The H-1B Fight Is About So Much More
In which Vivek and Elon say the quiet part really loud
If you were busy spending time with your family over the holidays, you may have missed The Great H-1B Visa Debate of Christmas 2024. On one hand, you didn’t miss much. Nearly everyone agreed that system is badly broken and frequently abused. We ended up with one side defending the premise that we should welcome truly world-class talent like NBA All-Stars, with which almost no one disagrees, and the other side attacking a modified form of indentured servitude for entry-level IT outsourcers, with which almost no one disagrees.
Vivek Ramaswamy, who found himself in the middle of the controversy, tweeted, “I’ve advocated for years to gut the H-1B system: replace the lottery with merit-based entry & end indentured service at one company, while also making the process simpler & faster for the cream of the crop to enter our country & make contributions. This shouldn’t be controversial.” Indeed this is not controversial, and differs little from American Compass’s own H-1B recommendation “to award visas only to those jobs offering the highest wages and phase it down as part of any transition to a skills-based immigration system.”
On the other hand, the conflict was very real, and very important. Politics is not only, or even primarily, about the details of policy design. What the tech libertarians did wrong, prompting conservatives to take entirely appropriate umbrage, was evince disinterest in and even outright disdain for American workers.
Venture capitalist Sriram Krishnan’s initial comment had been a response to Elon Musk’s invitation to send the Department of Government Efficiency ideas about “wasteful” and “insanely dumb” spending. “Anything to … unlock skilled immigration would be huge,” said Krishnan.
Venture capitalist Joe Lonsdale came to Krishnan’s defense by arguing: “For USA to have the highest standard of living, generous govt services, and strongest military, we need to recruit the best and brightest and build the best companies.” Musk responded to this with, “the ‘fixed pie’ fallacy is at the heart of much wrong-headed economic thinking. There is essentially infinite potential for job and company creation. Think of all the things that didn’t exist 20 or 30 years ago!”
The shared obsession underlying these comments is with a particular type of company employing a particular type of worker. What should a “department of government efficiency” do? Anything to unlock skilled immigration. It’s a peculiar place to start.
Will this payoff for American workers too? Well, no, the claim is that it will guarantee us “the highest standard of living, generous govt services, and strongest military.” So, consumption, redistribution, and empire. This sounds familiar, and is cause for great concern. If there is truly infinite potential for job creation, would it be too much to ask that these masters of the universe create the kinds of jobs that, you know, they could hire Americans for?
The subtext for this worldview, in turn, is that the work done by these venture capitalists and the incredible talent they can find only overseas is uniquely valuable and vital to the nation’s well-being. But anyone watching Silicon Valley over the past decade knows that’s… well, a stretch.
Take Andreessen Horowitz, where Krishnan was a general partner. The glossy top of their portfolio page leads with Airbnb, Ciitizen (electronic health records), Coinbase (crypto wallet), Facebook, Github (collaboration for programmers), Instacart, Instagram, Lyft, and Nautilus Biotechnology. I mean, hey, cool companies, at least some of them. But if what we’re lacking is the top-flight talent needed to create social media sites and crypto wallets, I’m unimpressed. Labor market forces signaling to venture capitalists that they need to focus less attention on their one little niche and more on the rest of the nation seem worth amplifying, not overriding.
Put another way, while one might sympathize with Musk and his effort to staff a company like SpaceX, the problem seems less the amount of talent in the United States and more the share of that talent working at SpaceX versus at social media companies, private equity firms, and crypto startups. I was excited about Nautilus until I clicked the tile and saw the dreaded “Current Stage: SPAC.” Of course, a SPAC. And you will be stunned to learn, dear reader, that Nautilus’s value has fallen about 90% since the SPAC announcement in February 2021. Indeed, if what we’re lacking is top-flight talent to transform the world, ensure American security, and deliver prosperity, etc… I have a great idea for a place to look: the Wall Street firms specializing in SPACs.
I would also have more sympathy for Musk had he not taken the extraordinary engineering achievements of Tesla and moved them wholesale to China, selling out American leadership in that industry for at least a generation. You see, in an America where the world’s greatest entrepreneurs and engineers were building companies that moved the technological frontier forward and created better and more productive job opportunities all over the country for Americans of all abilities and aspirations, while themselves showing a great commitment to the nation and solidarity with their fellow citizens, support for supplementing that project with additional talent to further accelerate that flywheel of prosperity would presumably be quite high. But in an America where the primary output from all that talent appears to be devices and applications so toxic that the talent keeps it away from their own children, while the most valuable technologies get handed to the Chinese with abandon in exchange for access to their market, an insistence that we need more such talent for the good of the nation comes across as rather pretextual.
