Peter Z. Grossman, Efroymson Chair Economics, Butler University. His column appears in Indiana newspapers.
In his first address to Congress, President Donald Trump pointed out that the greatest Republican president, Abraham Lincoln, was for a protectionist trade policy. He quoted Lincoln, saying that “abandonment” of protectionism would lead to “want and ruin.”
But elsewhere in his speech, Trump took a position that was opposite of Lincoln’s. That was when Trump talked about restricting immigration.
Lincoln was the strongest supporter of open immigration of any president in our history. The Republican platform that he ran on and helped write in 1864 advocated, “Foreign immigration, which in the past has added so much to the wealth, development of resources, and increase of nations, should be fostered and encouraged by a liberal and just policy.” He is the only president to ask Congress for funds to promote more immigration.
Lincoln seemed to understand intuitively that the benefits of international exchange — lower costs, greater productivity, increased consumer choice — come in three parts. A country can exchange goods with other countries (trade); it can exchange the means of production (capital, foreign investment); and it can exchange labor (emigration/immigration).
A country is likely to prosper most if all of these — goods, capital and labor — are free to move across and within borders. But history has shown that one can be restricted and the nation still prosper if the other two are open and free. In Lincoln’s time, and in fact throughout the 19th century, the U.S. restricted the flow of goods, but had free entry for capital and labor. And we became the greatest economic power in human history.
I disagree that taxes on imports (borne mostly by American consumers) is a wise policy today; we live in a different world from Lincoln’s. But I know that tariffs plus increased restriction on immigration is a really bad idea. We’ve tried it before. In the 1920s, the U.S. began severely limiting immigration, and then in 1930, Congress passed (and President Hoover signed) the infamous Smoot-Hawley Tariff Act, which caused international trade to collapse, worsening the Great Depression.
It should be pointed out that the Smoot-Hawley tariffs were meant to help American workers. Make the price of foreign goods much higher and people will buy American. This is approximately the same sentiment offered by Trump.
But restricting immigration at the same time led, to use Lincoln’s words, “to want and ruin.”
Maybe there are security issues that require immigrants from parts of the world to be closely vetted, although people from Asia, the Middle East and Africa have become some of the most industrious and wealth-creating Americans. And, yes, the same is also true of immigrants from Mexico and Central and South America.
Trump has played on fears that immigrants are terrorists and criminals. That’s nonsense. Of course, some are offenders, but what immigrant group didn’t have its share of crooks? The Italians, the Irish, the Poles, the Chinese, the Cubans, the Russians — any group you name has had its gangs, murderers and thieves. Indeed, the early founders of the U.S. included crooks and descendants of crooks who were sentenced to “transport” and came here rather than face execution back home. But would the country really be better off today if any of those groups had been permanently barred?
Trump suggests that if they aren’t criminals, immigrants nonetheless harm America; they cause unemployment and lower wages, and live off government largesse, he claims. But in reality, most immigrants, including illegals, contribute to the economy today and even more in the future. And they don’t (in fact in the case of illegals, cannot) live on public assistance. Studies also show that they do not compete with and do not depress wages of the vast majority of American workers. Especially for the illegal immigrants with family ties, there should be a path to citizenship not a cop showing them the road out the door.
On July 4, 1858, Abraham Lincoln noted that immigrants rightfully identified with the Declaration of Independence. The ideals of the Declaration, he said, were held dear by multitudes of Americans whose ancestors did not live here in 1776.
“Life, liberty, and the pursuit of happiness” is the positive message of the Declaration. We will gain none of it by thinking our problems can be solved by a Trumpian wall of despair.