Immigration has become an increasingly divisive issue and chronic homelessness and panhandling are our plaguing our cities. I have a modest policy proposal for addressing these problems that would increase immigration and improve the well-being of all Americans including the panhandlers. Relying on politically determined quotas to address immigration and bureaucratic compassion to help the homeless and panhandlers has clearly failed to solve these problems. The time has come to increase our reliance on the problem solving power of individual freedom and market exchange.
First consider the fact that America's homeless and panhandlers (who are often different people—some homeless don't panhandle and some panhandlers aren't homeless) are actually quite wealthy. Almost all own an asset—their United States citizenship—that is worth several hundred thousand dollars. The problem is that they are denied the right to sell that asset.
Citizenship in the United States is a highly valuable asset because it gives its owner enormous productive potential. American citizens are able to take advantage of the opportunities to combine their ambition, ingenuity and labor with an unparalleled capital base and other hard-working and talented people to create wealth. The homeless and panhandlers in America have clearly failed to use their citizenships as productively as many non-U.S citizens could, and would, if they became citizens. This is where freedom and market exchange are relevant. When people are free to buy and sell, markets do an impressive job directing assets to those who will make the most valuable use of them.
The suggested policy is straightforward. Simply give Americans the right to sell their citizenships to non-Americans, with the sellers having to leave the country and the buyers allowed to move in with all the rights and opportunities of any other U.S. citizen.
Obviously almost all those who sell their citizenship will be poor. But this is not a policy that discriminates against the poor. The choice to sell their citizenship and leave the country is entirely up to them, and it is an option that many poor will refuse. Those who do take advantage of the option, however, will receive far more money than they are ever likely to win buying lottery tickets, and will have no problem getting permission to settle in another country with a much lower cost of living than America's.
Obviously some restrictions would be imposed on a market in U.S citizenships. For example, no one would be permitted to sell her citizenship to Osama bin Laden or anyone else who is considered a terrorist threat to America.
One can object that many panhandlers and homeless are mentally ill and not competent to exercise the freedom to sell their citizenships. This is no doubt true in some cases. But the burden of proof should be on those who are quick to conclude that few of us are smart or informed enough to make important decisions without the assistance of a government bureaucracy. If someone is too mentally incapacitated to make a free choice in a market for citizenships, should she be considered competent enough to choose a life on the street rather than being institutionalized?
Obviously, some who sell their citizenships will spend their money in ways that most of us consider wasteful. But that objection applies to giving the poor the freedom to spend their money on lottery tickets in the hope of improving their lives. I have yet to hear this freedom being criticized by any of my fellow professors at the University of Georgia. Just maybe this has something to do with the fact that, as opposed to the money raised from selling citizenships, much of the money raised from lottery sales ends up in the pockets of teachers and professors.
Those foreigners who buy U.S. citizenships will be far more educated, ambitious and productive than those who sell them. Yet many will not be as well off as most people in America who are considered poor. But poor immigrants will be able to borrow the money needed to purchase citizenships based on their earning potential as Americans, and with those citizenships as collateral.
Except for those who spend too much time worrying about the mistakes others might make, it is difficult to imagine who would lose from a market for citizenships. Those who are so poor that they are resorting to panhandling and living on the streets are unlikely to object to the option of receiving several hundred thousand dollars and a greatly increased standard of living in another country. The ambitious and talented from other countries attracted by the enormous opportunities of living in America legally would hardly lose. And the rest of us will benefit from more productive Americans working hard to increase their wealth and ours.
No one would argue that all the problems with immigration, homelessness and panhandling can be eliminated by a market for citizenships. But it would do more to solve these problems than the policies we have been following.
The author is Ramsey Professor of Economics and Private Enterprise, Terry College, University of Georgia.