Following along with the tweeting, I found my mind wandering to a hypothetical Earth-2, in which our nation’s most prominent entrepreneurs had taken to social media over the holidays to really go to the mat over the importance of American reindustrialization and investing in the skills and workforce preparation of the tens of millions of workers who had been left behind by the past 25 years of globalization and financialization, while inspiring a new generation to pursue engineering and make things. It wouldn’t have been boring. They could have ranted about China, about the failures of the free traders, about the outright corruption of the higher education system—all in service of making America work better for American workers.
Instead all we got were hopes and wishes from people hoping and wishing America worked better for themselves. That, and Musk responding to someone who suggested that H-1Bs shouldn’t exist with, “take a big step back and FUCK YOURSELF in the face. I will go to war on this issue the likes of which you cannot possibly comprehend.” It’s hard to believe that sentiment and tone are driven by passion for thoughtful immigration reform and not by a cult-like obsession with unfettered access to foreign talent.
And then, of course, we got Vivek Ramaswamy. His meandering middle finger to the American people, read more than 100 million times on Twitter, will likely be the defining moment of his political career. According to Ramaswamy, “top tech companies often hire foreign-born & first-generation engineers over ‘native’ Americans” because of “culture.” Apparently, “our American culture has venerated mediocrity over excellence for way too long (at least since the 90s and likely longer). That doesn’t start in college, it starts YOUNG. A culture that celebrates the prom queen over the math olympiad champ, or the jock over the valedictorian, will not produce the best engineers.”
One thing you notice early in the soliloquy is that it makes no sense even on its own terms. In what era did America celebrate the math olympiad champ over the prom queen, or the valedictorian over the jock, any more so than it does now? Ramaswamy complains that, “a culture that venerates Cory from ‘Boy Meets World,’ or Zach & Slater over Screech in ‘Saved by the Bell,’ or ‘Stefan’ over Steve Urkel in ‘Family Matters,’ will not produce the best engineers.” At what point in our space-race triumph and invention of the digital age were nerds driven by Tiger Moms ruling American high schools, teasing the loser jocks and prom queens? Where can I stream those sitcoms?
The worst paragraph is this one:
More movies like Whiplash, fewer reruns of ‘Friends.’ More math tutoring, fewer sleepovers. More weekend science competitions, fewer Saturday morning cartoons. More books, less TV. More creating, less ‘chillin.’ More extracurriculars, less ‘hanging out at the mall.’
Slander the America people if you want, Vivek, but do not slander Friends. Who does Rachel end up with at the end? Joey the soap star, or Ross the paleontologist? I rest my case.
Seriously, though. More movies like Whiplash, the story of a student “pushed to his limit by his abusive instructor”? Fewer sleepovers? We’ve really got too many middle schoolers spending time with friends, and that’s why we need more foreign engineers? Thank goodness the addictive apps developed by so much of our top talent is destroying the social lives and mental health of so many middle schoolers so quickly… we’ll be back on top in no time.
Even if Ramaswamy could marshal a shred of evidence behind this narrative, it would be a dead end because it lands on the punchline: “‘Normalcy’ doesn’t cut it in a hyper-competitive global market for technical talent.” Here we reach the crux of the issue. The vision of human flourishing valued by the American culture, what we consider normalcy, had a quite good track record of dominating the global economy, driving technological innovation, and generating unparalleled middle class prosperity. But from the vantage point of the investors trying to earn a return, normalcy is inconvenient. Thanks to the “hyper-competitive global market,” they can now place enormous pressure on all those normal people trying to live normal lives. They can tell us to fashion our children into obsessive engineers for them, and threaten us with losing to someone somewhere else in the world who will. It’s a perverted form of cultural arbitrage.
I’ve always been inclined to support high-skilled immigration, but Ramaswamy’s missive is the best argument I’ve seen against it. In the United States of America today we are in the middle of a national identity crisis. We have lost our sense of who we are as citizens of this nation, and sloppy immigration policies have only worsened that crisis. So the right immigration policies would be those that look after the security interests of the United States but they would also look after preserving the national identity of the United States. Sorry, I left the quotes off those last three sentences by mistake. They’re from a recent speech by Vivek Ramaswamy.
