Congressional Issues 2010
INTERNATIONAL ECONOMIC
POLICY
Immigration in a Division of Labor Economy
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Too many Christians oppose immigration because they have been
infected by anti-Christian Darwinian and socialistic
presuppositions. This webpage is the economics lesson you never
got in your government school economics class.
| Our teacher is Prof.
George Reisman. His book, Capitalism, is one of
the best economics texts ever written. It is thoroughly Free
Market in perspective. We recommend purchasing the book
using the link at right. You can also view the book online
for free here.[pdf]
We are drawing this information from chapter 9, "The
Influence of the Division of Labor on the Institutions of
Capitalism," Part C, "Economic Competition,"
pages 358-366. |
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First we need to understand the concept of "the
division of labor." It is what gives us in Capitalistic America
the highest standard of living that human beings have ever enjoyed.
There was no "division of labor" on the deserted island
where Robinson Crusoe
was stranded. Mr. Crusoe had to do by himself everything necessary
to live. The Swiss Family Robinson, by contrast, had a limited
division of labor: the father could hunt, the mother could prepare
the food, and the children could gather firewood.
The Division of Labor is powerfully illustrated in the Biblical
metaphor of the Body:
12
The body of Christ has many different parts, just as any other
body does. 13 Some of us are Jews, and
others are Gentiles. Some of us are slaves, and others are free.
But God's Spirit baptized each of us and made us part of the body
of Christ. Now we each drink from that same Spirit. 14
Our bodies don't have just one part. They have many parts. 15
Suppose a foot says, "I'm not a hand, and so I'm not part of
the body." Wouldn't the foot still belong to the body? 16
Or suppose an ear says, "I'm not an eye, and so I'm not part
of the body." Wouldn't the ear still belong to the body? 17
If our bodies were only an eye, we couldn't hear a thing. And if
they were only an ear, we couldn't smell a thing. 18
But God has put all parts of our body together in the way that he
decided is best.
19 A
body isn't really a body, unless there is more than one part. 20
It takes many parts to make a single body. 21
That's why the eyes cannot say they don't need the hands. That's
also why the head cannot say it doesn't need the feet. 22
In fact, we cannot get along without the parts of the body that
seem to be the weakest.
1 Corinthians 12:12-22
4 A body is made up of many parts, and
each of them has its own use. 5 That's how
it is with us. There are many of us, but we each are part of the
body of Christ, as well as part of one another.
6 God has also given each of us different
gifts to use.
Romans 12:4-6
This idea of specialization has life-changing implications for
economics. Prof. Reisman will now explain them to us:
| 4)
The division of labor, a leading feature of capitalism, which
can exist in highly developed form only under capitalism,
provides among other major benefits, the enormous gains from
the multiplication of the amount of knowledge that enters into
the productive process and its continuing, progressive
increase. Just consider: each distinct occupation, each
sub-occupation, has its own distinct body of knowledge. In a
division-of-labor, capitalist society, there are as many
distinct bodies of knowledge entering into the productive
process as there are distinct jobs. The totality of this
knowledge operates to the benefit of each individual, in his
capacity as a consumer, when he buys the products produced by
others—and much or most of it also in his capacity as a
producer, insofar as his production is aided by the use of
capital goods previously produced by others.
Thus a given individual may
work as a carpenter, say. His specialized body of knowledge is
that of carpentering. But in his capacity as a consumer, he
obtains the benefit of all the other distinct occupations
throughout the economic system. The existence of such an
extended body of knowledge is essential to the very existence
of many products—all products that require in their
production more knowledge than any one individual or small
number of individuals can hold. Such products, of course,
include machinery, which could simply not be produced in the
absence of an extensive division of labor and the vast body of
knowledge it represents.
Moreover, in a
division-of-labor, capitalist society, a large proportion of
the most intelligent and ambitious members of society, such as
geniuses and other individuals of great ability, choose their
concentrations precisely in areas that have the effect of
progressively improving and increasing the volume of knowledge
that is applied in production. This is the effect of such
individuals concentrating on areas such as science, invention,
and business.
Source: Some
Fundamental Insights Into the Benevolent Nature of Capitalism |
Those who complain about the harm immigrants do to the economy
haven't fully considered how increased population, combined with the
division of labor under capitalism, actually improves the economy.
First, let's consider Prof. Reisman's insights into the old
Malthusian world-view:
6. The Population Question
With the notable exceptions of Adam Smith and Frederic
Bastiat, the classical economists taught, in sympathy with
Malthus, that population growth represents a threat to the
average standard of living. As explained in connection with
the discussion of private ownership of land and “land rent”
earlier in this chapter, their belief was that the larger the
number of people, the larger the amount and poorer the quality
of land and mineral deposits that must be worked to support
them, and, at the same time, the more intensive the
exploitation of each piece of land and mineral deposit worked,
resulting in diminishing returns. For both reasons, they held,
increases in population and in the number of workers tend to
be accompanied by less than proportionate increases in the
supply of food and minerals.
