Is there enough asymmetric information to create adverse selection? Criminals and welfare bums might have some asymmetric information, but these were excluded from the argument. What remains seems to be the potential for some mysterious damage to the commons. Is the idea that people come here with the explicit purpose of changing the culture negatively? Are they any more likely to succeed than those who are here already trying to do the same thing?
Any change is seen as negative by someone. Is it really the case that non-criminal immigrants have such divergent preferences that we should count them as a negative externality?
The reliance on a weak analogy with financial instruments makes Khale's argument confusing and unpersuasive. It is fair to worry about criminals and welfare bums and the difficulty of distinguishing them from others, but it seems unfair to punish others because of this difficulty. Perhaps it is necessary none the less, but Khale's argument does not make this more apparent to me.
IF you've studied at least a little economics, you recognize traffic congestion as a classic negative externality: the marginal driver doesn’t bear the full social cost of joining traffic, leading to overuse of shared resources. We solve this with tools like congestion pricing to internalize those costs. Caplan’s proposals for immigrant vetting—admitting those with financially responsible sponsors or requiring refundable bonds—seem to follow a similar logic by ensuring the risks are borne by those creating them.
But doesn’t this acknowledge that open borders without these mechanisms impose negative externalities on “natives”? While Caplan might argue that the marginal gains to immigrants outweigh the costs to residents, this feels theoretical to those living in El Paso or East LA, where the impact on infrastructure, public services, and community cohesion is most visible.
If we’re serious about accounting for externalities, shouldn’t we also consider harder-to-quantify costs, like the erosion of social trust or strain on cultural and institutional foundations that high-trust societies rely on? These are real losses that affect the very social systems enabling prosperity. If Caplan accepts the need for congestion pricing in other contexts, why wouldn’t similar principles apply to managing the externalities of open borders? What price does he place on the unique cultural and social assets being strained, and how does his moral calculus address these costs?
Sounds a lot like the Benedict Option without religion. But I'm not sure how well it works anymore without religion. People's values are too far apart.
What if we tweak your "communist" vision so that the cul-de-sac has a religious affiliation and only allows co-religionists to buy? Should that be legal?
The canary in the coal mine is Canada, UK, and Australia. Three large Anglo countries across three different continents.
All went "all-in" on infinite Indian immigration the last decade. All stagnating on a per capita GDP basis. All failed to create Silicon Valley 2.0. All consider it a failure and incumbents are losing big time.
Silicon Valley is an ethos. Risk taking, non-conformity, and a variety of anglo values.
Hot house cram school culture is the opposite.
And Indian culture in particular, with its nepotism, corruption, dishonesty, and factionalism is particularly toxic.
Indian values are great for ruthlessly taking over existing institutions, but not building or maintaining them. The rest of the anglo sphere already figure this out.
Ironically, it would be in the best interest of existing Indian immigrants to cut immigration. They already have a critical mass of co-ethnics. Further immigration will "dilute the brand" and cause massive strain with the native populations as happened in the other anglo countries.
Like Catholic Europe in 1924 or Hispanics in the 2024 election, Indians need to recognize that a break is necessary to facilitate proper assimilation.
On the last point, another keyhole solution is insurance. Imagine the guys milling about outside Home Depot in the mornings holding up signs that say "Bonded and Insured"
Legal and illegals immigrants bring at least one major factor that everyone seeks to ignore because the focus is on economics alone for some reason — cultural incompatibility.
America had decayed in line with the ingress of culturally incompatible immigrants (legal or not), and Americans have suffered for it.
We cannot boost America by diluting America and replacing Americans.
The issue with this is that those people, and their cultures, were already a good fit. They weren’t so genetically different as to do significant damage, or run into any hurdles assimilating, since integration was seamless.
However, distant people and their cultures (e.g. South America, Indian, Chinese, African, middle eastern, etc.) are too different to compatibly assimilation, even if they integrate to a slight degree (though they tend not to, hence China Town, etc.). Even the Italians of Moorish ancestry, haven’t assimilated well (hence Little Italy).
And yet that doesn't make it untrue, if anything it shows the opposite. Look at Hawaii, you have nearly 150 years of being part of America yet it hasn't adapted at all and in fact, gets less and less American with each flight from the west and successive generations. They still celebrate their slave owning monarchs, ignore US Federal holidays, have school prayer, have open public racial discrimination, and have no concept of liberty or the rule of law. American Samoa has been party of the US nearly a hundred years and you wouldn't even know you were in America if you visited, including culturally, given they still have tribes, chiefs, etc. Puerto Ricans don't even speak English yet how long have they been American?
