According to Cass, we are now allies. I am as willing to argue with my allies as with my opponents, perhaps more willing; allies are more likely to have enough in common with me to be willing to be listen to my arguments.
“That is one example of a broader point. Under institutions of secure property rights and voluntary transfers, individuals gain by the existence of other individuals as potential trading partners. In a transfer society that is no longer true — individuals may correctly believe that it is in their interest to keep out people, potential free riders or rivals for power.
It might even be in their interest, given the power, to push them out.”
Thank you for being the rare open borders - or “we should have compassion for illegal immigrants” - advocate who acknowledges that, in our current system of a very large welfare state, people who oppose mass illegal immigration can take that position from a legitimate rational basis, not merely because they are “hateful bigots.”
Here are some interesting statistics: from Claude AI:
The libertarian-leaning Cato Institute, using 2022–2023 federal data, finds that noncitizens received about 54 percent less in benefits per capita than native-born citizens — roughly $4,564 versus $9,623 per year. Newsweek Breaking it down further, immigrants consumed 36.9% less Social Security, 26% less Medicare, 10.7% less Medicaid, 11.5% less SNAP, and 87.6% less TANF than native-born Americans on a per capita basis. Econlib Cato also finds that immigrants are less likely to enter the welfare system, less likely to remain on welfare for long periods, and less likely to age into the most expensive entitlement programs.
The Center for Immigration Studies (CIS), which takes a more restrictionist view, finds a very different picture when measuring at the household level. About 61% of households headed by illegal immigrants access welfare, compared to 37% of households headed by the U.S.-born. CIS The key reason: while 59% of households headed by an illegal immigrant receive welfare, just 20% of illegal immigrant heads personally receive welfare themselves — other household members, usually U.S.-born citizen children, make up the difference. Center for Immigration Studies
So the CIS and Cato figures aren't necessarily contradicting each other — they're measuring different things. Cato looks at what immigrants personally receive; CIS looks at what flows into households they head (including benefits going to their U.S.-born children).
On Social Security
Both documented and undocumented immigrants pay more into public benefit programs than they take out. According to the Institute on Taxation and Economic Policy, undocumented immigrants contribute an estimated $11.74 billion to state and local economies each year. However, undocumented immigrants are not eligible for many of the federal or state benefits that their tax dollars help fund. National Immigration Forum
Many undocumented workers use fake or borrowed Social Security numbers, meaning payroll taxes are withheld but they'll never collect the retirement or disability benefits those contributions fund. This is a well-documented structural subsidy they provide to the system.
Bottom line
If you're comparing what individuals personally receive, immigrants (including undocumented ones) use significantly less welfare than native-born citizens. If you look at households they lead — factoring in U.S.-born children — the numbers are higher, though most of those benefits go to citizens, not the immigrants themselves. The framing matters enormously, which is why you'll see wildly different claims made in good faith from different sources.
Thanks. Any idea what "contribute an estimated $11.74 billion to state and local economies" means? Is that tax revenue? Expenditure by undocumented immigrants?
I asked Claude. After apologizing for being imprecise, it said:
To clarify: the $11.74 billion figure is tax revenue paid by undocumented immigrants, not their general economic spending.
Specifically, the $11.74 billion represents the estimated total that undocumented immigrants collectively pay in state and local taxes per year. This includes more than $7 billion in sales and excise taxes, $3.6 billion in property taxes, and $1.1 billion in personal income taxes. CIS That was from a 2017 ITEP report using 2014 data.
The more recent ITEP figures are substantially larger. Undocumented immigrants paid $96.7 billion in federal, state, and local taxes in 2022 — $59.4 billion to the federal government and $37.3 billion to state and local governments. Newsweek
And confirming your Social Security intuition: more than a third of the tax dollars paid by undocumented immigrants go toward payroll taxes dedicated to funding programs these workers are barred from accessing — $25.7 billion in Social Security taxes, $6.4 billion in Medicare taxes, and $1.8 billion in unemployment insurance taxes in 2022. Newsweek
One other notable detail: income tax payments by undocumented immigrants are affected by laws that require them to pay more than otherwise similarly situated U.S. citizens — they are often barred from receiving meaningful tax credits like the Child Tax Credit or Earned Income Tax Credit. National Immigration Forum And in a large majority of states (40), undocumented immigrants pay higher state and local tax rates than the top 1 percent of households within their borders. National Immigration Forum
So the short answer: the $11.74 billion is tax revenue flowing to governments from undocumented immigrants — and it's grown considerably since that figure was calculated.
