Essay on Passions and Challenges for Social Entrepreneurship

We live in a world rife with mass inequality and social stratification. This is an odd fact for a libertarian like me—one who considers individual liberty to be the ultimate political aim--to acknowledge, let alone care about passionately. It would seem, at first glance, that liberty and equality are fundamentally at odds with each other – the first, taken to its logical extreme, leading to laissez faire free-market capitalism; the second, leading to redistributionist, socioeconomic egalitarianism of the social democratic, socialist, or communist variety. It is difficult to imagine two greater polar opposites on the (two-dimensional) political spectrum than radical capitalism and radical socialism.

But the world is not as it seems. Maximum liberty, rightly understood, may in fact not only be compatible with, but indeed require (and be required by) maximum equality, rightly understood. Under this conception, far from being at odds with each other, the two are mutually reinforcing; like two keystones buttressing each other in a mortarless arch, both elements support and necessitate the other.[1]

One way to understand this happy congruence is to avoid looking at the world in terms of zero-sum games, in which one person’s fortune is another person’s misery, where to alleviate the suffering of some, we must thereby inflict suffering on others. Instead, we could look at the world in positive-sum terms, captured by the timeworn aphorism, "a rising tide lifts all boats." This is the central insight of free trade, generally credited to Adam Smith (for absolute advantage) and David Ricardo (for comparative advantage). When two or more parties willingly enter into trade with each other, they (generally, but not always) come out wealthier and happier as a result.

The free movement and trade of goods and services, while not complete, is pretty well established as desirable and beneficial for the progress of human flourishing. While there is still much room for improvement at the margins, much of the major work here, both ideological and on the ground, has already been done. So too, the free movement of capital and information is almost universally accepted, if not ideologically, than at least pragmatically settled as the status quo for much of the world.

And yet massive poverty and inequality still exists. What is to be done? In one of those deliciously ironic twists of history, Lenin’s eternal question[2] is today being answered by the unlikeliest (unlikeliest in Lenin’s eyes, at least) of unsung heroes: Bill Gates. “Gates, in deciding what to do with his fortune, crunched the numbers and determined that he could alleviate the most misery by fighting everyday scourges in the developing world like malaria, diarrhea and parasites.”[3]

While Gates’ efforts are laudable, and, at least from a short-term perspective[4], perhaps the most utility-maximizing use for his wealth, charity of this type is, in a certain sense, zero-sum, and only sustainable so long as successful businesspeople-cum-philanthropists care to bestow their largess upon those less fortunate. Better than giving a fish, goes the old saw, is teaching the skill and vocation of fishing. Better still, though, is eliminating existing injustices that prevent poor people from practicing the skills and vocations they already know.

And chief among these injustices is the system of international apartheid[5] that prevents the free movement of—not merely goods, capital, or information—but people themselves. As much as egalitarians may focus on economic inequalities within a developed country like the U.S., these inequalities pale in comparison to the inequalities between developing and developed countries. Loosening border restrictions, thereby allowing a freer world market in labor, would do far more to benefit the world’s poor than any sort of foreign aid program ever could, and at not just no cost, but positive monetary benefit, to aggregate domestic income. Writes Kerry Howley, in an interview with former World Band economist, now Harvard economics professor Lant Pritchett in the February 2008 issue of Reason Magazine,

If the 30 affluent countries making up the Organization for Economic Cooperation and Development (OECD) were to allow just a 3 percent rise in the size of the their labor forces through loosened immigration restrictions, claims a 2005 World Bank report, the gains to citizens of poor countries would amount to $300 billion. That’s $230 billion more than the developed world currently allocates to foreign aid for poor countries. And foreign aid is a transfer: The $70 billion that rich countries give leaves those countries $70 billion poorer. According to the World Bank study, wealthy nations that let in 3 percent more workers would gain $51 billion by boosting returns to capital and reducing the cost of production.

Not only is promoting free migration one of the greatest possible boons for helping poor people trapped in dysfunctional labor markets, and not only is it a costless[6], positive boon for the generally wealthier host communities (thereby satisfying the condition of positive-sum versus zero-sum), but promoting free migration also simultaneously promotes liberty (the liberty of poor people to travel and sell their labor; the liberty of hosts to purchase their services) as well as equality, on a massive, international scale.

