UC Davis Econ in the News

I didn’t see this before… Professor Clark had an op-ed about immigration in the LA Times:

Can the U.S. forestall the relative decline of the economies on its southern fringe? No. The evidence from history again is that the rise and decline of economies is beyond the reach of economic policy. The British ran India from 1857 to 1947 with a set of economic policies that would have brought pride to the heart of the most pro-market modern economist: free markets, absolute security of property, price stability, low taxes, free mobility of capital and entrepreneurs. Yet, in that same interval, Indian income declined relative to that of Britain. Quite possibly the income gap between the U.S. and its southern neighbors will further widen.

In such a situation, recognizing that there will be some flow of labor across this wealth divide, and periodically legalizing those who manage to find their way to the U.S. labor market, is not a bad option. The United States’ biggest foreign aid program is not the $19 billion that it sends through official aid channels (a mere 0.14% of GDP) worldwide. Instead, it is the employment it provides for the many millions of illegal immigrants in the U.S. from the Third World, mainly Latin America. The earnings of these migrants, which some estimate at more than $200 billion a year, easily dwarf the official U.S. aid contributions.

Furthermore, the remittances these immigrants send back to relatives in their home countries — more than $25 billion annually just to Mexico, according to the World Bank — far outweigh official aid. And unlike that aid, a large share is not absorbed by bureaucrats and consultants but goes directly to the poor.

UPDATE: I had no idea Clark wrote so many editorials… Here’s another one he wrote last month. This one is on African development:

Before the Industrial Revolution all societies were caught in the same Malthusian Trap that imprisons Africa today. Living standards stagnated because any improvement caused births to exceed deaths. The resulting population growth, pressing on fixed land resources, inevitably pushed incomes back down to subsistence.

But living conditions did vary across pre-industrial societies. Perversely, rich societies were those where nature or man created high death rates. In such settings living conditions could be good as long as the population did not grow. In the Malthusian era, what is now vice in economic policy — violence, poor public health, war, inequality — was virtue in terms of living standards. And what is now virtue, vice.

But much of Africa is still trapped in its Malthusian past. Indeed, material consumption has fallen well below the preindustrial norm as a result of the Western gift of modern medicine and hygiene. A host of countries, such as Malawi or Tanzania, would be better off materially had they never had contact with the industrialized world and instead continued in their preindustrial state.

4 thoughts on “UC Davis Econ in the News”

  1. He is probably going to be at the Colbert report show. And a New Yorker article is also a possibility. Oh fame…

  2. What if fear of murder hinders the African entrepreneurial spirit? Also, modern combat tends to damage capital goods and infrastructure.

    Your statement seems to fit something more like a plague scenario.

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