I absolutely DO believe that the above is mostly accurate for *legal* immigrants.
And is a strong powerful reason to support relatively large amounts of legal immigration (which I do).
But due respect, I don’t believe for a second that it is true and truly representative of illegal immigrants, and in particular those illegals who entered in the last 5 years.
And I think if you reread it you will see that the response is quite selective in where it distinguished illegal immigrants from legal ones. The only thing it notes is the positive (for tax revenue) point about illegals illegally using fake Social Security numbers and *possibly* not later collecting future Social Security benefits based on those taxes paid.
And if the claimed “Bottom line” was accurate about welfare benefits of illegals going largely to their legal status children, it provides no data for it.
Claude, like all other LLMs, is heavily biased to deliver the leftist POV on all subjects political, most definitely including illegal immigration.
I am very skeptical of any claims based on "are not eligible for". We have seen that not only are the programs apparently pretty easy to defraud but also that states, who administer most of the programs, are willing to do end runs around those eligibility requirements.
And further, how in the world can they have good stats for most of these for illegal immigrants who are “not qualified for” said benefits.
IMO the stats are indeed quite powerful when speaking of legal immigrants, but say somewhere between nothing and less than nothing about the reality for illegal immigrants.
And even less than that about the surge in illegals under Biden.
The argument against redistribution because of the advantages of secure property rights is a compelling one, but not completely compelling. Absent the moral argument (and I believe you are correct that Sunstein would reject it), it leaves you open to disagreements about policy priorities.
A government rightly taxes to provide for the common defense. A government might well decide that redistribution to fend off internal revolution is an equally compelling expense. I believe Turchin suggests that the New Deal was precisely such a decision. (If so, I believe it was a feckless choice, but hanging your argument on practical considerations leaves you open to such.)
Economics assumes given preferences and explains behavior as responses to changing opportunities. If preferences are endogenous, economics becomes tautological -- anything can be explained, nothing can be rejected. Thus, economics becomes useless. The conceivable useful complement would be a theory of preference formation. We don't have one.
I think this very much fits the temper of the times, and I don't mean just Trump's times. Just think how much psychology and sociology is putting forward such stuff. It is tremendously popular with much of the public, in sharp contrast to economics. Psychological introspection, like astrology, is much more popular than budget constraints.
1. "Our account of government failure, that it is a result of the same causes as market failure in other markets, situations where an actor does not bear the net cost of his actions hence where his interest is not our interest, is stylized, depends on the usual economic assumption of rationality — although if it is a fairy tale it is the kind with a witch and an oven"
Something is wrong with this sentence. Perhaps you meant to begin with "Whether"? Still, I would recommend not making a too-long sentence even longer. Perhaps:
"Our account of government failure is that it is a result of the same causes as market failure in other markets, situations where an actor does not bear the net cost of his actions hence where his interest is not our interest. This account is stylized insofar as it depends on the usual economic assumption of rationality — although if it is a fairy tale it is the kind with a witch and an oven"
2. "under such a system, people well spend substantial efforts trying to arrange to be transferred to rather than from"
“Neither of us has any good reason to expect the pattern of transfers under such a system to fit our particular preferences but we both have reasons to expect that, under such a system, people well spend substantial efforts trying to arrange to be transferred to rather than from, the dead weight cost of rent seeking.”
While my personal position is much, much closer to yours than to Sunstein’s, a more charitable reading of his views is that he is not defending concentrated benefits, diffused costs rent-seeking types of transfers, but rather primarily defending diffused benefits programs (disproportionately funded from costs concentrated to be borne by those most fortunate) that help out the mass less fortunate. E.g. Medicaid, food stamps, etc.
We can each of course point out many *other* problems with such government transfers as implemented today, but IMO the rent-seeking problem argument is a relatively weak one in arguing against broad-based redistribution.
