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100% Free Markets = 100% Open Borders


My own position is that free markets are a good thing in moderation. Capitalism has been extraordinarily powerful in generating economic growth. Free markets and letting buyers and sellers determine the price and quantity of goods based on their own rational choices has been an incredibly powerful tool for the creation of societal wealth.

Yeah, you can’t have complete anarchy in free markets. You can’t allow fraud. You can’t allow arbitrary reneging on previously signed contracts. You can’t allow profit-making activities that wreck the profit-making potential of the neighbors. (No opening a smelly chemical factory next to someone else’s pre-existing luxury resort.) And you do need government to invest in shared goods everyone is going to need, like educating the children or staffing a police force.

But, basically, free markets are a good thing and with light handed regulation, they get even better.

However, some people want zero government intervention at all. They idolize far-right economists such as Friedrich Hayek who said that all government intervention in the market produces dead-weight losses compared to letting market rationality determine outcomes. If they read popular fiction, they adore Ayn Rand who said that if anything was rational, people would produce it of its own accord. Government exists only to protect the mediocre against the great.

These people want zero government regulation of anything. They are completely and totally libertarian all the way.

They are against minimum wages. They are against ecological regulations. They are against anti-trust regulations. They are against product safety regulations. They are against securities paperwork regulations. They are against equal opportunity regulations. They are against gun control. They are against zoning regulations. They are against workhour regulations.

They are particularly against the government regulation of financial activity. An open free capital market should have no borders. Those arguments actually sound pretty good. People should be able to invest in any country they want. They should be able to remove their money from any country they want. Money should be allowed to flow freely to whatever nation provides the greatest return and to then be transferred to other projects if no opportunities arise that produce even greater returns.

Leftist nationalists have counter-arguments against that position. However, completely free flow of capital across borders is an appealing idea. A lot of growth has occurred due to the flow of money from the rich nations to viable economic opportunities in the Global South.

If we take their positions seriously, money should be allowed to cross any border it wants to. Money should move to the international location of greatest profitability. Businesses should be able to accept money from any location. There should be no geographical limits on investment.  Government should not tell any business or any investor where they can place or cannot transfer their money.

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Well, how come what applies to money does not apply to labor?

Why shouldn’t workers be allowed to cross any border they want to? Why shouldn’t labor move to the international location of greatest profitability? Why shouldn’t businesses be able to accept workers from any location? Why should there be geographical limits on working? Why should government be able to tell any employer who they can or can not hire?

Why isn’t economic output maximized by letting the market rationally match workers who want to work with employers who want to hire them?

If someone from Paraguay wants to come to the United States and work for fifty cents an hour, why isn’t it more rational to let employers use the cheapest possible labor possible?

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Most American conservatives are profoundly opposed to increasing the amount of immigration to the United States, and want strong government measures taken to keep the migrants out.

They want walls.

They want police forces dedicated to finding migrants and sending them home.

They want the government to lock up migrants’ children to provide future migrants with negative incentives to come to the United States.

All of this represents government intervention in the working of a free and rational labor market.

The conservatives may have arguments that justify their positions.

They may claim that Americans are better off with fewer migrants.

They may claim that American unemployment will be lower with fewer migrants and that American income will be higher.

They may claim that new migrants provide a drain on public goods and services.

I do not fully agree with those claims – but for the present purposes – let us assume every one of those conservative positions is correct.

If they are paying millions and millions of government dollars on border defense – using tax dollars to interfere with the working of the free market ….

Who is the bigger “socialist”, Alexandria Ocasio-Cortez or Donald Trump?

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