Garett Jones faults me for treating cross-country productivity differences as exogenous. I disagree. On further reflection, though, I think he’s making an analogous error. Ponder his statement:
As you know, my key disagreement is a theoretical and empirical one: the policy of Open Borders flows fairly naturally from the view that a nation’s level of productivity—total factor productivity or TFP to be pedantic—is largely exogenous to the experiences, backgrounds, and skills of a nation’s citizens.
The most natural reading here is: “Successful countries are successful because their citizens have the right experiences, backgrounds, and skills. Unsuccessful countries are unsuccessful because their citizens lack those experiences, backgrounds, and skills. If successful countries want to remain successful, they need to exclude immigration from unsuccessful countries.”
Now ask yourself: What is the underlying assumption? Answer: That experiences, backgrounds, and skills are exogenous. Some humans have them; some don’t; end of story.
On my view, however, the experiences, backgrounds, and skills of a countries’ inhabitants are thoroughly endogenous. When successful countries admit immigrants from unsuccessful countries, they transform the new arrivals’ experiences, backgrounds, and skills for the better. The first generation transforms moderately; the next generation transforms radically.
Critical point: This transformation largely goes one way. Why? Even if immigrants are more numerous than natives, immigrants typically arrive with low status. How do they raise their status? By emulating higher-status natives. They learn the language. They acquire new job skills. They bend the traditions they were raised on. They grow accustomed to (relative) freedom. Above all, they encourage their kids to succeed in their new land. Natives, in contrast, have little to gain by emulating low-status immigrants. They may eat their food or borrow their fashions – the superficial dabbling hypersensitive observers call “appropriation.” Yet very few natives actually switch teams.
One of economists’ favorite games is: “More endogenous than thou.” On reflection, it’s a silly game, because some factors really are exogenous. Still, if you want to make a virtue out of endogeneity, at least do it consistently. Yes, immigrants change countries. Yes, countries change immigrants. And the net effect is awesome.