Extending Democracy And The Age Of Voter Entitlement

Friday, 25 November 2022, 1:43 pm
Article: Keith Rankin

Earlier this week, in the wake of a decision by the Supreme Court of Aotearoa New Zealand, the Government announced it would draft a Bill which would extend the franchise in New Zealand to sixteen- and seventeen-year-old citizens and permanent residents. (See this press release on Scoop from the 'Make it 16' advocacy group, this on Evening Report from The Conversation, and this from RNZ.)

Indeed, the denial of the franchise to these younger people may contradict the New Zealand Bill of Rights. Yet, in Aotearoa New Zealand, the Government explicitly denies Covid19 booster vaccinations to people based on their ethnicity. (See this on Stuff.) Contradicting the Bill of Rights has not even been discussed with respect to vaccination rights.

I have no concern about sixteen- and seventeen-year-olds being less capable of voting wisely than, say, their parents. Nevertheless, whether this is a good idea for 2026 should be seen in the context of the history of democracy. Democracy is not a form of governance which arrived in one hit. Rather, democracy worldwide is a long-running 'project' which remains incomplete, more incomplete in some countries than others.

The progress of the democracy project can depend on the sequence of democratic reforms undertaken.

Sequences of Democratic Reforms in United Kingdom and New Zealand.

The first step towards democracy in England was the Magna Carta, in 1215. Further steps were taken in the English (and Scottish) Civil War of the 1640s, when the King was deposed, and then beheaded, by Parliamentarians. These 1640s' developments were problematic, and largely reversed with the restoration in 1660. But a big step was then taken in 1688, when the Glorious Revolution in England and Scotland replaced the absolute monarch with a constitutional monarchy.

Early steps on the road to democracy were power struggles between King and a Parliament of nobles. The mass of the people were largely unaffected by the gradual gains made by Parliament; in some cases they could be worse off, having less recourse to the King to override abuses perpetrated by the nobility.

In the eighteenth century, important steps to democracy were taken in the United States (1770s and 1780s) and France (from 1789 to 1798); both in the forms of Liberal (or 'bourgeois') revolutions. Again, these may not have much brought many people in these countries closer to the levers of power; we may note, for example, the matters of women and of slaves. These revolutions led to a conservative reaction in the United Kingdom, a formal Union from 1801.

Nevertheless, democratic reforms of a progressive nature did take place: namely, the Reform Acts of 1832, 1867, 1884, and 1918; each of which significantly extended the franchise in the United Kingdom. In addition, 'plural voting' (some people being able to vote more than once) was abolished in 1848. This meant the United Kingdom essentially had a system of 'one man, one vote' by 1918. While the 1918 reform also gave the vote to some women, it was in 1928 that women and men aged over 21 had the vote on an equal and universal basis. The United Kingdom voting age was lowered to 18 in 1969; and to 16 in Scotland in 2014.

New Zealand essentially inherited the British Law of 1832. All Māori men over 21 gained the right to vote (in special Māori electorates) in 1867. From then, universal male voting was introduced in 1879, and plural voting was eliminated in 1889. Working-class men gained the vote in 1879 (1867 for Māori), and all women in 1893; the only cases where New Zealand reforms preceded equivalent British reforms.

New Zealand of course introduced the critical reform of 'proportional representation' in 1996; a reform still awaiting in the United Kingdom. So New Zealand did precede the United Kingdom in the more critical extension to democracy.

Elite versus Non-Elite Voting

The key step changing the class balance-of-power was the 'universal male franchise'. The female franchise was of course important, although working-class men then were reticent about this, believing that, on balance, women would vote for conservative candidates. That 'concern' was probably valid, from the working-class point of view; although, fortunately, the critical universal reform had already taken place.

