Friday, September 14, 2018

Immigration Roundtable: Hans-Hermann Hoppe - By Jeff Deist

[Editor’s note: our immigration roundtable is a series of articles presenting the views of prominent Austrian and libertarian thinkers. By necessity each article provides only a basic overview of those views, with links to original sources.]
Our goal is to present each thinker’s views on immigration by excerpting his or her writings on the subject.
Earlier articles in this series addressed the views of Ludwig von MisesMurray N. Rothbard, and Walter Block. This article discusses the views of Dr. Hans-Hermann Hoppe.
Hans-Hermann Hoppe is well-known in Austro-libertarian circles as a critic of “open borders” and an advocate for purely private communities. In his earlier works (1980s and 1990s) on socialismprivate property, and argumentation ethics, Hoppe demonstrates his unyielding support for absolute property rights. This perspective informs his later work on trade, immigration, and borders, in well-known publications like Democracy: The God that Failed.
We start with his seminal 1998 article from the Journal of Libertarian Studies titled “The Cases for Free Trade and Restricted Immigration,” where Hoppe first challenges the analogy between trade restrictions on goods and immigration restrictions:
I will argue that this thesis and its implicit claim are fundamentally mistaken. In particular, I will demonstrate that free trade and restricted immigration are not only perfectly consistent but even mutually reinforcing policies. That is, it is not the advocates of free trade and restricted immigration who are wrong, but rather the proponents of free trade and free immigration. In thus taking the “intellectual guilt” out of the free-trade-and-restricted-immigration position and putting it where it actually belongs, I hope to promote a change in the present state of public opinion and facilitate substantial political realignment.
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Because goods and people are not the same thing, Hoppe argues, even a provable overall increase in national income does not address the subjective nature of “wealth”:
From the outset, it must be emphasized that not even the most restrictive immigration policy or the most exclusive form of segregationism has anything to do with a rejection of free trade and the adoption of protectionism. From the fact that one does not want to associate with or live in the neighborhood composed of Mexicans, Haitians, Chinese, Koreans, Germans, Catholics, Moslems, Hindus, etc., it does not follow that one does not want to trade with them from a distance. Moreover, even if it were the case that one’s real income would rise as a result of immigration, it does not follow that immigration must be considered “good,” for material wealth is not the only thing that counts. Rather, what constitutes “welfare” and “wealth” is subjective, and one might prefer lower material living standards and a greater distance from certain other people over higher material living standards and a smaller distance. It is precisely the absolute voluntariness of human association and separation — the absence of any form of forced integration — which makes peaceful relationships — free trade—between racially, ethnically, linguistically, religiously, or culturally distinct people possible.
Furthermore, the incentive to emigrate from low-wage countries to higher-wage countries is reduced by free trade policies:
The relationship between trade and migration is one of elastic substitutibility (rather than rigid exclusivity): the more (or less) you have of one, the less (or more) you need of the other. Other things being equal, businesses move to low wage areas, and labor moves to high wage areas, thus effecting a tendency toward the equalization of wage rates (for the same kind of labor) as well as the optimal localization of capital. With political borders separating high- from low-wage areas, and with national (nation-wide) trade and immigration policies in effect, these normal tendencies — of immigration and capital export — are weakened with free trade and strengthened with protectionism. As long as Mexican products — the products of a low-wage area — can freely enter a high-wage area such as the U.S., the incentive for Mexican people to move to the U.S. is reduced. In contrast, if Mexican products are prevented from entering the American market, the attraction for Mexican workers to move to the U.S. is increased. Similarly, when U.S. producers are free to buy from and sell to Mexican producers and consumers, capital exports from the U.S. to Mexico will be reduced; however, when U.S. producers are prevented from doing so, the attraction of moving production from the U.S. to Mexico is increased.
Hoppe then makes his critical distinction between “invited” goods imported by a willing buyer and an individual’s desire to move at will. Uninvited mass migration, he argues, frequently makes one party or parties (current inhabitants of the recipient nation) subjectively worse off in their view. Thus immigration is not always analogous to “win-win” trade exchanges.
The phenomena of trade and immigration are different in a fundamental respect, and the meaning of “free” and “restricted” in conjunction with both terms is categorically different. People can move and migrate; goods and services, of themselves, cannot.
