Missouri's 7th District, U.S. House of Representatives




Congressional Issues 2010
Immigration in a Division of Labor Economy

Too many Christians oppose immigration because they have been infected by anti-Christian Darwinian and socialistic presuppositions. This webpage is the economics lesson you never got in your government school economics class.

Our teacher is Prof. George Reisman. His book, Capitalism, is one of the best economics texts ever written. It is thoroughly Free Market in perspective. We recommend purchasing the book using the link at right. You can also view the book online for free here.[pdf] We are drawing this information from chapter 9, "The Influence of the Division of Labor on the Institutions of Capitalism," Part C, "Economic Competition," pages 358-366.


First we need to understand the concept of "the division of labor." It is what gives us in Capitalistic America the highest standard of living that human beings have ever enjoyed.

There was no "division of labor" on the deserted island where Robinson Crusoe was stranded. Mr. Crusoe had to do by himself everything necessary to live. The Swiss Family Robinson, by contrast, had a limited division of labor: the father could hunt, the mother could prepare the food, and the children could gather firewood.

The Division of Labor is powerfully illustrated in the Biblical metaphor of the Body:

       12 The body of Christ has many different parts, just as any other body does. 13 Some of us are Jews, and others are Gentiles. Some of us are slaves, and others are free. But God's Spirit baptized each of us and made us part of the body of Christ. Now we each drink from that same Spirit. 14 Our bodies don't have just one part. They have many parts. 15 Suppose a foot says, "I'm not a hand, and so I'm not part of the body." Wouldn't the foot still belong to the body? 16 Or suppose an ear says, "I'm not an eye, and so I'm not part of the body." Wouldn't the ear still belong to the body? 17 If our bodies were only an eye, we couldn't hear a thing. And if they were only an ear, we couldn't smell a thing. 18 But God has put all parts of our body together in the way that he decided is best.
       19 A body isn't really a body, unless there is more than one part. 20 It takes many parts to make a single body. 21 That's why the eyes cannot say they don't need the hands. That's also why the head cannot say it doesn't need the feet. 22 In fact, we cannot get along without the parts of the body that seem to be the weakest.
1 Corinthians 12:12-22

4 A body is made up of many parts, and each of them has its own use. 5 That's how it is with us. There are many of us, but we each are part of the body of Christ, as well as part of one another.
6 God has also given each of us different gifts to use.
Romans 12:4-6

This idea of specialization has life-changing implications for economics. Prof. Reisman will now explain them to us:

4) The division of labor, a leading feature of capitalism, which can exist in highly developed form only under capitalism, provides among other major benefits, the enormous gains from the multiplication of the amount of knowledge that enters into the productive process and its continuing, progressive increase. Just consider: each distinct occupation, each sub-occupation, has its own distinct body of knowledge. In a division-of-labor, capitalist society, there are as many distinct bodies of knowledge entering into the productive process as there are distinct jobs. The totality of this knowledge operates to the benefit of each individual, in his capacity as a consumer, when he buys the products produced by others—and much or most of it also in his capacity as a producer, insofar as his production is aided by the use of capital goods previously produced by others.

Thus a given individual may work as a carpenter, say. His specialized body of knowledge is that of carpentering. But in his capacity as a consumer, he obtains the benefit of all the other distinct occupations throughout the economic system. The existence of such an extended body of knowledge is essential to the very existence of many products—all products that require in their production more knowledge than any one individual or small number of individuals can hold. Such products, of course, include machinery, which could simply not be produced in the absence of an extensive division of labor and the vast body of knowledge it represents.

Moreover, in a division-of-labor, capitalist society, a large proportion of the most intelligent and ambitious members of society, such as geniuses and other individuals of great ability, choose their concentrations precisely in areas that have the effect of progressively improving and increasing the volume of knowledge that is applied in production. This is the effect of such individuals concentrating on areas such as science, invention, and business.

Source: Some Fundamental Insights Into the Benevolent Nature of Capitalism

Those who complain about the harm immigrants do to the economy haven't fully considered how increased population, combined with the division of labor under capitalism, actually improves the economy. First, let's consider Prof. Reisman's insights into the old Malthusian world-view:

6. The Population Question

With the notable exceptions of Adam Smith and Frederic Bastiat, the classical economists taught, in sympathy with Malthus, that population growth represents a threat to the average standard of living. As explained in connection with the discussion of private ownership of land and “land rent” earlier in this chapter, their belief was that the larger the number of people, the larger the amount and poorer the quality of land and mineral deposits that must be worked to support them, and, at the same time, the more intensive the exploitation of each piece of land and mineral deposit worked, resulting in diminishing returns. For both reasons, they held, increases in population and in the number of workers tend to be accompanied by less than proportionate increases in the supply of food and minerals.

The clear implication of this doctrine is that there is an inherent conflict of interests among people as their numbers increase. It is tantamount to the claim that man is in the position of the lions in the jungle after all. The lions are at the point of a scarcity of food supply; man allegedly approaches it with every increase in his numbers. Indeed, Malthus was the inspiration for Darwin, whose writings were in turn the inspiration for the doctrine of conflict of interests presented under the name Social Darwinism.[108] A garbled form of Malthusianism is a root of the ecology movement’s hostility to population growth.