On this matter of women voting more conservatively, we may note the poem by James K Baxter – The Ballad of Calvary Street – with its famous line "National Mum and Labour Dad". Baxter wrote this in 1944, when he was 17 years old. (And here's an academic reference to that line, in Landfall volume 16, 1962.) Many would argue that women this century vote less conservatively than men; but, then, the meaning of 'conservative' may have changed; try substituting the words 'privileged' or 'advantaged' instead. A vote for Labour may now be at least as much a vote for 'no substantial change' as a vote for National once was.

Sequence does matter. If, in the nineteenth century, middle-class women had got the vote before working-class men, then there could have been a considerable delay in granting the vote to working-class men.

There may be similar concerns with the proposal to lower the voting age. The push to lower the age appears to be driven by the new elite, or at least the teenage children of the new elite. And, it is almost certainly true that, at present, new-elite young people are significantly more likely to vote than are working-class or underclass youth. So the question is whether this mooted lowering of the voting age will in any way impede more important and more necessary democratic reforms. Certainly, in the past, it has been elite interests which have been the barriers to the eventual achievement of hard-won extensions to non-elites. (Or, maybe lowering the voting age might facilitate further democratic reforms which benefit non-elites?)

Extensions to Democracy unrelated to the extension of the Franchise

The introduction of proportional representation was clearly the most important of these in New Zealand's history. This reform meant that one person's vote had the same value as any other person's vote.

(We see many overseas examples where this is not the case. The most obvious is that voters in California have zero influence in choosing who the President will be, and almost zero influence in determining the balance of power in the senate. There are two issues here. Re the president vote, California always votes Democrat; it is not even close to being a 'swing state'. Re the Senate vote, the ratio of population to senators is 20,000,000 to 1. In neighbouring Nevada, which is also a swing state, there are 1,600,000 people per senator. Nevada senators have the same weight in the federal Senate as do California senators.)

The discussion around democracy gets more diffuse when it goes beyond ballot-box issues. Here we move into the realm of economic democracy, and the importance of expressing constitutional equality in the area of public property rights. Huge amounts of each country's productive economic resources are subject to collective ownership – that is, collective stewardship and (ideally sustainable) utilisation. In some cases, collective resources are local, in some cases they are national. And in many cases resource ownership/stewardship is global, meaning that each country has equity with respect to a population-weighted share of global public resources.

Economic democracy means that every 'person of age' – currently that age is 18 in most parts of the world – has an equal share of the public property rights associated with collectively owned public resources.

Economic democracy is as conceptually simple as political democracy. Yet the elites muddy the waters, just as they have done through most of human history with respect to the establishment of universal voting rights.

In this case democracy means that economic organisations – 'firms', for want of a better word – should be paying a 'production tax' (a mix of a rent and a service fee) for their use of collective resources. Firms should be paying that tax in proportion to their size. Thus, if Firm A is twice as big as Firm B, then Firm A – using twice as much public resource – should pay twice as much production tax. (The next thing to be aware of is that, by definition, production taxes are the same as income taxes; just another name. A change of language does, however, facilitate a new way of thinking about income tax.)

The second half of the argument for economic democracy is that every person 'of age' – as equal shareholders of our collective resources – should receive an equal stipend from production tax revenue.

Economic democracy can be represented by the bumper sticker slogan: 'flat tax, universal income'.. In conventional language, it’s a built-in rights-based (ie non-targeted, non-bureaucratic) mechanism of 'progressive taxation'. Depending on the rate of production tax and on the size of the universal stipend, the mechanism may be broadly neutral in its income distribution effect, or may be more 'redistributive'.

As a simple way of conceiving this, we may think of public finance at the local council level. Imagine two proprietors in a town, and three equal properties in that town. Proprietor A owns two of the properties, and proprietor B owns the other property. Under the principle of economic democracy, A pays twice as much in property rates as B. But the benefits of the revenue raised are shared equally between all persons in that town, meaning that A and B get the same as each other.

Prospects for Economic Democracy

Possibly, in western societies our present position is much like the United Kingdom in the year 1801; meaning that the First Economic Reform Act may be about 30 years hence, say around the year 2050. Economic democracy is needed now, of course, just as political (and economic) democracy was desirable in 1801.

