Culture, Not Economics, Determines Immigration Politics

Immigration has raised the wages of US-born workers.  Moneybox:

Via Dylan Matthews, the Hamilton Project has the great summary chart (above) comparing the findings about the short-term economic impact of immigration from two major studies by economists.  I'm more of an Ottaviano-Peri man than a Borjas-Katz man because I believe in complementarity, the idea that immigrant workers increase the demand for skills (English language competence, for example) that even 'unskilled' U.S.-born workers have.

What it also shows you is that the actual economics of immigration are totally irrelevant to the political debate. The voters most likely to oppose high levels of immigration are precisely the people who Borjas and Katz say benefit from it economically. Meanwhile, immigration supporters and especially Spanish-dominant Latinos often feel the negative wage impact of immigration, since that's where complementarity plays the least role. In other words, if the immigration issue were about economics, then you'd see white working-class voters clamoring for amnesty and open borders while SEIU and MALDEF emphasized the need to secure the border before taking any further steps.

Of course you don't see that at all...

Kevin Drum explains the politics further:

John Tanton, the founder of FAIR, the nation’s oldest and most influential immigration restriction group... tried to preach an anti-immigration message based on economic and conservation grounds. But it didn't work. Chris tells us what did work:

Crisscrossing the country, Tanton found little interest in his conservation-based arguments for reduced immigration, but kept hearing the same complaint. “‘I tell you what pisses me off,’” Tanton recalls people saying. “‘It’s going into a ballot box and finding a ballot in a language I can’t read.’ So it became clear that the language question had a lot more emotional power than the immigration question.”
Tanton tried to persuade FAIR to harness this “emotional power,” but the board declined. So in 1983, Tanton sent out a fundraising letter on behalf of a new group he created called U.S. English. Typically, Tanton says, direct mail garners a contribution from around 1 percent of recipients. “The very first mailing we ever did for U.S. English got almost a 10 percent return,” he says. “That’s unheard of.” John Tanton had discovered the power of the culture war.
The success of U.S. English taught Tanton a crucial lesson. If the immigration restriction movement was to succeed, it would have to be rooted in an emotional appeal to those who felt that their country, their language, their very identity was under assault. “Feelings,” Tanton says in a tone reminiscent of Spock sharing some hard-won insight on human behavior, “trump facts.”

Cultural insecurity and language angst are the key issues here. It doesn't matter if they're rational or not.

 How much of general globalization opposition is also due to cultural issues rather than economic ones? 

The reason immigration benefits native workers is that they are more complimentary for native workers rather than substitutes which makes native workers more productive.  The same is true for capital goods.  If robots make your labor more productive, then they will raise your wage, but if they are substitutes for your labor, then they will lower your wage.  Immigration has increased the supply of dishwashers and busboys which has let native-born Americans move up to higher-paid employment as waiters, chefs, and making kitchen equipment.  Moneybox:

The research that really changed my thinking on this is ably covered in this great Heidi Shierholz did for EPI back in February 2010. Note that EPI is the premiere labor-liberal think tank in Washington and hardly a hotbed of apologism for the top one percent. The basic point here is that the old CW on low-skill immigration is that it raised real wages for high-skill workers but lowered them for low-skill workers. The key methodological advance comes from realizing that a very large share of low-skill workers in the United States are themselves immigrants. Since restricting low-skill immigration for the sake of low-skill immigrants is a little perverse, it's helpful to distinguish between the impact on immigrant workers and native-born workers.

Here's what they found:

One key finding here is that if you look at typical native-born working class Americans—folks with high school diplomas but no college degree—they win out thanks to immigration. And even if you restrict your attention to U.S.-born high school dropouts they win under most scenarios.

The losses from increased labor market competition are very real but they're concentrated among other immigrants. That's because it's all about complements. An increased supply of dishwashers and busboys increases the value of modestly educated people with complementary skills. To return to the restaurant, a waiter or a bartender needs to be able to speak English. In a world with no immigrants "can speak English" isn't much of a skill but when low-skill immigrants rush in suddenly it is. The people who lose out are the other workers who can't speak English, or who have specialized taco-making skills, or otherwise are extremely similar to new immigrants.

