Institutionalist Perspectives on Immigration Policy
Peach, Jim, Journal of Economic Issues
The recent intense, national debate over various proposals to reform U.S. immigration laws will not be the last such debate nor are the issues new. The immigration debates frequently produce unexpected political alliances and disrupt old, well-established ones.
Institutionalists also have been sharply divided on the immigration issue. Institutionalists arguing in favor of fewer restrictions on international migration include Thorstein Veblen, Wendell C. Gordon, and John Kenneth Galbraith. Other institutionalists including John R. Commons and Vernon Briggs have argued in favor of more restrictive immigration policies. The remainder of this paper will (a) review the nature of the institutionalist immigration debate; (b) argue that current U.S. legislative immigration proposals, even if enacted, would do little to resolve the immigration issue; and (c) suggest that institutionalists could play an increasingly important role in the current immigration debate.
Veblen viewed international borders, restrictions on migration, and all forms of nationalism as impediments to industrial efficiency. For Veblen, the technological revolution was a worldwide phenomenon: "... no civilized country's industrial system will work in isolation" (1918, 397). And, "[a]s an industrial unit, the nation is out of date." (Veblen 1918, 397) According to Veblen:
The modern industrial system is worldwide, and the modern technological knowledge is no respecter of national frontiers. The best efforts of legislators, police, and businessmen, bent on confining the knowledge and use of the modern industrial arts within national frontiers, has been able to accomplish nothing more to the point than a partial and transient restriction on minor details. (Veblen, 1918, 397).
Veblen left no doubt that his disparaging remarks about national borders applied to the movement of people as well:
The continued growth and spread of population, by natural increase and by immigration, has furnished the business men of this country a continually expanding market for goods; both for goods to be used in production and transportation and for finished articles of consumption. Hence the American business men have been in the fortunate position of not having to curtail the output of industry harshly and persistently at all points. (Veblen,  1969, 98)
Veblen's analysis of borders and restrictions on the movement of people, goods, and ideas was consistent with his evolutionary (Darwinian, if you like) approach to economic analysis. Darwin ( 2004) explicitly recognized the role of the migration of species (sometimes deliberate and sometimes accidental) in the evolutionary process. Although Darwin did not directly address human migration, he devoted two full chapters ( 2004, 277-325) to the geographical dispersion of various species.
Though Commons was certainly aware of the works of both Darwin and Veblen his position on immigration stands in sharp contrast to that of Veblen. Commons (1911) conducted a massive study of immigration and immigration policy. Commons thought that "[t]o prohibit or greatly restrict immigration would bring forth class conflict within a generation." Nevertheless, he was not opposed to the system of racial quotas that became the basis of U.S. immigration policy by the early 1920s, or restricting immigration based on the "quality" of potential migrants. Throughout his study on race and immigration, Commons referred to the superior and inferior races and left no doubt about which races he considered inferior. Commons asserted that "[o]ther races of immigrants, by contact with our institutions, have been civilized--the negro has only been domesticated" (Commons 1911, 41).
As for policy, Commons (1911, 229) suggested: "As for the inferior, defective, and undesirable classes of immigrants, there is no protection except stringent selection. …