Thursday, July 1, 2010

Seeing the Trees for the Forest

So what could you do with $130 billion dollars? Finally get that new roof? Let me rephrase the question. What could you do with 130 billion dollars if you were a criminal?

Okay, maybe that question is a little unfair. 130 billion is the annual total of global criminal trade, comprised mostly of illicit drug sales, according to the UN. So let’s alter the perspective of the question.

You’re an unemployed male somewhere in South America with no prospects and little hope of cashing in on the global economy. Do you:

A. Apply for a job at ADM?
B. Help smuggle cocaine to America?

Ordinarily I like what Thomas P.M. Barnett has to say about things, but sometimes he just can’t see the trees for the forest. In his blog, "Good globalization = $20T in annual trade; bad globalization = $130B in annual criminal trade," Barnett assures us that globalized criminal trade is nothing to get too worried about since it’s less than one percent of global trade overall.

Is he kidding? IT’S 130 BILLION DOLLARS!

Okay, so you’re not an unemployed man in South America. You’re a high ranking member of a terrorist group that has grown a brain and figured out that America is highly vulnerable to certain types of attack, and if you only had the right funding, you could wage an insurgent campaign that could be devastating to America, and finally help you realize your dream of 7th century paradise. Do you:

A. Apply for a job at ADM?
B. Start smuggling drugs to America?

But let’s put the drug issue aside for a moment. Of that 130 billion dollars, the UN states that 6.6 billion of that is in human trafficking (something on the order of 3 million people). So that’s no big deal at all, since it’s only about .1 percent of the global economy. Wait, what?

3 MILLION PEOPLE?

According to Rescue and Restore Campaign, human trafficking is the fastest growing criminal industry in the world behind drugs. Here’s a sobering bit of data: according to United States State Department data, an estimated 600,000 to 820,000 men, women, and children [are] trafficked across international borders each year for purposes of enslavement of some form or another, approximately 70 percent are women and girls and up to 50 percent are minors. In a U.S. Department of Justice 07-08 study, more than 30 percent of the total number of trafficking cases for that year were children coerced into the sex industry. (wiki)

Personally, I don’t care how small a percentage of the global economy it is, that number is staggering. We read and hear all over that we have an illegal immigration problem. Frankly, the reality is that we have an immigration disaster. We just haven’t fully understood the true nature of it.

While police in Arizona now check immigration status of traffic violators, we are completely ignoring the fact that it is our own appetite that has created this situation. When thinking about illegal immigration, ask yourself the question
Why are these people here? Typical answers include (in order of good to incrementally bad):

Make a better life
Support their family back home
Seek better medical care
Seek better social services
Seek Welfare
Give birth in America, thereby making the child a US citizen
Sell or smuggle drugs
Sell or smuggle people (prostitutes, sex slaves, children)

I find it hard to generate hostility toward those at the top of the list, and difficult to not advocate summary execution for those at the bottom. But I notice one very specific perspective associated with that set of answers: they are all coming from the supply side. The answer that we don't include in the list is the most powerful one:

There is DEMAND from citizens of the US that makes all of the above possible.

Illegal immigration is quite costly to the US, but what do we actually get for those costs? This is an important question, because we do get something. In fact, we get several things (again, listed in a sort of moral order):

Inexpensive food, grown here, and subject to our health standards.
Less expensive construction costs
Inexpensive domestic services (lawn care, child care, etc.)
Potential voting blocks for incumbent powers
Access to prostitutes
Access to a variety of drugs
Access to child pornography
Access to slaves
Access to sex with children kidnapped from other countries

If we intend to address this problem from the supply side, the costs will be astronomical. We are a country of due process, thus, each detained illegal immigrant must be processed, then deported. To secure our border in such a manner that we seal off ingress, the cost is even more enormous, and will pale next to the cost of the deportations.

The reality is that supply side solutions are immensely costly. What's worse, because the supply side solutions do nothing about the demand, the demand will simply be met in some other fashion, further destroying the fabric of our society. Addressing this problem from the supply side will become exactly like fighting a counter insurgency campaign, one that will continue on in perpetuity, costing us tremendous amounts of wealth, and never actually solving the problem itself.