To Trade Is Human

Updated at Medianism.org

The Wall Street Journal summarized the work of some economic historians who argue that trade was the reason that puny humans took over the world: Evolution and Creativity: Why Humans Triumphed:

Nothing seems to explain the sudden takeoff of the last 45,000 years—the conversion of just another rare predatory ape into a planet dominator with rapidly progressing technologies. Once “progress” started to produce new tools, different ways of life and burgeoning populations, it accelerated all over the world, culminating in agriculture, cities, literacy and all the rest. Yet all the ingredients of human success—tool making, big brains, culture, fire, even language—seem to have been in place half a million years before and nothing happened. Tools were made to the same monotonous design for hundreds of thousands of years and the ecological impact of people was minimal. Then suddenly—bang!—culture exploded, starting in Africa. Why then, why there? The answer lies in a new idea, borrowed from economics, known as collective intelligence: the notion that what determines the inventiveness and rate of cultural change of a population is the amount of interaction between individuals….
Scientists have so far been looking for the answer to this riddle in the wrong place: inside human heads. Most have been expecting to find a sort of neural or genetic breakthrough that sparked a “big bang of human consciousness,” an auspicious mutation so that people could speak, think or plan better, setting the human race on the path to continuous and exponential innovation.  But the sophistication of the modern world lies not in individual intelligence or imagination. It is a collective enterprise. Nobody—literally nobody—knows how to make the pencil on my desk ...let alone the computer on which I am writing…
We tend to forget that trade and urbanization are the grand stimuli to invention, far more important than ...individual genius. It is no coincidence that trade-obsessed cities—Tyre, Athens, Alexandria, Baghdad, Pisa, Amsterdam, London, Hong Kong, New York, Tokyo, San Francisco—are the places where invention and discovery happened. Think of them as well-endowed collective brains. Trade also gave way to centralized institutions…
Agriculture was invented where people were already living in dense trading societies….
Go even further back and you find the same thing. The explosion of new technologies for hunting and gathering in western Asia around 45,000 years ago, often called the Upper Paleolithic Revolution, occurred in an area with an especially dense population of hunter-gatherers—with a bigger collective brain. Long before the ancestors of modern people first set foot outside Africa, there was cultural progress within Africa itself, but it had a strangely intermittent, ephemeral quality: There would be flowerings of new tool kits and new ways of life, which then faded again….
Trade is to culture as sex is to biology. Exchange makes cultural change collective and cumulative. It becomes possible to draw upon inventions made throughout society, not just in your neighborhood. The rate of cultural and economic progress depends on the rate at which ideas are having sex.
Dense populations don’t produce innovation in other species. They only do so in human beings, because only human beings indulge in regular exchange of different items among unrelated, unmated individuals and even among strangers. So here is the answer to the puzzle of human takeoff. It was caused by the invention of a collective brain itself made possible by the invention of exchange.
Once human beings started swapping things and thoughts, they stumbled upon divisions of labor, in which specialization led to mutually beneficial collective knowledge. Specialization is the means by which exchange encourages innovation: In getting better at making your product or delivering your service, you come up with new tools. The story of the human race has been a gradual spread of specialization and exchange ever since: Prosperity consists of getting more and more narrow in what you make and more and more diverse in what you buy. Self-sufficiency—subsistence—is poverty….
This theory neatly explains why some parts of the world lagged behind in their rate of cultural evolution after the Upper Paleolithic takeoff. Australia, though it was colonized by modern people 20,000 years earlier than most of Europe, saw comparatively slow change in technology and never experienced the transition to farming. This might have been because its dry and erratic climate never allowed hunter-gatherers to reach high enough densities of interaction to indulge in more than a little specialization.
Where population falls or is fragmented, cultural evolution may actually regress. A telling example comes from Tasmania, where people who had been making bone tools, clothing and fishing equipment for 25,000 years gradually gave these up after being isolated by rising sea levels 10,000 years ago. Joe Henrich of the University of British Columbia argues that the population of 4,000 Tasmanians on the island constituted too small a collective brain to sustain, let alone improve, the existing technology.
The oldest evidence for human trade comes from roughly 80,000 to 120,000 years ago, when shell beads in Algeria and obsidian tools in Ethiopia began to move more than 100 miles from the sea and from a particular volcano respectively. (In recent centuries stone tools moved such distances in Australia by trade rather than by migration.) This first stirring of trade was the most momentous innovation of the human species, because it led to the invention of invention. Why it happened in Africa remains a puzzle, but Steve Kuhn and Mary Stiner of the University of Arizona have argued that for some reason only Africans had invented a sexual division of labor between male hunters and female gatherers—the most basic of all trades….
The process of cumulative innovation that has doubled life span, cut child mortality by three-quarters and multiplied per capita income ninefold—world-wide—in little more than a century is driven by ideas having sex. And things like the search engine, the mobile phone and container shipping just made ideas a whole lot more promiscuous still.

