Friday, May 19, 2006

Illegal Immigration, 1806 -2006

The issue of illegal immigration into the United States, primarily of unskilled and uneducated poor from South America across the Mexican border, is bursting to the surface of american politics, fracturing traditional party lines. What to do? Build a 2000-mile wall and patrol it with the army? Arrest and expel 12 million people, including american citizen children of illegals? A Guest-worker program? Amnesty? Open borders? Give California, Arizona and Texas back to Mexico?

A look at our history would be beneficial if we truly want to find policies which will minimize our problems and conflicts down the road; we’ve been through all this before.

Pioneers and Outlaws

200 years ago, America faced a different type of ‘illegal immigration’ problem. I’m not talking about the invasion of indigenous native American tribal land by Europeans per se. I mean squatting, as practiced by dirt-poor but hardy immigrants from England, Ireland, Scotland, Germany and other European countries. These folks would load their wagons and head for the Wild West ---which at the time was just about anything west of the eastern seaboard cities like Boston, Philadelphia and New Amsterdam; certainly anything west of the Appalachian mountains --- find a plot of suitable land that appeared to be uninhabited, and claim it as theirs to live on, building fences around and houses and barns within, and enjoying the fruit of the land and their labor. Never mind that the land they had so taken might be the officially recorded and recognized property of someone else --- someone else like, say, George Washington, John Adams or Thomas Jefferson, or one of the colonial, state or national governments. For official title to large tracts was indeed granted or claimed by wealthy landowners and governments regardless of their actual ability to survey, fence, develop and patrol the land. To any casual observer, the land seemed utterly vacant.

For generations, the landowners and governors fought the squatters, in the courts and in the country. Armies were dispatched to evict illegal claimants, burn their barns and houses, destroy their fences and tear up their fields. Recalcitrant squatters were imprisoned. The landowners had the law and the high ground on their side; the squatters were clearly in flagrant violation of private (and public) property law, having stolen, without compensation or consent, the most durable and fundamental of all economic goods: land.

Yet over time and to an increasing degree, courts began to side with the squatters. In part this may have been the result of sheer, overwhelming numbers; there were thousands of immigrants pushing west, thousands of court cases. But there also emerged a genuine, defensible legal principle. The squatters were not just stealing land and depriving its rightful owners of its use; they were improving the land, making it livable and productive. The houses, fences, barns and cleared and plowed fields made the land more valuable than it had been, producing agricultural goods for the local, eastern, or even global markets. Courts began to recognize that evicting squatters from land they had thus improved was as much if not a greater violation of private property rights as the offense of squatting in the first place. Evicted squatters began to demand compensation for what had been taken from them, and courts with increasing frequency ruled in their favor. The legal principle and precedent of ‘preemption’, giving preferential rights to settler who had made improvements to land came to be recognized as a guiding principle.

For their part, the squatters and pioneers developed local legal systems of their own for establishing, recognizing and defending the legitimacy of claims to land. ‘Tomahawk rights’, ‘Cabin rights’ and/or ‘Corn rights’ (staking a claim by marking or deadening trees with a hatchet, building a cabin and/or raising a crop), and their elaborations and variations, were examples of this informal social contract. After gold was discovered in California in 1848, the mad rush of newly born miners, combined with the inherent inertia of the national legal system, mandated that local associations fill the void with norms, agreements and regulations to avert chaos, protect legitimate claims and settle disputes without violence. What is extraordinary in US history is how over time the official authority came to recognize such contracts born outside of the formal legal system as legitimate.

The Homestead Act of 1862 was the culmination of generations of struggle over this issue, conferring legitimacy to the extralegal claims and local agreements of communities distant from the sophisticated eastern cities. Under the Homestead Act, anyone could acquire a recognized and protected claim to 160 acres (a quarter of a square mile) for the trouble of living on it and making improvements for 5 years. In 1866 the US Congress belatedly (by 18 years) declared the mining of mineral resources on government owned land to be a legal, legitimate activity for cititizens of the United States. Interestingly, as grand and important as these pronouncements were symbolically, they followed, rather than led, reality on the ground.

