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The authors are making the very popular claim that the "lump of labor fallacy" and that migration is not "zero-sum" conclusively demonstrate that any permissive

The authors are making the very popular claim that the "lump of labor fallacy" and that migration is not "zero-sum" conclusively demonstrate that any permissive migration scheme is undoubtedly beneficial for everyone in any country at any time ("In short, immigration creates more economic opportunities for everyone: a win-win scenario"). It is true that there isn't a "lump of labor" (the amount of work is not fixed) and that migration isn't "zero-sum" (where each participant's gain or loss of utility is exactly balanced by the losses or gains of the utility of the other participants). But those are very narrow claims. It doesn't follow every conceivable permissive migration scheme is beneficial for every receiving country and it certainly doesn't follow that nobody is harmed by any permissive migration scheme. The H1B scheme, a topical example here, is restricted to a small number of professions by statute (and in practice is 70% software people) so the arguments about migration generally and the economy broadly shouldn't be applied without further consideration. It is easy to imagine if you had a profession that has some limitation to demand and narrowly allowed migration for that profession only that given a sufficient number of migrants you would displace some current residents from the profession and preclude some number of current residents from joining that profession and lower salaries of the profession.

arcticbull 6y ago
The broader issue is that the US birth rate is 1.77 births per woman -- and falling, which is below the replacement rate. If you want to maintain the population (and economic activity) at the same level as today, you're going to have to bring in 0.23 people per woman per generation via immigration. In the pathological case of closed borders, the economy will shrink in accordance with the birth rate. This effect is on top of the non-zero-sum impact of qualified migrants. Consider the 1.43 births per woman (and low net migration rate) of Japan and the fact that the GDP was lower last year than it was almost twenty years ago. In the same time period the US GDP has tripled. Canada's has almost quadrupled -- and Canada brings in 1% of the nations population each year via immigration, in part to offset its 1.5 births per woman.
- toomuchtodo 6y ago
  Those who experience wealth inequality or are otherwise economically disadvantaged in their own country may view national economic activity in the same way they view the stock market: with apathy. Having a job at all is the priority for many.
  - arcticbull 6y ago
    GDP is not a proxy for wealth inequality. For instance, Canada has much lower inequality than the US [1] (0.32 vs 0.47) and saw a much greater percentage of its country materialize through immigration, but still saw a greater increase in GDP over the same time period. Wealth inequality is a symptom of government policy, nothing more. [1] https://en.wikipedia.org/wiki/List_of_countries_by_income_equality https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...
    - deleted 6y ago
      [deleted]
      - deleted 6y ago
        [deleted]
    - toochini 6y ago
      You think a government can make inequality go away? Please give us one example
      - arcticbull 6y ago
        Sure, the Soviet Union. A government literally made inequality go away with the stroke of a pen. Ideal, of course not. Recommended? Definitely not. However, it's clear and self-evident that the US government allows wealthy people to keep their wealth. A wealth tax would solve that problem, for instance. Again, without advocating, I'm just saying that wealth and wealth inequality exist at the whim of the ruling class. I'm not sure I could come up with a counter-example that didn't involve a contrived crypto-ancap utopia. The fact that income and wealth inequality are different in different countries is proof in and of itself.
digitaltrees 6y ago
Except that even in software. More developers makes it easier to build more products and more manageable prices making it easier to expand the market. Lower develop cost makes pricing better which makes demand increases. There’s a positive feedback loop that also results in more opportunities for developers. Take the flip side. Scarcity of talent leads to competition which leads companies to be aggressive in deterring movement of employees to competitors so things like non competition agreements increase. In extreme cases you get cartel like activity between Apple <> google and others agreeing not to recruit or hire each other’s employees. Similar protections against employees founding their own companies. So while income may increase with restrictions on immigration, all of other effects may Outweigh the salary offset.
- jacobriis 6y ago