Now, the harder question is how we get there from here. The obvious answer, when dealing with a problem created by politics, is solving it directly through political channels, especially through electoral politics. For reasons that I shall not delve into here[7], I do not find this approach satisfactory or satisfying. Other, more palatable approaches include:

  1. Persuading as many others of the importance of rectifying this injustice. This has the dual effect of both reducing political support for continued injustice, as well as tapping into the creativity and ingenuity of other minds for solving the problem in ways that would never have occurred to existing activists otherwise.
  2. Providing free or reduced-cost legal aid and advice to immigrants, both documented and undocumented, for those who have already made it here and for those who have yet to come, to make their journey, arrival, and stay here easier and safer.
  3. Providing other forms of social support that are systematically denied to undocumented immigrants, including transportation, bank loans, health insurance and police protection.[8]

While formulating these potential strategies, it occurs to me that there is an important distinction between the ultimate ends a social entrepreneur hopes to achieve, and the intermediate means at his or her disposal. Must both the ends and the means meet the (admittedly self-imposed) standard of positive-sum, non-transfer, sustainable interactions? While the ultimate goal of freer migration may constitute a positive-sum interaction, it is much more difficult to think of mutually beneficial (i.e. self-sustaining, non-perpetual reliance on philanthropic donations of time and money) means of achieving that goal.

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[1] Expanding upon and defending this claim is beyond the scope of this paper; for more on this, see Roderick Long, “Equality: The Unknown Ideal,” a lecture presented during the Philosophy of Liberty Conference at the Ludwig von Mises Institute in Auburn, Alabama, Saturday, September 29, 2001

[2] “What Is To Be Done?” Lenin Collected Works, Foreign Languages Publishing House, 1961, Moscow, Volume 5, pages 347-530.

[3] Pinker, Steven. "The Moral Instinct." The New York Times Magazine January 13, 2008

[4] The ecologist Garrett Hardin took an extremely pessimistic view in thinking that the short-term benefits of foreign aid would be dwarfed by the long-term costs (measured in human suffering) of unsustainable overpopulation. Hardin, Garrett. "Lifeboat Ethics: the Case Against Helping the Poor." Psychology Today September 1974

[5] Manifesto for the Abolition of International Apartheid

[6] Costless on an aggregate level, but not necessarily costless for each individual in the aggregate.

[7] See here for further explanation.

[8] For a recent, local example of immigrants’ lack of police protections, see: Feagans, Brian. "Immigrants' unlicensed stores easy prey to crime." The Atlanta Journal-Constitution January 10, 2008

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I have a friend who is

I have a friend who is taking number three to the extreme: he intends to marry a South American woman that he doesn't know just so she can get citizenship. I think it's an admirable act of civil disobedience, but I still think he's kind of nuts because of it.

Hmm, I see a lot of ads on

Hmm, I see a lot of ads on places like craigslist with American citizens offering their hand at marriage for platonic citizenship reasons, and non-American citizens looking to buy. Call me crazy, but there might be something to this as an agorist strategy to simultaneously fight against absurd immigration laws and absurd heteronormative marriage laws. I wonder what the risks are...

This for example

Caution

Arthur's link underlines the importance of not making public statements about what has been done or what is being contemplated that might come back to haunt us or our friends.

Although it is clear that

Although it is clear that many persons do so for economic or social reasons

Wow, the government has got its work cut out for itself for a long, long time if it plans on going after all the people who enter into sham marriages strictly for economic or social, and not romantic reasons. Maybe they should start with the fucking queen of England or something.

I think that statement may

I think that statement may be referring to making false statements to immigration personnel, not entering marriages.

Oh, shutup, esquire, I know

Oh, shutup, esquire, I know what the statement is referring to. But if I was interpreting it honestly and accurately my attempt at a joke wouldn't work. Still, it seems kind of silly that it's okay to make false or misleading statements when signing a marriage contract, but not when filling out immigration paperwork.

I agree.  You shutup.

I agree.  You shutup.

The best question I ever had

The best question I ever had from immigration personel was :

"Have you ever been to school while you were not supposed to"

To which I answered, as it was beyond my strenght to resist

"Not but sometime I haven't been to school while I was supposed to"

Big, big mistake. Lot's of explaining to do after that.

