"Do you believe they are better off if they are not allowed in at all, which is the present system?"

Ah, the old, "even the slaves are better off than they were in Africa" argument! A true classic of American history...

"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

But no, despite this and other quotes from anti-abolutionists who died over a centry ago, I do NOT believe that someone is better off having paid $50,000 to cross a border.

"Or do you believe students are “indentured” because many of them have large loans when they finish school?"

In a way, yes... as anyone in law school will tell you, graduating with $90K in debt absolutely limits the range of jobs one can take. Just try working in a $36K per year public interest law job and paying down your loan at $1K per month.

"Ah, the old, "even the slaves are better off than they were in Africa" argument! A true classic of American history"

Ah, we should have known this was around the corner. If indentured servitude doesn't quite cut it, bring in slavery. The only problem here is that it Becker's proposal is COMPLETELY VOLUNTARY.

If student loans are indentured servitude, what are taxes? Oh, oh, but that's different. Sure it is. Taxes are worse.

"In a way, yes... as anyone in law school will tell you, graduating with $90K in debt absolutely limits the range of jobs one can take. Just try working in a $36K per year public interest law job and paying down your loan at $1K per month."

I believe this referred to an 'investment.' In Professor Becker's language, it is an investment in human capital. So, in the short term, there is a sacrifice: large debts to pay off with low-medium paying jobs. This means you must make trade-offs between paying off loans and other activities you desire. But, in the long-run, given that you are wise, your invest will pay-off: higher wages, or whatever you are trying to maximize by going to school in the first place--human capital.

If that is indentured servitude then i guess Professor Hayek should have rewrote his famous THE ROAD TO SERFDOM to argue that modern capitalist societies, by nature of investments, are creating indentured servants. If that is true and undesirable, we could let government take care of our costs, and just have central planning! Off to to the fuedal order for us!

I think, in short, that this criticism is misplaced. I for one, certaintly believe i am better off for incuring college loans, and will continue this process by going to grad school.

How about if all or part of the proposed fee was put into a personal Social Security account for the immigrant's retirement?

In defense of Corey:

spiritofcapital: you describe the economic situtation that Corey accurately depicts as an "investment." I think that's a grossly inaccurate description, because an "investment" is generally viewed as something which involves a short term expenditure for the long-term gain of the person doing the expending. By contrast, the plight of most people studying law (or science, or art, or pretty much anything) who want to serve the public is best described as a "donation." They take a short-term expenditure for the privilege of providing a long-term gain to society in general.

Palooka: taxes are not worse. An activity which a mixed public and private good ought to be funded with mixed public and private dollars.

1. Tax payments are distributed through the entire public, which is as it should be, since education is a public good. Education is a private good too, since it increases the earning power of the person educated, and that person should contribute, but not beyond their means, and not in such a fashion that it prevents them from contributing to the public good.

2. Tax payments are dependent on income. Student loan payments (or at least student loan totals) are not. This is very important. Imagine three students. One is a brilliant artist. The second is a brilliant physicist. The third is a brilliant stock market picker. Student A will go to undergrad, then get a MFA, then do art, which will be a positive social contribution regardless of whether they make any money out of it. Student B will go to undergrad, then get a PHD and do physics, which could either serve the public good and not make much money (go work for NASA) or serve some private industry and make lots of money (go work for Lockheed). Student C will go to undergrad, then get a MBA, then do investment banking, which will achieve ABSOLUTELY NO PUBLIC GOOD WHATSOEVER, since it will entirely consist of shifting electronic representations of money around between various rich people so as to make them richer and skimming a cut off the top, and they'll make a pile of money. YET A, B, and C will have very similar student loan bills! Is this right? Does this make sense? C will have their student loan bill paid off in an instant. A could easily end up either in default or working at somewhere where her talents are not used for society. B will be forced into Lockheed rather than into NASA, C will be rewarded for choosing pure self-interest, and A will be punished for producing art.

I suggest that this system, which is what we have right now, is manifestly unjust, and, insofar as it does keep A out of the system, heap rewards on C, and force B into Lockheed rather than NASA, it does constitute indentured servitude (especially as to poor B). I further suggest that all of these problems would be solved by putting a greater portion of education on the public purse rather than the private purse.

Moreover, the alternative system is readily achievable as demonstrated by the state university systems of California, Michigan and Virginia (just for starters), as well as the fact that a student must still pay a maximum of about £1,200 to go to Oxford and Cambridge.

