Notes Towards a Policy Platform: Part IV

Short one: immigration.

I live in New York City. New York City is really crowded. Most of the country isn’t. We have plenty of room to grow, and if we want to amortize our debt effectively, we should do it over a modestly growing population.

But we need a population that is more productive. Right now, we’re selecting our immigrant population very peculiarly. We strictly limit the number of highly-skilled immigrants. Unskilled immigrants who sneak in we harass and generally leave vulnerable to economic exploitation and other suffering, but we don’t do much of anything punish the exploiters.

It seems to me that a very simple way of cutting the Gordian knot of immigration would be to auction visas.

Each year, Congress would set the number of visas available for auction. They would then go up for bid by anybody. With a visa in hand, anybody who passed some form of security check to make sure you’re not a criminal, spy, terrorist, etc. would be permitted to reside in the U.S.A. for the duration of the visa, and work, study – whatever.

NGOs could purchase visas for political or economic refugees. Employers could purchase visas for desired employees. Universities could purchase visas for desired students. Individuals could purchase their own visas to do whatever.

Work here without a valid visa? Somebody’s defrauded the government; you should have purchased that visa at auction. There’s really no good excuse for not having one. Sanctions could be split between the individual and the employer according to some formula. Take the whole question out of the hands of the INS and give it to the IRS, who seem to get better results generally.

With such a system in place, I think you’d immediately see an uptick in the average skill level of the immigrant population. The economy would benefit from reduced labor market friction. And the American people would get the benefit of the revenue from the auctions, which would offset the socialized transaction costs of absorbing immigrants.

The United States is anomalous relative to other countries that are generally open to immigration (e.g., Canada, Australia) in paying negligible attention to trying to attract skilled immigrants. Rather than having the government decide who we need to bring in, this is basically a proposal to let the market decide.