I still would like to see America be the country that attracts and welcomes talent from around the world. I think that, under the right conditions, the nation as a whole can benefit tremendously if we do. But we should expect the people we attract to be ones who can succeed by embracing the American culture, not by undermining it. And we should expect those already here to be using their own talents in ways that benefit the nation as a whole and provide opportunities for others to do the same. As with so many things that we have mistakenly treated as isolated subjects of cost-benefit analysis, rather than recognized as part of a package, advocacy for skilled immigration must come embedded within a commitment to an economic model that advances the common good. That case is a strong one. The case the tech bros are tweeting is not.
This was an early skirmish between two points of view within the conservative coalition. One view, a MAGA-tinted market fundamentalism, still embraces the trickle-down Reaganomics model that says pursuing whatever policies are best for growth and “job creators” will ultimately benefit everyone; “warmed-over market fundamentalism with a dash of nationalism sprinkled on to mask that past-the-expiration-date funk,” as I’ve described Ramaswamy’s “national libertarianism.” (Not coincidentally did Ramaswamy himself return to Twitter shortly after his anti-American jeremiad to say, “the root cause of America’s working class struggle is actually the federal government itself.”)
Those of us with the opposing view say we understand that theory, we simply have not seen it in practice and we do not believe it. So we would begin by telling the entrepreneur: Look around at the kinds of workers who live in our country. We are very excited to see what you can build with them.
My essay on this point is one of my favorites; if you’ve never read it, please click on over to Jobs Americans Would Do. It begins:
The labor shortage afflicting American employers nationwide is nothing new in the San Joaquin Basin of California’s Central Valley, which produces 40% of the nation’s fruits and nuts. For Alex, who asked that we use only his first name, the trouble started eight years ago, with an epiphany that came while driving down the I-5 from his office in San Francisco to a conference in Los Angeles. “Our team of programmers was expensive, and demanding,” he explained, “our lease costs were spiking. As I looked out my window at the toiling farmhands, I thought maybe I saw an answer.”
Alex relocated his app development firm to a small patch of farmland outside Fresno, setting up crates on which workers could rest their laptops in the dusty field, and lowered pay to $16 per hour. Not a single member of the team joined him. Ever since, getting apps developed has proved nigh impossible. “Occasionally someone will apply,” he explains, “but they never know Java. It’s what I call the ‘skills gap.’”
- Oren
I worked as an engineer at a very large auto company until I recently retired. I have a sister who is in engineering management in a similar area - different vehicles but very similar engineering needs. It had become obvious to me we were replacing outgoing engineers with imports from India and to a lesser extent China via the H1B visa. It so happened that she was also involved in hiring new engineers and her area was growing quite a lot.
We were going around and around on the H1B issue one time and she made the case that we couldn't find enough 'talent' so we had to go outside the US. I pressed her on this and she pointed out that it was difficult to compete with tech companies (and other auto firms) for engineers because, in large part, they paid more money. So I suggested we compete for those engineers by offering higher salaries! Seemed straightforward! Then the mask slipped. She said we didn't have the budget to pay higher salaries to new engineers. We needed more engineers, but the budget for them was shrinking annually. You don't have to be Elon or Vivek to see where this fairly simple math leads.
This system has to be gutted - and soon. It is the job of congress to fix this. But, they don't do anything without clearing it through you know who. And they will bend to his will without much resistance. I'm curious to see where Mr. Trump's loyalties really lie. This will be an interesting issue to follow.
Btw - What's particularly frustrating is that this is a company that hemorrhages billions of dollars a year in warranty costs. It is, by far, the industry leader there. But, it's easier to reduce dollars/engineer to save pennies than solve the ongoing quality issues and save billions.
The problem of merchants making poor political leaders goes all the way back to the American founding. Thomas Jefferson put it best: "Merchants have no country. the mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains. in every country and in every age." Words that ring even more true in our era of globalized everything.
https://founders.archives.gov/documents/Jefferson/03-07-02-0167
He lays into lawyers too, which I get. Can't agree with his criticism of priests, but that's Jefferson for you. We didn't really have "investment bankers" or "venture capital" or "hedge funds" in 1813, but I'm sure he would have choice words for them too.