Migration/Labor

A very well thought post, Micha. I don't know if you have read the recent special report on Migration in the Economist but I think that report may interest you.

However, I have one point of disagreement with you. I see you doing something that many pundits do all the time that I strongly disagree with: framing the debate on migration in terms of labor needs. Although the search for economic betterment is a big reason why people migrate (war and persecution is actually an ever bigger reason statistically today!), as long as we think of migrants as economic tools, there can never be equality (I actually think you mean equity, not equality strictly speaking but I don't know what equality "rightly understood" actually means to you). When we treat people as means to an economic end (most often, OUR economic end), there can be no better life for them anywhere they go. They are viewed mostly as tools rather than people with rights to be respected and other political claims to be made. I am very disturbed by the fact that migration policy seems to turn on the ups and downs of the labor market. That seems to me like subjecting an individual's liberty of movement to the whims of the labor market. Historically, I think migration has benefitted the total global economic output but I question how much migration has benefitted the actual truly desperately poor (i.e. unskilled) given that those migrants will continue to be poor even in their host countries precisely because they are entrenched in social and political pitfalls. I am not sure what my solution would look like but I think it would go along the lines of reframing citizenship and other forms of civic ties.

I don't have time to respond

I don't have time to respond in detail to your post right now, Alicia, but let me just caution that you may have just stepped on a hornet's nest here, and simultaneously urge DR regulars (Constant, I'm looking at you, kid) to keep it somewhat civil and respectful. Alicia is a close friend of mine, and this issue is personal for her, so try to make at least some attempt to understand her perspective before resorting to the holier-than-thous.

Who, me?

I don't want to respond to her comment. I don't feel that I understand what she is saying well enough to form a useful response to it.

I can't recall Constant ever

I can't recall Constant ever being uncivil or disrespectful.  Wrong, yes, but uncivil and disrespectful, rarely if ever.

desperate poors

If migration doesn't benefit the desperatly poor, why did they migrate ? Everyone can make a mistake, but why would that mistake be systematic?

Arthur, I am talking about a

Arthur, I am talking about a relative benefit. If my company is giving out $100 dollars in bonuses between you and me and you get $99 and I get $1, I don't think I really benefitted at all compared to you.

I understand, but how is my

I understand, but how is my benefit relevant to you ?

This is the central question

This is the central question that divides the economic Left from libertarianism.

While in principle

I agree that no one should be punished for being born on one side or another of a border (and I also generally consider it true that no one should directly benefit by being born any particular place), however, my sympathies lie elsewhere.

When I think of freer migration, I generally think of less-skilled labor, which drives wages down further, and profits up higher, which results in even greater inequality.

Unlike you, I am far more interested in political outcomes than in economic ones. I am not a, in Montesquieu's terms, a Democratic-Republican, who believes in near absolute equality, but I also believe that a certain amount of equality (rather, moderation, Montesquieu's principle for the other type of Republic, Aristocratic) is an absolute necessity when we have a government where, in the form of juries and elections, all citizens have the right to participate in government.

If you think a billionaire (of which there are many) and pauper (of which there are many more) can simply sign a contract, and have a fair deal, well, I don't believe you believe that. You know that the law can be flexible for the price of a few, good lawyers. This is part of the evidence that things are too unequal now.

Another important feature is the amount of public-spirited interest people have. When they don't think it will do any good (for reasons rationale or not) they will instead read of things which they can get involved in, for example, four-wheeling and beer (to quote a inebriated man I met in a bar). Look through any magazine stand, see how much concerns the public interest.

Surely you don't believe that the dozen or more people standing for election, in either party, are the best and the brightest?

Speaking of Distributed Republic, I had the craziest idea the other day. I am not a currency crank. I don't believe the money supply should depend on tastes in fashion accessories on the Indian subcontinent (10% of the world's gold supply is jewelry for women in India), but I can't help scratching my head thinking that, yes, the government's right to print money (admittedly fixed by Volcker in 1981 to a constant rate) is somehow inequitous. What if, each time "a dollar" was added to the money supply... everyone got one. The rationale for the poor to keep printing money, not realizing that 1 for them (in the modern US context) means 299,999,999 for everyone else, still, well, food for thought, Certainly "hard" currency is something I laught at, and I happily mock currency cranks like Alan Greenspan and Ron Paul (at least, on that particular topic). In a completely rational "Distributed" Republic, I can see money being printed that way. After all, it would just be an electronic transaction into their Federal Mint accounts.