  Are you defending the article's claim that "In short, immigration creates more economic opportunities for everyone: a win-win scenario"? That's a tall bar to clear. "More [house cleaners] makes it easier to [clean more houses] and more manageable prices making it easier to expand the market. Lower [house cleaning] cost makes pricing better which makes demand increases. There’s a positive feedback loop that also results in more opportunities for [house cleaners]." Clearly house cleaners currently working in the US would benefit from unrestricted migration of people restricted to house cleaning. "Scarcity of talent leads to competition which leads companies to be aggressive in deterring movement of employees to competitors so things like non competition agreements increase. In extreme cases you get cartel like activity between Apple <> google and others agreeing not to recruit or hire each other’s employees." Obviously barriers to entry to professions do not always (probably never not once ever) lead to the subjugation of the members of that profession by cartels. I assume brain surgeons are then the worst off having been captured by hospitals, held in captivity and forced to preform brain surgery all day.
  - LeonB 6y ago
    I do take your point, but I think “house cleaner” in 2020 doesn’t contribute to “the growth engine of the housing market” quite as directly as “software engineer” contributes to the growth engine of the software economy. No one goes around saying “house cleaning is eating the world!”
Barrin92 6y ago
>and it certainly doesn't follow that nobody is harmed by any permissive migration scheme. I've seen these responses a lot to the economic case for migration, the general tone being that economists are too simplistic in their model of migration, some fall through the cracks and so on, but what always seems to be ignored is that the exact same argument applies to political measures limiting migration. In fact the politicization of migration restriction for populist, racist reasons and so on is significantly stronger and a bigger threat than the downsides of the economic case for open migration. People in tech are very well acquainted with this logic when it comes to regulatory capture.
- pnako 6y ago
  A bigger threat to who?
  - Barrin92 6y ago
    Everyone involved of course, given that the US loses critical talent and individuals it needs and who seek a better life in the US, the immigrants whose freedom of movement is denied and who will have fewer opportunities. The tragic outcome to these policies is how damaging they are to everyone. Immigration restrictions are by and large, the biggest inhibitor of increasing global prosperity. https://foreignpolicy.com/2019/11/01/immigration-wall-open-borders-trillion-dollar-idea/ https://foreignpolicy.com/2019/11/01/immigration-wall-open-b...
LaMarseillaise 6y ago
> a profession that has some limitation to demand This is the lump of labor fallacy. No profession is so fundamentally limited in the long term and no skills are set in stone. The article explains the national labor market effects (lower marginal cost, higher marginal benefit), but we are still not done. Resources are allocated more efficiently in the international labor market with permissive schemes, as each individual seeks the greatest marginal benefit for their labor (their comparative advantage). > The H1B scheme H1B is a restrictive immigration scheme. The recent policy change is even more restrictive. Everyone is worse off relative to having been completely permissive all along. To switch immediately to a permissive scheme would likely cause short-term unemployment in certain fields. But over the long term, people's skills can be changed or applied more efficiently, and new entrants will choose to develop skills that maximize utility.
- Haga 6y ago
  Slavery with less extra steps for the unskilled
- im3w1l 6y ago
  There are three important considerations here: 1. Service jobs such as haircutters are needed proportionally to population. 2. RnD and art. If the same proportion of the population does RnD / art, then a higher population means faster progress and more prosperity. 3. Fixed resources. For instance US has a limited amount of farmland. You cannot scale farming up. From one perspective there are a fixed amount of farming jobs. From another perspective people will go hungry if population is too high. The higher population California has, the more carefully it has to save water.
  - seanmcdirmid 6y ago
    The USA has a substantial surplus in arable land, so much so that it is a huge exporter of agriculture output. Now, if our population rises then we won’t export as much, which could affect say pork prices in China (they get a lot of animal feed from the USA). On the other hand, moving population from where food isn’t as abundant to a pace where it is would be more efficient overall.
tshaddox 6y ago
> and it certainly doesn't follow that nobody is harmed by any permissive migration scheme. Speaking of extremely narrow claims, of course this isn’t the case. Most policies do not have the goal that no one is harmed. As the most obvious example: criminals are harmed by laws which punish crime. Even minor loosening of restrictions to immigration might at least temporarily harm people whose jobs involve deporting immigrants or filing difficult immigration paperwork.
- gwd 6y ago
  > As the most obvious example: criminals are harmed by laws which punish crime. Even a criminal is better off in a jail than in a society run exclusively by gangs and local warlords.
anigbrowl 6y ago
When restrictionists stop using the lump-of-labor fallacy as their opening argument then discussion will no doubt evolve.
- qwerty456127 6y ago
  How comes the lump-of-labor fallacy still is so widespread? It feels like the majority of educated people should understand it's wrong yet so many people still believe in it, major politicians still exploit it regularly and that's considered Ok. Isn't this weird?

