entry such as Ellis Island.
There are many upsides to returning to such a regime — not least of which is that law enforcement officials would be better able to screen for, and focus on apprehending, terrorists. The billions of dollars now spent each year patrolling borders against the entry of people who simply seek to earn a better living, and enforcing anti-work regulations on illegal immigrants, could instead be spent on protecting Americans from people who mean us genuine harm.
The most common objection is that more-open borders, however desirable they might be in the abstract, are impractical as long as America has a welfare state.
Indeed, even the late, great Milton Friedman famously argued against more-open borders precisely on this ground.
Seldom do I disagree with Friedman — and when I do, I worry. But in this case I’m confident he was mistaken.
I don’t deny that taxpayer-funded welfare and “public goods,” such as government schools, attract some poor people to the U.S. Nor do I deny that immigrants’ use of these taxpayer-funded resources is undesirable. But I do deny that this problem is as bad as it appears to be and that it is a reason to keep immigration so limited.
The most important fact overlooked by Friedman — or, at least, by those who cite Friedman as an authority for keeping immigration strictly limited — is that the costs of immigrants’ freeloading on taxpayers must be weighed against the benefits of immigrants’ contributions to the economy and, indeed, to tax revenues themselves.
The fact that some, or even many, immigrants come to America to bilk U.S. taxpayers does not, standing alone, argue against more-open immigration. Working immigrants’ extra private-sector output and contributions to tax revenues might well outweigh the burdens created by other immigrants’ use of America’s welfare state.
Closely related is the heavy emphasis in U.S. immigration law on preventing immigrants from working.
The numerous prohibitions and restrictions against immigrants (legal and illegal) finding gainful employment in America constitute overwhelming evidence that the real concern today is not that immigrants will abuse the U.S. welfare state. Quite the opposite: It’s that immigrants will compete with native-born Americans for jobs. And such competition is something that an economist of Friedman’s caliber would rightly applaud rather than condemn.
Given these many prohibitions and restrictions, any data on immigrants’ likelihood of using the U.S. welfare state, or on the degree to which they use it, are useless for inferring how they would act if they weren’t so hamstrung in finding gainful employment in America.
This fact holds even for the common complaint that immigrants overuse hospital emergency rooms. Of course they do. Being illegal, not only are their opportunities for employment lessened, but they also have no ability to receive employer-provided group health insurance.
Employers who hire undocumented workers generally pay them in cash. Enrolling such workers in a group health-insurance plan risks exposing them to deportation and their employers to punishment.
Cut off from the least expensive varieties of health insurance, it is no surprise that illegal immigrants overuse hospital emergency rooms — their safest and least costly means to get medical treatment.
Abolish the existing prohibitions on legal employment and watch the incidence and severity of these problems diminish. And watch immigrants pay more taxes to support the government schools and government hospitals they now use free of charge.
But let’s assume these highly restrictive work rules cannot be eliminated. Would Friedman’s case against more-open immigration then fly?
Friedman often proclaimed that the strongest case for individual liberty is a moral one. Because it is immoral for government to prevent the free movement of peaceful people, the existence of one immoral institution — the welfare state — ought not be used so cavalierly to justify the imposition of another immoral institution — restrictions on peaceful immigration.