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February 19, 2011

The Problem With Rights

By Sterling T. Terrell
Everything is a right.  Right?  Well, maybe not, but looking at the changing culture we find ourselves in, more and more goods seem like they are being pushed into that category.

Some would say that food is a right.  Others, shelter.  Still others, Social Security.

United States Senator Bernie Sanders declares that health care is a right, not a privilege, for Americans.  The United Nations agrees and goes further by saying that health care is a right for everyone.  In fact, the U.N. includes much more than health care in its list of rights. Article 25 of it's Universal Declaration of Human Rights states:

Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

That sounds all well and good, but it also creates a lot more questions.  For instance: What kind of food, clothing, housing, and medical care is considered "adequate"?  Or, maybe more importantly, who gets to define what entails adequate food, adequate housing, or adequate medical care?  Will it always be the same for everyone?  What is considered a "necessary" social service?  And who gets to decide what "necessary" means?

Standing opposed to the idea of something being a "right" is a cold reality.  It's been called "the dismal science."  But most people call it "economics."

In the most basic concept of economics, everything that exists can essentially be classified into two categories: Economic Goods and Non-economic Goods.

Non-economic goods, sometimes referred to as "free goods," do not suffer from scarcity.  This means that everyone in the world can have as much of a non-economic good as they want and there is still an abundance of it left to go around.  Common examples of non-economic goods include: oxygen, ideas, and love. This article you are reading is also an example of a non-economic good.  As many millions of people can read it as wish to and it is in no way diminished.  It can still be read, and shared again -- and again still.

Unfortunately, most things that exist fall into the category of being an "economic good." This means that they suffer from scarcity.  And scarcity is the quintessential dilemma of economics.  Let's look at it.  Assume a world where anyone can have anything that they want and nobody pays a price for anything.  Ok.  Now raise your hand if you want a coach purse.  And raise your hand if you want a new car.  Raise your hand if you want a computer.  In this scenario, there is no difference between wanting six coach purses, three computers, and two cars, and wanting ten million coach purses, five million computers and six billion cars -- the price is still zero.  Very quickly we run into a problem.  There are not enough resources to satisfy everyone's desires.  Coach purses, cars, computers, and almost everything else suffer from scarcity.

This takes us back to the issue of rights.  There is an obvious conflict between calling an economic good a "right."  How can something be declared a right if it is, by definition, scarce?

Economics attacks this scarcity problem by asking:  How do we satisfy unlimited wants with limited resources?  Put simply:  Who gets a coach purse, and who doesn't?  Who gets a computer? Who must borrow a friend's?  Who gets a car, and who has to walk to work?  Further, how many purses, computers, and cars does everyone get to have?

Well.  At its core, there are only two ways to solve the issue of scarcity.  One is by a market-based system of prices, and the other is by the decision of a third party (usually the government).  The purpose of an economic system is not to provide people with goods and services.  The purpose of a given economic system is to deny people goods and services.  The market-based system denies people goods and services through prices, and a state-based system denies people goods and services through government fiat.

Comparing and contrasting these two economic systems, economist Walter Williams of George Mason University said it best:

In truth, in a free society, income is earned through pleasing and serving one's fellow man. I mow your lawn, repair your roof or teach your kid economics. In turn you give me dollars. We can think of dollars as certificates of performance. With these certificates of performance in hand, I go to my grocer and ask him to give me a pound of steak and a six-pack of beer that my fellow man produced. In effect the grocer says, "You're making a claim on something your fellow man produced. You're asking him to serve you -- but did you serve him?" I say, "Yes I did." The grocer responds, "Prove it!" That's when I show him my certificates of performance -- namely, the money my fellow man paid me to mow his lawn.

Contrast the morality of having to serve one's fellow man as a condition of being served by him with the alternative. Government can say to me, "Williams, you don't have to serve your fellow man in order to have a claim on what he produces. As long as you're loyal to us, we will take what your fellow man produces and give it to you."

This is at the heart of many fiscal problems that both states and the federal government find themselves.  Rights have been dolled out without "certificates of performance," or rationing.

In short, the problem with declaring something a right is the problem of scarcity.  And dealing with it is a straightforward choice:  Either the market can allocate goods and services through prices, or the government can allocate goods and services by decree.

The issue is plain, and every time you vote -- the decision is yours to make.

Sterling T. Terrell is an economist and writer living in Texas.  Email him at: sterling@mises.com.
on "The Problem With Rights"