[108] Cf. von Mises, Socialism, pp. 315–319.

George Reisman's Program of Self-Education in the Economic Theory and Political Philosophy of Capitalism

Gary North's essay on Darwin, Malthus, and a Biblical world-view
In his book The Myth of Over-Population, R.J. Rushdoony shows that the symptoms of "overpopulation" are actually symptoms of government intervention. Darwinian and Malthusian assumptions govern the modern State, and both the Republican and Democrat Parties.

Order Now:
The Myth of Over-Population

This kind of thinking might have applied before the industrial revolution, because as Prof. Reisman points out, the division of labor had not yet come to full flower in the Western world. Human society was based largely on "self-sufficient" individuals, as Reisman notes in his book Capitalism:

The fact is, however, that the classical economists’ ideas on the effects of population growth are valid only for a stagnant, non-division-of-labor society. (This was essentially the kind of society to which all but the most recent experience of the human race referred at the time that Ricardo wrote, which was in the early nineteenth century. He wrote too soon to know that he lived at the beginning of a radically new era in human history. Thus, it is understandable that neither he nor his followers were able decisively to break with this pessimistic view.) In such a society [a stagnant, non-division-of-labor society], everyone lives in the same way—namely, as a self-sufficient farmer. In such a society, the existence of more people does mean the need for more and more land of progressively inferior quality and an ever worsening problem of diminishing returns. In such a society, it does mean the need to start farms higher and higher up the sides of hills or mountains, to extend farming to rockier patches of soil, or down into marshlands, and to subdivide existing farms among more and more people— all with the result of declining yields per unit of labor expended.

Without the division of labor, there is no difference between the eye and the ear. Both do the same work: the work of survival. Both are "self-sufficient," that is, barely sufficient.

But this is not at all what the existence of more people means in a division-of-labor society. In a division-of-labor society, a larger population means a greater, more intensive division of labor.

Adam Smith alluded to this fact when he wrote that “the division of labor is limited by the extent of the market.”[109] The meaning of this proposition is that the extent to which the division of labor can be carried in the production of anything depends on the volume in which it is to be produced. If, for example, automobiles are to be turned out at a rate of, say, 10 or 20 a day in a given location, then it is impossible that a step which takes 5 minutes to perform on any one car could be anyone’s full-time job. The daily volume of automobile production would have to be increased to approximately 100 in a given location before such an operation could be made into a full-time job. (One hundred times 5 minutes equals 8.33 hours, which represents a full-time job.) The daily volume of automobile production would have to be increased to approximately 1 thousand in a given location, before an operation requiring only 30 seconds could be made into a full-time job, and so on. (One thousand times 30 seconds also equals 8.33 hours.) Thus, the larger the volume to be produced—the larger the market to be served—the further can the division of labor be carried.[110]

[109] Cf. Adam Smith, The Wealth of Nations (London, 1776), bk. 1, chap. 3; reprint of Cannan ed. (Chicago: University of Chicago Press, 2 vols. in 1, 1976), 1:17–25. See also Frederic Bastiat, Economic Harmonies, trans. W. Hayden Boyers (New York: D. Van Nostrand & Co., 1964), pp. 561–567.

[110] It is important to recall that the extension of the division of labor in this way requires the availability of more capital. There must be the appropriate additional supplies of plant and equipment and materials, as well as the larger number of  workers. See above, p. 141.

Of course, merely having more immigrants in an economy serves no beneficial purpose if it is illegal to hire those immigrants so that they may be producers as well as consumers.

Markets, however, are not made possible by non-producing consumers, as Adam Smith well knew, but only by producers.[111] And without a larger total number of producers participating in the division of labor overall, a more intensive division of labor in the production of any one good would require drawing labor away from the production of other goods, and thus correspondingly reducing the extent of division of labor elsewhere. The only way to have a greater division of labor overall is by virtue of a larger population of participating producers. This alone permits the division of labor to be extended in some areas without being correspondingly reduced in other areas. Thus, when we refer to the connection between the division of labor and population, or the division of labor and markets, it must be kept in mind that what is always referred to is a larger population of producers, and of overall markets that are larger by virtue of the existence of more producers.

[111] 111. Cf. below, pp. 542–580 passim.

We are now ready to see the effects of increased immigration and a society which encourages these immigrants to be producers rather than welfare recipients.

Continue to next part.

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In the Next Two Years, Congress should:
  • expand, or at least maintain, current legal immigration quotas;
  • increase permanently the number of H-1B visas and deregulate employment-based immigration to facilitate the entry of skilled immigrants;
  • remove the new one-year time limit on filing for political asylum and reform the "expedited removal" laws;
  • repeal employer sanctions;
  • stop the move toward a computerized national identification system and the use of government-issued documents, such as birth certificates and Social Security cards, as de facto national ID cards; and
  • reduce restrictions on the movement of workers within the North American Free Trade Agreement area.
By the end of the decade, Congress should:
  • Abolish all anti-immigration laws.

As soon as possible, America should:

  • Create a vast network of voluntary social service agencies to meet all immigrants at the borders or piers and ensure their literacy and familiarity with American values.
  • Commit to on-going transmission of American values to immigrants in all areas of life. Read more about this.


next: part 3