The article also talks about Neanderthals:

Neanderthals are now known to have had brains that were bigger than ours and to have inherited the same genetic mutations that facilitate speech as us. Yet, despite surviving until 30,000 years ago, they hardly invented any new tools, let alone farms, cities and toothpaste. The Neanderthals prove that it is quite possible to be intelligent and imaginative human beings (they buried their dead) yet not experience cultural and economic progress.
Further proof that exchange and collective intelligence are the key to human progress comes from Neanderthal remains. Almost all Neanderthal tools are found close to their likely site of origin: they did not trade. In the southern Caucasus, argues Daniel Adler of the University of Connecticut, it is the “development and maintenance of larger social networks, rather than technological innovations or increased hunting prowess, that distinguish modern humans from Neanderthals.

Our ancestors (Homo sapiens) displaced Neanderthal man (Homo neanderthalensis) despite our competitors having larger brains and much stronger bodies.  They had tools and speech and buried their dead.  Jason Shogren argues that the only advantage our ancestors had over Neanderthal man is that Homo sapiens was much more inclined to trade:

SINCE the days of Adam Smith and David Ricardo, advocates of free trade and the division of labour, …have lauded the advantages of those economic principles. Until now, though, no one has suggested that they might be responsible for the very existence of humanity. But that is the thesis propounded by Jason Shogren, … For Dr Shogren is suggesting that trade and specialisation are the reasons Homo sapiens displaced previous members of the genus, such as Homo neanderthalensis (Neanderthal man), and emerged triumphant as the only species of humanity.
Neanderthal man has had a bad cultural rap over the years since the discovery of the first specimen in the Neander valley in Germany, in the mid-19th century. The “caveman” image of a stupid, grunting, hairy, thick-skulled parody of graceful modern humanity has stuck in the public consciousness. But current scholarship suggests Neanderthals were probably about as smart as modern humans, and also capable of speech. If they were hairy, strong and tough—which they were—that was an appropriate adaptation to the ice-age conditions in which they lived. So why did they become extinct?
Neanderthals existed perfectly successfully for 200,000 years before Homo sapiens arrived in their European homeland about 40,000 years ago, …. But 10,000 years later they were gone, so it seems likely that the arrival of modern man was the cause. The two species certainly occupied more or less the same ecological niche (hunting a wide range of animals, and gathering a similarly eclectic range of plant food), and would thus have been competitors….  according to Dr Shogren’s paper in a forthcoming edition of the Journal of Economic Behaviour and Organisation, it was neither cave paintings nor better spear points that led to Homo sapiens‘s dominance. It was a better economic system.
One thing Homo sapiens does that Homo neanderthalensis shows no sign of having done is trade. The evidence suggests that such trade was going on even 40,000 years ago. Stone tools made of non-local materials, and sea-shell jewellery found far from the coast, are witnesses to long-distance exchanges. That Homo sapiens also practised division of labour and specialisation is suggested not only by the skilled nature of his craft work, but also by the fact that his dwellings had spaces apparently set aside for different uses….  Only in the case of the trading and specialisation variables did they allow Homo sapiens an advantage: specifically, they assumed that the most efficient human hunters specialised in hunting, while bad hunters hung up their spears and made things such as clothes and tools instead. Hunters and craftsmen then traded with one another.
According to the model, this arrangement resulted in everyone getting more meat, which drove up fertility and thus increased the population. Since the supply of meat was finite, that left less for Neanderthals, and their population declined…. the presence of a trading economy in the modern human population can result in the extermination of Neanderthals even if the latter are at an advantage in traditional biological attributes, such as hunting ability.

Both trade and technology finally had an enduring expansion during the “upper paleolithic explosion” about 40,000 years ago. The above reading argues that it was due to population density.  Haim Ofek’s book argues that this was due to the invention of money.  He argues that this was the time when there was a blossoming of symbolic expression like sculpture and cave paintings.  Money is nothing more than a symbolic representation of value and so a culture that widely engages in symbolic artistic representation may also ‘get’ the idea that rare beads are worth trading for food or stone blades.