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Unintended Consequences, installment #638
"Security Crackdown Cuts Illegal Crossing But Aids Smugglers." That's the headline and the story concerns the border between Mexico and Texas. How might this be true? It is simple:
As tighter security makes crossing the border trickier and more hazardous, the traditional mom-and-pop operations in Mexico that used to ferry people across have been replaced by larger, more-professional criminal gangs, often with ties to the illegal drug trade.
Or think of it in terms of finance: "Authorities are beginning to see commingling of drugs and human loads and are frequently seizing migrants who apparently are paying for their trip by carrying drugs for traffickers." This is also known as the Alchian and Allen theorem.
The information and quotation are from today's WSJ, "Shift is Afoot on Mexican Border," p.A8. Here is a previous installment in this series.
Posted by Tyler Cowen on October 25, 2007 at 01:32 PM in Law | Permalink
Comments
Oddly enough, my wacky libertarianism extends to not minding drugs but not as far as wanting lax borders, so the news is just dandy to me.
Posted by: TGGP at Oct 25, 2007 2:16:50 PM
This is also known as the Alchian and Allen theorem.Could someone elaborate on this? What are the two substitute goods?
Posted by: Bob Montgomery at Oct 25, 2007 2:37:17 PM
Anyone got some good Alchian and Allen theorem micro exam questions they want to share? IE, do the work for me so I can put it on my test.
Posted by: jason voorhees at Oct 25, 2007 3:06:13 PM
Economics is not the only field that has a theorem for this. Systems logic also has models for how plans in a highly complicated system often achieve the opposite results or re-enforce the problem they were to solve. A silly but true example: the huge hanger built to protect the space shuttle is so big that it develops it's own weather and ecosystem. There are probably as many ways to quantify and qualify this principle as there are academic disciplines, but it's certainly not surprising.
What is also not surprising is how asinine policy makers and voters are for not endeavoring to ask themselves 'what might happen if we do this?' Surely some economist has enough pull to whisper 'Alchian and Allen' into the ears of some congressman, or into the microphone on a local news interview.
Posted by: Voce at Oct 25, 2007 3:18:17 PM
Also called externalities.
Posted by: sa at Oct 25, 2007 4:42:54 PM
migrants who apparently are paying for their trip by carrying drugs for traffickers
I've read this happens regularly to refugees crossing illegally out of Iraq, and that they might not be informed that they'll be mules until they reach the border, because how can you say no then?
Posted by: neil at Oct 25, 2007 5:07:47 PM
This sounds like Econ 101. As the border becomes harder to cross, the cost of crossing the border goes up. Demand also goes down.
Econ 101
Israel has a border tough enough to stop suicide bombers who are clearly willing to pay a lot, indeed everything.
We should hire the Israelis to run our borders.
Call it 'globalization of border control, the outsourcing edition'.
Thomas Friedman will love it.
Posted by: Peter Schaeffer at Oct 25, 2007 6:01:17 PM
When my son was in his terrible 2's, a friend giving advices said " I know how to handle tantrums, my children have been having them years". When ever someone suggests we copy Israel's policies for handling security, I think of this remark.
Posted by: joan at Oct 25, 2007 8:36:22 PM
Bob- the two substitute goods are the mom-and-pop ferries and the more sophisticated drug runners. Mom-and-pops are the lower grade good in the Allen-Alchian formulaization, while the drug runners the high grade. They are both taxed by the heightened security, causing the relative price of using drug runners to cross to grow smaller. That is at least what Cowen is suggesting by the analogy.
Posted by: jason voorhees at Oct 25, 2007 9:37:59 PM
I have a couple simple questions, I've never driven across the borders (only flown), so these questions might be dumb.
What prevents American citizens from driving into Mexico and bringing someone back? Do they check every passengers ID?
Can't Mexicans visit the US for business or tourism (Disney) or to see family? Can't they just come and then not go back?
Couldn't they just use fake IDs? Seemed easy enough to get in high school. Or even better, just borrow one from a real Mexican-American that looks vaguely similar.
I have had family visit from Europe and Asia for weddings, births, etc -- and it wasn't that hard for them. Do we have different rules for Mexicans? Or is air travel treated differently?
thanks.
Posted by: jim at Oct 25, 2007 10:54:37 PM
Israel effectivly ended the second intifada (including suicide bombings) with its fence. That's a success story the US would do well to emulate.
Fences work.
Posted by: Peter Schaeffer at Oct 25, 2007 11:12:17 PM
Forgive me if I'm wrong, but aren't there a couple differences between Israel's fence and our Mexican border. One, that the Israeli border is monitored by personnel at a vastly higher rate than would be possible here? And two, didn't they achieve such a successful wall by stopping almost all border crossing including economic activity?
Posted by: false_cause at Oct 26, 2007 1:51:35 AM
Comparisons to Israels border policy is dead wrong. Why? There is the fact that Mexico is our second
largest trading partner. Israel does not do much trade with its neighbors and would be glad if
they disappeard (as would the neighbors). Last I checked we were a free society not a society bent
on destroying or terrorizing those that live around us. Its much more complex to regulate the
border between two countries that have huge volumes of economic and tourist activity.
Posted by: Robert at Oct 26, 2007 2:55:53 AM
On another note: Supply meet demand. Why bring drugs to U.S.--we like em drugs. Is there a Mexican Intifada?
Not last I checked? Do we have a trade deficit with Mexico? yes. Do we have a free trade agreement
with em--yes. We buy their oil and we make our cars their. Comparisons to the Israel case are not only
wrong but show complete ignorance of historical and economic contexts. Guess it appeals to some us vs. them racist viesws--who knows but it aint pretty guys and girls. Yeesh.
Posted by: Robert at Oct 26, 2007 3:03:43 AM
You guys stop needing abundant low skilled low wage workers, stop smoking pot and snorting cocaine
and we promise to stop. O.K.?
Posted by: Mario el Mexicano at Oct 26, 2007 3:07:24 AM
False cause,
The US has 43 times the population of Israel as well as quite a bit more money. We can easily police the border if we want to. Of course, those who profit from illegal immigration prefer the status quo. The bigger point is that fences are force multipliers. Considerably fewer agents are needed to control a fenced border because of how few illegals will attempt to penetrate a double fence topped with concertina wire.
Israel does have extensive commercial relations with the Palestinian territories including using Palestinian workers. However, commerce goes through controlled checkpoints.
The US fence will stop illegal immigration across deserts and the like. Legal commerce and trade will continue through legal border crossing points.
Posted by: Peter Schaeffer at Oct 26, 2007 2:33:33 PM
Robert,
The fence will stop illegal movements of people and drugs across the unguarded sections of the border. It will have no impact on legal commerce or travel. What is your problem with stopping illegal activity?
I like the part about “racist”. So now stopping drug traffickers and illegal aliens is “racist”. I didn’t know.
Posted by: Peter Schaeffer at Oct 26, 2007 2:43:06 PM
Mario el Mexicano,
“You guys stop needing abundant low skilled low wage workers, stop smoking pot and snorting cocaine and we promise to stop. O.K.?”
Agreed, and we will build a double fence to do it. However, with do consideration to the impact drug trafficking is having on Mexico, shouldn’t Mexico help pay for the fence? As a crime control measure in Mexico?
As for “needing abundant low skilled low wage workers”. That’s nonsense. US wages have been falling for decades.
Also, please tell me why Mexico imports illegals from Central America. Mexican employers complain that “Mexican workers are too lazy”. Do you believe that?
Posted by: Peter Schaeffer at Oct 26, 2007 2:46:49 PM
Commingling was already happening when I reported on the border in Arizona in 2003.
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