Keith Rankin

Keith Rankin is a political economist and economy historian
who lives in Auckland, New Zealand. His biographical info.
Keith's email contact is: <keithr@ak.planet.gen.nz>.

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The Rankin File: #35

Children as a "Public Good".

Wednesday 3 December 1997

The principal message to the government from the "Work, Families and the State" conference held in Palmerston North (Hokowhitu Campus, Massey University) from 2830 November was that "children are a public good who should be collectively supported".

Children are not public property. Rather, the unanimous resolution served to emphasise that the economic product of each workingage generation is to collectively provide for all generations: children, retired persons and working age persons. Thus, the care of children should be regarded as social investment, with the future production of children being the payoff for that investment.

From this perspective, parents as caregivers are akin to unpaid public servants. Thus, it follows that investing in children means resourcing parents to bring productive wellsocialised children into adulthood.

This characterisation of children is a sharp contrast from traditional prewelfare state practice, in which parents had children as private investment goods, to in turn support them in old age. And it differs significantly from the modern "Treasury" view, which regards children solely as private "consumption goods"; ie as a vehicle for parental leisure and parental pleasure.

The transition from tradition (in which the family is the only welfare institution and which creates a high fertility bias) to modernity (in which welfare states collectivise the benefits arising from the rearing of children, leading to a lowfertility bias) can be said to be a case of "children moving from the private domain into the public domain".

A friend of mine questions the use of terms such as "public goods" and "public domain" with respect to children:

"I don't think I could subscribe to the view that children are a public good. Certainly it is true that the existence of children probably creates a net beneficial externality to society which is, or may be, enhanced by collective support. But to speak of "children...in the public domain" raises all sorts of issues about ownership and property rights. Speaking as a parent, my children are absolutely not in the public domain."

Chris Carson, Economist, Internet Consultant and Parent.

Certainly, there are many issues relating to the economics of ownership and property rights that are touched on when we discuss children; issues that have not been well addressed in public debate. The important idea is to distinguish "being in the public domain" from being "public property". We own ourselves as adults. Parents, however, can be regarded as regents with limitedterm copyright over their children.

Producing children is in some respects like writing. Writing is a privately produced good for public consumption. The written word is in the public domain, a private gift from the author to society. Intellectual property, while in the public domain, is also private property via copyrights and patents. The economic impact of a generation is comparable with the impact of a body of knowledge and artwork; it is a collective impact.

I see parenting as being based on two contracts.

The first parental contract is the intergenerational social contract in which all children can be regarded as private gifts from parents with the public becoming the sole economic beneficiary. (Consumption benefits - the enjoyment of making babies and raising children - can be regarded as noneconomic benefits.) Thus, the only economic benefit parents get from their own children is a share in the collective benefit of being able to draw on the collective product to which their grown children contribute to.
The second parental contract is the private contract between each mother and father. It is a contract containing implicit understandings about how that private economic cost of raising a child is to be shared. That cost involves both unpaid housework and time sold on the labour market in return for a cash income.

The implication of the first parental contract, the social contract, is that a wide range of public services should be available to parents, including services that ensure that no child is damaged as a result of parents being underresourced. A damaged child, once an adult, contributes to the public domain in a negative way, absorbing resources that could have gone elsewhere, and/or committing crimes that devalue public spaces. Thus, benefits such as the DPB and Family Support represent part of society's contractual duty to parents, as are public education, public health and family law.

Child support - i.e. child maintenance - relates to the second contract, the private contract. It is a means of enforcing appropriate shares of private costs between mothers and fathers. All gifts involve some private cost. To be effective, child support must be seen as quite separate from the domestic purposes benefit and other provisions of the social contract, and therefore should not be used as a means of state benefit recovery.

To facilitate compliance of private contracts between parents throughout the childhood of a child, the state, as the economic beneficiary of children, needs to ensure that the allimportant nonmonetary parental roles are met. Parental duty is about much more than breadwinning. And the state also needs to ensure that the private noneconomic benefits of having children - the only benefits if we accept the Treasury view - are shared between parents. To the extent that children are private to a family, costs can only be shared if benefits are shared.

If the private contractual arrangements of childraising are properly enforced and facilitated through a just system of family law, then the all important social contract between parents and the state can deliver a more than satisfactory economic return to the public. That means that children, not the state, must be the beneficiaries of parental child support.

The consequences of unsocialised governments cheating on social contracts are no less serious than the consequences of private citizens refusing to pay taxes or ignoring the criminal law; no less serious than parental failure. An effective intergenerational social contract is required to deliver high living standards to all generations next century. A state that fails to comply with its crucial role in this or any other social contract is an unsocialised agent; it is a government that cares only about its present, and not about the future of its people.

Compliance with the law, the payment of taxes, and the collective resourcing of families are socially contracted outcomes. The consequences of governments failing to comply with their contractual obligations are particularly serious, because governments and government institutions act, among other things, as role models for families and for firms. We become happy to pay our taxes when we see governments investing public revenue in supporting our children's future ability to support their parents.

Keith's 1996 New Zealand Political Review article "Investing in Children" about the Massey (Albany) conference on "The Multiple Effects of Poverty on Children and Young People: Issues and Answers"
(it is: http://www.oocities.org/Athens/Delphi/3142/krnknchildren.html

{ This document is: http://www.oocities.org/Athens/Delphi/3142/krf35-wfs_childrn.html

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