Economic Disparity as Fuel for Progress

Mike Speiser writes:

Immigrants come to the United States and take menial jobs so that their children have a chance at a better future, he told me. While the jobs they take are below their intrinsic capabilities, they’re focused on giving their children a better life, not personal job satisfaction. Second-generation children, seeing how hard their parents work to give them an opportunity, in turn work hard at school, where, he noted, they often focus on mathematics and science in pursuit of the economic returns promised by careers in engineering and medicine. Third-generation kids figure the economic return on effort expended is better for business and legal professionals and pursue those professions instead of technical ones. By the fourth generation, any immigration-related incentives to work hard are largely nonexistent.

link: America’s Secret Innovation Weapon: Immigration

My gut reaction to Mike’s article is that he is absolutely right in his premise. I think that the US strategy of brain drain has been widely understood for some time. There are a few questions that came to mind as I read his article, however.

One thing that struck me about his opinion is how necessary it is for there to be an economic or social disparity for this strategy to work. It’s like reverse osmosis. The flow of talent will go from the places which have less to the places that have more. Since WWII, the United States has maintained an image disparity with the rest of the world. Long term, however, you cannot maintain that image. In the same way that large corporations are often targeted as evil for doing what is in their best interest, countries also loose their shiny finish. So, the interesting question is whether the economic/social disparity has to be an international only arrangement. Is it possible that the socio-economic gap must be maintained within a country in order to progress? We saw, with the Soviet experiment, that giving to people what they did not earn breeds discontent and stagnates progress/innovation. We also see with Socialism that innovation is limited. In fact, Europe has become far more innovative in the last 20 years (as they have introduced more capitalistic concepts) than they were in the 50 before that. So, does the same engine that drives those to make a better life for their children via immigration also drive those who have less within the country? Do you need an convection current between those who have and those that do not? Will the current administrations desire to elevate the middle class break the balance and slow innovation? Or are we close to breaking the balance in the other direction and falling into social unrest?

Another thought that stuck me was the distribution that Mr. Speiser wrote about. He assumes that brilliance is evenly distributed across the population. However, since genetics are involved, it is more likely that brilliance comes in spurts in small areas. So, how does it effect things if brilliance is not evenly distributed? What if a generation were to experience a concentration of higher IQ individuals in a particular area? Is that how political change happens? Is it possible in that circumstance that it becomes less likely that another country will be able to convince them to immigrate in that circumstance?

Another question that haunts me is how important our higher educational system ,and it’s reputation, are to out ability to attract talent. Without an international perspective that the best and brightest go to US universities, would we have a chance of attracting the best and the brightest?

We have been fortunate as a country to be able to encourage those that have the desire to work. With that work, they can achieve their wildest dreams. We have to be very careful not to change that promise. Increased taxes (redistributing those rewards to those who need), government run industry, government regulation to prevent outliers, government investment with strings, government run health policy, and other all impact that promise. I can’t tell what the impact will be. However, we have to be very vigilant that we do not cross the boundary to place the optimal reward in the middle class. If we do, if we breed a larger middle class, then we will stagnate our progress as a society.