Sanctuary Cities are Special Economic Zones - Just Not For You

The Trump Administration’s ICE roundups are surfacing all sorts of crime in migrant communities — much of which has been concealed by those communities, including by the victims, in order to avoid immigration enforcement.

Many left-wing or libertarian commentators argue that this is a justification for amnesty or a “path to citizenship”, so that otherwise-law-abiding people can “come out of the shadows”.

But the whole economic justification for illegal immigrants — their willingness to “do the jobs Americans won’t do” — hangs on their illegal status.

It doesn’t matter how gritty and hard-working an immigrant is — if you are required by law to provide them with healthcare, pay for their sick leave, compensate them when they’re injured, etc. — they’ll cost about the same as an American worker.

In fact, in many lines of work illegal labor actually costs more money per hour than American workers, because the savings from dodging regulations are so extreme:

Assisted living is dominated by Filipino and Eastern European operators who undercut prices by staffing with indentured servants from their home countries, garnishing their wages to pay back debts and threatening them with deportation if they report abuses.

Ditto nail salons, dry cleaners, convenience stores, motels, food processing, manufacturing — basically any industry that depends on human physical labor in the real world is now dominated by immigrants.

Their labor isn’t cheap because they’ve got superior Immigrant Grit and Determination and Sticktuitiveness. Their labor is cheaper because they live in Ancapistan, where slavery is legal and the ground beef is 0.3% Guatemalan fingers, while American citizens live with near-EU levels of suffocating regulation.

The exception is in tech, which is why the overwhelming majority of America’s brains have crowded there — it’s a refugee camp for high-IQ Americans who have been pushed out of the real world.

Every economy on earth faces tradeoffs between productivity and quality of life.

The Japanese, for example, are more conservative than the Chinese about environmental protections, worker safety, etc. — but at least both sides are making a rational choice and internalizing the consequences, because their system of law covers their entire economy.

If a given regulation doesn’t strike the right balance — either because it’s too burdensome, or too lax — both the Chinese and Japanese state have mechanisms to perceive the problem and respond to it.

But in the two-track American system, with essentially free movement of labor and capital, there is no such mechanism. If the US passes a stupid regulation that makes it impossible for home-builders or meat processors or steel mills to do business, one of two things will happen:

a) sufficiently large and well-connected players will hire illegal labor to violate the stupid regulations, and gobble up all the smaller fish

b) Americans will simply import from a country that doesn’t have the stupid regulations (China), and the native industry will collapse

Either way, no policymaker ever gets a warning light that says “this is a stupid and impossible regulation”. Voters and consumers don’t feel the pain. The cost falls on workers and businesses who can’t afford to comply with the regulation, and lack the legal and political resources to challenge it — who are, by definition, politically invisible.

Regulation is incompatible with the free movement of labor and capital.

If you let factories employ illegal labor without overtime pay, it will be impossible to run a factory that offers overtime pay. If you allow imports from Chinese chemical plants that poison their rivers, it will become impossible to operate an American chemical plant that doesn’t poison our rivers.

As long as the US allows vast portions of its economic activity to take place outside its regulatory framework (either through outsourcing, or through black- and gray-market immigrant labor), American labor and environmental regulations will be meaningless, except as a way to expropriate and disenfranchise law-abiding American citizens.

But this situation is perfect for America’s schizoid political class: it allows Chamber of Commerce Republicans to get what they want (A de-facto ancap regulatory environment for them and their serfs), while also giving Democrats the opportunity to grandstand and campaign on worker and environmental protections whose costs are borne exclusively by white kulaks, whom both parties despise.

If immigrants had captured America’s real-world economy through superior Grit and Initiative, they would do it in their own countries.

They haven’t, because their home countries are bloated half-communist kleptocracies like ours, where they are subject to the same suffocating miasma of regulation.

“Sanctuary cities” are de facto Special Economic Zones, but only for illegals & their corporate employers. They get to earn and pay market rates, with no oversight and no taxes, while their competition needs a notarized approval from the DMV to take a shit.

You’d work hard too, if you got that kind of deal.

And it’s been great for them: the smart ones have used these physical businesses in exactly the same way that Americans used to: as a slingshot into the middle class.

Yet another reason why mass deportation is the only issue:

Illegal labor and open borders reverses the polarity of all laws intended to protect Americans.

Instead of requiring your employer to treat you fairly, they simply encourage your employer not to hire you, because he can always dip into the ocean of unregulated slave labor. Instead of cleaning up the environment in your Rust Belt town, they move the industry to China and leave the town to die.

As long as there is an economically viable alternative to complying with a regulation, the regulation will simply immiserate anyone who is required to comply. Mass migration and outsourcing make it literally impossible for any regulation to improve Americans’ lives.

But even if you’re an ancap who thinks that all these regulations are bullshit, illegal labor is what keeps those regulations on the books, because it makes it possible for the very powerful (and only the very powerful) to do business in an otherwise totally unsustainable regime.

A truly unregulated labor market might trigger a “race to the bottom” in which American citizens are forced to compete for slave wages with the Global South — but our current system is actually worse than that. Corporations get their slave labor (either here or overseas), and Americans are forbidden by law to compete.

And it goes beyond economic regulation. Democrats love to talk about immigrants who are not “otherwise” criminal — but all of America’s laws are undermined by the presence of a caste who are above or below them.

Organized crime has been decimated in America since the 1970s — except in immigrant communities, where our insane laws simultaneously afford criminals freedom of action, and enormous leverage over the “civilian” illegal population.

Citizens cannot help becoming cynical about a code of law that only punishes them and does not protect them.

Mass deportations and tariffs will make all these hypocrisies untenable.

If America’s corporations and voter-consumers had to live with the actual consequences of our regulatory regime as written, the political will for deregulation and reindustrialization would be unstoppable.

Legally homogeneous societies (with one code of law that applies to the entire system) have to make rational decisions about the tradeoffs and burdens of new regulation.

The Japanese economy is highly regulated and conservative, but they maintain productivity through automation, investment in human capital, and intense attention to organizational efficiency. They actually have to confront the cost and lifestyle expectations of their domestic labor force. American corporations have no incentive to do this, when they can simply chew through an endless supply of foreign serfs.

If the Trump Administration succeeds in deporting an economically-material number of illegal immigrants, the liberals are right: avocados and almonds will get very expensive, along with new homes, senior care, hotel rooms, and every other industry dominated by illegal labor.

They are basically correct that an economy in which industry was forced to take our present absurd and contradictory regulatory standards seriously would be unsustainable — but that price discovery has to happen sooner or later. The walls need to be torn down. Americans need to be invited back into the American economy.

The American state cannot survive globalization.

Either the Trump Administration will find a way to rationalize America’s economic borders and end the globalist experiment, or the American state will collapse under the weight of these contradictions.

In either case, the fake-and-gay B2B SaaS economic paradigm is going away, and we need to build for what comes after. We need parallel structures for generating and securing wealth. We need parallel educational systems to prepare our kids to support themselves, as the standard college-to-corporate-W2 pipeline has already collapsed for most of them. We need to identify and exploit productive frontiers that the regulatory vetocracy hasn’t captured yet. We need to organize and build together in the real world.

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