Adding Value by Not Destroying it First

Yglesias has been having an interesting conversation with respectable blogging economists Tyler Cowen and John Quiggen.  The gist of it is that much of the value added to society in the last ten years was not very well connected to the market.  Or, in Quiggen's words, "monetary returns are weakly, or even negatively correlated with the value of social production," and so "there's no reason to expect capital markets to do a good job in allocating resources to supporting innovation."

Yglesias gives Craigslist and Wikipedia as examples of this phenomenon.  It makes sense if you think about the corporate world, helpfully symbolized by 30 Rock's GE reward structure that pays someone like Jack Donaghy a salary an order of magnitude higher than someone like Liz Lemon.  Which is often how it works in real life.

I'd add that innovation in the nonprofit world has long been disconnected from capital markets.  Social innovators like the migrant rights group Families for Freedom, and innovations like the pro-migrant blogosphere or the mass immigration rallies of 2006, exist almost entirely outside of the market.

But a lot of innovation in my field goes toward fixing problems that we have created for ourselves.  For instance, one thing immigration lawyers do is try to reunite mixed-status families split apart by deportation.  There is a lot at stake for these families--their future often depends on the government allowing a hard-working, non-criminal father and husband to return to the U.S. to support his family.

But these families are essentially only separated now because of restrictions to the law that Republicans in Congress added gradually over the last 20 years.  Republicans in Congress added those laws primarily because some Americans felt uncomfortable about the growing numbers of their brown-skinned neighbors.  My work is valuable in this context, but essentially unnecessary.  I'm working within a system the ultimate purpose of which is to "preserve the character" of the neighborhoods of people who think Rush Limbaugh is a visionary and John Tanton is a great American.

To me it feels like a big waste of time.  I can't even begin to count the number of hours the immigration adjudicators, judges, ICE agents, bail agents, consular officers, attorneys, and friends and family members of the typical deportee have spent trying to prevent deportation and rectify it once it occurs.  Immigration cases can last years, even decades.  All those resources could have been more productively employed.  These opportunity costs could be avoided if we had an immigration policy that (a) better matched labor supply to employer demand, and (b) took into account the damage the laws cause to U.S. citizen families.