Duty Of Care And Economic Citizenship

Tuesday, 7 July 2020, 9:38 am
Article: Keith Rankin

Three Citizenships

The concept of 'citizenship' has both general and specific meanings.

The most specific and familiar I call passport citizenship. A passport citizen of a country is a person holding a passport for that country, or with unambiguous entitlement to hold such a passport. More than anything a passport is a travel document, so passport citizenship largely defines a person's travel rights.

A child can be a passport citizen. And it is possible for a person to hold multiple passport citizenships.

The second concept is political citizenship, which is essentially suffrage, the right to vote. Thus, political citizenship is a democratic concept. A 'dependent child' cannot be a political citizen, though the definition of 'dependent child' may differ in different countries. (For this discussion, a child is a non-adult; a person can only be an adult or a dependent child.) It is possible for a person to hold multiple political citizenship, even if a person holds just one passport citizenship. For example, an Australian-born adult resident in New Zealand – as a 'permanent resident' of New Zealand – is a political citizen of both Australia and New Zealand; many such people only carry Australian passports.

An ordinary adult resident of a non-democratic country is a passport citizen, but not a political citizen. In New Zealand, a person in prison for more than three years is not a current political citizen, but is a passport citizen (albeit with highly constrained travel rights!). Political citizenship confers political rights.

The third concept is economic citizenship. At present, while economic citizenship has no formal definition, it is a very important concept. In summary, economic citizenship confers economic rights; and an adult person without economic rights is either a slave or an Orwellian unperson. Economic citizenship is not a new phrase; the term was used, for example, during the later years (1933 to 1935) of the Great Depression in New Zealand. (Refer, Malcolm McKinnon, The Broken Decade, p.291.)

As with political rights, economic rights are held by adults. In New Zealand at present, different economic rights come at different ages: 16 the right to own property and to marry; 18 the right to a normal benefit and to drink alcoholic beverages; 20 the right to inherit property; 24 the right to a student allowance. 18 is probably the most important age determining adulthood, because that's when a parent ceases to be able to claim Family Tax Credits, Child Support, or Sole Parent Support. While, for sometime in the future I am comfortable with 16 being the age that defines adulthood, overall 18 would appear to be the age that in New Zealand best defines adulthood at present. In particular, the age of adulthood represents the commencement of both political and economic rights, and personal responsibility.

The appropriate definition of economic citizenship is firstly that an economic citizen is an adult. Secondly, every adult in the world is by definition a current economic citizen of one and only one country.

Thus, once a person is determined to be an adult, the only matter of interest to a country's bureaucracy is which country that person is an economic citizen of. Thus, an adult born in Paraguay but living in New Zealand would have either 'Paraguay' or 'New Zealand' listed in their economic citizenship box; not 'yes' or 'no'.

Economic Citizenship

The concept of economic citizenship works best when all countries are on the same page. Thus, all adults in the world would have defined economic rights associated with the country of their economic citizenship. Of course, in a transitional world where the concept is new, it is inevitable that some countries will develop their economic rights ahead of other countries, just as some countries lagged in granting political rights. For example, Switzerland only granted women political citizenship in the 1970s.

Any adult living and working in New Zealand and only paying taxes in New Zealand clearly qualifies as an economic citizen of New Zealand. And they can only cease to be an economic citizen of New Zealand when they become an economic citizen of another country; thus, they do not cease to be economic citizens if they become unemployed. Further, adults who come to reside in New Zealand because their partners or 'adult children' are New Zealand economic residents become economic residents of New Zealand when they relinquish economic rights in their country of origin.

This means that many people who are passport citizens or political citizens of other countries are nevertheless economic citizens of New Zealand. And these people continue to be economic citizens of New Zealand, even when they visit their country of origin or any other country. Further, all economic citizens of New Zealand should have an equal and unqualified right to enter New Zealand. Any denial of the right of an economic citizen to be in New Zealand is the equivalent of deportation. (And we note that nobody should ever be deported to a country which is experiencing war, pestilence, or famine.) Any adult who has an agreed time limit on their economic citizenship – eg a term or condition on their visa – reverts to being an economic citizen of their country of origin, but only so long as they are able to re-acquire economic rights in their country of origin. (Inability to transfer economic rights could be a lack of transportation to that country, or pestilence in that country.)

Where a working visa expires and there is disagreement – eg a New Zealand economic citizen is stranded overseas, or where economic citizens in New Zealand are unable to undertake economic citizenship elsewhere – then they continue to be New Zealand economic citizens.

Where a person runs a business in another country but has residential rights in New Zealand (indeed may have a family resident in New Zealand), that person would normally be an economic citizen of the other country. That person's partner, however, may be an economic citizen of New Zealand. A person can only be an economic citizen of one country at a time. Further, all dependent children of New Zealand economic citizens have the same residential rights as their parent(s).

There is a special case of 'swallows', or seasonal workers who regularly work in one country for a part of each year, and live in another country for the other part. Such people – and there are many Pacific-born people in New Zealand who are swallows – should be able to arrange seasonal transfers of economic citizenship. Thus, Tongan-born seasonal workers stranded in New Zealand should be classed as New Zealand economic citizens until they are able to resume Tongan economic citizenship.

The key principle of economic citizenship is that a person can only cease to be an economic citizen of one country if they can practically become an economic citizen of another country.

