But lo and behold, the businessman builds a factory by the ocean. ![]() Socrates: That’s exactly what the scientists in my fable say. Once upon a time, a businessman announced to the world that he knew how to turn corn into cars. Socrates: Perhaps you’re right, but let me tell you a little fable about the magic I believe in. Socrates: Strangely, Glaucon, I believe in the magic you deny. ![]() Wages depend on productivity, and trade doesn’t magically make native workers more productive. I’m just generalizing my original argument. Free trade doesn’t benefit natives workers. You know what? I’m just going to deny the premise. You’re going to say that free trade is mutually beneficial, and immigration is just free trade in labor, so immigration is mutually beneficial. Mutually beneficial trade is possible even if one country has an absolute advantage in everything. In your trade class, you almost certainly learned about the Law of Comparative Advantage. Glaucon: You’re reminding me of an international trade class. Does this preclude mutually profitable trade between natives and immigrants? But suppose you’re right: Natives are more productive than immigrants at everything. Low skilled immigrants are worse than natives at everything. Animals are useful tools because they are better than humans at certain tasks. Do you deny that humans are animals? Or that immigrants are human? Socrates: How can you dispute the comparison? You admit that a tool raises workers’ productivity. Socrates: I repeat: What if the animal is a man from another land? Now I ask you: What if the animal is a man from another land? Economically speaking, giving an animal treats to make it work harder is no different than polishing a tool to make it sharper. Socrates: What if the man had to entice the animal to work with treats? Would that change anything? Economically speaking, an animal is merely a living tool. What would you say, then, if a man domesticated an animal? Would you call it “sophistry” to say that the animal raises the man’s productivity? ![]() Therefore tools make men more productive. Men with tools produce more stuff than men without tools. Socrates: What if someone claimed that it was the tool, not the man, who was more productive than before? Would you call it “sophistry” to say that this tool raises the man’s productivity? Glaucon: Well, I guess I’ve got nothing better to do. Would you mind helping me to clarify my thinking, dear Glaucon? Glaucon: Huh? How can you equate specialization and trade with “raising productivity”? Sophistry! ![]() Socrates: Perhaps immigration encourages natives to specialize in jobs where they are especially productive – and subcontract their other jobs to the new arrivals. It doesn’t actually raise natives productivity. Glaucon: Well, the most immigration can do is shift labor demand around. Glaucon: Standard labor economics says that labor demand depends entirely on workers’ marginal productivity. But immigration couldn’t increase native wages in general. If the immigrants need housing, for example, native construction workers might benefit from the increase in demand. Glaucon: I can see how immigration might raise the wages of some natives. Glaucon: Well, I’ve heard some “economists” claim that immigration might actually increase native wages. Glaucon: You agree, then, that increasing supply reduces prices. Socrates: Yes, I was recently promoted from philosopher to philosopher-economist.
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