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America is generally recognized as unique in the world for the prosperity fostered by its form of Democracy and Capitalism, as pioneered by great minds of the late eighteenth century and culminating in the Declaration of Independence and the Constitution of the United States. Let us not forget, however, that in 1800 the United States still had most of the characteristics that we would today ascribe to a third-world country: a minority of elite wealthy landowners, lawyers and professionals, and a vast majority of poor, uneducated rural dwellers living on the periphery of the legal system. Yet much of the hard physical and even intellectual or legal work to realize the promise of American democracy and capitalism was accomplished by these same gritty, uncredentialled pioneers; farmers, ranchers, and miners. A critically important historical lesson which is not commonly understood regarding America’s uniqueness, is the degree to which it has been able to recognize, assimilate, integrate and legitimize the local agreements and extra-official arrangements of legally marginal populations into the mainstream of its legal and property title systems. This is what made America truly unique in the world and this is what is key to America’s great and general (not just for an elite few, as die-hard marxists would assert) prosperity.

How much more difficult it must have been in those days to reconcile the legal issues surrounding squatting! The violation of the written and officially sanctioned law was so blatant and obvious that honest and educated people could hardly be persuaded any other way. The squatters were not merely an eyesore or a nuisance; they were actually taking physical property from its rightful owners, a dozen acres times a thousand immigrants at a time. Yet over time we as a nation came to realize that however logical and clear-cut the official law seemed, it was out of step with reality, to wit:

  • The immigrants are coming and they’re not going back. The promise of a better life in America is too powerful a draw to hold back the flood; to expect otherwise would be to expect Niagra Falls to flow upstream.
  • The immigrants are performing work and adding economic value beneficial to health of the nation. The work on the land improves the value of the land; the product of the land feeds, clothes and provisions more people more cheaply throughout the country and beyond.
  • The lives, property, and liberty of poor immigrants are as sacred and defensible as those of lettered statemen and wealthy merchants. The american brand of the Judeo-Christian tradition, combined with the independent spirit and willingness of the common people to fight for their dignity and rights, ensured that the concerns of all citizens regardless of rank be respected.

Applying the lessons to today’s problems

The same principles are applicable today. In fact, it should be easier to accept and assimilate immigrants at a rate in harmony with reality for the simple fact that they are not stealing anything that isn’t given to them. With the exception of a minute minority of political activists, they are not claiming land for themselves or Mexico or other nations. No one advocating a guest-worker program or even amnesty has suggested that we grant title to so much as one acre of land to anyone crossing the Mexican border. With the exception of taking advantage of our generous and ill-considered welfare state, the vast majority of immigrants are coming here to work, that is, to offer their services in exchange for money and goods with whomever is voluntarily willing to take them up on the offer. Voluntary exchange of goods, services and money is not fundamentally a crime, however much the written law may interfere.

Is this conclusion unrealistic or naive in a post-9/11 world? What about terrorism? What about the crimes committed by illegal aliens? What about the drug traffic? The youth gangs? What about repatriation; all the money they send back to their families in Mexico? What about the jobs lost by unskilled white, black or other american citizens? What about overwhelming our hospitals, especially emergency rooms? Let us examine these issues in turn, categorizing them into 1) security, 2) economic competition and 3) economic damage.


In light of global radical islamic terrorism, organized crime and individual cases of murder, theft, assault and so on, the United States, like any nation, has legitimate right and need to control who comes into its territory. My argument is that by creating a legal system that is out of touch with reality on the ground, we have exacerbated the problem and lost control. We are cutting our noses off to spite our faces. Any woman with breast cancer or any man with prostate cancer will tell the surgeon, please remove the tumor but spare the organ. We cannot target the small number of international terrorists and criminals by declaring 12 million people felons. The chaos that would result from that is the perfect enviroment for the criminals and terrorists to thrive in.

Rather, we need to make it easy for people willing to use their own resources to voluntarily and legally cooperate with others, to do so; make it advantageous to them to be part of the system.

We can never have a 100% guarantee against terrorism or crime. But with more people coming to America through legal channels and fewer ‘sneaking’ across the border, the terrorists and criminals will be easier, not more difficult, to expose and pursue.

South American immigrants know the difference between themselves and arabic-speaking middle-eastern men. Any terrorists attempting to blend in with the crowd crossing the border illegally would be highly suspect and have a high probablility of being ‘outed’. Mexicans don’t want the US to militarize the border following a successful infiltration by islamic terrorists. The Mexican government and even the illegal immigrants are more our allies than conspirators against us in this.

