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Commoditizing citizenship: an idea whose time has come…

Ok, maybe the time as not quite arrived just yet but it is an idea I have long liked, and it seems I am not the only one:

You could open up futures markets in passports, you could have derivatives.
– David Card, professor of economics, U.C. Berkeley

The notion gives me the giggles and it has much to commend it. Yes, I used to be a futures trader 😉

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14 comments to Commoditizing citizenship: an idea whose time has come…

  • Nicholas (Unlicensed Joker!) Gray

    Apparently, no-one wants to comment on it, so it must be awe-inspiring!

  • bobby b

    But there already is a futures market in passports.

    Think of citizenship as shareholder ownership of a nation. I hold one share in the USA. Every citizen holds one share each. But each share is valued individually – there is no set share price.

    We’ve bought our shares using a coin minted by ourselves. My share cost one “bobby.” John’s share cost one “john.” Muhammad bought his share using his “muhammad” coin.

    Valuation of these coins is obviously a problem. One “bobby” is worth whatever net value I bring to the other citizens. One “john” is worth whatever John’s value to society is. Each coin’s value floats relative to all others, and can change daily.

    So, immigration becomes our passport futures market. If Juan wants in, and can pay one “juan”, we as a society decide if the value of a “juan” makes him a worthy applicant. When we accept several Juans and take their “juans” as full payment for their shares, we’re buying Juan futures, betting that their value to us will (at least) not decrease from the day they are offered to us.

    Problem is, part of our leadership wants to fix the values of these floating currencies, arbitrarily pegging their value to one “bobby.” This destroys the futures function of the currencies, only allowing true evaluation after the coin has already been offered and accepted.

    This makes it easier to assign an accepted value to all of our individual currencies. We would no longer need to analyze and value each underlying asset. We could deal with fungible “people”. The only problem would be that the valuations would all be wrong, but that would be a downstream problem, passed on costlessly by whoever decided that a “juan” and a “tommy” were worth one “bobby.”

    Right now, I think we’re in a “muhammad” bubble.

  • Richard Thomas

    Given the current charges for renouncing citizenship, it seems the US government places negative value on that commodity

  • Since citizenship can be purchased, there is already a market for this.

    Not very surprisingly purchasing citizenship in a 3rd world shithole such as Belize (formerly British Honduras) is fairly cheap at $40,000 USD and 5-years of residence.

    EU citizenship, for example costs a lot more with Malta and Cyprus both offering 5-years residence followed by citizenship for €1.15 million Euros and €2 million Euros respectively.

    Why would anyone want to “buy” citizenship of a foreign country? Well if you are from the United States or Eritrea (the only two countries that have citizenship-based taxation), then you might be wishing to escape taxes as Eduardo Saverin of Facebook fame did. The pre-requsite however is to pay a substantial exit tax and to obtain citizenship of another country.

    For Chinese and Russian millionaires / billionaires, the desire to get out from under a corrupt regime that can lock you up on a whim, seems justification enough and even at a couple of million Euros, may be a price worth paying.

  • Erik

    Sell immigration permits while you’re at it.

  • The many problems with immigration evident today simply illustrate that either citizenship is much much more than a commodity, or else it is a wasting asset as the country whose citizenship you bought dies into a purely nominal entity, like the western Roman empire in the middle 400s.. The Labour party importing voters in the early 2000, Hollande granting French citizenship to record numbers this year (well aware he would not have won last time without the votes of recent citizens), all these are ways in which the core asset you are supposedly purchasing a share of is wasted into another junk bond. A nation can take in a certain number at a certain rate, more or less as the incomers are more or less like the ones they join, plus a few rich passport purchasers from anywhere if it wants them. A random group of people are not a nation, and the political life of that ‘nation’ is very degraded compared to the real thing. Like the new car that loses half its value by being driven off the showroom forecourt, so the citizenship you buy – or steal, e.g. as a migrant pretending to be a refugee – loses greatly in value if you have too many imitators.

  • Watchman

    Niall,

    I hate to break this to you, but a nation need not be anything more than a random group of people. It depends who is doing the definition, but for example hardly any (if any) African nation makes sense due to nationhood being defined by lines on the map, not group identity (note almost all local identity-based rebellions have either failed or ended up taking over the whole space between the lines). Nations are defined in various ways, and group identity is only one of them (although nations also create group identities that might not otherwise exist – the Belgians and the Swiss spring to mind).

    All of which is to say that the market idea is terrible, because amongst those defining nationhood (and therefore the award of passports) are the UN and governments, cryponite to the running of a proper market…

  • Watchman (October 10, 2016 at 1:11 pm), you’re not ‘breaking it to me’; reflecting on those African nations is one of many ideas that cause me to prefer living in one more like ‘the real thing’.