Economic citizenship gives a person economic rights in one country. Thus, in a civilised world, no adult human being can have no economic rights. (The economic rights of dependent children are implicit, through their parents' duty of care to their children.) Economic rights can be transferred, but not extinguished.

Denizens

We may note that any person who is an economic citizen of the country they live in, but is not a political citizen, is thus a denizen. For example, most New Zealand born economic residents of Australia are denizens of Australia, and political citizens of New Zealand. While they pay taxes in Australia, they vote for parliamentarians in New Zealand.

Economic Rights – Duty of Care

The essential economic right is 'duty of care', including the right to a return on shared equity. I will formalise the latter right as the conceptual right to an economic dividend as a public property right. Economic citizens hold collective ownership of a country's collective economic resources, including a share of their country's share of global collective resources.

Thus, the most important economic right is one that no country has yet granted in a formal sense, but most countries do in an informal sense. This is the right to an economic dividend.

The most practical way to think through this is to note that all countries currently pay their economic citizens a formal weekly dividend of $0.00. Thus, we create the concept of a formal dividend as a conceptual placeholder. Next, we can think about how different countries exercise their duty of care towards their citizens and denizens.

On this, I will note the concept of 'social security' as synonymous with 'duty of care'. There is an accepted understanding that all people who belong in a community have a right to some share of that community's benefits. We may extend the word 'community' to society, where 'society' can be understood as a national community. We expect that an unemployed person in Norway has a higher material standard of living than an unemployed person in Ukraine, even though neither has a job. And we expect that a minimum wage worker in Norway has a higher standard of living than a minimum wage worker in Ukraine, despite the fact that both may be doing much the same job. In both cases, the Norwegians are receiving higher social dividends than the Ukrainians; even if in neither case their dividends are called 'dividends'.

What happens is that unemployed Norwegians receive bigger welfare 'transfers' than unemployed Ukrainians. And Norwegian Workers receive higher wages (and income tax concessions that come with their wages) than do Ukrainian workers. Part of each Norwegian's wage is in reality a payment that reflects productivity rather than effort. The main source of higher productivity in Norway is more capital – public capital and private capital – per person resident in Norway. Part of the wage of the Norwegian worker and the benefit of the Norwegian beneficiary is in reality a 'public equity dividend', reflecting the public capital contribution to productivity. Likewise, the Ukrainian worker and the Ukrainian beneficiary; it's just that the Ukrainian dividend is much less than the Norwegian dividend.

In each country there may be people who miss out on these implicit dividends, because they have 'fallen through the cracks'. A formal non-zero public equity dividend means that no economic citizen falls through the cracks. It's mainly an accounting matter to formalise the public equity dividend, noting that for most people they already receive it as a part of something else. The reform process may be called 'account and fill' – properly accounting for those who do get it, and filling in the cracks for those who don't.

Presently – in New Zealand and elsewhere – the formal weekly dividend is $0.00. Following an 'account and fill' reform, the formal weekly dividend will rise above $0.00. Once that is done, the important discussion about how big or small the dividend should be can then take place. I have suggested elsewhere that the most practical starting level in New Zealand is $175 per week, payable as an economic right to all economic citizens of New Zealand. (Refer to my Universal Income Flat Tax: the Mechanism that Makes the Necessary Possible.)

Addendum: Foreign Lives Matter

In modern political discourse, the biggest taboo of all is to discriminate against people based on the colour of their skin, or any other identity attribute. That is, so long as the person is a political or passport citizen of a country.

But it is open season to discriminate against economic citizens based on their immigration status. Governing attitudes make it a requirement to think of people who are not political citizens as foreigners, and that foreign lives are inconsequential. There is an ugly new nationalism building around the world, and I sadly note that New Zealand's political leadership is contributing to that new nationalism. The message going out to economic citizens of New Zealand who are political citizens of South American nations is that they should 'go home' to countries that are currently the continental epicentre of a hugely consequential pandemic. (It is no better than the President of a foreign country a few years ago telling political citizens of African descent that they could 'go back to where they came from'.)

New Zealand – like any other country – has a duty towards its economic citizens. It is not appropriate to narrow the definition of those to whom New Zealand has a duty of care towards, cynically allowing people to fall through the cracks. The cost of abstaining from that duty is much greater than the cost of meeting it. The cost is not in money; after all, money is a social technology. The cost is in lost care, in lost employment opportunities, in lives adrift. So long as New Zealand has access to food and labour, New Zealanders do not give up anything of substance in order to provide for all of those economic citizens 'who are us'.

Further, New Zealand can provide support to others that might not be us, but who are close to us. What are we doing for our Pacific neighbours? Samoan lives matter. Fijian Lives matter. Tongan lives matter.

While New Zealand has no special obligation towards other countries – other than neighbours such as these – New Zealanders should not be asked to not care about foreign lives.

© Scoop Media

Keith Rankin

Political Economist, Scoop Columnist

Keith Rankin taught economics at Unitec in Mt Albert since 1999. An economic historian by training, his research has included an analysis of labour supply in the Great Depression of the 1930s, and has included estimates of New Zealand's GNP going back to the 1850s.

Keith believes that many of the economic issues that beguile us cannot be understood by relying on the orthodox interpretations of our social science disciplines. Keith favours a critical approach that emphasises new perspectives rather than simply opposing those practices and policies that we don't like.

Keith retired in 2020 and lives with his family in Glen Eden, Auckland.

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