arcticbull 6y ago

The broader issue is that the US birth rate is 1.77 births per woman -- and falling, which is below the replacement rate. If you want to maintain the population (and economic activity) at the same level as today, you're going to have to bring in 0.23 people per woman per generation via immigration. In the pathological case of closed borders, the economy will shrink in accordance with the birth rate. This effect is on top of the non-zero-sum impact of qualified migrants. Consider the 1.43 births per woman (and low net migration rate) of Japan and the fact that the GDP was lower last year than it was almost twenty years ago. In the same time period the US GDP has tripled. Canada's has almost quadrupled -- and Canada brings in 1% of the nations population each year via immigration, in part to offset its 1.5 births per woman.

toomuchtodo 6y ago
Those who experience wealth inequality or are otherwise economically disadvantaged in their own country may view national economic activity in the same way they view the stock market: with apathy. Having a job at all is the priority for many.
- arcticbull 6y ago
  GDP is not a proxy for wealth inequality. For instance, Canada has much lower inequality than the US [1] (0.32 vs 0.47) and saw a much greater percentage of its country materialize through immigration, but still saw a greater increase in GDP over the same time period. Wealth inequality is a symptom of government policy, nothing more. [1] https://en.wikipedia.org/wiki/List_of_countries_by_income_equality https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...
  - deleted 6y ago
    [deleted]
    - deleted 6y ago
      [deleted]
  - toochini 6y ago
    You think a government can make inequality go away? Please give us one example
    - arcticbull 6y ago
      Sure, the Soviet Union. A government literally made inequality go away with the stroke of a pen. Ideal, of course not. Recommended? Definitely not. However, it's clear and self-evident that the US government allows wealthy people to keep their wealth. A wealth tax would solve that problem, for instance. Again, without advocating, I'm just saying that wealth and wealth inequality exist at the whim of the ruling class. I'm not sure I could come up with a counter-example that didn't involve a contrived crypto-ancap utopia. The fact that income and wealth inequality are different in different countries is proof in and of itself.

digitaltrees 6y ago

Except that even in software. More developers makes it easier to build more products and more manageable prices making it easier to expand the market. Lower develop cost makes pricing better which makes demand increases. There’s a positive feedback loop that also results in more opportunities for developers. Take the flip side. Scarcity of talent leads to competition which leads companies to be aggressive in deterring movement of employees to competitors so things like non competition agreements increase. In extreme cases you get cartel like activity between Apple <> google and others agreeing not to recruit or hire each other’s employees. Similar protections against employees founding their own companies. So while income may increase with restrictions on immigration, all of other effects may Outweigh the salary offset.

jacobriis 6y ago
Are you defending the article's claim that "In short, immigration creates more economic opportunities for everyone: a win-win scenario"? That's a tall bar to clear. "More [house cleaners] makes it easier to [clean more houses] and more manageable prices making it easier to expand the market. Lower [house cleaning] cost makes pricing better which makes demand increases. There’s a positive feedback loop that also results in more opportunities for [house cleaners]." Clearly house cleaners currently working in the US would benefit from unrestricted migration of people restricted to house cleaning. "Scarcity of talent leads to competition which leads companies to be aggressive in deterring movement of employees to competitors so things like non competition agreements increase. In extreme cases you get cartel like activity between Apple <> google and others agreeing not to recruit or hire each other’s employees." Obviously barriers to entry to professions do not always (probably never not once ever) lead to the subjugation of the members of that profession by cartels. I assume brain surgeons are then the worst off having been captured by hospitals, held in captivity and forced to preform brain surgery all day.
- LeonB 6y ago
  I do take your point, but I think “house cleaner” in 2020 doesn’t contribute to “the growth engine of the housing market” quite as directly as “software engineer” contributes to the growth engine of the software economy. No one goes around saying “house cleaning is eating the world!”

