Wednesday, 14 March 2012

Hacking immigration regulations

Blueseed gets a very nice writeup from the Canadian Broadcasting Corporation:
I asked him [Blueseed CEO Max Marty] if there wasn't something absurd about Blueseed — the idea of floating human beings outside an arbitrary line in the ocean because of some regulation that would appear to hobble the growth of a vital industry.

It seems like something out of science fiction. Does it mean America has become dystopian?

His answer was careful. "I wouldn't say the U.S. is a dystopian society so much as a place that has strayed from the idea of what it is supposed to be."

Marty reminds me Blueseed will be off the coast of California, not South Korea or Singapore or Tokyo, but a fast ferry ride from Silicon Valley. It's because that's where his future clients will want to be.

"Silicon Valley is still a beacon," he says.
In New Zealand's days of stupid, entrepreneurs commissioned Japanese TV makers to disassemble fully manufactured TVs and ship them to NZ in parts, there to be re-assembled, because the tariff rate on TV parts was low relative to the tariff on televisions. Bad regulations invite entrepreneurial innovation to route around the stupid and turn deadweight costs into surplus. It's not first best, but it's better. And, by helping to point out just how stupid the stupid is, it can help push us towards the first best.

The CBC piece does a nice job in pointing out just how stupid the American immigration regs on entrepreneurs are, and in pointing out why things stay as they are: They pull some particular insanity from Wired's comments section (never read comments sections, except at Worthwhile Canadian Initiative):
"So the slave ships of old have gone hi-tech?" wrote one commenter. "Lovely... I would want to be captively working for on an isolated ship away from the protections of the law. Golly, where do I sign up?"
Said another: "This is yet another greed driven excuse to bypass workplace and immigration law at the expense of shore-side economies and workforces. There are plenty of unemployed Americans willing to work for fair wages, not slave wages and as innovative as this idea is, it's a slap in the face to the middle class.
"Going to this extent to get cheap labor is as appalling as it is insulting to the American worker who can see right through this abhorrent BS."
The lump of labour fallacy is particularly fallacious when applied to entrepreneurs who are trying to start up new businesses. Blueseed will be most successful if there are enough people like those quoted above to keep US immigration law from changing, but not so many as to force regulatory tweaks that would keep Blueseed's residents from easily entering the US. Max, I'd expect, would count himself as more successful if, after the ship's earned enough to provide a nice return to its investors, immigration rules are loosened so the ship is no longer necessary. I wish Max every success.

HT: Erin Crampton


  1. There's been an exciting amount of that kind of hatred spewed out on occasion in the comment section. I think you're right about it being based on the lump of labor fallacy.

    I'd also add another closely synergistic explanatory theory. Bryan Caplan recently had an article on it inspired by the book "Thinking Fast and Slow" ( Basically it says that when people are confronted with a seemingly hard question, they find and answer an easier question and then substitute that answer for the original hard question.

    Thus in our case, the seemingly hard question-

    "Will Blueseed's foreign entrepreneur 'startup gateway' community result in my being more or less able to find a job?"

    becomes the seemingly simple:

    "Blueseed has something to do with foreigners... could foreigners be taking my job?"

    And we all know the usual answer to that second question...

  2. Best case I can make for job destruction is just the usual Schumpeterian one: entrepreneurs are disruptive. I suppose that if they were more coherent, they could instead complain that Indian and Chinese software entrepreneurs are going to be taking venture capital that could have gone to fine American startups.

    Some of the hate is lump-of-labour, some of it is indignation at what seems, to them, like cheating. The messaging seems right in your CBC piece to defuse it: the rules can't tell potential job-creators from other folks; the start-ups will wind up hiring Americans.