Immigration Reform and the Zero Sum Fallacy

Mark Zuckerberg has founded a new immigration reform advocacy group: FWD.us.

From his Op-Ed in today’s Washington Post
“The economy of the last century
was primarily based on natural resources, industrial machines and manual labor. Many of these resources were zero-sum and controlled by companies. If someone else had an oil field, then you did not. There were only so many oil fields, and only so much wealth could be created from them.

Today’s economy is very different. It is based primarily on knowledge and ideas — resources that are renewable and available to everyone. Unlike oil fields, someone else knowing something doesn’t prevent you from knowing it, too. In fact, the more people who know something, the better educated and trained we all are, the more productive we become, and the better off everyone in our nation can be.”

-Mark Zuckerberg

Although I disagree with Mr. Zuckerberg’s characterization of the oil economy;* I am very glad that Mr. Zuckerberg chose to point out the zero sum fallacy because I believe it is behind many of today’s bad policies and bad ideology. The zero sum fallacy is simple: because you have something I cannot.

More specifically:
“Rich” people have money that the poor could have had and therefore we need to redistribute it.
Your chances of gainful employment rely on keeping out competitors by force of government.

These ideas are simply wrong and they hurt everyone.

The wealthy:
The wealthy earn their wealth by providing a product or service to others who value it enough to spend their resources on it. Real wealth is generated not by theft but by innovation, hard work and thrift. Bill Gates didn’t take his billions from the rest of us, he created products that allowed us to live better lives and do things more efficiently. The wealthy must also use their capital well or they will lose it eventually no matter how large the fortune is. When we take that money in order to redistribute it to others we squander it in two ways. Firstly the government has no competition and is therefore inefficient by nature, historically delivering only about 50 cents on the dollar to “beneficiaries.” Secondly by taking capital away from people who have demonstrated skill and ability to use and giving it to people who have demonstrated the opposite we lose much of the value of that capital. For example, as an entrepreneur I might expand my business or start a new one with my capital, this would help others by employment or valuable services. If the government takes my capital to give to others that potential is lost or lessened. Whatever impact I could have made with that money will be lost and granted to the government. Would you rather men like Bill Gates, and Mark Zuckerberg spend their capital or the same entity that runs the DMV and Post office? Some taxes for limited governmental responsibilities such as defense and law and order are necessary; but the less the government does and the less capital it takes the better for all.

Immigration:
Zuckerberg eloquently stated why immigration reform is good: “…someone else knowing something doesn’t prevent you from knowing it, too. In fact, the more people who know something, the better educated and trained we all are, the more productive we become, and the better off everyone in our nation can be.”

Zuckerberg knows that when we keep engineers and scientists and other skilled immigrants here we all benefit. These men and women create more jobs than they take. They also are our future problem solvers, perhaps one of them will advance cancer research and prolong and save lives in America. Perhaps one of them will create a better more efficient engine to power our cars. Elon Musk the current founder of Tesla and SpaceX was an immigrant from South Africa. He has advanced electric cars and Space exploration. Who knows what Musk would have been able to achieve if he’d not been able to stay in America. Tesla employs 3000 people, SpaceX 1800- mostly good very highly paid. If we’d made the union argument that Mr. Musk would take away the job of a “deserving” America and shipped him back to South Africa we would have ignored the greater good of the many thousands of jobs Elon has created.

Many of you are now thinking: “What about the non skilled illegal immigrants that we have now.” The problem is our welfare state in general not illegal immigrants. Immigrants, legal or not will not come to the United States to work and contribute if there is zero potential of coming here in order to feed on our welfare state. In other words, if we reward work and productivity we will get more of it, if we reward dependency we will get more of that.

Zero Sum thinking focuses on stage one, we admit an engineer from India and he takes the job of an engineer from Ohio. This ignores the full picture, this same engineer might have started a business in Mumbai and done so well that he caused an American company with 10,000 engineers to close. Protectionist ideology doesn’t work, we have a global economy and we can all advance together if we stop thinking zero sum.

————————————————————————————————————————————

*We keep finding more oil and new ways to get it, it is only zero sum in absolute terms not in the practical.

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