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02/26/2005

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Charlie Bourne

I am very surprised that people confused any of the proposals by Becker or Posner with indenture. Not only is indentured labour unfree (masters had significant social control over servants), it is an alternnative to cash and monetary exchanges - the servant is bound to labour for a period of years, not to pay off a debt.The crucial comparison is with the freedom to enter indentured servitude - nobody was required to do so - it was indeed not slavery, it was quite voluntary. Given the onerous demands over a period of four to ten years that it entailed, it was some of the most enterprising and determined individuals who used it - and on being freed often made extraordinarily successful lives for themselves.People do seem to feel that there is a danger of "debt peonage" - that is to say that the terms of the loan needed by the immigrant would be so onerous that it would never get paid off (c.f. share croppers in the post Civil War Southern states). But they offer no evidence as to why this would be likely to happen, and legislative provisions could quite legitimately proscribe if necessary.I am astonished by how many people seem determined to attack these proposals for the sake of it, and bring to bear much error and ignorance. I think the biggest criticism is that the proposals - like any other legal-procedural response to real forces - would make relatively little difference. It is the huge impersonal forces that are in motion, and as in previous eras, they will press forward regardless.

David

I must admit that I was guilty at times of meshing Judge Posner's and Prof. Becker's different proposals into one. Judge Posner's screening system is not a flat-fee sale of immigration rights, and many of us who commented, including myself, were guilty of sometimes treating it as such.

Still, I stand by my comments regarding the problems of selling (and yes, it is "selling") immigration rights to anyone, even on a sliding scale. Posner's proposal will let in more unskilled workers than Becker's, because if they are deemed healthy they will be admitted for free (or for a lesser sum than others), but it still gives extra rights to the rich. If a huge influx of 80-year-old immigrants were draining our Medicare system, that might be a reason for age-based immigration restrictions, but I doubt that ever has been, or ever will be, much of a problem. It is mostly younger, abler people who have the initiative and inertia to move to a foreign land.

My biggest question in all this is why. Judge Posner agrees with the open-border advocates that immigration is a net plus for the country. So why bother with the screening process? It just makes us look greedy and selfish as a nation. Let everyone in (except terrorists or criminals), and we all gain.

I agree that this has been a very stimulating discussion; thanks again to our hosts!

David

BTW, interesting little piece on indentured servitude. Contrary to Judge Posner's suggestion, it is unclear whether it truly benefited the servants:

http://college.hmco.com/history/readerscomp/rcah/html/ah_045000_indenturedse.htm

Of course, this is all academic after the 13th Amendment, not to mention the moral repugnancy of any kind of human servitude. Except, that is, at large law firms. j/k

Charlie Bourne

What strikes me is the degree to which no policy (incuding more vigorous application of the current one) is likely to make a significant impact on the real forces of demographic change and international labour movement. The biggest impact would be in shifting monetary, tariff and tax policies in a direction that would aid the economies of the countries from which immigrants are flowing.

For the UK this is much harder than for the US - (a) the counties from which its mass illegal immigration originates are among the poorest in the world;
(b) there are real forces of political oppression involved, including keeping the countries' economies underdeveloped.

But either way, the best immigration policy would be one that (a) documented and tracked entrants; thereby making it possible to (b) ensure immigrants were not subject to exploitation or denial of rights; (c) better protecte the citizens of the country from criminality by excluding more criminals, and acting effectively against crime by immigrants; (d) allowed the state to tax earnings by immigrants, largely to pay the costs of (a), (b) and (c). There could be a place in this for sale of the right to work, alongside other bases of entry, to achieve that modest but useful goal.

Corey

"Indentured servitude (which must not be confused with slavery) is a method of commitment that, like a mortgage, enables a person to obtain an economic advantage that he could not obtain otherwise. Unfortunately this is a point that is very difficult for people not steeped in economic thinking to grasp. But try!"

Oh, that's right, I forgot that we had already established for all time that economic thinking is the one true right reason and that fairness and morality "have no content." We should all be out buying and selling baby adoption futures and trading our kidneys for food stamps...

Should I apply Coase? A single unskilled worker with no assets and no voting rights negotiating with the Federal Government through the INS for an entry price, yes, sounds like an ideal fit for an assumption of no transaction costs.

I do get that slavery and indenture are different:

slavery = work under physical duress
indentured servitude = work under economic duress

When an immigrant works 16 hour days and makes just enough to cover rent, food, debt payments, and NOTHING else, they are in exactly the same situation as someone who works all day for food and shelter provided by the Master. Just because the Master has changed from Jim-Bob Brown to a combination of UltraMega Apt. Management, WalMart Superstores, and MBNA we have started calling it voluntary market participation. Sounds prettier.

I may not be steeped in economic right reason, but I do live in the real world. In that world, people do not gain an economic advantage from being $50,000 in debt, short or long term. That is a crushing debt load unless you make at least twice as much per year. I have been there.