Barrin92 6y ago

>and it certainly doesn't follow that nobody is harmed by any permissive migration scheme. I've seen these responses a lot to the economic case for migration, the general tone being that economists are too simplistic in their model of migration, some fall through the cracks and so on, but what always seems to be ignored is that the exact same argument applies to political measures limiting migration. In fact the politicization of migration restriction for populist, racist reasons and so on is significantly stronger and a bigger threat than the downsides of the economic case for open migration. People in tech are very well acquainted with this logic when it comes to regulatory capture.

pnako 6y ago
A bigger threat to who?
- Barrin92 6y ago
  Everyone involved of course, given that the US loses critical talent and individuals it needs and who seek a better life in the US, the immigrants whose freedom of movement is denied and who will have fewer opportunities. The tragic outcome to these policies is how damaging they are to everyone. Immigration restrictions are by and large, the biggest inhibitor of increasing global prosperity. https://foreignpolicy.com/2019/11/01/immigration-wall-open-borders-trillion-dollar-idea/ https://foreignpolicy.com/2019/11/01/immigration-wall-open-b...

LaMarseillaise 6y ago

> a profession that has some limitation to demand This is the lump of labor fallacy. No profession is so fundamentally limited in the long term and no skills are set in stone. The article explains the national labor market effects (lower marginal cost, higher marginal benefit), but we are still not done. Resources are allocated more efficiently in the international labor market with permissive schemes, as each individual seeks the greatest marginal benefit for their labor (their comparative advantage). > The H1B scheme H1B is a restrictive immigration scheme. The recent policy change is even more restrictive. Everyone is worse off relative to having been completely permissive all along. To switch immediately to a permissive scheme would likely cause short-term unemployment in certain fields. But over the long term, people's skills can be changed or applied more efficiently, and new entrants will choose to develop skills that maximize utility.

Haga 6y ago
Slavery with less extra steps for the unskilled
im3w1l 6y ago
There are three important considerations here: 1. Service jobs such as haircutters are needed proportionally to population. 2. RnD and art. If the same proportion of the population does RnD / art, then a higher population means faster progress and more prosperity. 3. Fixed resources. For instance US has a limited amount of farmland. You cannot scale farming up. From one perspective there are a fixed amount of farming jobs. From another perspective people will go hungry if population is too high. The higher population California has, the more carefully it has to save water.
- seanmcdirmid 6y ago
  The USA has a substantial surplus in arable land, so much so that it is a huge exporter of agriculture output. Now, if our population rises then we won’t export as much, which could affect say pork prices in China (they get a lot of animal feed from the USA). On the other hand, moving population from where food isn’t as abundant to a pace where it is would be more efficient overall.

tshaddox 6y ago

> and it certainly doesn't follow that nobody is harmed by any permissive migration scheme. Speaking of extremely narrow claims, of course this isn’t the case. Most policies do not have the goal that no one is harmed. As the most obvious example: criminals are harmed by laws which punish crime. Even minor loosening of restrictions to immigration might at least temporarily harm people whose jobs involve deporting immigrants or filing difficult immigration paperwork.

gwd 6y ago
> As the most obvious example: criminals are harmed by laws which punish crime. Even a criminal is better off in a jail than in a society run exclusively by gangs and local warlords.

anigbrowl 6y ago

When restrictionists stop using the lump-of-labor fallacy as their opening argument then discussion will no doubt evolve.

qwerty456127 6y ago
How comes the lump-of-labor fallacy still is so widespread? It feels like the majority of educated people should understand it's wrong yet so many people still believe in it, major politicians still exploit it regularly and that's considered Ok. Isn't this weird?