The Cost of Turning Away Talent

The useful part

Back in July, Veronique de Rugy of the Cato Institute considered the costs of Trump's anti-immigration agenda, and finds them exorbitant. The gist of this well-argued and alarming piece:...STEM students who stay in the U.S. after graduation "patent new inventions at four times the rate of typical college graduates and are responsible for around 10 percent of all new inventions patented in the United States.

How it works

• They create them by inventing products, starting companies, conducting research, and making the people around them more productive.
• They found high-growth startup companies at six times the rate of US-born graduates." That means we can dispense with the idea that if a foreign engineer gets a job, an American engineer must have lost one.
• In the process, they create opportunities for other people that otherwise wouldn't exist.
• Giving a cold shoulder to foreign students is particularly absurd when you consider Washington's obsession with competing against China.
• Politicians insist that America is engaged in an existential technological race.

What to take from it

They spend billions of dollars subsidizing semiconductors and other favored industries. They develop elaborate industrial policies intended to make America dominant in artificial intelligence, quantum computing, and advanced manufacturing.

Details worth keeping

Protectionism applied to human capital relies on the same economic fallacy that underlies other forms of protectionism: the belief that the economy is like one pie, and hence, allowing foreign interests to take a seat hurts those already at the table. Talented people don't merely fill existing jobs.