(partially excerpted from my own blog)

It's not just that Corey is obviously wrong--paying $50,000 (voluntarily) is a great investment if you come here to work--he's also unbearably condescending. Apparently, he knows better than the hundreds of thousands who would pay such a fee what is best for them and how they should live their lifes.

"Apparently, he knows better than the hundreds of thousands who would pay such a fee what is best for them and how they should live their lifes."

Its not me, it is the authors of the 13th Amendment. Apparently, they knew better than thousands of white slave owners and hundreds of thousands of slaves and indentured servants who just came here to work. How paternalistic of them to say that slavery is bad!

Although to be fair, society had already largely disaproved of indentured servitude BEFORE the civil war. Perhaps because it is easier for some people to have empathy for folks who are the same color.

I challenge any of you to borrow $200,000 unsecured for you and your family and try to live on a job at Walmart. See how voluntary your life feels then.

Becker did not deny that his proposal is similar to indentured servitude, he said, "but they will still be better off."

"If that is indentured servitude then i guess Professor Hayek should have rewrote his famous THE ROAD TO SERFDOM to argue that modern capitalist societies, by nature of investments, are creating indentured servants. If that is true and undesirable, we could let government take care of our costs, and just have central planning!

Now you are getting it! Good luck paying down your student and credit card debt. I hope the capitalists are nice to you since you defend them so well. Maybe if you work really really hard you will be a billionaire!

Isn't it funny how both sides accuse the other of leading us to feudalism. I think it is.

"Capitalism leads to dole queues, the scramble for markets, and war. Collectivism leads to concentration camps, leader worship, and war. There is no way out of this unless a planned economy can somehow be combined with the freedom of the intellect, which can only happen if the concept of right and wrong is restored to politics" -- George Orwell (commenting on Hayek's "The Road to Serfdom")

Again, if you sincerely believe a VOLUNTARY loan is indentured servitude. What are taxes?

"taxes are not worse. An activity which a mixed public and private good ought to be funded with mixed public and private dollars."

I am always amazed at the poor quality of arguments from lawyers, especially civil rights lawyers.

I asked: If voluntary loans are indentured servitude, then what are taxes?

The loans were described as such because an individual, once making the decision, must pay it back (though they are discharageable for exceptional circumstances), and must often make sacrifices in career choice.

If one really believes these are analogous (which they are not), then one has to wonder what taxes are.

Taxes are involuntary (thus it is more like slavery in that respect), not paying your taxes is criminally punishable (defaulting on student loans is not), and taxes also effect career choice (many would choose lesser paying jobs if the tax burden was less). As far as the individual is concerned, taxes are worse, and are clearly a closer analog to indentured servitude.

How then to explain away these similarities? Paul Gowder responds with the inapposite remark that taxes serve the public good. Is that supposed to make our indentured servants feel better?

The truth is neither is a valid analog to identured servitude (which was more like temporary slavery, e.g. you had NO freedom). Reducing the amount of choices you have by voluntarily taking on debt cannot be described as having zero freedom (the case of indentured servants). Likewise, having no choice about paying taxes, or the amount of taxes, cannot be described as a total lack of choice. Reduction, or narrowing of choices, because of voluntary (and usually entirely rational) decisions is not worthy of a comparison to indentured servitude. But if we were to rank which was closer to indentured servitude, it would almost certainly be taxes. But, as the liberal mind goes, taxes are good, therefore they cannot be bad. Mind shuts down. End of discussion.

Palooka:

The loans were described as such because an individual, once making the decision, must pay it back (though they are discharageable for exceptional circumstances), and must often make sacrifices in career choice.

If one really believes these are analogous (which they are not), then one has to wonder what taxes are.

Taxes are involuntary (thus it is more like slavery in that respect), not paying your taxes is criminally punishable (defaulting on student loans is not), and taxes also effect career choice (many would choose lesser paying jobs if the tax burden was less). As far as the individual is concerned, taxes are worse, and are clearly a closer analog to indentured servitude.

There's your error.

I'm going to keep this simple:

Taxes are income-dependent.
Student loans are income-independent.

If you make less money, you will pay less taxes.
If you make less mney, you will still pay the same amount of student loans.

This means that taxes constrain career choice less than student loans do. Someone who chooses a low-paying, public service job is hurt less by higher taxes than by proportionally higher student loans because their tax burden goes down while their student loan burden does not.