The clear implication of this doctrine is that there is an
inherent conflict of interests among people as their numbers
increase. It is tantamount to the claim that man is in the
position of the lions in the jungle after all. The lions are
at the point of a scarcity of food supply; man allegedly
approaches it with every increase in his numbers. Indeed,
Malthus was the inspiration for Darwin, whose writings were in
turn the inspiration for the doctrine of conflict of interests
presented under the name Social Darwinism.
A garbled form of Malthusianism is a root of the
ecology movement’s hostility to population growth.
|
George Reisman's
Program of Self-Education in the Economic Theory and Political
Philosophy of Capitalism
- MALTHUSIANISM
VS. COVENANTALISM
- Gary North's essay on Darwin, Malthus, and a Biblical
world-view
| In his book The Myth of
Over-Population, R.J. Rushdoony shows that the symptoms of
"overpopulation" are actually symptoms of government
intervention. Darwinian and Malthusian assumptions govern the
modern State, and both the Republican and Democrat Parties. |
|
This kind of thinking might have applied before the industrial
revolution, because as Prof. Reisman points out, the division of
labor had not yet come to full flower in the Western world. Human
society was based largely on "self-sufficient"
individuals, as Reisman notes in his
book Capitalism :
| The fact is, however, that the classical
economists’ ideas on the effects of population growth are
valid only for a stagnant, non-division-of-labor society.
(This was essentially the kind of society to which all but the
most recent experience of the human race referred at the time
that Ricardo wrote, which was in the early nineteenth century.
He wrote too soon to know that he lived at the beginning of a
radically new era in human history. Thus, it is understandable
that neither he nor his followers were able decisively to
break with this pessimistic view.) In such a society [a
stagnant, non-division-of-labor society], everyone lives
in the same way—namely, as a self-sufficient farmer. In such
a society, the existence of more people does mean the need for
more and more land of progressively inferior quality and an
ever worsening problem of diminishing returns. In such a
society, it does mean the need to start farms higher and
higher up the sides of hills or mountains, to extend farming
to rockier patches of soil, or down into marshlands, and to
subdivide existing farms among more and more people— all
with the result of declining yields per unit of labor
expended. |
Without the division of labor, there is no difference between the
eye and the ear. Both do the same work: the work of survival. Both
are "self-sufficient," that is, barely sufficient.
| But this is not at all what the existence of
more people means in a division-of-labor society. In a
division-of-labor society, a larger population means a
greater, more intensive division of labor.
Adam Smith alluded to this fact when he wrote that “the
division of labor is limited by the extent of the market.”
The meaning of this proposition is that the extent to
which the division of labor can be carried in the production
of anything depends on the volume in which it is to be
produced. If, for example, automobiles are to be turned out at
a rate of, say, 10 or 20 a day in a given location, then it is
impossible that a step which takes 5 minutes to perform on any
one car could be anyone’s full-time job. The daily volume of
automobile production would have to be increased to
approximately 100 in a given location before such an operation
could be made into a full-time job. (One hundred times 5
minutes equals 8.33 hours, which represents a full-time job.)
The daily volume of automobile production would have to be
increased to approximately 1 thousand in a given location,
before an operation requiring only 30 seconds could be made
into a full-time job, and so on. (One thousand times 30
seconds also equals 8.33 hours.) Thus, the larger the volume
to be produced—the larger the market to be served—the
further can the division of labor be carried.
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Of course, merely having more immigrants in an economy serves no
beneficial purpose if it is illegal to hire those immigrants so that
they may be producers as well as consumers.
| Markets, however, are not made possible by
non-producing consumers, as Adam Smith well knew, but only by
producers.
And without a larger total number of producers
participating in the division of labor overall, a more
intensive division of labor in the production of any one good
would require drawing labor away from the production of other
goods, and thus correspondingly reducing the extent of
division of labor elsewhere. The only way to have a greater
division of labor overall is by virtue of a larger population
of participating producers. This alone permits the division of
labor to be extended in some areas without being
correspondingly reduced in other areas. Thus, when we refer to
the connection between the division of labor and population,
or the division of labor and markets, it must be kept in mind
that what is always referred to is a larger population of producers,
and of overall markets that are larger by virtue of the
existence of more producers.
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We are now ready to see the effects of increased immigration and
a society which encourages these immigrants to be producers rather
than welfare recipients.
Continue to next part.
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Recent Blog Posts
- In the Next Two Years, Congress should:
- expand, or at least maintain, current legal immigration
quotas;
- increase permanently the number of H-1B visas and
deregulate employment-based immigration to facilitate the
entry of skilled immigrants;
- remove the new one-year time limit on filing for
political asylum and reform the "expedited
removal" laws;
- repeal employer sanctions;
- stop the move toward a computerized national
identification system and the use of government-issued
documents, such as birth certificates and Social Security
cards, as de facto national ID cards; and
- reduce restrictions on the movement of workers within
the North American Free Trade Agreement area.
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By the end of
the decade, Congress should:
- Abolish all anti-immigration laws.
As soon as possible, America should:
- Create a vast network of voluntary
social service agencies to meet all immigrants at the
borders or piers and ensure their literacy and familiarity
with American values.
- Commit to on-going transmission of American values to
immigrants in all areas of life. Read
more about this.
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next: part 3
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