Of course, borrowing $50K on the future earnings of every single immigrant will have a great positive effect on the share price of MBNA and Sallie Mae! I understand that much econ.

I know it is hard for many people to imagine not being a rich, privileged, and sheltered white man. But try!

Maybe this guy can teach me about the economic advantages that immigration provides...

"What the purpose of his coming is, we may not presume to judge. But we can see much good already resulting from it--good to the negro, in his improved condition; to the country whose rich fields he has cleared of the forest and made productive in climates unfit for the labour of the white man; to the Continent of Africa in furnishing, as it may ultimately, the only means for civilizing its people."
-- William John Grayson, 1855

Samuel Gross

It would also be interesting to see the effects of such a system on how companies chose their employees. It would seem that allowing companies to pay the entrance fees for certain employees that are in short supply in the United States (the purpose of the special skills exception now) makes a lot of sense. The fees could also be adjusted depending on the labor market and whether there are certain types of skill sets that are needed (perhaps doctors or chemists) and the fee could also be modified to prevent some abuse of the special skills system now where immigration policy hasn't quite kept up with the labor market.

The fee could be modified to keep companies from having the incentive to import labor (in terms of jobs where presence in the US is critical) from simply importing the workers from abroad (if protectionism is your goal). Just a couple of thoughts and possible effects that I thought were intriguing.

David

I agree with Corey that Judge Posner overreached by implying that those of us who criticize indentured servitude do not understand the "economic way of thinking." We understand the possible economic benefits; we just reject the notion that it is ever a "voluntary" transaction to sell onesself into servitude. The potential for abuse is too high, and the law should not permit one person to be the economic "property" of another. History teaches us the evils of such systems. Also, what is the remedy if the servant breaches the contract and decides to go free? Courts should never be forced to declare that one person must serve another. Period. This is an unconscionable contract, just like Shakespeare's "pound of flesh."

My major criticism of the Law and Economics movement is that it lacks a moral compass and worships the false god of efficiency. Efficiency is often good, but there are limits. Hunger might be reduced by killing babies (see Malthus), but morally we should not consider such an option. Slavery in the antebellum south might have been "efficient" in some sense (as some economists have argued), but it was a gross travesty. Simply, efficiency is a terrible first principle, though it might be a decent second principle, when there is no moral objection to either of two choices.

Palooka

"We understand the possible economic benefits; we just reject the notion that it is ever a "voluntary" transaction to sell onesself into servitude."

This is stupid. You don't disagree that it is voluntary (do you?), you disagree that it should be allowed. Much as the same as voluntary drug use (at least some drug use) should not be allowed, or the sexual exploitation of children, etc. Its wise, as a general rule, to scrutinize "voluntary" exchanges when those exchanges take place with a great asymetry of power, or when the putative results of that "voluntary" action, both to the individual and society broadly, are negative.

I do agree, however, that Posner's response was a little unusual (though not unusual for Posner). As I, and many other commenters, pointed out involuntary servitude is not a close analog to student loans, or a proposed immigration fee, etc. Posner instead takes the unconventional route of proclaiming the utility of indentured servitude! While it is true that indentured servitude is not a perfect analog to slavery, the degree of freedom was as closest to slavery as one can come without actually being a slave! Just because someone's life is so miserable they will literally sell themselves into slavery to escape it doesn't mean society should condone or even allow that exploitation to take place. I am sure there are many desperate peoples across the world which, in order to survive or ensure their family's survival, would sell themselves into near or complete slavery. Should we let that happen because it is "voluntary?" No. That said, for reasons stated at great length previously, Becker's proposal is leaps and bounds from indetured servitude.

Palooka

involuntary servitude=indentured servitude

Alex Robbins

David- the baby-killing reference to Malthus is out of order, not because it's offense but because it's wrong. Law and Economics tends to favor only mutually-advantageous transactions; in other words, A cannot hurt B because A gains more than B loses. Judge Posner discusses, at some length, this distinction in "Economics of Justice" when he argues for "weath maximization" over "utilitarianism" for just such reasons as baby-killing and "utility-monsters" (originally coined by Noizick, however you spell it).

Corey- I'm personally not a fan of the indentured servitude idea, but I am very happy that you're not in charge and I'm allowed to be far more than $100,000 in debt. Why? B/c I expect it to pay off. Anyone who goes to law school or med school is likely in this position -- do you find that abhorrent? If not, how come poor Mexicans don't deserve the same choice?

David

Palooka - THINK! My argument is that if you give up your freedom, that is not a truly "voluntary" transaction, because it results in the destruction of your free will. I can see both sides of this argument, but it is certainly a fair argument. I would think that such contracts would pose grave dilemmas for libertarians, because if you believe in freedom, that includes the right to change your mind later (though there might be economic sanctions for a default). A very interesting application is the question of how the army should treat a soldier who wishes to leave before his commitment is up. Of course, the gov't can "draft" the soldier, but assuming a voluntary system, what is the answer?