Also Italians didn't integrate well even into America hence why Italian ghettos still exist and people identity as Italian. When was the last time you met a girl from Montana who identified as a Brit or walked around the still existing and vibrant polish ghetto in Cleveland.
Fair points. But the bottom line is whether letting in such immigrants (who in exceptional cases may not fully assimilate) is beneficial for the country at large. Economics aside (I think we're in agreement that there's an economic benefit if immigrants don't receive subsidies and welfare), does having the Hawaiians retain their culture, the Italian "ghettos" (I live in Boston; several towns are still heavily Italian or Irish, but nevertheless very nice places), or Chinatowns harm the country as a whole?
I don't see it. I see Chinatowns and other ethnic enclaves as adding spice to the culture without subtracting anything. If Chinese (say) immigrants spread widely outside of Chinatowns but didn't assimilate, I'd agree that might be a problem - but it doesn't seem to be what happens. Either people stay in enclaves/ghettos and don't assimilate, or they mix with the general population and do assimilate. Either way seems fine.
Let me add - I'm a big fan of American culture and would be unhappy if I saw immigrants diluting it. We should have programs that ensure that immigrants learn the basics of US culture and history - the founding fathers, the American Revolution, the Constitution and Bill of Rights and the historical reasons behind them. We need to make an active effort to get immigrants up to speed.
That was a common thing in the 1st half of the last century (and seems to have worked well). Unfortunately (in my view) we don't even teach American kids these things in school anymore. We should change that.
As Garett Jones writes, there was two-way assimilation. America changed as a result of such immigrants. The economist Ed Glaeser wrote about the "Curley effect" of Irish immigrants on local politics in the US, for instance.
Is there enough asymmetric information to create adverse selection? Criminals and welfare bums might have some asymmetric information, but these were excluded from the argument. What remains seems to be the potential for some mysterious damage to the commons. Is the idea that people come here with the explicit purpose of changing the culture negatively? Are they any more likely to succeed than those who are here already trying to do the same thing?
Any change is seen as negative by someone. Is it really the case that non-criminal immigrants have such divergent preferences that we should count them as a negative externality?
The reliance on a weak analogy with financial instruments makes Khale's argument confusing and unpersuasive. It is fair to worry about criminals and welfare bums and the difficulty of distinguishing them from others, but it seems unfair to punish others because of this difficulty. Perhaps it is necessary none the less, but Khale's argument does not make this more apparent to me.
IF you've studied at least a little economics, you recognize traffic congestion as a classic negative externality: the marginal driver doesn’t bear the full social cost of joining traffic, leading to overuse of shared resources. We solve this with tools like congestion pricing to internalize those costs. Caplan’s proposals for immigrant vetting—admitting those with financially responsible sponsors or requiring refundable bonds—seem to follow a similar logic by ensuring the risks are borne by those creating them.
But doesn’t this acknowledge that open borders without these mechanisms impose negative externalities on “natives”? While Caplan might argue that the marginal gains to immigrants outweigh the costs to residents, this feels theoretical to those living in El Paso or East LA, where the impact on infrastructure, public services, and community cohesion is most visible.
If we’re serious about accounting for externalities, shouldn’t we also consider harder-to-quantify costs, like the erosion of social trust or strain on cultural and institutional foundations that high-trust societies rely on? These are real losses that affect the very social systems enabling prosperity. If Caplan accepts the need for congestion pricing in other contexts, why wouldn’t similar principles apply to managing the externalities of open borders? What price does he place on the unique cultural and social assets being strained, and how does his moral calculus address these costs?
Sounds a lot like the Benedict Option without religion. But I'm not sure how well it works anymore without religion. People's values are too far apart.
What if we tweak your "communist" vision so that the cul-de-sac has a religious affiliation and only allows co-religionists to buy? Should that be legal?
The canary in the coal mine is Canada, UK, and Australia. Three large Anglo countries across three different continents.
All went "all-in" on infinite Indian immigration the last decade. All stagnating on a per capita GDP basis. All failed to create Silicon Valley 2.0. All consider it a failure and incumbents are losing big time.
Silicon Valley is an ethos. Risk taking, non-conformity, and a variety of anglo values.
Hot house cram school culture is the opposite.