Put differently, while someone can migrate from one place to another without anyone else wanting him to do so, goods and services cannot be shipped from place to place unless both sender and receiver agree. Trivial as this distinction may appear, it has momentous consequences. For free in conjunction with trade then means trade by invitation of private households and firms only; and restricted trade does not mean protection of households and firms from uninvited goods or services, but invasion and abrogation of the right of private households and firms to extend or deny invitations to their own property. In contrast, free in conjunction with immigration does not mean immigration by invitation of individual households and firms, but unwanted invasion or forced integration; and restricted immigration actually means, or at least can mean, the protection of private households and firms from unwanted invasion and forced integration. Hence, in advocating free trade and restricted immigration, one follows the same principle: requiring an invitation for people as for goods and services.
However, with respect to the movement of people, the same government will have to do more in order to fulfill its protective function than merely permit events to take their own course, because people, unlike products, possess a will and can migrate. Accordingly, population movements, unlike product shipments, are not per se mutually beneficial events because they are not always — necessarily and invariably — the result of an agreement between a specific receiver and sender.
Furthermore, the reality of modern welfare states means that an influx of people (unlike an influx of goods) can be disastrous:
According to proponents of unconditional free immigration, the U.S. qua high-wage area would invariably benefit from free immigration; hence, it should enact a policy of open borders, regardless of any existing conditions, i.e., even if the U.S. were ensnarled in protectionism and domestic welfare. Yet surely, such a proposal strikes a reasonable person as fantastic. Assume that the U.S., or better still Switzerland, declared that there would no longer be any border controls, that anyone who could pay the fare might enter the country, and, as a resident then be entitled to every “normal” domestic welfare provision. Can there be any doubt how disastrous such an experiment would turn out in the present world?. The U.S., and Switzerland even faster, would be overrun by millions of third-world immigrants, because life on and off American and Swiss public streets is comfortable compared to life in many areas of the third world. Welfare costs would skyrocket, and the strangled economy disintegrate and collapse, as the subsistence fund — the stock of capital accumulated in and inherited from the past — was plundered. Civilization in the U.S. and Switzerland would vanish, just as it once did from Rome and Greece.
What then, is Hoppe’s answer to the essential conflict posed by immigration rules — i.e., the desires of some residents of a country to permit immigration, and the desire of others to prohibit it? Not open borders, he says, which are inconsistent and contradictory. Some immigration restrictions must exist, but what restrictions? The only consistent and workable answer to that question is nothing less that a full anarcho-capitalist model for property, where private owners invite immigrants onto their property after assessing the benefits and costs. Neither forced integration nor forced exclusion should be permissible:
The guiding principle of a high-wage-area country’s immigration policy follows from the insight that immigration, to be free in the same sense as trade is free, must be invited immigration. The details follow from the further elucidation and exemplification of the concept of invitation vs. invasion and forced integration.
For this purpose, it is necessary to assume first, as a conceptual benchmark, the existence of what political philosophers have described as a private property anarchy, anarcho-capitalism, or ordered anarchy: all land is privately owned, including all streets, rivers, airports, harbors, etc. With respect to some pieces of land, the property title may be unrestricted, that is, the owner is permitted to do with his property whatever he pleases as long as he does not physically damage the property of others. With respect to other territories, the property title may be more or less restricted. As is currently the case in some developments, the owner may be bound by contractual limitations on what he can do with his property (restrictive covenants, voluntary zoning), which might include residential rather than commercial use, no buildings more than four stories high, no sale or rent to unmarried couples, smokers, or Germans, for instance.
Clearly, in this kind of society, there is no such thing as freedom of immigration, or an immigrant’s right of way. What does exist is the freedom of independent private property owners to admit or exclude others from their own property in accordance with their own restricted or unrestricted property titles. Admission to some territories might be easy, while to others it might be nearly impossible. Moreover, admission to one party’s property does not imply the “freedom to move around,” unless other property owners have agreed to such movements. There will be as much immigration or non-immigration, inclusivity or exclusivity, desegregation or segregation, non-discrimination or discrimination as individual owners or owners associations desire.