This means that taxes are beneficial for two reasons:
a) As I mentioned before (and as you seem to take great offense at), it divides the cost of the public good of an educated citizenry amongst the public that benefits
b) A tax-funded educational system objectively constrains career choice less, on an individual basis, than does a loan-funded system. This means that more people will be able to enter careers which have a higher public than private good component to them. This is Good For Society, because it means that Society Will Get The Benefit of things like Art and Criminal Prosecution and Scientific Research. Society will lose that benefit if the people who would otherwise do Art and Criminal Prosecution and Scientific Research are instead forced by their Mountains of Debt to do Derivatives and Futures and Human Resources and Private Security and Insurance Defense.

It should be humiliating to you that you sink to insults in order to avoid this reality.

"Tax payments are dependent on income."

One more point, which I should have addressed in my last post. Student payments share this attribute as well. Undergraduates can borrow increasing amounts as they advance (as their chance of graduation increases, and with that their earning potential). Graduate students can borrow more than undergraduates because their potential income is much greater. Moreover, one cannot adjust the term of the loan to match one's income and goals (5 years, 10 years, 20 years). Private loans are more readily available to doctors and lawyers than graduate art students. Therefore, the amount one can borrow is ALREADY related to one's income, though perhaps imperfectly. One other note: Student loans ARE dischargeable for exceptional circumstances, such as profound disability.

"a) As I mentioned before (and as you seem to take great offense at), it divides the cost of the public good of an educated citizenry amongst the public that benefits"

I guess you still don't get it. I didn't take offense, it was just a very stupid argument. If slaves were used in building a library (thus serving the public good) would it make that slavery any less like slavery? Would it cease to be slavery?

"I challenge any of you to borrow $200,000 unsecured for you and your family and try to live on a job at Walmart. See how voluntary your life feels then."

I challenge you, corey, to give up all your possessions and move to Mexico to work as a laborer. See how good that loan looks then.

(whoops, the first three paragraphs of my previous comment should have been quotes)

Palooka, that's true, at some level student loans are income-dependent. However, the brunt of it is much less income-dependent than taxes, surely you agree with this. The number of years in school is roughly the same for a MFA or a MBA, the tuition is roughly the same -- hence the need to borrow is the same. If the ability to borrow is lessened, then my initial point (about the cost of higher education being bad for society) remains.

I agree with you on variable payment terms, however. As for dischargability, profound disability is pretty much the only way a student loan will get discharged.

We seem to have fallen off the train here, which started with regard to immigration and indentured servitude. I think the point is only this: an economic arrangement which conditions something which ought to be marketplace-independent (living in a free country, getting an education) on payments comprising a high percentage of a person's income for a significant amount of time is comparable to indentured servitude, insofar as it binds those people into certain forms of work for a certain amount of time without regard to the fact that the thing which they get for that work (immigration, education) ought to be considered a human right.

Dearest Palooka:

I hate to break this to you, but taxes are good. (Rather than, say, "slavery.") Taxes allow for public goods to be created that would otherwise not be created. Things like militaries (albeit often misused), roads, and schools.

If you had the choice between living in a world with no taxes, but no government either, no public schools, no police, the Hobbesian war of all against all, or living in the current world, which would you honestly choose?

Which would any of you economist/republican types honestly choose? Solitary, poor, nasty, brutish and short, or taxes? You do realize that's the choice, don't you? If the government isn't abolished, business isn't going to provide police or schools. Well, maybe they will, but they'll be operated in a totally unrestrained fashion, schools will be staggeringly expensive and will only teach corporate dogma and the police will function as a private mafia against non-members. That's what happens when we get rid of things like law and government and education.

"However, the brunt of it is much less income-dependent than taxes, surely you agree with this."

I think you would be surprised at how it correlates to income, but, yes, it is not perfectly individualized like taxes.

"The number of years in school is roughly the same for a MFA or a MBA, the tuition is roughly the same -- hence the need to borrow is the same. If the ability to borrow is lessened, then my initial point (about the cost of higher education being bad for society) remains."

You'd have to make the case as to why we need more MFAs when the market doesn't think so. Why? I don't believe someone has a RIGHT to pursue the degree. If they believe they cannot afford to take on additional debt and do what they want, then I am sorry but that is just tough luck.

One more thing:

Palooka said: "Again, if you sincerely believe a VOLUNTARY loan is indentured servitude."

Indentured servitude was "voluntary" in its original form.

Many people would enter into contracts in which they traded their labor for X years for the price of transportation in the new world. They didn't have to do it. They could have stayed in England.

Now, admittedly, some were transported for indebtness or crime, but a large portion were "voluntary."

It was still wrong. It is possible for voluntary economic arrangements to me morally wrong.