Let's look at the demand component in more detail.

Inexpensive food, grown here, and subject to our health standards.
Less expensive construction costs
Inexpensive domestic services (lawn care, child care, etc.)

Demand side solution: 10 thousand dollar fine for each instance of any individual and 100 thousand for any corporation employing an undocumented worker. This is a law that the state of AZ could have put in place itself had it had the foresight and political will to do it. Use proceeds from fines to cover deportation costs, and to cover the cost of making domestic employment expenses by families tax deductable. The cascading effect is that cost of food and construction rises, but probably less than expected if sensible guest worker programs are expanded and properly run. Enforcement of this is what AZ should have passed.

Potential voting blocks for incumbent powers

Demand side solution: Use the public forum to denounce such politicians and exercise your right to vote.

Access to a variety of drugs

Demand side solution: First, completely legalize the domestic production, sale, and use of marijuana. Legalize the domestic production and sale of other drugs. Impose much harsher sentences on users on national security grounds (financing terrorism, etc.). Go after the demand of drugs, rather than the supply. Result: immediate increase in revenue and GDP as marijuana becomes part of the domestic economy. Casual use (the majority of drug sales) of hard drugs disappears immediately (too costly if caught). Addicts removed from market. Prison costs increase, but likely would be more than offset by tax revenues from marijuana. There is some political will for this, as CA has already demonstrated, re. marijuana.

Access to prostitutes
Access to child pornography
Access to slaves
Access to sex with children kidnapped from other countries

Demand side solution: This is possibly the most difficult problem to solve. First, legalize independent prostitution. What a grown woman chooses to do with herself is her business. Criminalize pimping and trafficking under slavery laws. Make ownership of a sex slave a capital offense. Traffickers who cross the border should be treated as enemy combatants and be subject to military tribunal.

I maintain that demand is the key to dealing with this problem. It is substantially less costly, and actually addresses the root cause of the immigration problem rather than imposing restrictions on our broader freedoms in an effort to treat the symptom. People who are employing undocumented workers are also breaking the law (not just the illegal immigrant). Kill the demand, and the vast majority of the problem disappears, along with all the undesirable cascading effects, such as 12 year-olds recruited as assassins in Colombia.

Building a fence and closing the border is a stupid solution. The biggest threat to stability in Mexico is drug cartels run rampant, and they are financed by our behavior. If we continue down this path, closing our doors to immigrants and leaving them in the hands of the cartels, Mexico ultimately becomes a failed state. Look at all the trouble we’ve had with Afghanistan. Imagine how much trouble it would be if it was on our Southern border. A failed Mexican state is a huge problem for the US, and it’s also a huge possibility.

Mr. Barnett needs to step closer to the forest and have a look at the trees. 130 billion dollars may be a small percentage of the global economy, but it’s more than the entire GDP of most failed states.

3 comments:

ltmurnau said...

Good points, all, and interesting solutions. The President of what's left of Mexico has remarked recently that it was the American demand for drugs that was tearing his country apart.

Going deeper on the demand side, why do you think there is such a demand for drugs and orifices in the United States in the first place? Are there social, cultural or educational changes that could be made to address these problems? It's one thing to simply cancel an unpopular law that criminalizes the process of getting zonked and sitting around all day, and quite another to ask the question why someone would feel the need to spend the day like that in the first place.

Jon Compton said...

It's a good question, but one that lies outside my expertise. I think that there is a psychological element involved that may require certain sorts of training or medication to overcome, but that's not an informed idea. Deterrence is something I know, so it's something I advocate. Doesn't mean it's the perfect answer.

ltmurnau said...

I saw this (http://www.nytimes.com/2010/07/10/us/10enforce.html?_r=1) and thought about how this is an effort to attack the demand side of the equation. Though $3 million in fines is just a start.

Also telling is the assertion that even through all the recession, jobs went empty on America's farms - but this is a crucial sector of the economy that has been conditioned to accept only the lowest-cost labour. If the cost of food rose, then it woudl be possible for farmers to actually make a living at what they do, and not be forced into a choice between indigency or tenancy at ever-larger centralized corporate kolkhozes.