As somebody who does not live and work in the US, it seems plausible to me that the H1B system helps prevent other countries from obtaining similar talent hubs as Sillicon Valley. A lot of the talent is in the US, which attracts more companies, which attracts more talent, which means it's easier to go to the US and work there and start companies there than to do it anywhere else.

> phrased differently, the goal is to help industry, not hurt workers. hurting some workers is an acceptable cost, not the goal.

The phrase "help industry" has many dimensions. The simplest of course is that by increasing labor supply and suppressing wages it increases profit margins, rewarding shareholders.

Another important function is that by having more workers overall in the US, it increases the productivity of the domestic industry itself, due to increased competition for jobs driving up the productivity of the average worker. This in turn makes the industry more competitive vs its equivalents in other countries.

The average worker (whether permanent resident or temporary/H1B) who doesn't have significant investments likely doesn't receive much of those productivity gains, since they mostly go to capital owners.

Long term, it boosts returns to capital while capping returns to labor, the same trend noted by Thomas Piketty some years back.

If the purpose is cheaper STEM workers than downward pressure on wages is a goal and not just an effect.

The purpose of a system is what it does.