Incentives have been marking the evolution of the human being, and therefore of its economy, since its dawn. Studying, promoting and managing them in a specific and interested direction has been one of the constants of experts for more than a century. From its development, all kinds of theories have emerged that have transcended the economic field to reach any management model.
The person who, from an extreme liberalism, approached incentives as the best self-regulation mechanism beyond markets was the 1976 Nobel Prize winner in Economics, the American Milton Friedman. Recognized for his macroeconomic contributions, which allowed us to overcome Keynesian theory, but also for the development of mechanisms such as the school bonus or individual pension funds.
A firm defender of deregulation, privatization and price flexibility, he was an advisor to the governments of Ronald Reagan and Margaret Thatcher, but also to the Augusto Pinochet regime, with formulas that worked half-heartedly and ended up failing in Chile. Likewise, he is considered the inspiration for the neoliberal policies that were tested in different Latin American economies and the containment measures implemented after the Great Recession of 2008.
Among his most controversial proposals, which he disseminated widely through the media with direct and accessible language during the 70s, 80s and 90s of the last century, the legalization of drugs and prostitution or the abolition of the minimum wage and social security in your country. He also proposed the elimination of federal food and drug control agencies. The freedom and self-regulation of the market taken to the extreme.
Friedman also dedicated several public interventions to the problem of immigration. In this area, his lecture This is America, which he gave at the University of Chicago in October 1977 and which we offer as an excerpt, is paradigmatic. With a populism that marked many of his appearances, the Nobel Prize winner defended the incentives of illegal immigrants to work in the United States with no reward other than their salary. For the expert, any social advantage that an immigrant could benefit from represented a perverse incentive.
“There was an avalanche of immigrants, millions of them, who came to this country. What brought you here? It was the hope of a better life for them and their children. And, for the most part, they succeeded. It is difficult to find a time in which such a large number of people have experienced such a great improvement in their living conditions and in the opportunities offered to them as in the period from the end of the 19th century to the beginning of the 20th century.
”A kind of paradox has always caught my attention. Suppose you go anywhere in the United States and ask people: ‘Before 1914 this country had completely free immigration. Anyone could get on a boat and come to these shores and if they landed on Ellis Island, in New York, they were already an immigrant. Was that a good or bad thing?
”There will hardly be anyone who will say that it was something bad. Almost everyone will say it was a good thing. ‘But what’s happening today? Do you think we should have free immigration again?’ ‘Oh no! –they will say–, it is not possible for us to have free immigration today. That would flood us with Indian immigrants from God knows where. We would be reduced to a minimum subsistence level.
“What is the difference? How can people be so inconsistent? Why was free immigration a good thing before 1914 and free immigration a bad thing today? In a sense, the answer is logical. Because free immigration, in the same sense that we had before 1914, is not possible today. Because?
”Because it is one thing to have free immigration to get a job and another thing is to have free immigration to achieve well-being. Because if what we have today is a welfare state, if what we have is a state in which each resident is promised a certain minimum level of income, or a minimum level of subsistence, regardless of whether they work or not, Whether it occurs or not, comparison is impossible.
”If there is free immigration, as we had before 1914, everyone would benefit. The people who were here benefited. The people who came benefited. Because no one came unless he or his family thought he would do better here than somewhere else. And the new immigrants provided additional resources, provided additional possibilities for the people who were already here. So that everyone could mutually benefit.
”But, on the other hand, if we find ourselves in circumstances where each person is entitled to help, to a small slice of the pie, the effect is that free immigration means a reduction for everyone in social benefits to a uniform level. Of course, I’m exaggerating, I wouldn’t go that far, but I would go in that direction. And it is that perception that leads people to adopt what at first seem inconsistent values.
”Let’s look at the obvious, immediate and practical example of illegal Mexican immigration. This immigration, on the other side of the border, is positive. It is good for illegal immigrants and ends up being beneficial for the United States, for its citizens. But it is because it is illegal.
”It’s an interesting paradox to think about. Make it legal and it won’t work. Because? Because as long as it is illegal, the people who enter do not receive social assistance, they do not benefit from social security. As long as they do not apply for it, they migrate only in search of employment. They accept jobs that most residents of this country are not willing to accept. They provide employers with the kind of workers they can’t get. “They are very hardworking, they are good workers and they are clearly in a better situation.”