When I think of freer

When I think of freer migration, I generally think of less-skilled
labor, which drives wages down further, and profits up higher, which
results in even greater inequaty.

On the contrary immigration strongly reduce wealth disparities, as the poor immigrants gains much more from the wage differential than the people in the host country will gain from the decrease of wage created the increased supply of labor.

Not everyone gains, on the short term, someone might be getting a slightly lower wage, but the net effect of an increased supply of labor is to drive prices down, which benefits the consummer, on the long term, overall, real wages increase.

If everyone was granted the unlimited right to print money, the value of money would be reduced to the marginal value of printing paper and it would become a hard currency. (Actually gold or anything else would pick up way before that happens).

Since you are talking about economics, may I kindly suggest that you read some books about economics. I am by no mean an economist nor a specialist but I assure you that the ideas you defend have been debunked for centuries.

Josh, When I think of

Josh,

When I think of freer migration, I generally think of less-skilled
labor, which drives wages down further, and profits up higher, which
results in even greater inequality.

Greater inequality for whom? Surely not for the migrants themselves - who tend to be significantly poorer that even the poorest U.S. citizens. So how does allowing poor migrants the freedom to travel to wherever their talents are most highly valued lead to greater inequality? Surely greater inequality results from their being kept isolated and trapped in dysfunctional economies.

I don't enjoy being rude or blunt, but this issue really isn't even contestable. Unless we completely ignore the interests of the migrants themselves, it just isn't possible for freer migration to result in greater inequality. This is not to say there aren't additional concerns some people might have with freer migration, but increasing global inequality cannot be one of them.

Again, I'll quote from another Kerry Howley piece on immigration:

As Americans struggle with the implications of immigrants who come to live but not to stay, their single greatest objection to a guest worker plan may have nothing to do with migrant well-being. The gains for immigrants are demonstrably too big and the need too great to lend credibility to those who cast all guest workers as victims. According to the Inter-American Development Bank, migrants send $62.3 billion in remittances to Latin American and the Caribbean last year, keeping 8 to 10 million families above the poverty line. The unexplored opportunities for mutually advantageous cooperation are massive and undeniable. But it seems dirty. “It simply feels exploitative and un-American to allow migrants in without giving them a shot at becoming citizens,” writes Jacob Weisberg in Slate.

The economist Lawrence Summers, a former president of Harvard, has expressed this objection in somewhat loftier terms. In a critique of Harvard’s Pritchett, Summers explains: “Lant’s kind of compassionate libertarianism carries the risk of a morally problematic coarsening that we resist in many other ways.” The problem with guest worker programs, in other words, has nothing to do with the good of guest workers, and everything to do with the moral harm that proximate poverty might cause to their hosts. Allowing workers entry to the United States might be mutually beneficial for employer and employee, all the while producing corrosive cultural externalities. Summers seems to think that guest workers will inure Americans to a system of class stratification and undermine a shared, naive sense of global solidarity.

The moral calculus, then, is to be weighed between the welfare of potential workers and the preservation of an idealized American narrative. Does it reflect better on the American character to lock poor people out than to permit them entry on limited terms? Guest worker programs do clash with deeply held mythologies about our relationship to the global poor. We live in a state of relative political equality nested awkwardly within a deeply unequal world, and it can seem better, kinder, to keep the inequality outside, walling it off and keeping our hands clean. Perhaps American egalitarianism, like a dress too precious to be worn, is a value too dear to expose to the real world. As the essayist Richard Rodriguez, himself the son of Mexican immigrants, has written, “Americans prefer unknowing.”

When I think of freer

When I think of freer migration, I generally think of less-skilled labor, which drives wages down further, and profits up higher, which results in even greater inequality.

This is simply not true. Free migration across national boundaries is no different economically from free trade across national boundaries. It greatly reduces inequality. Opposition to free migration, just like opposition to free trade, is an economic position in support of keeping the poor of the third world poor.