Upon reflection, perhaps I should have focused my objection more properly on this bit of your claim: “people will spend substantial efforts trying to arrange to be transferred to”.
For mass redistribution, the evidence does not seem strong that this is the case. And hence my claim that yours a weak argument against “redistribution” as most people understand that term.
However, we surely know that in a democracy *politicians* will devote resources and make campaign pledges and actual policy doing this in order to win votes and secure political power by offering to make such transfers.
A second order effect, as it is *not* those receiving the transfers who are doing the spending of substantial efforts, but a powerful argument to be sure.
THIS argument is still unlikely to be positively persuasive to those sympathetic to the left, but is indeed one that would be embraced by the broad center.
Whether the center-left Sunstein might find it persuasive or not, I cannot say.
Every time someone does something in order to receive a benefit paid for by someone else, he is putting effort into being transferred to. That includes someone who goes to the doctor more often than he would if he was paying for it himself. Every time someone does something to keep down his taxes ... .
Lobbying to change the rules in your favor is only part of it.
To me you are simply conflating the problems of cronyism and of a big powerful government - inarguable in this context - with the problems with mass redistribution.
Your argument against the government having such powers is far stronger than your arguments here against redistribution per se.
Most people do not take the idea “redistribution” to be the same thing as rent-seeking, but instead specifically about transfers from the richer to the poorer.
The fact that cronyism can occur is not a strong argument against some amount of mass redistribution.
By this reasoning, you are also arguing against a classical liberal’s merely minarchist-leaning government, since the concentrated benefits, diffused costs *can* happen there too (at minimum, in spending for national defense).
Said argument might appeal to anarchists, but is scarcely likely to be persuasive to anyone else.
If you are simply making the public choice point that politicians and bureaucrats are self-interested and so that any government that allows transfers of any kind or spends any substantial amount of money is subject to the incentives of those in government, IMO you should make that point directly, rather than indirectly
Given that in the real world a return to government that did neither of those things is not remotely possible in our lifetimes, arguing that “redistribution” is problematic per se because of the potential for cronyism is unlikely to persuade anyone with any leftist or even broadly centrist tendencies.
I am arguing for a prejudice against redistribution. Absent such a prejudice, "lt would be better if A had more money and B less" is a legitimate argument for government action. The prejudice doesn't rule out actions that affect A and B, such as taxing B to buy armaments from A, justified on other grounds.
"At first glance it seems to argue for the stability of oppressive regimes able to mold the preferences of their population, perhaps also for control of the schools as the back door to power."
They wish!
I learned about the Amish from your writings. Hell, even the Amish let their teenagers out into the wider world to make their own choices. Their benign socialism, embedded in the wider society, lets them lose 10% of their cohort each year, IIRC.
Israeli Kibbutz, another variant of voluntary socialism, lost population share from 7.5% in 1950 to 2% in the 2000's, and IIUC, the kibbutz of today is far more individualistic and screened than the kibbutz of 1950.
To say nothing of East Europe and even the Soviet Union. East Germany aside, where there was always a lot of outside information available, the lesser amount that was available in the rest of the Soviet bloc didn't make the rulers popular, and they knew it!
Property controlled by the collective is indeed the proper Marxian interpretation of socialism. I was implicitly following the cultural Marxian interpretation -- the cultural institutions are collective, and they determine the hearts and minds. I am so post-modern! :-)
The point about the “endogeneity of human preferences” seems to hark back to the ideas of Vance Packard and J. K. Galbraith from the 50s, that people’s preferences are easily manipulated, and so are not worthy of the respect that individualists and economists give them.
Does no one remember Herb Simon (Grandfather of AI, econ Nobel, etc)? Seems to me his "bounded rationality" was a strong precursor to all of this stuff.
“That is one example of a broader point. Under institutions of secure property rights and voluntary transfers, individuals gain by the existence of other individuals as potential trading partners. In a transfer society that is no longer true — individuals may correctly believe that it is in their interest to keep out people, potential free riders or rivals for power.
It might even be in their interest, given the power, to push them out.”
Thank you for being the rare open borders - or “we should have compassion for illegal immigrants” - advocate who acknowledges that, in our current system of a very large welfare state, people who oppose mass illegal immigration can take that position from a legitimate rational basis, not merely because they are “hateful bigots.”
