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The Market Gives Privilege to No One

Mises Daily: Monday, March 19, 2007 by

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"Bankers' hours" is an old phrase that actually reflects monopolistic privilege. The 10AM to 3PM that banks formerly were open to serve customers was made possible by government regulation and the consequent lack of competition to force bankers to be more available when customers needed them. With modest deregulation (and the electronic bookkeeping that deregulation encouraged) banks today are open a little longer than the former hours and some are even open on Saturdays.

Doctors, dentists, lawyers, and professors, however — a distinguished group that enjoy government-granted privileges in the form of licensing and other regulatory protections — still do not usually work weekends. Free-market service firms must be open and available when their customers need them. Why should medical or educational services only be available Monday through Friday, 8AM to 5PM? The significantly unregulated computer industry's "24/7" indicates the ultimate in service. The free market gives privilege to no one.

Privilege is a remnant of aristocratic life, special enjoyments granted due to birth or rank in society. Today, the rank stems directly from bureaucratic intrusions into the marketplace. Its key trait is that it is unearned, making the holder of the rank exempt from competition. Regulations restrict a portion of the market to the exclusive enjoyment of those protected at the expense of those who are not so protected. Sometimes, those enjoying this rank exhibit aristocratic arrogance, such as the professor who says to a student, during the professor's posted office hours: "I can't talk now. I have a meeting." The meeting is with other professors and the message conveyed is that other professors are more important than paying customers.[1]

Robert Fuller, former president of Oberlin College, has coined a word that actually is broader than the monopolistic privileges I am talking about here. (And Fuller, who is a social liberal, would certainly not agree with my application of his term.) Fuller recognizes that there is legitimate rank that can be earned, so he coined the term "rankism" to mean "the abuse of rank." Rankism, he says, describes a concept similar to, but broader than, racism, sexism, and bullying in general:

"Rankism insults the dignity of subordinates by treating them as invisible, as nobodies. Nobody is another n-word and, like the original, it is used to justify denigration and inequity."[2]

Fuller argues that equality means "equal dignity" and everyone has a right to it; equality does not mean equal wealth or equal rank. As a social liberal, he thinks the government, as in the case of race and gender inequities, must step in. My interpretation is that the government was a cause or magnifier of these particular inequities.

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Despite his social liberalism, Fuller's concept provides valuable insight into the psychological underpinnings of the abuse of rank by those in higher or privileged authority. Earned rank does exist naturally in society — parents hold rank over children, teachers over students, and employers over employees — and more earned rank would exist in a truly free-market economy because bureaucrats would have to get jobs in business and compete for their positions of authority.

From the standpoint of psychology, though, as Fuller demonstrates, "lording it over" one's subordinates derives from defensive anxiety and the necessity of setting oneself up as special or superior to others. Sometimes this necessity is made manifest through regulatory privilege.

Rankism, says Fuller, is the last "vestige of aristocratic class" that must be eliminated from the home, school, workplace, and social order before we can achieve a just society based on equal dignity. The first step, in contrast to what Fuller would say, involves removing the last semblance of regulatory privilege by getting government out of our lives and economy.


Jerry Kirkpatrick is professor of international business and marketing at California State Polytechnic University, Pomona, and author of In Defense of Advertising: Arguments from Reason, Ethical Egoism, and Laissez-Faire Capitalism. Send him mail. Comment on the blog.

Notes

[1] Oops! Did I say students were paying customers? I realize that many professors — a privileged group I know well — object strenuously to this characterization. Yet students in a state-financed university, such as mine, often work thirty or more hours per week to pay for their education. This means they are paying substantial taxes to pay for their professors' meal tickets. And this doesn't count the taxes the students' parents have paid over the years. So, yes, I do believe it is correct to call my students paying customers.

[2] Robert Fuller, Somebodies and Nobodies: Overcoming the Abuse of Rank, p. 5. Fuller's web site is called Breaking Ranks.