Bastiat and immigration

What a French economist and Robinson Crusoe have to say about immigration

Below is a piece first published by Liberty Fund’s Reading Room. Check out Liberty Fund’s catalog of books, especially their editions of Frederic Bastiat’s books and the other entries in Reading Room. TL;DR: Bastiat is an undervalued advocate for immigration’s economic benefits.

That Robinson Crusoe and Friday are better together is obvious. No reader is surprised to find that, once united and working together, they do more together than apart. Yet, when we talk about essentially equivalent situations today, that agreement disappears. 

• If Crusoe and Friday found each other, but a national border sat between them, they would be subject to visa restrictions. 

• If Crusoe and Friday needed a home, zoning policies would make it hard to build. 

• If Crusoe and Friday needed sugar for a chocolate company, they’d find it limited by quotas or taxed.

This conflict between the commonsense approval of Crusoe and Friday but the rejection of their cooperation in practice is a fundamental frustration for economists. In 1850, Frédéric Bastiat’s Economic Harmonies used Daniel Defoe’s story of Robinson Crusoe to make a detailed case that we’re better together. Despite 200 years of experience and evidence accumulating in its favor, the world is unfortunately far from realizing the potential for human cooperation that Bastiat envisioned. We have failed to make it easier for Crusoes and Fridays to find each other. 

Policymakers will serve their constituents well by opening up opportunities for immigration. Or, more simply, by removing obstacles to Crusoes and Fridays the world over working together. There are, as George Mason University economist Michael Clemens points out, trillion-dollar bills on the sidewalk. This is to say that removing obstacles to the free cooperation of people will do more to enrich the world than almost anything else. 

Of course, there is room to quibble about the equivalence between Daniel Defoe’s story and modern life. Not all interactions are peaceful and there will be people who need assistance. But, the combination of story and economic theory, as found in Bastiat, is a potent remedy for ill-formed policy. Policymakers are well-served by considering Robinson Crusoe and Friday’s cooperation when setting immigration policy.

How We're Better Together

The story of how we’re better together is simple. The stuff of economics 101. When Crusoe and Friday begin to concentrate on specific tasks, they produce more. Then they exchange for what they didn’t make themselves. Adam Smith’s pin factory is the typical example among economists. If a worker were to make a pin alone, she would need to learn and perform each step. But by each concentrating on a single task within the factory, each worker makes more. As Smith describes the process, there are as many as 18 distinct operations performed by up to 18 distinct workers. Each with care and expertise required—as he jokes, “it is even a trade by itself to put them into the paper.”

Taken from Adam Smith Works.

From an economic point of view, the division of labor allows each worker to specialize and improve in what they contribute to the whole. Ultimately, the factory’s workers produce more through their specialization than they could alone. This logic is the same whether talking of Crusoe and Friday, a factory, or an entire city. At root, it depends on little more than the decision to peaceably trade together. 

Bastiat lays this out with a hypothetical separate from his discussion of Robinson Crusoe. As he explains, when one squatter settles land, the second benefits by being near him. As the third squatter settles, she enjoys the same benefit. This continues and the settlements diversify—more crops, more tools, and less work for each of them results. 

Bringing People Together Powers a Positive Cycle

The cooperation between squatters creates gains for all of them. This is clearest in cities. By bringing people together, both Bastiat and Smith observe, you remove obstacles and reduce effort in serving each other. “The town is a continual fair or market,” where the residents are mutual “servants of one another,” Smith wrote.

The division of labor is limited by the extent of the market, so bigger is better. As Bastiat explains, bringing people together “transmits greater power to the machinery of exchange… it is a source of progress.” With more people, you get more diversity in products and services. This means larger areas grow more productive as people join them. All of this comes from making exchange between people easier, “Improvements that are desirable in a densely populated area, because they will save more effort than they will cost, are not feasible in a sparsely populated area.”

Immigration Brings People Together

At this point, those armed with Bastiat’s insights are ready to evaluate policies. Although Economic Harmonies does not directly address immigration questions, his economic thinking extends easily to them. After all, once the first squatter creates a settlement, where do the squatters come from, if not elsewhere? 

At its base, Economic Harmonies is underlined by a story of people moving towards opportunity and the resultant economic growth and prosperity that movement creates. In this light, Bastiat was an early proponent of the idea that people bring prosperity. That is, he would decry the inability of Crusoe to hire Friday because of international barriers. He would rightly point out that the arrival of immigrants of all sorts enriches countries, just as the arrival of people in a city enriches the city. 

To emphasize, this is a process that improves everyone. “The more prosperous the place in which he is situated, the better the chances a man has to prosper,” Bastiat concludes. This is the right response that economists should make to the real concerns about immigration’s harms on small groups of natives. The concentration of people together makes the entire whole better off. We can tackle specific ailing groups with targeted policies—but calls to cut immigration are simply a variation of the candlemaker’s petition that Bastiat rightly satirizes. When enacted, heavy-handed immigration restrictions set the whole back for the gain of only a minority.

Immigration is a Personification of the Division of Labor

Embracing immigration is akin to championing the division of labor, a cornerstone of economic wisdom championed by Bastiat himself. By creating simple and easy immigration rules, we're inviting a dynamic interplay of skills and ideas that collectively enhance our economic tapestry. Immigration is a process mirroring the essential principles of the division of labor—the personification of the division of labor. Diverse contributions coalesce to create something greater than the sum of its parts. 

Recognizing immigration as simply a form of the division of labor lays clear the basis of how immigration policy should be set. Immigration is an uncomplicated affirmation of a fundamental economic truth. The success of America and our global community hinges on our ability to collaborate and learn from one another. In this light, immigration is not a challenge to be managed but a triumph of human cooperation to be celebrated, a living testament to the enduring relevance of Bastiat's insights in shaping a prosperous and interconnected world.

Thanks again to Liberty Fund for publishing this essay. Check out the other entries in Liberty Fund’s Reading Room here.