Here are some interesting statistics: from Claude AI:
The libertarian-leaning Cato Institute, using 2022–2023 federal data, finds that noncitizens received about 54 percent less in benefits per capita than native-born citizens — roughly $4,564 versus $9,623 per year. Newsweek Breaking it down further, immigrants consumed 36.9% less Social Security, 26% less Medicare, 10.7% less Medicaid, 11.5% less SNAP, and 87.6% less TANF than native-born Americans on a per capita basis. Econlib Cato also finds that immigrants are less likely to enter the welfare system, less likely to remain on welfare for long periods, and less likely to age into the most expensive entitlement programs.
The Center for Immigration Studies (CIS), which takes a more restrictionist view, finds a very different picture when measuring at the household level. About 61% of households headed by illegal immigrants access welfare, compared to 37% of households headed by the U.S.-born. CIS The key reason: while 59% of households headed by an illegal immigrant receive welfare, just 20% of illegal immigrant heads personally receive welfare themselves — other household members, usually U.S.-born citizen children, make up the difference. Center for Immigration Studies
So the CIS and Cato figures aren't necessarily contradicting each other — they're measuring different things. Cato looks at what immigrants personally receive; CIS looks at what flows into households they head (including benefits going to their U.S.-born children).
On Social Security
Both documented and undocumented immigrants pay more into public benefit programs than they take out. According to the Institute on Taxation and Economic Policy, undocumented immigrants contribute an estimated $11.74 billion to state and local economies each year. However, undocumented immigrants are not eligible for many of the federal or state benefits that their tax dollars help fund. National Immigration Forum
Many undocumented workers use fake or borrowed Social Security numbers, meaning payroll taxes are withheld but they'll never collect the retirement or disability benefits those contributions fund. This is a well-documented structural subsidy they provide to the system.
Bottom line
If you're comparing what individuals personally receive, immigrants (including undocumented ones) use significantly less welfare than native-born citizens. If you look at households they lead — factoring in U.S.-born children — the numbers are higher, though most of those benefits go to citizens, not the immigrants themselves. The framing matters enormously, which is why you'll see wildly different claims made in good faith from different sources.
Thanks. Any idea what "contribute an estimated $11.74 billion to state and local economies" means? Is that tax revenue? Expenditure by undocumented immigrants?
I asked Claude. After apologizing for being imprecise, it said:
To clarify: the $11.74 billion figure is tax revenue paid by undocumented immigrants, not their general economic spending.
Specifically, the $11.74 billion represents the estimated total that undocumented immigrants collectively pay in state and local taxes per year. This includes more than $7 billion in sales and excise taxes, $3.6 billion in property taxes, and $1.1 billion in personal income taxes. CIS That was from a 2017 ITEP report using 2014 data.
The more recent ITEP figures are substantially larger. Undocumented immigrants paid $96.7 billion in federal, state, and local taxes in 2022 — $59.4 billion to the federal government and $37.3 billion to state and local governments. Newsweek
And confirming your Social Security intuition: more than a third of the tax dollars paid by undocumented immigrants go toward payroll taxes dedicated to funding programs these workers are barred from accessing — $25.7 billion in Social Security taxes, $6.4 billion in Medicare taxes, and $1.8 billion in unemployment insurance taxes in 2022. Newsweek
One other notable detail: income tax payments by undocumented immigrants are affected by laws that require them to pay more than otherwise similarly situated U.S. citizens — they are often barred from receiving meaningful tax credits like the Child Tax Credit or Earned Income Tax Credit. National Immigration Forum And in a large majority of states (40), undocumented immigrants pay higher state and local tax rates than the top 1 percent of households within their borders. National Immigration Forum
So the short answer: the $11.74 billion is tax revenue flowing to governments from undocumented immigrants — and it's grown considerably since that figure was calculated.
Here are the links referred to in the above:
ITEP: https://cis.org/Report/Welfare-Use-Immigrants-and-USBorn-2022
Newsweek: https://www.newsweek.com/immigrants-welfare-spending-american-citizens-report-2033486
Another Newsweek report: https://www.newsweek.com/immigrants-welfare-spending-american-citizens-report-2033486
National Immigration Forum: https://immigrationforum.org/article/fact-sheet-immigrants-and-public-benefits/
(The same link from the Forum was referenced twice.)