One of Becker's defenses of his flat-fee proposal seems to be that unskilled immigrants are better off, because they could not get in otherwise (assuming they don't qualify under the quota for their country). I might be willing to grant that, assuming that they could put together the financing, which is a big if. Unskilled immigrants with no assets or work history would have trouble getting private loans, even with the incentives that Becker proposes. More likely, they'd borrow the money from the local loan shark or the mafia, which would cause all sorts of other problems.

Further, if the goal is to increase immigration (and Becker claims to be pro-immigration), why not just have an open borders policy, excluding terrorists and criminals, of course? I don't see the justification for any "fee" unless it is proven that legal immigration is a drain on our society. And so far, I have seen no such proof.

Gowder,

The debate wasn't if taxes are "good" or "bad" but if they resembled indentured servitude. Saying they don't resemble indentured servitude because they are "good" is non-responsive. Is the definition of slavery dependent on what the slaves do (killing in war versus building a library)? Is the definition of indentured servitude dependent on what the servants do (blacksmithing or building a library)? NO! Thus your argument was a non-sequitor--"Taxes are not indentured servitude because taxes finance things which are good."

Taxes are good, and justifiable. They are necessary for a "civilized" society. I already stated I do not believe taxes or student loans or immigration fees are analogs to indentured servitude. My point is that IF you believe student loans are, then you must believe taxes are as well, right?

("be" morally wrong. Not "me" morally wrong. Jesus. If I'm to get into multi-cycled arguments in the blogosphere, I need to learn how to type without a spell/grammar checker as a backstop.)

Palooka: see, that's where we're fundamentally in disagreement. I think that if someone has the talent, they do have a capital-R Right to pursue that MFA degree. I can't justify this on a utilitarian basis, because I think it's a moral/philosophical issue. Life is short. We all die. In the brief time that is allowed to us, we should all be allowed to pursue our talents to the fullest. It gives life meaning. The idea of a talented artist, who loves his work, being chained to a desk somewhere is a tragedy, because it means that someone will die without having reached their potential.

Moreover, at least when art is concerned, all too often, the marketplace is willing to pay for them, just not until after they've already given up and/or are dead. My favorite modern example of this is John Kennedy O'Toole. Have you ever read Confederacy of Dunces? It's an absolutely brilliant book. A laugh riot. It won the Pulitzer Prize. That prize was awarded to the author posthumously because he killed himself before it was published. To be more specific, he couldn't get it published. It was rejected by the marketplace for ten years.

I consider Mr. O'Toole direct proof of the proposition that the marketplace is ineffective at supporting artists. By some miracle, the public benefit of his book got out -- but not before it killed him.

Palooka said: "Again, if you sincerely believe a VOLUNTARY loan is indentured servitude."

Indentured servitude was "voluntary" in its original form.

-----

Yes, exactly. Now, since taxes are NOT voluntary, but shares the same attributes of indentured servitude (under your criteria), then what would it be?

My point is that under your standards, taxes would be tantamount to slavery. Sound ridiculous? It is. That's my point.

As I stated earlier:

"The truth is neither is a valid analog to identured servitude (which was more like temporary slavery, e.g. you had NO freedom). Reducing the amount of choices you have by voluntarily taking on debt cannot be described as having zero freedom (the case of indentured servants). Likewise, having no choice about paying taxes, or the amount of taxes, cannot be described as a total lack of choice. Reduction, or narrowing of choices, because of voluntary (and usually entirely rational) decisions is not worthy of a comparison to indentured servitude. But if we were to rank which was closer to indentured servitude, it would almost certainly be taxes."

Yes, exactly. Now, since taxes are NOT voluntary, but shares the same attributes of indentured servitude (under your criteria), then what would it be?

My point is that under your standards, taxes would be tantamount to slavery.

Fine. Taxes are analagous to slavery to the same extent that student loans are analagous to indentured servitude. I'll concede this, arguendo, and by doing so defeat your silly reductio ad absurdum. Sure. Taxes constitute partial slavery, insofar as a percentage of one's labor is involuntarily alienated from oneself. (Perhaps a better analogy would be to sharecropping, but I'll give you slavery.)

Now that we've established that we must suffer either slavery or indentured servitude, lets look at the relative cost-benefit ratios of each.

Lo and behold, we find that the minor slavery imposition of taxes is less harmful (as discussed copiously in my previous posts and elsewhere) than the major indentured servitude of completely rechanneling someone's life to pay student loans or immigration fees.

