Immigration, Three

Fernando and Dan debate immigration below, with Fernando championing the huddled masses yearning to be free and Dan a little more cautious, worrying about both welfare and communitarian reasons. As a believer in basically free immigration, I will add some thoughts.

First, it seems unwise to continue the discussion without noting the contributions some time ago by Richard Posner, Gary Becker, and Tyler Cowen. Posner and Becker each suggest a pay-to-enter system (with low-interest loans) that would be pareto-superior to our current system. Tyler Cower is basically libertarian about this, but worried about shanty-towns and underclasses. In the end, he favors trying to substitute legal immigration for illegal immigration.

I am willing to go farther than that. As a matter of basic justice, I think nothing should stop a willing landowner from selling or renting his house to somebody who would like to come and live in it, even if that potential buyer will be coming from Mexico or Manitoba or Malawi. Similarly, nothing should stop somebody from hiring folks who she likes regardless of where they live. Free trade should apply to houses and jobs too.
My friend Indivar Dutta-Gupta likes to refer to the "birth lottery". If you imagine you are going to be born as any possible baby on the earth, one of the largest random swings in your well-being will be what country you are born in. Whether we believe that the government should try to equalize these inequalities or not, it does seem trouble for the government to deliberately entrench them.
At the same time, the worries about impacts on the welfare system and the like are quite real. If we were to totally open the gates, I suspect the population of the U.S. would be well over a billion within 10 years. Now, I would be fine with drastically reducing the amount of federal welfare payments and the minimum wage in order to do this-- better poor in New York than poor in Niger-- but a lot of people would in fact be troubled by this.
I think this is Guido Calabresi's lesson about "Tragic Choices". In fact, people would like very much to turn a blind eye to certain problems because they don't like any of the possible solutions. Keeping immigrants out allows most people to pretend, most of the time, that their plight doesn't really exist, or somehow has less moral salience. Whether this is rational or reasonable is beside the point as a political matter. Psychological does not always bend to logic, so we would-be liberalizers have to figure out how to work with what we're likely to have.
[I will set aside the communitarian argument, not because I think it is obviously vapid, but because I think it is totally intractable. One person's community is another person's xenophobia. Plus, even supposing a communitarian ideal, the question of what the American community ought to look like is so highly contested that it hardly resolves the problem. Some people believe Americans should be white or black english-speakers. Others believe in the total melting pot.]
So the question is what to do. The problems are real-- it is simply implausible that current Americans would tolerate letting in large numbers of immigrants without also extending to them welfare payments that might be fiscally unfeasible. So if one believes in open immigration, as I do and as Fernando does, the question is how open of a policy we could get away with. This is surely the appeal of our current system-- having large amounts of illegal immigration and then not talking about it. We allow large numbers of people who want to come to come, withhold certain social welfare programs from them and thus keep states solvent, but avoid offending middle-class voters that both parties find themselves forced to pander to.
I in no way endorse this equilibrium, so feasible suggestions about how to improve on it are welcome.