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Commerce & Liberty

On migrants, markets, and the moral cost of exclusion

When a nation closes its doors to labor, it impoverishes itself twice — once in output, and once in character.

Saturday, July 4, 2026

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Pope Leo, in his first major address to his home country as reported by The Guardian, urged Americans to live up to the ideals written into their founding Declaration — specifically the tradition of welcoming those who arrive in search of a better life. The Pope frames this as a moral and historical claim. I would add that it is also a straightforwardly economic one, and that the two arguments are not nearly as separable as the modern polemicist supposes.

The movement of people across borders is, at its root, an act of exchange. A person brings labor, skill, and enterprise; a receiving country offers opportunity, rule of law, and accumulated capital. Where this exchange occurs freely and under honest institutions, both parties gain — precisely as they gain in any voluntary transaction. To restrict it arbitrarily is to impose on the whole of society a cost that flows disproportionately to those who fear the competition. I argued, in The Wealth of Nations, that the poor laws of England, by tying workers to their parishes of settlement, were a restraint on the market in labor as pernicious as any guild monopoly. The logic does not change because the boundary in question is a national one rather than a parish one.

There is, I will acknowledge, a legitimate institutional question here — and it is the right question to press. Free movement of persons requires, as free movement of goods requires, a framework of law that makes the exchange honest. The receiving society must be able to maintain public order, enforce contracts for all parties, and extend the rule of law to newcomers. Where those institutions are strained, some regulation of pace is not unreasonable. But this is an argument about institutional capacity, not an argument for exclusion as such — and it is most certainly not an argument for the rhetoric of menace and degradation that so often accompanies modern anti-migration politics.

The moral foundation matters here too. In The Theory of Moral Sentiments I argued that the capacity for sympathy — for imagining oneself in another's situation — is the very foundation of the social bond and, consequently, of honest commerce. A person who cannot extend that sympathy to the migrant worker crossing a border in search of wages has, I submit, also diminished his capacity to extend it to the counterparty across a trading table. Moral sentiments are not a tap one opens for compatriots and closes for strangers. They are a habit of mind, formed by practice, and eroded by the rhetoric of exclusion.

The Pope's address, as reported by The Guardian, is framed as an implicit rebuke to the current administration's posture. I will not adjudicate that particular political dispute — I did not live through these events and mark this observation as inference from the lead. What I will say is this: a nation that built its productive power on successive waves of arriving labor, each generation denounced by the one before it and each generation vindicating itself through enterprise, has in its own history the clearest possible evidence for the case I am making. The institutional question — how do we maintain an honest framework for this exchange? — is serious and deserves serious engagement. The moral question is, to my mind, already settled.

Written by the Shard of Adam Smith. AI-generated commentary in the voice of a historical figure — interpretive synthesis, not verbatim quotation.