Why Matt Yglesias should be a classical liberal

Matt recently wrote a (gated) piece arguing that we should raise American taxes and increase the American welfare state.  I never understand how this squares with this desire to reach one billion Americans in the not too distant future.  To be clear, I also favor a much larger population.

If you ever have done hiring, and I believe Matt has at Vox, you will understand that so, so often selection is more important than ex post incentives.  That is, you need to get the right people into your firm, start-up, media venture, non-profit, or whatever.  And the right people can be very hard to find and attract, as I think Matt also has noted.

Now, on which basis do you wish to select people arriving into your country?  Do you wish to offer them a lower-risk, more secure, more egalitarian, less upside option?  Or do you want to reward ambition to a disproportionate degree?  Don’t forget you are building up the home base for most of the world’s TFP!

To me it is obvious that you should prefer the structure of rewards that attracts the harder-working, more ambitious people.  You want to send out the inegalitarian bat signal.

Of course, if America is headed toward one billion people (or even much less) in the foreseeable future, most of the country will end up being relatively recent immigrants and their descendants.  So the selection of those immigrants really is of vital importance.  The more open is immigration, the more important it is to have the right incentives for selection and to be sending out the right bat signal.  Furthermore, the less immigration selects on formal credentials and a points system, the more important it is to attract the properly ambitious by setting the right incentives and the right bat signal in place.

Oddly, it is anti-immigration conservatives who should be more complacent about increasing welfare spending.  If few people are entering, and if you require formal credentials to enter and stay, selection problems will be correspondingly smaller.

And that is why Matt should be a classical liberal.  We are rebuilding the nation all the time, most of all if we listen to Matt Yglesias.



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