The fallacy of that “granted privileges” argument is that it depends on the premise that the people are there to serve the interest of the state rather than vice versa.
No, not at all. The state definitely can grant a privilege that one does not possess intrinsically, usually to do with the operation of the state itself. I enumerated them: a privilege to adopt a child who is a ward of the state, or to gain a citizenship. None of these are intrinsic rights. It does not mean I serve the state, merely that I do not wholly control its laws.