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I think there are two separate though somewhat linked questions in the whole debate over Vivek's recent extremely controversial post:
I think that the answer to #1 is a very complex one and largely boils down to what you value. Clearly high-skill immigrants who assimilate benefit the economy, but they also take away jobs from possible US native-born competitors. A lot of one's answer to this question will depend on whether you want to maximize your at least short term market value and are willing to accept a sort of socialist nativism to try to maximize it, or whether you value other things more. There are also obvious questions of the possible dilution of culture by immigrants, fears of future race wars, and all sorts of complicated issues.
I would like to focus on #2. Is the Asian work model actually better than the US one? To me, the answer is pretty clearly no, and this is what offends me mainly about Vivek's post. The whole idea that Americans are too lazy and we should have a work ethic more like Asians.
I don't think many would doubt that the Asian work ethic is in many ways personally damaging to people who follow it. It is both emotionally and physically damaging. I have met more Asians who complain about that work ethic than Asians who support it.
But does it even bring objectively better economic results? To me the answer seems clearly to be no, it does not. Take Japan for example. It has had more than 70 uninterrupted years of peace and capitalism, yet despite its Asian work model, it has never managed to economically catch up with the US. Now to me it seems clear that Japan is in many ways a better place to live than the US is - it has much lower levels of violent crime, it seems to have a better solution to finding people housing, and so on. But I think those things, while correlated with their work culture, are also potentially separable from their work culture. I see no fundamental reason why Japanese could not adopt a more Western type of work model while also retaining the low violent crime rates and the better housing situation.
Japanese have less per-capita wealth than Americans. If working constantly was truly superior, then why do they have this outcome? Of course America has many advantages, like a historical head-start on liberal capitalism and great geography and winning wars and so on. But it's been 70 years now... the geography is what it is, but certainly modern Japan has not been plagued by a lack of capitalism or by wars or by authoritarianism. If they slave away working so hard, or pretending to work so hard, all the time, then why are they still significantly poorer than we are? To me this suggests that the Asian work model is not essentially superior to the Western one, and it would not only be personally damaging to me if we were to import it here in the US, but it would not even make up for that by yielding better economic outcomes.
It's not just that. If the argument was "Yes, some native-born Americans will lose their jobs to immigrants, but the economy will improve overall for everyone," it might be an easier sell to those who aren't ethnonationalists. But I don't see a lot of evidence that middle class whites or working class Latinos or lower-class blacks benefit from a bunch of H1-Bs flooding certain markets, to say nothing of illegal immigrants. All that wealth they generate seems to mostly circulate within their own community or get sent back home. So it's not just techbros crying that they got laid off for an Indian H1-B and unable to see how America is benefitting by recruiting the "top 0.1%" as Elon would have us believe. It's that the techbros get laid off and their replacements aren't actually doing anything for "America"; they are generating wealth for themselves and their masters.
As for Japan, I agree with you that the Asian work model is not categorically superior to ours. (I have long pointed out, before it was fashionable, that all the people praising how great Japanese and Korean and Chinese kids are at math have never actually interacted with them in a classroom and tried to get them to produce an original idea that wasn't rote-memorized from a textbook.) However, I'll also point out, for those with short memories, that the 80s was the decade of Rising Sun. Japan was ascendant and buying up half of California, and a frequent meme was that Japan had lost World War II and was now winning the economic war in revenge. Why did their economy end up tanking in the end? It's complicated and I won't pretend to have a concise answer for that, but I will say that very few people were predicting it back then; if there were signs of an inherent weakness in the Japanese economy that would spell their eventually failure (as many people are now saying is true of China), they weren't obvious. Look at how many near-future SF tales from the era depicted Japan as the future global superpower. (Just as many people today now think it will be the Chinese century, though I think there is more justified skepticism of this as well.)
I don't know why you think that the wealth circulates in their own community - they buy goods and services like any other Americans. Cognizant H1Bs aren't getting haircuts from other Cognizant employees.
They do send remittances, but what's wrong with that? Taking money out of circulation in America reduces the price level.
It's my understanding that taking money out of circulation is bad for the nation's economy, but I am open to explanation as to how it's actually good for billions of dollars to be earned in the US and sent to other countries.
What's your view on fiscal multipliers from local consumer spending?
