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Underprivileged or Rights-Deprived?
by Fred E. Foldvary, Senior Editor
Progress Report

Poor folk are often labeled "underprivileged" and richer folk are called "privileged." For example, there is a book titled "One Nation, Underprivileged: Why American Poverty Affects Us All." But "privileged" and "underprivileged" are confused and misleading expressions. If you think the poor are "underprivileged," then you don't really understand poverty.

What is a "privilege?" The term originally meant "private law." A privilege is a special advantage or prerogative or immunity or benefit given only to some people only because they have power or are favored by those with power. If everyone is entitled to something, like freedom of expression, or if everyone may obtain an item such as a passport with the same rules applying to all, then it is not a privilege but a right.

Whether a rich person is "privileged" depends on how he got the money. If he got a subsidy from the government, say for not growing corn, or protection from competition, then indeed that person is privileged. But if he got rich from working hard and investing well, then he is not privileged, because he earned the wealth. Working and investing are not privileges, but rights.

So if a person is poor, it is not because he is lacking in special protections, subsidies, and other privileges. A person is usually poor because he has been deprived of the natural right to work. Governments world-wide impose barriers between labor and productive resources, keeping some workers deprived of labor and others who do work deprived of their earnings from labor.

Taxes on wages create a wedge between the cost of labor to employers and the take-home pay of the worker. More costly labor results in less employment. Taxes on the income from capital goods and on the sale of goods has the same effect. There are unemployment taxes, disability taxes, and payroll taxes that increase the tax wedge. On top of that, there are minimum-wage laws that prevent the least productive workers from getting hired. There are permits, zoning, and other rules and costs that also prevent some workers from becoming self-employed.

Deprived of the full natural right to peaceful enterprise and labor, and the natural right to fully keep one's earnings, the poor have little or no income, and depend on charity and governmental assistance. To call them "underprivileged" is a lie. The rights-deprived poor do not need privileges. They just need government to stop interfering with their right to work and save!

The biggest privilege world-wide is subsidies to landowners. Land values get pumped up from governmental services and goods such as streets, highways, bridges, mass transit, parks, local and national security, fire protection, and subsidies such as for schooling and water. Landowners are privileged to get land rent from tenants or the implicit geo-rent of their land, the extra value paid for by taxes on workers and enterprises.

There has been confusion about what is a right and what is a privilege. For example, driving a car is often called a privilege, for which one requires a license. Perhaps legally, driving is treated as a privilege, but actually, traveling is a natural right, and driving should legally be a conditional right, contingent on being a safe driver accountable for any damage.

Some consider a patent a privilege, but it too is a right. A patent would be a privilege if some lucky persons got patents because they have brown eyes while blue-eyed inventors don't get patents. But if all persons have the same rules for getting patents, a patent ideally should be an application of contracts, a simple way of having a standard contract when selling an invention, where the buyer agrees not to copy the invention for commercial sales.

Some also consider a corporation to be a privilege, since the firm has a charter from a government. But limited liability applies also to some partnerships and to some non-corporate assets such as bonds. Moreover, it is a right rather than a privilege to operate a business, and a corporation should simply be a type of organizational structure with the technicality of treating the entity as a legal owner, as are trusts, cooperatives, associations, and other entities.

Real privileges are favors arbitrarily given to some groups and not others.
  • Religions have privilege when their doctrines are enforced by law, imposed on those not holding those beliefs. For example, Christians are privileged when the law prohibits private enterprise on Sunday.
  • Alcohol and tobacco producers and sellers are privileged when they can sell their products but competitors such as marijuana growers are prohibited.
  • Farmers are privileged when they get protection from imported food.
A real privilege favors one cultural, religious, or economic interest over another peaceful and honest practice.

The really underprivileged folks are all consumers, taxpayers and those who are restricted from peaceful and honest practices or have to pay extra to the government while others are unrestricted and non-taxed. These people lack privileges which others have. The proper remedy is not to expand privileges, but to eliminate all governmental privileges. That is why libertarians and geoists alike have the motto: "Equal rights for all; privileges for none!"

-- Fred Foldvary      

Copyright 2005 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.

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Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper