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Liberty And Equality

Rand Paul had the right instincts and intentions, but the real issue is privilege.

by James Leroy Wilson
May 26, 2010

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Liberty And Equality

Disclosure: I am employed by DownsizeDC.org, and Rand Paul has announced that if elected he would introduce some of DownsizeDC.org's proposals before the Senate. Rand Paul is also the son of Rep. Ron Paul, and longtime readers are aware of my support for the elder Paul. This essay also links to DownsizeDC.org's campaign in support of Ron Paul's Free Competition in Currency Act. But I will emphasize that 1) I have no personal or professional ties with either of Rand or Ron; 2) I write this column in a personal capacity and my opinions are my own and not the views of DownsizeDC.org.

Last week, Kentucky Republican Senatorial candidate Rand Paul got into political hot water. He was asked his views of the 1964 Civil Rights Act.

He answered that he agreed with the bill's prohibition of state-mandated segregation and government discrimination on the basis of race, but he disagreed with a ban on private forms of discrimination. After some controversy, he backed away from his remarks somewhat.

But the idea behind his original remarks is hardly unreasonable. Individuals should have the right to determine who enters their property, shouldn't they? Moreover, doesn't this freedom of association empower, for instance, the black businessman to help his community out by hiring only other blacks?

But on the other hand, as we all know, this position is considered racist because it would also allow whites to discriminate against blacks.

And this is where the argument is supposed to end. Supporters of freedom of association are racists. Never mind some lingering Constitutional and ethical problems of the Civil Rights Act (CRA). Here are five.

First, the CRA employs the dubious use of the Constitution's Commerce Clause, originally intended to regulate goods crossing state lines, to regulate what are essentially intrastate, personal transactions. Where does this Commerce power end? The controversy still rages on in the medical marijuana and Obamacare insurance mandate issues today.

Second, it seems highly unfair to force an owner to have a relationship with applicants or customers with lifestyles and moral beliefs the owner considers offensive. This is often illustrated as the homophobe discriminating against the homosexual, but the tables could be turned in the other direction. Why should an atheist be forced to do business with a Christian, if the atheist blames the Christians for all the world's problems?

Third, the CRA can put the owner in impossible situations. Imagine kicking out rowdy youths from your restaurant, but they happen to be of another race, and the only persons of another race in the entire restaurant. Or imagine the fear that not hiring a questionable candidate of another race will bring on a lawsuit, and then fearing a lawsuit if you have to fire the same person for incompetence.

Fourth, calling private property a "public accommodation" seems an arbitrary attack on property rights. Why are actions "public" just because money changes hands?

Fifth, it appears that grassroots activity like sit-ins and boycotts led to desegregation in many places before the CRA was enacted. Economics, public pressure, and moral persuasion may have continued this trend without the Constitutional problems the CRA created.

But then there's the other side of the story, founded on truths which should be obvious to most:

1. Property owners (especially landowners) are more powerful than the property-less
2. People with access to money and capital have more options than people who do not
3. Whites are more privileged than African-Americans and other races

And the above state of affairs did not come about under conditions of peace, freedom, and equality, but from historical conquest, cronyism, and slavery. Moreover, the inequalities today are not the mere cultural and sociological hangovers from a more unjust past. Rather, many of the privileges persist today and are protected by law as land and money monopolies.

As Dan Sullivan wrote in a Yahoo! Group discussion, the result is an "implicit, never-stated assumption [that] landlords, bankers, sellers and bosses have an artificial advantage over tenants, borrowers, buyers and employees." But, Sullivan argues, the purpose of the Civil Rights Act was not to abolish privilege, but to "guarantee that underprivileged blacks got to pay tribute to the landed and money-lending aristocracies on the same terms as underprivileged whites."

Remedies proposed since the Civil Rights Act, such as affirmative action and compensation for slavery, function on the same principle. The purpose is to overthrow #3 (racial inequality) while retaining the status quo in land and finance. It's impossible.

Like most "progressive" policies, "civil rights" is profoundly conservative in that it promotes only "reform" that strengthens the status quo. Yes, progressives stand to the "left" of conservatives who demand formal legal equality at all times and are outraged by affirmative action and "political correctness." And, it stands left of those who, though not racist themselves, believe private property owners have the right to do almost whatever they please, including the right to discriminate for any reason. But they all take the same world, the world of inherited privilege, for granted.

There is a solution, however, that stands firmly to the left of progressivism, even though it is also on the side of freedom of association, property rights, and freedom of contract. This approach shifts the "balance of power" from the landlords, bankers, sellers, and bosses to the tenants, borrowers, buyers, and employees. It's a "far left" solution in that its goal is to abolish the entrenched privileges.

The first step is to abolish the money monopoly and completely de-regulate the banking industry. This can be accomplished, first, by abolishing the legal tender laws through Ron Paul's Free Competition In Currency Act. There are general benefits to having competing currencies, as it halts price inflation and would force Congress to become fiscally responsible. But locally, it could also lead to the formation of voluntary credit unions with their own scrip, barter certificates, or various forms of commodity-backed money. The unemployed with bad credit could start working and putting food on the table again if he is part of such a community.

In turn, the national economy could develop all kinds of banks dealing in all kinds of currency - all of them anxious for customers. At the same time, the Federal Reserve will likely fold and the federal money would be issued by the Treasury, and will probably take the form of something reliable, safe, and valuable like precious metals. Assuming this will continue to be (though not forced to be) universally-accepted, and since gold can't inflate the way paper money can, consumers will have less need for credit because prices will fall instead of inflate.

The second step is to abolish all other taxes, and tax land values and natural resources only. Those who have exclusive rights to real estate, drilling, mining, airwaves, air routes, etc. pay rents and royalties to the state and federal governments according to their value. And unlike property taxes, only the value of the land or resource would be taxed, not improvements. An uncultivated field would pay the same tax as an adjacent cultivated field. The owner of a vacant lot in midtown Manhattan would pay the same as the owners of the surrounding buildings. (I discuss this in a 2007 piece "Reviving the Cities.")

Landowners, being the only ones paying taxes, would seek to maximize revenue. They would beg for employees, customers, and renters of any and all backgrounds. Sullivan, who is an activist in this area, says, "If land were taxed heavily on its value, and other taxes phased out, a landlord without a tenant would be under as much pressure as a tenant without a landlord. This would not only make it easier for people to find housing, but to start their own businesses and create more jobs."

The third step is to de-regulate everything. Allow people who can drive to start a taxi service. Allow medical school drop-outs to put some of their knowledge and skill to work if they wish. Fraud and negligence would still be punished in civil and criminal courts, but in this economy the consumers will drift to the best quality at the lowest price, and won't be beholden to or dependent on anybody.

In this society, could a landowner still discriminate? Sure. Just as he could own undeveloped land and pay the taxes on it at a loss. But the balance of power would change. The tenant could always find cheaper rent. The worker would always find a higher-paying job and would be free to start a business without permission or licensing. The need for "credit" would diminish and banks would become savings institutions rather than lending institutions. Growth would be based on investment, not on borrowing paper monopoly money. And consumers will have almost limitless options.

This would be true for white and black, male or female, gay or straight, members of mainstream religions or obscure cults, etc. By abolishing historically-created and government-backed privilege, we will discover that freedom and equality do not contradict each other. Rather, they reinforce each other.

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