The basic premise of the multiplier effect is that the benefit to GDP is larger than the actual amount of currency spent, and while there are different types / uses / implications, a basic point is that the value gained from the local spending by the remittance-sender can be more than the actual dollars spent. The UN estimates that on average migrants send only about 15% of their income back home as remittances. Of that remaining 85%, if you have a multiplier effect of 1.2 you're at 102%- i.e. not only not losing net money, but even still ahead.
Of course, that assumes a global standard of remittance %, but it also assumes a low multiplier effect of only 1.2, as opposed to something lower... or considerably higher. In the US I've seen variations as high as 2, as in a dollar spent is doubling in value of the economy. While there are general theories for the variations- local spending has higher multiplier effects thanks to more immediate reuse than spending on international chains where the money goes away- it's generally understood to be positive.
As long as it is positive, however, you have to have some very wonky dynamics for the addition of a migrant- and thus an additional job to the economy- to produce less net multiplier benefit than the job sans the migrant.
Say you have a net-value job worth net-1, standard benefit to the economy. Even if the remittance-migrant taking the job lowers the net benefit to net-0.5, the person who the migrant-taking-the-job affects (displaces) has to go from a net-1 job to a sub net-0.5 to provide a worse net effect... as opposed to a worse-paying net-0.8 job (new net gain of 1.3 versus 1), or an-even-better net-1.1 job enabled by the migrant (now net 1.6).
This is, uh, not the common economic case over time. It's not impossible for it to happen- if people are permanently unemployed and don't re-enter the workforce- but for that to happen at a systemic level you're probably talking far more along the lines of 'barbarians have sacked civilization and are enslaving the artisans' than 'remittance-migrants are undercutting salaries.'
Returning to the remittance, though- as long as the balance of the relationship is favorable (more benefit than harm), then you're just seeing a cost tied to a net-benefit. As long as that holds true- as long it remains a net benefit- then you want to scale up, not down, that cost, because the scaling of the cost is also scaling the benefit.
For example, go back to our UN % of remittances as 15% of income. Wiki estimates the US was the world's largest source of remittances at 148 billion in 2017. For simplicity, let's round that to 150 billion in remittance outflow.
If we take that UN 15%, that means that 150 billion of outflow is a result of 850 billion not outflowing. Which, in turn, means $850 billion for spending on the normal things that already eat up the %s of income, like taxes / housing / food / transportation / healthcare / and so on.
Since the outflows (remittances) and inflows (everything else) are tied to the same entity (the migrant with both categories attached to them), 'saving' $150 billion by blocking the worker from arriving in the first place also means not gaining- also known as losing- the $850 billion they weren't sending out of the country.
That's not impossible to be the 'right play,' but it's making some serious assumptions.
If you don't make new assumptions though- then as long as the ratios and relationship hold true, the bigger the cost, then by consequence the greater the net benefit.
If remittances stay at 15% and the remittance relationship is net positive 150 billion < 850 billion is not as good as 150 trillion < 850 trillion
It doesn't actually matter how big the outflow goes, because what matters isn't the absolute cost, but the relative relationship. You could argue the merits of tweaking the relationship- it'd be better if the remittances were a lower percent over time- but that already occurs. It's called generational turnover, which corresponds with both assimilation (migrants establishing roots) and generational turnover (people being more willing to send to still-living parents than dead ones, and less willing to send money to cousins than siblings).
Thanks. That does indeed shift my opinion a bit, though I am still not convinced that immigration (and especially our current H1B program) is overall a net good. The discourse from the pro-immigration side on Twitter (and your analysis, if I am reading you correctly) is that more immigrants = more people working = more net GDP, thus a net gain to everyone. But what if individually it results in a loss on average (e.g., the average native-born American goes from a net-1 job to a net 0.8 job? "An-even-better net-1.1 job enabled by the migrant (now net 1.6)" seems very optimistic.)
I am not a nativist, not entirely persuaded by pure culture war arguments, and like most folks who grew up in the "colorblindness is good" and "America is a melting pot" beforetimes, I really want to believe that infinity immigrants (or infinity minus the fig leaf we use to supposedly filter out those who will be a pure drag on the economy) will benefit us overall. But I have to admit, I am coming around to the anti-immigrationist position. You seem to be saying that the arguments Elon and Vivik are getting ratioed for on Twitter are actually correct?
