Friedman on Immigration: Setting the Record Straight

Even the most ardent supporters of a free labor market can experience trepidation regarding immigration when the specter of redistribution looms large. A popular refrain among skeptics is a quote from Milton Friedman, who is often cited for his controversial stance:

This perspective suggests that while immigration may be welcome in a purely free market, the reality of government benefits necessitates restrictions. The argument posits that these restrictions protect taxpayers from the potential financial burden of immigrants utilizing public resources. However, this reasoning may be overly simplistic, and even Friedman’s views warrant a more nuanced interpretation than is often acknowledged by both proponents and opponents of immigration.

To begin with, the fears surrounding the financial implications of immigration are often exaggerated. Research suggests that a significant portion of welfare expenditures in the United States goes to the very young and the elderly, while immigrants predominantly fall within the working-age demographic.

Setting aside this initial point, Friedman himself did not claim that immigration is inherently detrimental. He contended that legal immigration was problematic because it permits immigrants to access government benefits. In contrast, Friedman saw illegal immigration as advantageous. He stated, “It’s a good thing for the illegal immigrants. It’s a good thing for the United States. It’s a good thing for the citizens of the country. But it’s only good so long as it’s illegal.” His reasoning was that illegal immigration facilitates mutually beneficial exchanges in the market while limiting immigrants’ access to public assistance.

This recommendation by Friedman often draws skepticism from fiscal conservatives—if lawful immigration leads to the overuse of government resources, should we really advocate for encouraging people to break the law? While I understand this reaction, I don’t share it. The morality of an action doesn’t solely hinge on legal approbation. Take, for instance, the curious law prohibiting driving on Cape Cod’s National Seashore’s beach without a tire-pressure gauge. I have no ethical qualms about beach driving without such a gauge; it’s a harmless activity that infringes on no one’s rights.

You might disagree with my stance. Nevertheless, as some have proposed, there is an alternative way to honor Friedman’s general thesis: allow immigrants to enter as lawful permanent residents but limit their access to certain government resources. Economists refer to this as a “keyhole solution”—if the concern is immigrants’ consumption of benefits, we should tailor policies to address that issue without entirely curbing their ability to immigrate.

The primary objection to such a policy appears to stem from moral rather than economic grounds. In fact, Friedman himself was posed with this question and deemed the idea unappealing, partly due to the undesirability of creating two classes of citizens in a society. This is indeed a valid point.

It is inequitable for a government to provide taxpayer-funded benefits to some citizens and not others. If two individuals reside, work, and contribute to the tax system of a country, they ought to receive equal treatment from government officials, which includes equal access to public resources.

However, it’s essential to recognize that a policy of immigration restriction also differentiates between citizens and prospective immigrants, granting access to domestic job markets, private organizations, educational opportunities, and more exclusively to citizens. Thus, a principle of equal treatment may inadvertently advocate for open borders. Given Friedman’s rejection of this option, our task becomes identifying a second-best solution. (Moreover, it’s worth noting that Friedman’s critique of keyhole solutions seems inconsistent with his endorsement of illegal immigration, which would also create societal divisions.)

Why might a policy allowing open immigration with limited access to benefits be preferable to complete exclusion? The answer is straightforward: conditional admission treats prospective immigrants more favorably than exclusion does. A policy of open immigration with restricted benefits offers individuals the opportunity to relocate, which inherently cannot worsen their situation.

Consider an analogy: John is entering the job market and receives two job offers. One comes with health insurance and a retirement plan; the other offers a higher salary but no benefits. Even if you believe he should opt for the first job, it remains entirely reasonable to present him with the second option. John’s situation doesn’t deteriorate by simply having more choices. If he prefers the better pay without benefits, he stands to gain from the additional option.

John’s example parallels that of a prospective immigrant who anticipates earning significantly more by relocating to a country with restricted access to government benefits. If the immigrant values her current benefits more than potential higher earnings, she can choose to stay put; thus, she is not worse off by having the option. Conversely, if she prefers the higher earnings with fewer benefits, the option enhances her situation. Just like it’s appropriate to provide John with that extra choice, it’s equally justifiable to extend the same option to prospective immigrants.

It’s also important to emphasize another critical aspect of allowing immigrants limited access to benefits rather than imposing outright restrictions on their movement. Granting lawful permanent residency alleviates the threat of deportation and other negative consequences that accompany undocumented entry into a country. Even if you agree with Friedman (as I do) that admitting immigrants with limited access to benefits isn’t entirely equitable, it remains more just than denying prospective immigrants the opportunity to move safely.