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Intensifying International Competition

Judge Stephen Williams has provided an excellent description of some of the Hayekian advantages of international competition. Here I discus how sound legal policy can protect and intensify such competition. First, I want to suggest a few more points about the virtues of international competition.

1. Military Competition. As war has demanded ever better financing and technology, the connection between the flourishing of a nation’s citizens and its success in war has increased. Great Britain beat the continental powers in the eighteenth and nineteenth centuries in no small measure because her limited and democratic government gave lenders confidence that they would be repaid. As a result of the greater capacity to borrow Britain was able to muster greater military force in a crisis.

Today technological progress and military might are ever more connected: the robots conceived today will be the soldiers of tomorrow. The United States’ technological superiority is intimately connected to its open society and an educational system that favors creativity over rote learning. Authoritarian nations are at some disadvantage in replicating the decentralized structures that promote rapid technological progress.

This advantage for the West and the United States should make us wary of entering into agreements to limit the deployment of technologically advanced weapons like drones.

2. Competition from In-Migration of Firms and Individuals. The capacity of the United States to attract immigrants shows the relative power of its social norms. Indeed, its growth from a  relatively small nation of a few million people at the founding to the third most populous nation of the world is the most persuasive evidence of its greatness. And there is still a net flow of immigrants from almost every nation in the world. As Judge Williams notes, one danger of modern immigration is that some migrants may come for government benefits rather than the opportunity to work.  Although the vast majority of immigrants are not work-shy benefit seekers, our immigration policy should be structured to encourage those with skills to come and to discourage those who want to take advantage of our welfare state. Guest worker programs and awarding of citizenship only upon evidence of years of gainful employment are mechanisms to continue the virtuous cycle of immigration.

3. Intensifying Competition. In general, the greatest dangers to Hayekian international competition are attempts at the international level to impose requirements that interfere with the national discovery process for good social norms. As Ilya Somin and I have suggested, the process for creating customary international law is far inferior to the competitive process. It also has the disadvantage of imposing uniform norms that thwart experimentation. The United States should avoid signing most international human rights treaties because of similar dangers. Instead of acquiescing to substantive uniformity, the United States should instead promote international norms that intensify competition. These include freedom of speech to publicize conditions in other nations, freedom of trade to compete through the international exchange of goods and services, and certain migration freedoms to make it easier for individuals to choose the right pond.

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