From the archives of Dr. Marc Guttman. This was originally published in The Day , April 20, 2008. It seems appropriate to post it now due to the current crisis at our borders.
The free, voluntary exchange of value for value is mutually beneficial, whether trading goods or labor, yet we often hear it argued that particular restrictions will protect American industries and workers.
Ironically, what we find is that whenever we use force to protect ourselves from the competition of others, we are more likely harming ourselves. This is true whether we are evaluating immigration policies, labor laws or domestic and international trade restrictions. Most often these laws unfairly benefit some at a cost to many.
Individuals and organizations ought not be restricted from trading freely, regardless of their nationalities. The goal of non-coerced transactions is mutual benefit. Cooperation, not conflict, promotes peace, freedom and economic welfare. When individuals seek special favor from their government, either through subsidies or trade restrictions, individuals in other industries and countries feel compelled to seek the same. History proves that aggressive trade policies lead to political frictions and violent conflict.
Immigrants do enrich
Studies demonstrate that immigrants, while working to improve their own family’s situation, enrich us, rather than detract from our wealth. Most produce more than they consume. As total output increases industry grows and so does the demand for labor. Contrary to popular beliefs, immigration has been shown to improve employment rates and wages. Self-supporting immigrants are a proven benefit rather than the liability some portray them to be. When there were no limits on our immigration, our standard of living rose dramatically and was unparalleled across of the world.
The right to immigrate is a freedom of opportunity, however, not entitlements. We should not be forced to subsidize anyone’s relocation and livelihood here. This policy would be unlikely to deter many ambitious persons from immigrating here, who more likely would soon be enjoying a better standard of living. The most confounding question is why from a free society would we try to bar those most enterprising, independent, courageous and freedom-seeking?
The effect of the minimum-wage laws, one example of domestic trade restrictions, is that of discriminating against the employment of non-union and lower-skilled workers. Since employers understandably will not pay an unwarranted wage for lesser-quality services, individuals suffer unemployment and consumers pay more for products and services.
Economist Milton Friedman called protectionism, “a good label for a bad cause,” explaining that it really means exploitation of the consumer. This is my understanding of his lessons. It is everyone’s interest to buy quality products and services from the cheapest source. Special interests have proliferated restrictions on the products and labor we can buy and sell. The gain to one industry’s producers from tariffs or subsidies is more than offset by the loss to other producers and to all consumers in general from the tremendous array of restraints we have imposed.
Protectionists complain of unfair competition from abroad due to competition from low-wage foreign workers, subsidies from foreign governments to their industries, and tariffs. They use emotional appeals of preserving jobs, promoting the general interest, and protecting national security.
In any market, competition from a producer who creates a better product at a better price, may harm particular individuals, but it benefits others. If we want a vital and innovative economy, there must be mobility. Affected producers will move on to more productive industries. Retarding this flexibility hamstrings the system that has allowed the generation of our wealth. Helpful and more just would be freeing industries of oppressive and unfair regulations, making it more profitable to do business here.
When a foreign government subsidizes an industry, the prices of their products fall. The citizens of that country, who pay this subsidy, suffer a lower standard of living, to the benefit of the American consumer and their fellow citizens working in this industry. As American consumers pay less for particular products they have more disposable income. This increases the demand for other products, creating more jobs for workers in other more productive industries.
Tariffs will increase the output and employment in a particular industry, but foreign producers will sell less and have less money to spend on U.S. products. This will increase unemployment in other industries.
Many favor free trade, if only other countries complied. Other countries’ trade restrictions hurt them, just as our own restrictions harm us. In addition, our retaliatory actions lead to further restrictions. The most moral and beneficial policy is a unilateral transition towards true free trade, absent managed-trade agreements, opening our markets to everyone. Only this promises freedom, prosperity and harmonious relations among nations that differ in culture, attitudes, beliefs, interests, and institutions.
Application of libertarian principles is both just and beneficial. In the end, it is these founding ideals that call to so many and bring them to uproot their lives to immigrate here. Everyone should be able to live freely and enjoy the prosperity only a free society can produce.
Marc Guttman lives in Connecticut and is an emergency physician. He was the Libertarian candidate in the 20th Senate District in 2012, 2010 and 2008, and is the editor of two books, “Why Peace” and “Why Liberty.”