Then we're shifting the goalposts of whether the standard of success is harm to the economy, or the average current worker. Rather than a criticism, though, I am very sympathetic for that concern! The neoliberal consensus cracked because the advocates argued there would be no losers, and then stood by as regions were devastated because the multiplicative effect worked in reverse as industrial areas de-industrialized and saw money leave. Nations have a responsibility, or at least a compelling electoral interest, to the losers of economic disruption. We are in the midst of an ongoing political realignment of American class-politics, and new alliances are being made / tested that couldn't have credibly tried before.
But that's a social/political argument, not an economic argument, even though it was initially provided in the form of an economic argument. This is part of why the 'nativist' arguments against migration also get discredited- because they try and seize various mottes ('immigration is bad for the economy') which is relatively easily cracked. (Another one is 'migrants don't pay taxes'- the amount of tax-capture of even undocumented migrants is quite high, because many of the methods of undocumented migrant hiring don't involve evading things like payroll taxes or sales taxes and so on.)
The harder argument is whether migration lowers average jobs. This is also a much older argument in which the American cultural acceptance of capitalistic costs / lower social cohesion / constant churn that leads to a general view on how wealth is generated to make those net-1 jobs in the first place. Net-1 jobs are a result, not the start, of a system process, and that system is constantly raising and lowering the net-benefit of jobs based on market demands. Regulations to protect established interests- like people who want to avoid competition- are the same as regulations that raise costs for consumers who could benefit from not only primary actor savings (the consumer charged more due to input costs), but secondary market benefits (the consumer who is charged less, can now spend more on other people's other things).
Like, say that formally net-1 job is now a net 0.8 job. So what, if that transition (lower employment costs) can translate into second order benefits beyond those two participants (say by raising 20 other jobs by net +0.01). Then we're quibling over division of spoils, not net loss. Which goes back to being a social/political rather than economic argument.
But this argument gets very convoluted, hard to explain in clear terms, harder to prove, and politically difficult at best compared to simpler and stronger (even if wrong) memes.
I am... neutral on the position of a platform I make a point to avoid? I'm not familiar with their specific arguments, and I don't consider myself enough of an expert in the relevant policy fields to have a strong option. I certainly wouldn't be surprised if politically contentious people were being ratioed for politically contentious views, especially if other actors (including those with bot nets) had an incentive to maximize the impression of opposition. I wouldn't be surprised if they got ratioed regardlless of correctness.
I will say that arguments that appeal to per-unit quality over volume are quite often wrong, and more so when there's a self-serving interest on the part of the person making them (which is almost always true if they can't compete with volume). From a system / population performance level, 'better' is often less important than 'good enough', and as long as you have 'good enough' then more is generally better. This applies in system engineering (not over-engineering to raise costs), manpower (you don't need the best person in the world, only the best person who is good enough and available), ethics (demands of moral perfection obstructing imperfect improvements), information (overly complicated long-form arguments are less compelling than floods of simple-but-generally-sound constructs), and so on. This was long a regular refrain for why Chinese manufacturing wasn't a long-term industrial threat- because China wouldn't be able to compete on quality. Well, China has quality-enough that a lot of quality and more expensive producers went out of the business or went out of the country.
Part of the issue with the visa issue is that economic benefit is a necessary component of the advocates of either direction not coming off as selfish, as their position of advocacy probably really does benefit them. Someone is urging more a more distorted form of the 'ideal' market. This is where general market theory would go into consumer surplus / savings concepts, where artificially higher restrictions- such as maintaining a cartel dynamic- creates market inefficiencies that rob the consumers of market efficiencies.
And this creates the issue that employees resisting HB1 visas are not consumers in this model- they are producers, and their employers are their customers, and the HB1 visa market debate is a debate of how many producers/suppliers of labor should be allowed in the market. As a supply principle, ease of entry into a market increases supply, thus lowering costs and increasing quantity provided. Which is why labor unions exist- as a measure to restrain supply.
Historically the American labor movements have lost that fight, or at best had only conditional support. I have no strong feeling how it will turn this time, in part because (a) I don't think it matters on economic truth, and (b) I think some of the controversy is just an extension of politics.
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