So the question is, would the extension of political democracy to sixteen- and seventeen-year-olds impede or enhance our journey towards economic democracy?

My fear is that this extension to the franchise would create a further impediment to the achievement of economic democracy. The first reason, already alluded to, is that this change would slightly entrench the power of the new elites; and that it is the elites who represent the main impediment to the achievement of democracy by lower socio-economic groups.

Part of the sway of the elites is their obsession with 'sound' (in practice, 'miserly') public finance. Thus, if the age of entitlement to a universal public stipend is 16 instead of 18, then such a provision will be more expensive, because there will be more people entitled to that universal payment.

Second, the discussion around economic democracy – a discussion easily derailed by our old and new elites – is that the matter of paying an adult stipend to school 'children' may become a substantial diversion from the main discussion.

Third, there is the problem that advocates of a Universal Basic Income are often their own worst enemy. Many argue for a universal gift ('grant', 'transfer') without appreciating that the achievement of this payment is a consequence of a production tax regime as outlined above. Economic democracy cannot be the one part without being the other part. Production taxes and universal stipends represent an alternative to graduated income taxes and targeted transfers; not some kind of 'stick on' 'band aid' to our present conception of income taxes. If advocates don't get this right, they will be forever on the back foot when challenged on how to pay for what they present as a 'gift'. (Equity dividends are not 'gifts'.)

Further, many of the advocates of a Universal Basic Income see the 'universal gift' as a payment sufficient to create an alternative to labour, thereby enabling non-elites to choose to not work. This conception of a universal welfare state riles elites, and allows them to use the 'labour supply' issue as a 'straw man argument' against economic democracy. The important reality is that economic democracy enhances the functioning of the labour market, rather than stifling it. It should be that a universal stipend falls short of a stand-alone wage. The fact that participation in the labour market would not cost a person their stipend means that they are much better incentivised to participate in non-exploitative labour. In other words, a proper implementation of economic democracy creates the labour-supply elasticity – the 'surge capacity' if you like – that enables people to establish healthy work-life balances, and also enables people to adjust those balances (in favour of more paid work) in times of labour shortages.

I may be wrong in my concern that the inchoate economic democracy project might be derailed by the granting of full democratic rights to a younger cohort of people. Maybe, an extension to our education (probably in Years 9 and 10, given NCEA requirements for older students) towards "civics' education" might lead to school students becoming much more aware of the 'full gamut of democracy' discourse; civics would need to be well-taught, and not massaged to conform with elite interests. If quality civics' education is a co-requirement of extending the franchise to senior school pupils, and both teachers (who are not part of the social elite) and genuinely progressive students 'grasp the nettle', then a lower voting-age could smooth some of the many bumps in the road to a more complete democracy.

At the end of this essay are two academic references for my work on the theme of economic democracy.

Conclusion

The extension of democracy from political democracy – the right to vote in elections – towards economic democracy is critical if humanity is to have a future. Any proposals to extend democracy in 'sideways' directions must be evaluated in terms of whether these proposals inhibit or enhance the achievement of the more important reforms.

Just as if elite women had been given the vote before non-elite men then the achievement of universal suffrage may have been delayed (or otherwise compromised), so also an extension of voting rights which in practice will mainly benefit young elites may also endanger an already fraught path towards universal democracy. (Or it may not, if there can be genuine improvements in 'democracy education' as part of the reform.)

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Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

References:

Public Equity and Tax-Benefit Reform
https://thepolicyobservatory.aut.ac.nz/publications/public-equity-and-tax-benefit-reform
"economic democracy: one economic citizen, one dividend"

Symposium on The Basic Income Guarantee
https://scholarworks.wmich.edu/cgi/viewcontent.cgi?article=4024&context=jssw
Keith Rankin: Prospects for a Universal Basic Income in New Zealand

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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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