Economic Competition

Throughout history and in all civilizations, people at all strata of society have sought to insulate themselves from ‘unfair’ competition. Politicians have reponded to the calls with tarrifs, trade barriers, taxes, privileges and regulations. The elite brittish colonists in east Africa lobbied for laws against the retailers from India. The wholesale steel industry in the U.S. got --- for a time --- protection from foreign competition via legislation signed by the George W. Bush administration. Wine producers in California and France lobby for economic security fences in their countries. There are too many examples to list in an encyclopedia; protectionism is the oldest game in town.

In every case, however well-intentioned, protectionism breaks down as a viable principle, because there is no principle to defend. If I can buy a shirt made in America for $30 or the same quality shirt made in China for $20, I’ll buy the chinese-made shirt, and have $10 left over to spend on something else, which an american-made product will have another opportunity to bid upon. If John offers to mow my lawn for 10 dollars and Juan offers to do the same for 9, I’ll hire Juan, unless John is willing to come down to $8.50. If Juan messes up the job or steals my garden tools, I’ll go back to John, even if he now charges me $12. If I can buy a car manufactured in Bosnia on the cheap, but quality is more important to my valuation, I’ll buy a German car instead.

The fact is, every single one of us is in competition and cooperation with each other all the time. For my personal part, with my bachelor’s degree in Music and professional work in computer software development, I compete almost directly with Phd computer scientists from India who are willing to work for less than $10 per hour. It isn’t easy; but this article isn’t about life being easy.

There is no law, no wise lawgiver, no perfect program that can sort out all the justice so that everyone has a perfectly ‘level playing field’ on which to compete for customers and employers. The insistence on pursuing that Utopia leads to chaos, as pressure group after pressure group jockeys for advantage through the political process, vying for legislation favorable to their interests and unfavorable to other sectors of the same society; the steel manufacturers against the manufacturers of products that use steel; the milk or sugar farmers against the consumers, the consumers against the producers, the employees against the employers. The result is a tangled web of contradictory and self-defeating laws and a million-page tax code that not a single professional employee of the Internal Revenue Service can comprehend in its entirety.

We have to realize that in our quest for justice here on an imperfect Earth, the only laws that are viable and defensible in the long run are those that derive from the original 5 secular commandments: It is forbidden to murder, to rob, to rape, to falsely prosecute or to conspire to do any of the above out of envy or jealousy. That’s it! Any law that does not credibly derive from those simple five is suspect. Offering or accepting goods, services, or employment on a voluntary basis, by mutal consent of contracting parties, cannot be made illegal. There is no right not to have to compete.

Moreover, in the end the advantage of being protected is illusory. For if the competition for 12 million jobs goes away, so necessarily does the productivity of those same 12 million workers. The price of every commodity, good or service produced by the additional hands must necessarily rise, increasing the cost of living for everyone, including those who we might seek to ‘protect’ by keeping the competition out.

Free and open competition benefits the whole of society more completely and equitably that any form of favoritism, credentialism or protectionism.

Economic Damage

It is often charged to illegal immigrants that they are bankrupting our society through welfare and the ad hoc use of hospital emergency rooms for routine and emergency services, such as delivering american-citizen babies. These are very real problems that cannot be dismissed or ignored.

They also cannot be blamed on illegal immigrants.

With the exception of outright fraud, the failure of social programs cannot be blamed on those who accept their services and take their promises at their word. The fact is, the welfare state and government interference in the practice of medicine are inherently unstable and unviable systems. Socialism doesn’t work, period, because it destroys not only the incentives, risks and rewards of the free market, but destroys the very information base upon which decisions are to be made. No manager of a social program, hospital or business can make a decision which maximizes social welfare or justice, if profit and loss are taken out of the equation. If prices do not reflect true costs, if success is not measured by people’s willingness to voluntarily exchange their goods, services and money for those of the enterprise, then the manager cannot know what are the most urgent needs of customers or citizens and cannot know which resources are more scarce or more abundantly available for use in executing the Plan; the whole system breaks down. This is the result of forcing some people to provide goods and services without compensation, or at below-market compensation, while forcibly giving away wealth, money, goods and services to others for nothing other than a social identity or profile that the government, run by the prevailing political factions of the day, have identified as ‘worthy’. Socialism resulted in the collapse of the Soviet Union; collectivism is a cancer in western nations including the United States, which will result in economic and social breakdown in varying degrees to the extent that it is practiced.

