charter cities ctd.
Here’s a thought. Preventing immigrants from coming to the United States to work essentially creates a barrier to exit. Immigrants are forced to remain within the monopoly of their native state. Removing the barrier to enter the United States is effectively a trust-busting measure. Simply by granting citizens of other nations the freedom to exit (by granting them the freedom to enter) would thus have as profound an effect on foreign nations as any potential financial aid, trade policy, or military effort we could implement. In this sense, freedom of labor is as important or perhaps even more important than free trade.
This then leads back to the discussion Arnold Kling and Will Wilkinson were having a while back about autonomous city-states, or charter cities, which would be allowed to govern independently of their host nations – a la Hong Kong. Such city-states would indeed free up the movement of labor, tearing down barriers to exit in host nations that were previously only removed vis-a-vis illegal immigration to the United States. (They would also be economic and political laboratories/test tubes for their host nations, but that’s another story.)
Indeed, a Mexican Hong Kong, privately and independently managed without the suffocating influence of the corrupt, bankrupt Mexican government might even lessen the demand for illegal immigration into the United States. Several of these polities spread throughout Latin America and modeled after Hong Kong might substantially reduce that demand, especially if host nations began adopting the practices observed in the charter cities. Immigrants would be able to choose between the United States or Hong Kong Mexico or Hong Kong Columbia, and so on and so forth. Choice would also increase for high-skilled workers in the host nations and around the globe.
I don’t think decreasing the illegal labor pool is the point here, either. It’s by and large a good thing for Americans to have cheap, reliable labor available. Problems with crime stemming from illegal immigration are usually related to the War on Drugs or second-generation immigrants who are disenfranchised directly by the bungled process of integration into the United States that their parents faced. If anything, this increased choice would benefit the immigrants themselves the most – perhaps even to the detriment of American consumers. Then we might have an illustration of the benefits of illegal immigration, and may need to decide whether to reform in order to become once again a competitive labor destination.
See also: Bryan Caplan with a very important question.