ZadekpediaBenjamin Powell is an economist who has appeared as a guest on The Bob Zadek Show to discuss the economics of immigration. Bob Zadek introduced him as the Executive Director of the Free Market Institute and a professor of economics at Texas Tech University, a senior fellow with the Independent Institute, and holder of a PhD in economics from George Mason University. Zadek also noted that Powell had edited Wretched Refuse: Cambridge Studies in Economics, Choice, and Society, and had previously written Socialism Sucks: Two Economists Drink Their Way Through the Unfree World. The Economics of Immigration (2022)
On the show
2 appearances, 2019–2022.
- 2019-07-28 · Socialism… Still Not Cool · 52:04 — Socialism and the economics of beer.
- 2022-02-28 · The Economics of Immigration · 52:19 — Economic and social impacts of immigration.
Their books discussed on the show
- Socialism Sucks: Two Economists Drink Their Way Through the Unfree World (2019) — discussed 2019, 2022
Immigration costs and the moratorium estimate
In a December 2015 episode, Alex Nowrasteh cited a paper by Powell estimating the rent-seeking costs of an immigration moratorium combined with the annual economic benefits of immigration, arriving at a figure Nowrasteh recalled as $236 billion in total, which he rounded down to $200 billion for his own calculation. Nowrasteh described Powell as an economist at Texas Tech University in West Texas. Immigration Nation: Nowrasteh Sets it Straight Again (2015)
Ellis Island versus “open borders”
Powell told Zadek he finds “open borders” a loaded term that packages together disparate things for people, including the situation on the southern border along Texas-Mexico, which he said is not an open border when people pay $5,000 to $10,000 to coyotes to smuggle them across. He proposed distinguishing that from Ellis Island migration policy, or free migration like free trade, which he said implies no blanket quantitative restrictions on immigrants from any particular origin country, while permitting basic qualitative checks such as contagious disease and known criminal or terrorist exclusion. The Economics of Immigration (2022)
Zadek summarized Ellis Island as a placeholder for open borders and described the museum on the island in New York Harbor where immigrants arrived by boat and were processed, with officials looking for disease and criminality. Powell said he wanted to return to the type of migration policy that listeners’ great-grandparents faced, noting that Ellis Island policy allowed most people in the world to legally come to the United States, whereas currently almost everybody in the world is legally prohibited from migrating there. The Economics of Immigration (2022)
Immigrants as complements, not substitutes
Powell argued that immigration changes the mix of jobs the native-born population does to better correspond to what natives are good at, calling it the same finding economists reach when studying international trade in goods and services. When Zadek supplied the term “comparative advantage,” Powell adopted it, saying it shifts jobs to those things in which natives have a comparative advantage. He described immigrants to the United States as disproportionately either very low-skilled, such as lacking a high school diploma, or very high-skilled, with a disproportionate number of PhDs being foreign-born, making the immigrant distribution resemble an unbalanced hourglass against a diamond-shaped native labor market. The Economics of Immigration (2022)
Because immigrants for most natives are complements rather than substitutes, Powell said economists find no overall depression of US wages from more low-skill or high-skill immigrants. He acknowledged debate among economists over the wage impact on high school dropouts, with estimates ranging from as much as a negative 8% impact to nothing or slightly positive, lasting under two years or up to two years, which he called a sideshow relative to massive global gains from migration. He gave the example of a roofer who becomes the foreman talking to English-speaking customers when immigrants take over roofing jobs. The Economics of Immigration (2022)
Zadek reframed the 8% reduction as consumers paying 8% less for a service or product collectively, asking whether that is a bug or a feature and calling it a feature. Powell agreed, noting that virtually anything that could make the country richer has some small number of losers in the transition, as horseshoe manufacturers lost when Henry Ford created the assembly line. The Economics of Immigration (2022)
The fragility myth and internal migration
Powell addressed the fear that immigrants would undermine American institutions by analogy to internal migration, speaking from Texas about concerns that Californians moving there would turn the state purple. He said non-native-born Texans vote for Republican candidates at higher rates than native-born Texans and self-identify as conservative more, and that there is a selection bias among those who choose to come, with Californians who move to Texas more likely to want to buy a gun. He described himself as a man who moved from Boston, Massachusetts, to Texas to run a free market institute. The Economics of Immigration (2022)
Powell said there is an element of pre-assimilation in international migration too, and that immigrants do not come with the intent to undermine American institutions but to become part of them. He acknowledged the strongest counterargument—that immigrants unknowingly bring cultural traits and beliefs because they do not understand what makes America prosperous—but said the book explores it in several ways and finds no evidence for it. He argued that in the United States case, greater immigration in bigger numbers was associated with smaller government growth and limiting the socialist movement back when Ellis Island-style policies prevailed. The Economics of Immigration (2022)
Market-based solutions
Powell told Zadek the illegal immigration problem should be solved by drastically opening legal migration paths, ideally back to Ellis Island style, where anyone who is not a criminal or carrying a contagious disease can have a legal path. Acknowledging the political system may not deliver that, he proposed that if quantitative limits exist, visas should be allocated by market: auction them, allow employers to bid to bring people here, allow people here to bid to give them to a relative to reunite with, allow people in other countries to bid for the right to come, and even allow immigration restrictionists to bid so they could burn the permits. Under a truly open Ellis Island system, he said, the market price would be zero because anybody could get one by showing up. The Economics of Immigration (2022)
Asked whether there must be an upper limit, Powell said yes, there is a limit, but no human being knows it, and that we cannot centrally plan an international labor market any better than Soviet commissars could centrally plan markets for shoes or televisions. He noted that nowhere where people are free to move between jurisdictions do wage differentials exceed 30%, yet differentials between countries are orders of magnitude larger, and said we are so far from optimal immigration that the market process itself would slow and stop the flow before the limit mattered. The Economics of Immigration (2022)
Across episodes
The two episodes treat immigration economics at different points: the 2015 episode uses Powell’s cost estimate as an input to Nowrasteh’s risk calculation, while the 2022 episode presents Powell’s own arguments from Wretched Refuse on complementarity, assimilation and visa markets. The episodes show no development or change in Powell’s position between the earlier and later treatment.