Thanks.
I absolutely DO believe that the above is mostly accurate for *legal* immigrants.
And is a strong powerful reason to support relatively large amounts of legal immigration (which I do).
But due respect, I don’t believe for a second that it is true and truly representative of illegal immigrants, and in particular those illegals who entered in the last 5 years.
And I think if you reread it you will see that the response is quite selective in where it distinguished illegal immigrants from legal ones. The only thing it notes is the positive (for tax revenue) point about illegals illegally using fake Social Security numbers and *possibly* not later collecting future Social Security benefits based on those taxes paid.
And if the claimed “Bottom line” was accurate about welfare benefits of illegals going largely to their legal status children, it provides no data for it.
Claude, like all other LLMs, is heavily biased to deliver the leftist POV on all subjects political, most definitely including illegal immigration.
I am very skeptical of any claims based on "are not eligible for". We have seen that not only are the programs apparently pretty easy to defraud but also that states, who administer most of the programs, are willing to do end runs around those eligibility requirements.
And further, how in the world can they have good stats for most of these for illegal immigrants who are “not qualified for” said benefits.
IMO the stats are indeed quite powerful when speaking of legal immigrants, but say somewhere between nothing and less than nothing about the reality for illegal immigrants.
And even less than that about the surge in illegals under Biden.
The argument against redistribution because of the advantages of secure property rights is a compelling one, but not completely compelling. Absent the moral argument (and I believe you are correct that Sunstein would reject it), it leaves you open to disagreements about policy priorities.
A government rightly taxes to provide for the common defense. A government might well decide that redistribution to fend off internal revolution is an equally compelling expense. I believe Turchin suggests that the New Deal was precisely such a decision. (If so, I believe it was a feckless choice, but hanging your argument on practical considerations leaves you open to such.)
4a) The Endogeneity of Preferences
Economics assumes given preferences and explains behavior as responses to changing opportunities. If preferences are endogenous, economics becomes tautological -- anything can be explained, nothing can be rejected. Thus, economics becomes useless. The conceivable useful complement would be a theory of preference formation. We don't have one.
I think this very much fits the temper of the times, and I don't mean just Trump's times. Just think how much psychology and sociology is putting forward such stuff. It is tremendously popular with much of the public, in sharp contrast to economics. Psychological introspection, like astrology, is much more popular than budget constraints.
I'd call it all wishful thinking, nothing more.
ETA: a to 4, for a b is coming.
A couple of edits for your consideration:
1. "Our account of government failure, that it is a result of the same causes as market failure in other markets, situations where an actor does not bear the net cost of his actions hence where his interest is not our interest, is stylized, depends on the usual economic assumption of rationality — although if it is a fairy tale it is the kind with a witch and an oven"
Something is wrong with this sentence. Perhaps you meant to begin with "Whether"? Still, I would recommend not making a too-long sentence even longer. Perhaps:
"Our account of government failure is that it is a result of the same causes as market failure in other markets, situations where an actor does not bear the net cost of his actions hence where his interest is not our interest. This account is stylized insofar as it depends on the usual economic assumption of rationality — although if it is a fairy tale it is the kind with a witch and an oven"
2. "under such a system, people well spend substantial efforts trying to arrange to be transferred to rather than from"
You meant "people will", not "people well".
Thanks for pointing out the typo. Fixed.
“Neither of us has any good reason to expect the pattern of transfers under such a system to fit our particular preferences but we both have reasons to expect that, under such a system, people well spend substantial efforts trying to arrange to be transferred to rather than from, the dead weight cost of rent seeking.”
While my personal position is much, much closer to yours than to Sunstein’s, a more charitable reading of his views is that he is not defending concentrated benefits, diffused costs rent-seeking types of transfers, but rather primarily defending diffused benefits programs (disproportionately funded from costs concentrated to be borne by those most fortunate) that help out the mass less fortunate. E.g. Medicaid, food stamps, etc.
We can each of course point out many *other* problems with such government transfers as implemented today, but IMO the rent-seeking problem argument is a relatively weak one in arguing against broad-based redistribution.