"Lo and behold, we find that the minor slavery imposition of taxes is less harmful (as discussed copiously in my previous posts and elsewhere) than the major indentured servitude of completely rechanneling someone's life to pay student loans or immigration fees."

Less harmful how? Because there are fewer starving artists? In actuality, there might be more, being that you are going to channel more and more individuals into the arts, therefore reducing each one's chances of survivial. Maybe you can have the taxpayers support them after graduation (wait, we already do that with the NEA). Ever thought that is some of the reason why they are so poorly paid now? Why would the answer be to increase the supply of artists? They may find themselves with less disposable income even though they have less debt.

Paul, it's been a fun little spat, but I have to go for now. Though I will probably respond to whatever else you post at a later time.

palooka, are you saying that it is immoral to offer someone the option to take out a sizeable loan because of the possibility that they will not be able to repay it?

"Again, if you sincerely believe a VOLUNTARY loan is indentured servitude. What are taxes?"

Taxes.

Or Feudal Incidents. Depends on who is collecting I guess.

Want an equitable distinction? Ex post vs. Ex ante.

Paul - just because O'Toole's book was published posthumously does not mean the market failed. That book very well may have garnered such acclaim because he killed himself. It's not a great book in my opinoin - definitely not better than The Moviegoer, which it beat for the Pulitzer (ironic, seeing as how Walker Percy's entirely responsible for it being discovered and promoted). It was probably the story of O'Toole, as much as the book, that helped catapault it into the stars.

"palooka, are you saying that it is immoral to offer someone the option to take out a sizeable loan because of the possibility that they will not be able to repay it?"

No, and I have no idea where you got that idea. But in the storm of comments earlier with Gowder, maybe I posted something which was not explicit (a lot my argument was presupposing Gowder was correct for argument's sake).

my first comment (and my comments toward Becker's posts generally) was quite negative, and, upon reflection, too harsh. I latched on to a few statements Becker made which annoyed me (i.e., foreigners come here b/c of government handouts), and never really considered his argument. I do think it is imperative that the illegal immigrants who now reside in America are given an avenue to pursue their rights, such as the right to apply for driver's licenses, which will naturally increase the range of jobs they can do, and give them incentives to build a future in the US (aside from moral reasons). I also agree that Becker's idea is better than the present system where illegal immigrants have no chance to become American citizens.
Even so, I don't think I can come around to the view that the US should try to charge a revenue maximizing price, particularly for those poor illegal immigrants who reside in the US already. One reason is that society would also benefit by giving illegal immigrants more incentives to invest in their future here, by buying houses, cars, getting car & professional licenses, and acquiring skills. Setting a price much lower than what would maximize revenue yet enough to raise a substantial amount of money which should go to communities who spend money on services for these immigrants & to make the US's immigration services & border patrol more effective.
I would recommend a system like present (which kinder treatment to students applying for visas, and speeding up the whole process), a lottery system to fill up a certain quota (i think it's impossible to argue for open borders), and then employing a system like what Becker advocates for those who did not get in. (In the end, it looks like what Posner advocates.)

There is no "right" to a driver's liscense. This "right" doesn't even exist for citizens.

All of this makes sense, for someone immigrating from a poor country to a rich country. But what about someone immigrating from a rich country to a not-as-rich country?

For example, I intend to immigrate from the US to Australia. This is motivated by personal factors, as well as the increased quality of life, and an affinity for the Australian culture.

In order to move though, I have to take a significant pay cut -- once you factor in taxes, my pay will be cut about in half.

This pay differential is acceptable because of the non-financial benefits of living in Australia. If I had to pay a US$50k fee however, it would be much more dicey.

Also consider someone immigrating from Sweden (or really anywhere in Europe) to the US. It's very unlikely that they are moving to the US to take advantage of extra welfare benefits, and it would be ridiculous to make them pay as if they were.

In short, it seems as though you've only considered immigrants who come to the US from poor countries, not immigrants who come from rich countries, who make up a large proportion of all immigrants.

One could get around that problem somewhat by varying the fee by how much someone's income is expected to change -- someone who will earn an extra $50k/yr should be willing to bear a higher fee than someone who will make an extra $10k/yr.

That last Corey's comments were ludicrous enough to warrant them being attributed to someone else.

Here's my final defense of that "investment bankers have no social value" statement:
http://www.paultopia.org/blog/2005/03/defense-of-proposition-that-i-bankers.html

I'm probably not going to respond to any more comments on that one (unless they're REALLY interesting) so y'all can have the last word.