Monday, September 8, 2014

The Uncompensated Cultural Externalities of Immigration (part 3)

Part 1 Part 2

A common tongue lubricates trade. As someone who's lived abroad, I can assure you that even mundane daily shopping tasks are burdened by the inability to speak the local language fluently. Larger interactions like renting an apartment or negotiating wages are rendered considerably more frustrating.

So being able to speak the same language as everyone else is a good, but is it a public good?

For most commercial transactions, the native speaker might be put out a little bit by the extra cost of vaulting a language barrier. However in most cases, any such inconvenience is a petty nuisance. For the non-native speaker however, the cost relative to their reasonable alternatives is generally much worse. A shop clerk unable to close a sale with a non-English speaker is out a single sale; the non-English customer likewise. But the BATNA for the clerk is to move on to the next customer, while the BATNA for the customer is to go without the sale entirely. The opportunity cost for not knowing the local language impinges on the non-speaker much more than on the community. If there is a violation of euvoluntarity, the costs are internal to the non-speaker. So when natives complain of immigrants not speaking English, I imagine that routine daily commerce isn't what they worry about.

What then? Well, consider medicine. Translation is available at the common expense. Ditto for government services. Sure, the marginal expense is typically pretty low, as "translator" is typically not a primary job description, but if an ER nurse has to unexpectedly shuffle patients, the cost of that hassle is not borne by the patient as in the buying toothpaste example, but rather by the final payer. The costs of compliance are made public. I gather from some folks' complaints that a similar argument holds for primary education.

The economists' solution to problems of external costs is to revert these expenses to the beneficiaries. If translation services are valuable, charge the patient (or the student, or the customer) for them. Immigration restrictions in response to language difficulties is a drastically immoderate reaction.

A bit of the logic of public choice is that a vocal, well-organized, influential minority may successfully clamor for special consideration from the sovereign to the detriment of other constituents. It's hard to see how first-generation immigrants fit this description. Even Cesar Chavez, one of the most politically influential immigrants in American history campaigned not as a Mestizo in California, but rather as a farm worker. If there's a problem with offering free-to-the-customer translation services, charging the beneficiaries a fee corrects the externality while still permitting the immigrant the opportunity to serve the community with the product of her labor. Indeed, charging a fee for services rendered might well provide the extra incentive needed to learn the local language.

In the next post in this series, I'll continue with this idea a little more. There's nothing preventing Bed Bath and Beyond from charging for translation, yet they've apparently found that the equilibrium price is zero. Does competitive pricing logic apply for on-demand or mandatory services like medicine or education? We'll look at some LRTC curves and see what shakes out.

1 comment:

  1. Frankly speaking I didn't got the stuff what you posted in the blog, what it is all about ?


Do you have suggestions on where we could find more examples of this phenomenon?