When government intrudes, however — with its arbitrary borders and sanctioned passports — bureaucrats rather than invested property owners make the immigration rules. Thus what ought to be a private system becomes political:
In order to realize what this involves, it is necessary to explain how an anarcho-capitalist society is altered by the introduction of a government, and how this affects the immigration problem. Since in an anarcho-capitalist society there is no government, there is no clear-cut distinction between inlanders (domestic citizens) and foreigners. This distinction appears only with the establishment of a government. The territory which a government’s power extends over then becomes inland, and everyone residing outside of this territory becomes a foreigner. State borders (and passports), as distinct from private property borders (and titles to property), come into existence, and immigration takes on a new meaning. Immigration becomes immigration by foreigners across state borders, and the decision as to whether or not a person should be admitted no longer rests exclusively with private property owners or associations of such owners but with the government qua domestic security producer. Now, if the government excludes a person while there exists a domestic resident who wants to admit this very person onto his property, the result is forced exclusion; and if the government admits a person while there exists no domestic resident who wants to have this person on his property, the result is forced integration.
How would a process of “invited” immigrants work, per Hoppe? Through contractual admission, which in effect makes the inviting party the sponsor of such immigrants:
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Qua contractual admission, the inviting party can dispose only of his own private property. Hence, the admission implies negatively — similarly to the scenario of conditional free immigration — that the immigrant is excluded from all publicly funded welfare. Positively, it implies that the receiving party assumes legal responsibility for the actions of his invitee for the duration of his stay. The invitor is held liable to the full extent of his property for any crimes the invitee commits against the person or property of any third party (as parents are held accountable for the crimes of their offspring as long as they are members of the parental household). This obligation, which implies practically speaking that invitors will have to carry liability insurance for all of their guests, ends once the invitee has left the country, or once another domestic property owner has assumed liability for the person in question (by admitting him onto his property).
The invitation may be private (personal) or commercial, temporally limited or unlimited, concerning only housing (accommodation, residency) or housing and employment (but there cannot be a valid contract involving only employment and no housing). In any case, however, as a contractual relationship, every invitation may be revoked or terminated by the invitor; and upon termination, the invitee — whether tourist, visiting businessman, or resident alien — will be required to leave the country (unless another resident citizen enters an invitation-contract with him).
Dr. Hoppe closes the article with an admonition against the automatic grant of voting and citizenship rights to immigrants:
Becoming a citizen means acquiring the right to stay in a country permanently, and a permanent invitation cannot be secured other than by purchasing residential property from a citizen resident. Only by selling real estate to a foreigner does a citizen indicate that he agrees to a guest’s permanent stay (and only if the immigrant has purchased and paid for real estate and residential housing in the host country will he assume a permanent interest in his new country’s well-being and prosperity). Moreover, finding a citizen willing to sell residential property and being prepared and able to pay for it, although a necessary requirement for the acquisition of citizenship, may not also be sufficient. If and insofar as the domestic property in question is subject to restrictive covenants, the hurdles to be taken by a prospective citizen may be significantly higher. In Switzerland, for instance, citizenship may require that the sale of residential property to foreigners be ratified by a majority of or even all directly affected local property owners.
Moving forward to 2001, when Dr. Hoppe releases his famous political polemic Democracy: The God that Failed. Here he presents his full exposition of how and why democratic processes are incompatible with property and laissez-faire. He builds on his central arguments: trade protectionism and migration restrictions are not the same, neither forced integration nor forced exclusion are defendable, and only a system of fully private property can justifiably and practically resolve conflicts over immigration.
He opens chapter 7 of the book, titled “On Free Immigration and Forced Integration,” with a synopsis of the classical liberal argument for free immigration as increasing overall standards of living:
The classical argument in favor of free immigration runs as follows: Other things being equal, businesses go to low-wage areas, and labor moves to high-wage areas, thus affecting a tendency toward the equalization of wage rates (for the same kind of labor) as well as the optimal localization of capital. An influx of migrants into a given-sized high-wage area will lower nominal wage rates. However, it will not lower real wage rates if the population is below its optimum size. To the contrary, if this is the case, the produced output will increase over-proportionally, and real incomes will actually rise. Thus, restrictions on immigration will harm the protected domestic workers qua consumers more than they gain qua producers. Moreover, immigration restrictions will increase the “flight” of capital abroad (the export of capital which otherwise might have stayed), still causing an equalization of wage rates (although somewhat more slowly), but leading to a less than optimal allocation of capital, thereby harming world living standards all-around.