"People arguing for redistribution usually think of it as arguing for some particular pattern"
Upon reflection, perhaps I should have focused my objection more properly on this bit of your claim: “people will spend substantial efforts trying to arrange to be transferred to”.
For mass redistribution, the evidence does not seem strong that this is the case. And hence my claim that yours a weak argument against “redistribution” as most people understand that term.
However, we surely know that in a democracy *politicians* will devote resources and make campaign pledges and actual policy doing this in order to win votes and secure political power by offering to make such transfers.
A second order effect, as it is *not* those receiving the transfers who are doing the spending of substantial efforts, but a powerful argument to be sure.
THIS argument is still unlikely to be positively persuasive to those sympathetic to the left, but is indeed one that would be embraced by the broad center.
Whether the center-left Sunstein might find it persuasive or not, I cannot say.
Every time someone does something in order to receive a benefit paid for by someone else, he is putting effort into being transferred to. That includes someone who goes to the doctor more often than he would if he was paying for it himself. Every time someone does something to keep down his taxes ... .
Lobbying to change the rules in your favor is only part of it.
😕
To me you are simply conflating the problems of cronyism and of a big powerful government - inarguable in this context - with the problems with mass redistribution.
Your argument against the government having such powers is far stronger than your arguments here against redistribution per se.
Most people do not take the idea “redistribution” to be the same thing as rent-seeking, but instead specifically about transfers from the richer to the poorer.
The fact that cronyism can occur is not a strong argument against some amount of mass redistribution.
By this reasoning, you are also arguing against a classical liberal’s merely minarchist-leaning government, since the concentrated benefits, diffused costs *can* happen there too (at minimum, in spending for national defense).
Said argument might appeal to anarchists, but is scarcely likely to be persuasive to anyone else.
If you are simply making the public choice point that politicians and bureaucrats are self-interested and so that any government that allows transfers of any kind or spends any substantial amount of money is subject to the incentives of those in government, IMO you should make that point directly, rather than indirectly
Given that in the real world a return to government that did neither of those things is not remotely possible in our lifetimes, arguing that “redistribution” is problematic per se because of the potential for cronyism is unlikely to persuade anyone with any leftist or even broadly centrist tendencies.
I am arguing for a prejudice against redistribution. Absent such a prejudice, "lt would be better if A had more money and B less" is a legitimate argument for government action. The prejudice doesn't rule out actions that affect A and B, such as taxing B to buy armaments from A, justified on other grounds.
4b) The Endogeneity of Preferences
"At first glance it seems to argue for the stability of oppressive regimes able to mold the preferences of their population, perhaps also for control of the schools as the back door to power."
They wish!
I learned about the Amish from your writings. Hell, even the Amish let their teenagers out into the wider world to make their own choices. Their benign socialism, embedded in the wider society, lets them lose 10% of their cohort each year, IIRC.
Israeli Kibbutz, another variant of voluntary socialism, lost population share from 7.5% in 1950 to 2% in the 2000's, and IIUC, the kibbutz of today is far more individualistic and screened than the kibbutz of 1950.
To say nothing of East Europe and even the Soviet Union. East Germany aside, where there was always a lot of outside information available, the lesser amount that was available in the rest of the Soviet bloc didn't make the rulers popular, and they knew it!
We may be crazy, but we're not stupid.
I would not describe the Amish as socialist. Property is owned and controlled by families, not by the congregation.
Property controlled by the collective is indeed the proper Marxian interpretation of socialism. I was implicitly following the cultural Marxian interpretation -- the cultural institutions are collective, and they determine the hearts and minds. I am so post-modern! :-)
The point about the “endogeneity of human preferences” seems to hark back to the ideas of Vance Packard and J. K. Galbraith from the 50s, that people’s preferences are easily manipulated, and so are not worthy of the respect that individualists and economists give them.
if this view is true, then that advocates for socialism.
We can all be equal...
...equally miserable.
"While economics is about how people make choices, sociology is about how they don't have any choice to make."
-- Bertrand Russell
Does no one remember Herb Simon (Grandfather of AI, econ Nobel, etc)? Seems to me his "bounded rationality" was a strong precursor to all of this stuff.