All of this is entirely independent of illegal immigration; the problems inherent in socialism, collectivism, the welfare state and interventionsism will fester with or without illegal immigration. However, they also create perverse incentives which attract more illegal immigration than would otherwise be the case, and lead to the worsening of those same inherent problems.

Reform (eliminate) welfare and remove the heavy hand of government from medicine, and the problems linking illegal immigration to welfare fraud and hospital bankruptcy will be solved; not magically, but voluntarily through private initiative and cooperation. Doctors and hospitals existed in the United States, funded by private charities, religious organizations and for-profit entrepreneurs long before government got involved. The same will provide the best service possible in an imperfect world when they are no longer taking their marching orders from government. If the freebees and and benefits of working the system become less attractive, then word will get out and fewer people will come to our shores for that purpose.

One may reasonably ask, if we allow hospitals to turn away patients who lack the proven ability to pay, won’t that lead to patients dying in the streets? The response is equally reasonable: if hospitals are forced into bankruptcy because they have no right to contract on mutually agreed-upon terms with patients, as IS occurring in California, then most definitely, we do have patients dying in the streets, in ambulances looking for an open emergency room. It’s already happening! The difference is that it’s happening as a result of policies enforced by the chief monopolist of force, the government, and that the ensuing rigidity in the social system severely constrains choices of solutions.

It is commonly charged to the illegals, that they are robbing us by sending their earnings to family back home. This ‘charge’ is problematic for a number of reasons. To whom does the money belong, all else being equal, after it has been duly earned through the voluntary provision of services? If the people paying the money to the workers did so voluntarily, which presumably they did, that can only be because they valued the service more than they did that amount of money, to which they no longer can make any legal or moral claim. Shall we tell people how to spend their own money after they’ve earned it? Shall we invite the families of the workers to join them here, that they might spend all the money here? Not if our complaint is that there’s ‘too many’ of them. Rather, private businesses could see a market opportunity for increased exports to Mexico. If we want the money we paid for services we valued more back, we have to earn it again. Anyway, how many americans complaining of the repatriation of money could achieve the self-denial necessary to save out of the wages earned at the level of most illegal immigrants? Whose pain is greater?

It might be worth re-considering the constitutional right to citizenship based on birth within the geographical area. It was a reasonable policy at a time when the nation itself was being born. How many nations around the world practice this today? If immigrants could not procure instant citizenship for their children, would that not reduce the incentive to come to the United States illegally? Again, if we remove all enticements and incentives other than the most natural, that is, those based on voluntary cooperation and exchange of labor, goods and services, undistorted by the forced policies of government, then immigration will balance itself.

Illegal at Home

The immigrants whom we call illegal in America today are much like those squatters of the 18th and 19th century; viewed by many as a nuissance, living on the periphery of the official legal and property systems. What seems to be missing from our discussion today is that the ones we call ‘illegal’ here are de facto just as much illegal in their own countries, perhaps even more so. People come to our shores because where they live, the system has shut them out. Employment is micro-managed by corrupt governments for the benefit of political cronies. Private property is not respected, documented or leverageable, such that even if one owns a house and some land, one can’t get a mortgage or a bank acount, or even be guaranteed that it won’t be taken away by someone with a bigger stick. Either a local gang will disregard your title conferred by the national governement and rob you, or the national government will ignore the local agreements and rob you.

Just as we accomplished in the 19th century, third world countries must find the way to rationalize their legal and property systems, so that the majority of the population, not just the elite, are included. Only when that happens can the flood of economic refugees abate. Americans can help other countries through diplomatic, legal and private channels to achieve this.


There is no restriction on immigration from (Spanish-speaking) Puerto Rico, as Puerto Ricans are american citizens and therefore permitted to travel and work anywhere in the Unite States. This suggests that if Mexico can achieve a per-capita income of just one-third that of the United States, equivalent to that of Puerto Rico, then we’ll have to start raising the wages of unskilled laborers in order to entice enough of them to come over and work for us.

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Copyright © 2006 by Howard Hyde. All rights reserved.

Support for the historical analysis in this article comes in the main from The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else:, by the Peruvian economist Hernando de Soto, pub. 2000 by Basic Books, New York, NY.