    The French and German Swiss did indeed have a common identity – resisting the surrounding feudal lords who sought to absorb them – which, over centuries, caused the cantons to merge into a nation (somewhat – Switzerland is still astonishingly federalised). Italian Switzerland was at first conquered territory, administered by three bailiffs appointed by the three original cantons.

    Belgium’s history is more complex: its identity was original catholic, but in a somewhat negative sense – the parts of Burgundy that would not, could not or did not, join the protestant north which became Holland.

    My point is that it takes time and a shared history and/or reason on the part of the majority. If I’m understanding your comment correctly (I may not be), you are sort of agreeing with me in large part.

  • “You do not have to be a citizen to be a member of a society, regardless of what the state says.”

    We do rather hope that you will become a productive member of our society as a condition of your new citizenship. Currently the price for U.S. citizenship is a promise to vote Democratic in the next election.

  • Watchman

    Niall,

    Switzerland’s history is not one of everyone getting on even once the federation was started remember – the general assent to being Swiss (and despite the federal structure, this is a characteristic of Switzerland) is relatively modern compared to the local identities (and domination by the non-feudal ruling class of the canton n most cases).

    And Belgium’s history is that of a line on the ground, as the Burgundian domains never had a proper identity (hence the use of a geographical title that is several hundred miles misplaced) so much as a multiplicity of local identities (much like the Swiss). The coalation of the burghers of Flemish towns and the more fedual Wallon society of the south-east was not pre-ordained.

    The point here is that nations can create nationality, as a shared history, so I am agreeing in general. But this can be forced as well, as in the case of Africa (or to a certain extent, eastern Europe post-1918). Whilst this may not work in creating a common identity of the Belgian or Swiss or English or British models, these nations are still forced on their inhabitants, and act in the same way as a collective nation. Plus the little voice in my head that always rebels at authority would like to point out that it is possible to reject the shared history and culture and still be part of a nation.

  • Alisa

    Watchman:

    Whilst this may not work in creating a common identity of the Belgian or Swiss or English or British models, these nations are still forced on their inhabitants, and act in the same way as a collective nation. Plus the little voice in my head that always rebels at authority would like to point out that it is possible to reject the shared history and culture and still be part of a nation.

    I’m afraid that you may be conflating nation with state – the two terms are not mutually exclusive, but they are not the same thing at all.

  • Paul Marks

    I think some countries do, de facto, sell citizenship – certainly they sell residence.

  • I think some countries do, de facto, sell citizenship – certainly they sell residence.

    As mentioned previously, for the most part there is a period of residence, typically 5-years at which point they become eligible for citizenship. This is not just for purchased ‘residence to citizenship’ applications, but also where a migrant moves to a different country for work and becomes eligible after a certain period of residency.

    The Swiss value their citizenship so highly that they only grant permanent residence after between 5 and 10-years (depending upon country of origin) and those holding permanent residence become eligible for Swiss citizenship after 12-years (although this is in the process of changing to 10-years)

    The process of going from Swiss resident to Swiss citizen is also quite lengthy, such that only about 2% of those eligible for citizenship actually do so. To obtain Swiss citizenship you need to be culturally and socially integrated into Swiss society, familiar with Swiss customs and traditions, comply with Swiss law and not be a threat to Swiss security.

    I suspect that President of the European Commission, Jean-Claude Juncker must really hate the Swiss.

  • Laird

    Fan that I am of the virtues of a free market in just about everything, I’m not sure I agree when it comes to passports. First of all, there seems a lot of confusion here (perhaps “conflation” would be a better term) of the differences between passports, residency papers and work permits. They’re all different. A passport’s essential function is to permit re-entry into the country which issued it. Secondary functions can include visa-less entry into certain other nations, and serving as proof of identity and/or citizenship. Perry’s proposal seems to be the creation of a market in citizenships, and he views a passport as a proxy for that, although it’s not strictly accurate. (Passports can be issued to non-citizens.) And (to me, anyway) “citizenship” connotes something more than mere right of entry, residency or employment. If the concept of a “nation” means anything surely it includes some measure of control over who is permitted both entry and citizenship, which would obviously be impossible with tradable passports. So let’s just say that I’m not sold on the idea.

    But I will readily concede that if an active market in passports were to arise, it is inevitable that a futures market in them (permitting speculation on the future value of any given country’s passports) would soon follow (although it couldn’t be like commodities futures or stock options, as there would be no way to settle up via physical delivery, so it would have to be a purely cash settlement like an index option). I can’t conceive of a “derivative” on passports, though. Perhaps someone with more imagination than me can suggest an example of such.

    In any event, surprising as it seems to us today, the whole concept of passports is barely a century old. In the not-too-distant past there was active international discussion about abolishing them altogether. See this. No one talks like that any more. It’s just more evidence of how far we’ve fallen.