Alex - my references were not out of order. I realize that most members of the Law & Econ movement do not advocate slavery or killing babies. They believe, like Posner, that it is efficient (and therefore good) to ban murder and slavery. But in my view, they have the equation backwards. Murder laws are not desirable because they are "efficient" or because they maximize wealth. I believe that such laws have a moral underpinning. Of course, one can disagree, but then what happens if empirical evidence shows that murder is in fact efficient in some context? Would the utilitarian maintain his views?

Palooka

"THINK! My argument is that if you give up your freedom, that is not a truly "voluntary" transaction, because it results in the destruction of your free will."

This is semantics. The decision ITSELF is voluntary, your decisions thereafter, until expiration of the contract, are not. This is really no different than signing a loan (the only exception being discharge through bankruptcy). One can't decide later that the terms of the loan, if legal, are unsatisfactory.

"I would think that such contracts would pose grave dilemmas for libertarians, because if you believe in freedom, that includes the right to change your mind later (though there might be economic sanctions for a default)."

I think the purest libertarian principles would tend to strongly favor allowing indentured servitude. Though I think that is one of the many illustrations why that particular philosophy is utterly unpracticable.

"A very interesting application is the question of how the army should treat a soldier who wishes to leave before his commitment is up. Of course, the gov't can "draft" the soldier, but assuming a voluntary system, what is the answer?"

Again, it's semantics. "Voluntary" doesn't mean what you want it to mean, though it could if that is how they defined it. Voluntary means only that one agreed to the terms at the time of enlistment. It is really no different than most consumer transactions in everday life, except the gravity of the decision is greater.

Palooka

"They believe, like Posner, that it is efficient (and therefore good) to ban murder and slavery."

Have you ever read Posner's work? Where would you get an idea like this? Posner doesn't dispute the immorality of murder and slavery, and would find the near universal agreement on those questions as sufficient enough to ban them, without reference to whether or not they are "efficient." Just because Posner deeply questions the utility of philosophical thinking for questions such as abortion, where argument does little to persuade because those beliefs rest on different perceptions and assumptions which argument can do little to change, does not mean Posner thinks morality or disgust is an insufficient basis for legislation.

Alex

David-

I realize reading it now that the phrase "out of order" was itself out of order. I think I had been watching the House of Commons on CSPAN at the time. In any event, I would disagree that one need posit which came first: morality or efficiency. Efficiency, even if accepted, doesn't tell you how to live your life or treat other human beings. Efficiency and welfare maximization are primarily useful as social policy guides, in my opinion. The liberal (in the most classical sense of the word, or alternatively it's usage when talking about people outside of the US, such as a "liberal" Iraqi or Egyptian) believes that there can be a separation between what should be and what we will force to be, between morality and coercion, on the grounds that a greater moral value of human dignity prevents society from coercing "moral behavior" (Aquinas said something similar about not being able to force moral behavior). Hence, in my opinion, murder is evil because it is an affront to God and a violation of the command to love thy neighbor, and murder should be illegal because it is almost certainly inefficient. Tension does show up on some issues (mostly over duties / omissions), but not this one.

David

Without getting overly technical, my understanding of Posner's writings is that he, like Holmes, believes that law and traditional "morality" should be viewed separately. This is in opposition to more traditional theorists, like Dworkin, who believe that our deepest moral instincts play a part in legal decisionmaking. Basically, Posner is one of the theorists who would like to replace morality-based law with a more "objective" or "neutral" principle. This is of course a legitimate view held by many scholars. Personally though, I reject the idea that one can separate law and morality entirely. I believe that there are basic human notions of "right" and "wrong" that underlie much of the law, and these notions can evolve over time, based on the development of the human experience. This is not as "clean" a theory as efficiency or wealth maximization, but I think it is closer to the truth.

Next, let's talk about what "truth" means.. :)

Palooka

I think your impression of Posner's beliefs is largely valid if you qualify it a bit. Posner has no problem with moral sentiments which are nearly universal--read his discussion of the taboo of incest in Sex and Reason, for example, where he claims disgust is a legitimate basis for law, if that disgust is strong enough and widely shared. He accepts many moral sentiments, as far as I can tell from my readings of his work, without reservation.

And that is not to say that Posner disbelieves in "morality." His fondness for Mill's "one simple principle" is itself a broad moral principle, not necessarily an economic one.

Posner, I think, would be the first to point out that our most fundamental of beliefs are not subject to reasoning or contemplation, therefore why would he wish to reason them away with economics or any other device? It is the topics at the margins which he applies his moral and philosophical skepticism. At least, this is my impression having read a few of his works.

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