But again, the Austrian perspective requires us to understand value subjectively:
The problem with the above argument is that it suffers from two interrelated shortcomings which invalidate its unconditional pro-immigration conclusion and/or which render the argument applicable only to a highly unrealistic — long bygone — situation in human history. The first shortcoming will only be touched upon. To libertarians of the Austrian School, it should be clear that what constitutes “wealth” and “well-being” is subjective. Material wealth is not the only thing that has value. Thus, even if real incomes rise due to immigration, it does not follow that immigration must be considered “good,” for one might prefer lower living standards and a greater distance to other people over higher living standards and a smaller distance to others. Instead, a second, related shortcoming will be the focus here. With regard to a given territory into which people immigrate, it is left unanalyzed who, if anyone, owns (controls) this territory. In fact, in order to render the above argument applicable, it is implicitly assumed that the territory in question is unowned, and that the immigrants enter virgin territory (open frontier). Obviously, today this can no longer be assumed. It this assumption is dropped, however, the problem of immigration takes on an entirely new meaning and requires fundamental rethinking.
Hoppe expands the analysis to consider the likely differences in immigration policies under two scenarios, namely monarchy and democracy. First he considers a monarchical ruler:
It is time to enrich the analysis through the introduction of a few “realistic” empirical assumptions. Let us assume that the government is privately owned. The ruler owns the entire country within state borders. He owns part of the territory outright (his property title is unrestricted), and he is partial owner of the rest (as landlord or residual claimant of all of his citizen-tenants real estate holdings, albeit restricted by some preexisting rental contracts). He can sell and bequeath his property, and he can calculate and capture the monetary value of his capital (his country). Traditional monarchies — and kings — are the closest historical examples of this form of government. What will a king’s typical immigration and emigration policy be? Because he owns the entire country’s capital value, he will tend to choose migration policies that preserve or enhance rather than diminish the value of his kingdom, assuming no more than his self-interest.
He contrasts this with democratic leaders, whose time preferences reflect only their tenure in office:
Migration policies become predictably different once the government is publicly owned. The ruler no longer owns the country’s capital value but only has current use of it. He cannot sell or bequeath his position as ruler; he is merely a temporary caretaker. Moreover, “free entry” into the position of a caretaker government exists. In principle, anyone can become the ruler of the country. As they came into existence on a worldwide scale after World War I, democracies offer historical examples of public government. What are a democracy’s migration policies? Once again assuming no more than self-interest (maximizing monetary and psychic income: money and power), democratic rulers tend to maximize current income, which they can appropriate privately, at the expense of capital values, which they can not appropriate privately. Hence, in accordance with democracy’s inherent egalitarianism of one-man-one-vote, they tend to pursue a distinctly egalitarian-nondiscriminatory-emigration and immigration policy.
As far as immigration policies are concerned, the incentives and disincentives are likewise distorted, and the results are equally perverse. For a democratic ruler, it also matters little whether bums or geniuses, below or above-average civilized and productive people immigrate into the country. Nor is he much concerned about the distinction between temporary workers (owners of work permits) and permanent, property owning immigrants (naturalized citizens). In fact, bums and unproductive people may well be preferred as residents and citizens, because they create more so-called “social” problems,” and democratic rulers thrive on the existence of such problems. Moreover, bums and inferior people will likely support his egalitarian policies,
He concludes the chapter with a robust call for radical decentralization of immigration policy as the least-bad approach in democratic systems:
The current situation in the United States and in Western Europe has nothing whatsoever to do with “free” immigration. It is forced integration, plain and simple, and forced integration is the predictable outcome of democratic one-man-one-vote rule. Abolishing forced integration requires the de-democratization of society and ultimately the abolition of democracy. More specifically, the power to admit or exclude should be stripped from the hands of the central government and reassigned to the states, provinces, cities, towns, villages, residential districts, and ultimately to private property owners and their voluntary associations. The means to achieve this goal are decentralization and secession (both inherently undemocratic, and anti-majoritarian). One would be well on the way toward a restoration of the freedom of association and exclusion as is implied in the idea and institution of private property, and much of the social strife currently caused by forced integration would disappear, if only towns and villages could and would do what they did as a matter of course until well into the nineteenth century in Europe and the United States: to post signs regarding entrance requirements to the town, and once in town for entering specific pieces of property (no beggars, bums, or homeless, but also no Moslems, Hindus, Jews, Catholics, etc.); to expel as trespassers those who do not fulfill these requirements; and to solve the “naturalization” question somewhat along the Swiss model, where local assemblies, not the central government, determine who can and who cannot become a Swiss citizen.
Finally, in articles like A Realistic Libertarianism Hoppe makes the case for treating the net taxpayers of any political jurisdiction as the rightful owners of “common” or government property — with political officials acting as trustees of that property. Those trustees should ensure that property owners who invite immigrants bear the full cost of their impact on taxpayer-funded commons:
In a world where all places are privately owned, the immigration problem vanishes. There exists no right to immigration. There only exists the right to trade, buy or rent various places. Yet what about immigration in the real world with public property administered by local, regional or central State-governments?
