December 27, 2018

Marijuana, Illegal Immigration, and Economics

America barbed wire

Suppose that you live in an area where the recreational use of marijuana is still illegal. Further suppose that the demand for marijuana is relatively high and increasing. Just because it is illegal does not mean that people do not want to use it. What do you suppose happens? As the demand rises, there is a strong incentive for those who can grow it, bring it in, and sell it to do so. As the demand climbs, it becomes increasingly profitable for those who can satisfy it to do just that.

The "war on drugs" has contributed to this problem by focusing on limiting the supply of marijuana. By erecting barriers to the growth and distribution of marijuana, these activities have become more profitable. With the demand far outstripping the supply, these efforts have set up strong incentives for growers, importers, and dealers to operate. At the same time, they have done little to reduce the demand. Dealers know that there is a demand for their product, and they would have to be crazy not to try to meet it.

Now imagine what would happen if the demand for marijuana in your area were to plummet. With declining demand, the incentives would disappear. Dealers would have fewer and fewer customers, and that means that those importing marijuana would not be able to get rid of it as quickly. That would mean that the growers would find themselves with too much product they could not move. Prices would drop. Essentially, the incentives for growing, importing, and dealing would shrink.

Although there are some important differences between the example of marijuana and illegal immigration, there does seem to be at least one relevant consideration we aren't hearing nearly enough about. Right now, there are some strong incentives for illegal immigration. That is to say, there are some good reasons why someone might want to enter the country illegally. To keep this as simple as possible, think about one of the most obvious: there is a financial incentive in that someone who enters the country illegally may be able to obtain a job where he or she will earn considerably more money than might have been possible at home. As long as that remains true, it should not be difficult to understand why people would be motivated to try.

Building a border wall (that we have repeatedly been promised Mexico would pay for) might have a small impact on the number of persons entering the country illegally; however, it would do little to reduce the demand for immigrant labor. Instead of wallowing in negative stereotypes about immigrants or squandering taxpayer money on a wall, we might ask ourselves why we hear so little about those who hire illegal immigrants. We hear stories every once in a while about businesses being raided and employers being fined, but most of the enforcement seems to be aimed at the immigrants rather than those providing them with the financial incentives to enter the country illegally.

Effective border security is necessary, but those who want to see significant reductions in the number of immigrants would do well to think beyond walls. Why not remove (or at least reduce) the incentives for people to enter the country illegally. If they cannot find employers who will pay them more than they can earn at home, they would be less likely to bother. And if there is a genuine need for immigrant labor, then make legal immigration far easier to support it.

I do not think that all opposition to illegal immigration is racist or xenophobic; however, some of it starts to look racist and/or xenophobic when it focuses exclusively on demonizing the immigrants and ignores those who are essentially paying them to enter illegally. There are things we can do to make it somewhat more difficult for people to enter illegally, but they will continue to do so as long as the incentives remain so compelling.