And Indian culture in particular, with its nepotism, corruption, dishonesty, and factionalism is particularly toxic.
Indian values are great for ruthlessly taking over existing institutions, but not building or maintaining them. The rest of the anglo sphere already figure this out.
Ironically, it would be in the best interest of existing Indian immigrants to cut immigration. They already have a critical mass of co-ethnics. Further immigration will "dilute the brand" and cause massive strain with the native populations as happened in the other anglo countries.
Like Catholic Europe in 1924 or Hispanics in the 2024 election, Indians need to recognize that a break is necessary to facilitate proper assimilation.
On the last point, another keyhole solution is insurance. Imagine the guys milling about outside Home Depot in the mornings holding up signs that say "Bonded and Insured"
I like to compare immigration (from other countries) to two other forms of "immigration" when judging all these arguments:
1. "Immigration" between US states.
2. "Immigration" via all US births.
Khale writes, "we have made money from lifting offers in market X; therefore, we should lift every offer in market X.”
What does he, or the person he's quoting, mean by "lift?"
Agree to buy, I think.
Thanks.
Legal and illegals immigrants bring at least one major factor that everyone seeks to ignore because the focus is on economics alone for some reason — cultural incompatibility.
America had decayed in line with the ingress of culturally incompatible immigrants (legal or not), and Americans have suffered for it.
We cannot boost America by diluting America and replacing Americans.
Lots of people said that 150 years ago about about immigrants from Italy, Ireland, etc.
They seem to have integrated pretty well with American culture within 2 or 3 generations.
Just avoid partitioning them from the rest of society (as the French have done...)
The issue with this is that those people, and their cultures, were already a good fit. They weren’t so genetically different as to do significant damage, or run into any hurdles assimilating, since integration was seamless.
However, distant people and their cultures (e.g. South America, Indian, Chinese, African, middle eastern, etc.) are too different to compatibly assimilation, even if they integrate to a slight degree (though they tend not to, hence China Town, etc.). Even the Italians of Moorish ancestry, haven’t assimilated well (hence Little Italy).
Lots of people said that 150 years ago too.
And yet that doesn't make it untrue, if anything it shows the opposite. Look at Hawaii, you have nearly 150 years of being part of America yet it hasn't adapted at all and in fact, gets less and less American with each flight from the west and successive generations. They still celebrate their slave owning monarchs, ignore US Federal holidays, have school prayer, have open public racial discrimination, and have no concept of liberty or the rule of law. American Samoa has been party of the US nearly a hundred years and you wouldn't even know you were in America if you visited, including culturally, given they still have tribes, chiefs, etc. Puerto Ricans don't even speak English yet how long have they been American?
Also Italians didn't integrate well even into America hence why Italian ghettos still exist and people identity as Italian. When was the last time you met a girl from Montana who identified as a Brit or walked around the still existing and vibrant polish ghetto in Cleveland.
Fair points. But the bottom line is whether letting in such immigrants (who in exceptional cases may not fully assimilate) is beneficial for the country at large. Economics aside (I think we're in agreement that there's an economic benefit if immigrants don't receive subsidies and welfare), does having the Hawaiians retain their culture, the Italian "ghettos" (I live in Boston; several towns are still heavily Italian or Irish, but nevertheless very nice places), or Chinatowns harm the country as a whole?
I don't see it. I see Chinatowns and other ethnic enclaves as adding spice to the culture without subtracting anything. If Chinese (say) immigrants spread widely outside of Chinatowns but didn't assimilate, I'd agree that might be a problem - but it doesn't seem to be what happens. Either people stay in enclaves/ghettos and don't assimilate, or they mix with the general population and do assimilate. Either way seems fine.
Let me add - I'm a big fan of American culture and would be unhappy if I saw immigrants diluting it. We should have programs that ensure that immigrants learn the basics of US culture and history - the founding fathers, the American Revolution, the Constitution and Bill of Rights and the historical reasons behind them. We need to make an active effort to get immigrants up to speed.
That was a common thing in the 1st half of the last century (and seems to have worked well). Unfortunately (in my view) we don't even teach American kids these things in school anymore. We should change that.
As Garett Jones writes, there was two-way assimilation. America changed as a result of such immigrants. The economist Ed Glaeser wrote about the "Curley effect" of Irish immigrants on local politics in the US, for instance.
Caplan doesn’t ignore cultural objections. He’s addressed them a lot.