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First off: What would immigration policies be like if the State would, as it is supposed to do, act as a trustee of the taxpayer-owners’ public property? What about immigration if the State acted like the manager of the community property jointly owned and funded by the members of a housing association or gated community?
At least in principle the answer is clear. A trustee’s guideline regarding immigration would be the “full cost” principle. That is, the immigrant or his inviting resident should pay the full cost of the immigrant’s use made of all public goods or facilities during his presence. The cost of the community property funded by resident taxpayers should not rise or its quality fall on account of the presence of immigrants. On the contrary, if possible the presence of an immigrant should yield the resident-owners a profit, either in the form of lower taxes or community-fees or a higher quality of community property (and hence all-around higher property values).
What the application of the full cost principle involves in detail depends on the historical circumstances, i.e., in particular on the immigration pressure. If the pressure is low, the initial entry on public roads may be entirely unrestricted to ‘foreigners’ and all costs insofar associated with immigrants are fully absorbed by domestic residents in the expectation of domestic profits. All further-going discrimination would be left to the individual resident-owners (this, incidentally, is pretty much the state of affairs, as it existed in the Western world until WW I). But even then, the same generosity would most likely not be extended to the use made by immigrants of public hospitals, schools, universities, housing, pools, parks, etc.. Entry to such facilities would not be “free” for immigrants. To the contrary, immigrants would be charged a higher price for their use than the domestic resident-owners who have funded these facilities, so as to lower the domestic tax-burden. And if a temporary visitor-immigrant wanted to become a permanent resident, he might be expected to pay an admission price, to be remitted to the current owners as compensation for the extra-use made of their community property.
He also rejects the “accelerationist” view of some libertarians, namely that free immigration rules would overwhelm modern western welfare systems and thus hasten the demise of their respective governments:
Absent any other, internal or local entry restrictions concerning the use of domestic public properties and services and increasingly absent also all entry restrictions regarding the use of domestic private property (owing to countless anti-discrimination laws), the predictable result would be a massive inflow of immigrants from the third and second world into the US and Western Europe and the quick collapse of the current domestic ‘public welfare’ system. Taxes would have to be sharply increased (further shrinking the productive economy) and public property and services would dramatically deteriorate. A financial crisis of unparalleled magnitude would result.
Yet why would this be a desirable goal for anyone calling himself a libertarian? True enough, the tax-funded public welfare system should be eliminated, root and branch. But the inevitable crisis that a “free” immigration policy would bring about does not produce this result. To the contrary: Crises, as everyone vaguely familiar with history would know, are typically used and often purposefully fabricated by States in order to further increase their own power. And surely the crisis produced by a “free” immigration policy would be an extraordinary one.
He concludes with another admonition regarding the incompatibility of mass immigration and democracy, where political leaders bear no cost when they subsidize immigrants rather than act as trustees for property owners:
The immigration policies of the States that are confronted with the highest immigration pressure, of the US and Western Europe, have little resemblance with the actions of a trustee. They do not follow the full cost principle. They do not tell the immigrant essentially to “pay up or leave.” To the contrary, they tell him “once in, you can stay and use not just all roads but all sorts of public facilities and services for free or at discounted prices even if you do not pay up.” That is, they subsidize immigrants — or rather: they force domestic taxpayers to subsidize them. In particular, they also subsidize domestic employers who import cheaper foreign workers, because such employers can externalize part of the total costs associated with their employment — the free use to be made by his foreign employees of all resident public property and facilities — onto other domestic taxpayers. And they still further subsidize immigration (internal migration) at the expense of resident-taxpayers in prohibiting — by means of non-discrimination laws — not only all internal, local entry restrictions, but also and increasingly all restrictions concerning the entry and use of all domestic private property.
Ultimately, Dr. Hans-Hermann Hoppe’s positions on immigration and borders are logically consistent with a private property order — one where owners of said property bear the benefits and burdens of immigration. Government ownership of real estate, particularly in democratic welfare states, clouds the immigration issue and forces us to analyze the “least bad” policies.
Note: The views expressed on are not necessarily those of the Mises Institute.
Jeff Deist [send him mail] is president of the Mises Institute, a tax attorney, and a former staffer for Ron Paul.