Q22. What is privilege?
A. Strictly defined, privilege is, according to the Century Dictionary, "a
special and exclusive power conferred by law on particular persons or classes
of persons and ordinarily in derogation of the common right."
Q23. What is today the popular conception of privilege?
A. That it is the law-given power of one man to profit at another man's expense.
Q24. What are the principal forms of privilege?
A. The appropriation by individuals, or by public service corporations, of
the net rent of land created by the growth and activity of the community
without payment for the same. Also, the less important privileges connected
with patents, tariff, and the currency.
Q25. Where in does privilege differ from capital?
A. Capital is a material thing, a product of labor, stored-up wages; an instrument
of production paid for in human labor, and destined to wear out. Capital
is the natural ally of labor, and is harmless except as allied to privilege.
Privilege is none of these, but is an intangible statutory power,
an unpaid-for and perpetual lien upon the future labor of this and succeeding
generations. Capital is paid for and ephemeral. Privilege
is unpaid for and eternal. A
man accumulated in his profession $5,000 capital, which he invested in land
in Canada. Ten years later he sold the same land for $200,000. Here is an
instance of $5,000 capital allied with $195,000 privilege. This illustrates
that privilege and not capital is the real enemy of labor.
Q26. How may franchises be treated?
A. Franchise privileges may be abated, or gradually abolished by lower rates,
or by taxation, or by both, in the interest of the community.
Q27. Why should privilege be especially taxed?
A. Because such payment is fairly due from grantee to the grantor of privilege
and also because a tax upon privilege can never be a burden upon industry
or commerce, nor can it ever operate to reduce the wages of labor or increase
prices to the consumer.
Q28. How are landlords privileged?
A. Because, in so far as their land tax is an "old" tax, it is
a burdenless tax, and because their buildings' tax is shifted upon their
most landlords who let land and also the tenement houses and business blocks
thereon avoid all share in the tax burden.
Q29. How does privilege affect the distribution of wealth?
A. Wealth as produced is now distributed substantially in but two channels,
privilege and wages. The abolition of privilege would leave but the one
proper channel, viz., wages of capital, hand, and brain. ... read
the whole article
Thus far I’ve argued that Capitalism 2.0 — or surplus capitalism — has
three tragic flaws: it devours nature, widens inequality, and fails to make
us happier in the end. It behaves this way because it’s programmed
to do so. It must make thneeds, reward property owners disproportionately,
and distract us from truer paths to happiness because its algorithms direct
it to do so. Neither enlightened managers nor the occasional zealous regulator
can make it behave much differently.
In this part of the book I advance a solution. The essence of it is
to fix capitalism’s operating system by adding a commons sector
to balance the corporate sector. The new sector would supply virtuous
and proxies for unrepresented stakeholders: future generations,
pollutees, and nonhuman species. And would offset the corporate sector’s negative externalities
with positive externalities of comparable magnitude. If
the corporate sector devours nature, the commons sector would protect
it. If the corporate
sector widens inequality, the commons sector would reduce it. If
the corporate sector turns us into self-obsessed consumers, the
commons sector would reconnect
us to nature, community, and culture. All this would happen automatically
once the commons sector is set up. The result would be a balanced
economy that gives us the best of both sectors and the worst of
Organizing Principles of the Commons Sector
Property rights, especially the common kind, require competent institutions
to manage them. What we need today, then, along with more common property,
is a set of institutions, distinct from corporations and government, whose
unique and explicit mission is to manage common property.
I say set of institutions because there will and should be variety. The
commons sector should not be a monoculture like the corporate sector. Each
institution should be appropriate to its particular asset and locale.
Some of the variety will depend on whether the underlying asset is limited
or inexhaustible. Typically, gifts of nature have limited capacities; the
air can safely absorb only so much carbon dioxide, the oceans only so many
drift nets. Institutions that manage natural assets must therefore be capable
of limiting use. By contrast, ideas and cultural creations have endless potential
for elaboration and reuse. In these commons, managing institutions should
maximize public access and minimize private tollbooths.
Despite their variations, commons sector institutions would share a set
of organizing principles. Here are the main ones.
LEAVE ENOUGH AND AS GOOD IN COMMON
As Locke argued, it’s okay to privatize parts of the commons as long
as “enough and as good” is left for everyone forever. Enough
in the case of an ecosystem means enough to keep it alive and healthy. That
much, or more, should be part of the commons, even if parts of the ecosystem
are private. In the case of culture and science, enough means enough to assure
a vibrant public domain. Exclusive licenses, such as patents and copyrights,
should be kept to a minimum.
PUT FUTURE GENERATIONS FIRST
Corporations put the interests of stockholders first, while government puts
the interests of campaign donors and living voters first. No one at the moment
puts future generations first. That’s Job Number One for the commons
In practice, this means trustees of common property should be legally accountable
to future generations. (We’ll see how this might work in chapter 6.)
They should also be bound by the precautionary principle: when in doubt,
err on the side of safety. And when faced with a conflict between short-term
gain and long-term preservation, they should be required to choose the latter.
THE MORE THE MERRIER
Whereas private property is inherently exclusive, common property strives
to be inclusive. It always wants more co-owners or participants, consistent
with preservation of the asset.
This organizing principle applies most clearly to commons like culture and
the Internet, where physical limits are absent and increasing use unleashes
synergies galore. It also applies to social compacts like Social Security
and Medicare, which require universal participation. In these compacts, financial
mechanisms express our solidarity with other members of our national community.
They’re efficient and fair because they include everybody. Were they
to operate under profit-maximizing principles, they’d inevitably exclude
the poor (who couldn’t afford to participate) and anyone deemed by
private insurers to be too risky.
ONE PERSON, ONE SHARE
Modern democratic government is grounded on the principle of one person,
one vote. In the same way, the modern commons sector would be grounded on
the principle of one person, one share. In the case of scarce natural assets,
it will be necessary to distinguish between usage rights and income rights.
It’s impossible for everyone to use a limited commons equally, but
everyone should receive equal shares of the income derived from selling limited
INCLUDE SOME LIQUIDITY
Currently, private property owners enjoy a near-monopoly on the privilege
of receiving property income. But as the Alaska Permanent Fund shows, it’s
possible for common property co-owners to receive income too.
Income sharing would end private property’s monopoly not only on liquidity,
but also on attention. People would notice common property if they got income
from it. They’d care about it, think about it, and talk about it. Concern
for invisible commons would soar.
Common property liquidity has to be designed carefully, though. Since common
property rights are birthrights, they shouldn’t be tradeable the way
corporate shares are. This means commons owners wouldn’t reap capital
gains. Instead, they’d retain their shared income stakes throughout
their lives, and through such stakes, share in rent, royalties, interest,
the whole chapter