Plumb Lines

March 3, 2009

Labor and Capital

Filed under: Uncategorized — David Schaengold @ 9:56 pm

Freddie’s post on the conflict between support for illegal immigrants and organized labor deserves a careful reading from everyone who is, like me, a reflexive supporter of both. His prescription, namely higher rates of legal immigration, brought to mind a question about labor markets and capital markets: Why aren’t they equally free? I don’t mean “why” politically, since obviously we are not going to allow unrestricted immigration from any country. I’m interested in the moral question. Given that we have a  free capital market with Mexico and Canada and a restricted labor market with both, won’t this lead to intense exploitation of the disparities between the cost of capital in the single North American market and the cost of labor in one of the three North American markets? Even if free trade makes citizens of all the NAFTA countries better off materially, is there something inherently unjust about the inability of a Mexican factory worker to follow the work of his hands northward?

David Schaengold

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