"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trickier and more hazardous, the traditional mom-and-pop operations in Mexico that used to ferry people across have been replaced by larger, more-professional criminal gangs, often with ties to the illegal drug trade.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.
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.
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.
Also called externalities.
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.
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.
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.
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.
You guys stop needing abundant low skilled low wage workers, stop smoking pot and snorting cocaine
and we promise to stop. O.K.?
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.
Commingling was already happening when I reported on the border in Arizona in 2003.
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