Overview

• Free trade is the best way to maximise prosperity and eliminate poverty.
• A free choice economy (free market) is the natural consequence of calibrating our laws to harmonize with the Legal Principle.
• No-one should be compelled to participate in the free market, but those looking to improve their quality of life generally do.
• Free trade is also effective in incentivising peace between nations.
• Pollution is a breach of the Legal Principle.
• State-funded services are never free - they are paid for by inflating the mandatory state currency and by taxation, both of which breach the Legal Principle.

The power of businesses competing to serve us

• Competition naturally results in businesses offering higher quality services at lower costs, otherwise they lose out to more attractive offerings. The result is ever improving value for money.

  Example of the iPhone

  • When the first iPhone was produced in 2007, Apple sold it for $599 with 8GB of storage. A new iPhone 13 can be bought in 2024 for the same price ($599) but comes with 16X more storage, 2X longer battery life, 6X more mega-pixels in the camera and many more improvements. When adjusted for inflation the superior iPhone 13 is 40% cheaper too! Apple had to offer improvements to quality and cost given the strong competition from Samsung, Google, Huawei and others. These rapid improvements that we consumers benefitted from required no intervention via government.

  Example of the Healthcare, where regulations are high

  • Meanwhile, have we seen a 40% improvement in healthcare costs with radically improved service? Unfortunately not. Healthcare costs in the US are 60% higher and the service improvements are less pronounced.

Artificial monopolies

• Monopolies, where there is no competition in an industry, tend to result in lower quality and higher costs to consumers.
• When the state/government is the only provider of a particular service, the effects of this monopoly are no different: the lack of competition means there is no strong incentive to improve the customer experience.
• Some monopolies exist naturally - the Dutch semiconductor-manufacturing equipment company, ASML, is the only company in the world that can produce the advanced lithography machines used to drive efficiency in computer chips. This company charges high prices, the profits from which are reinvested to maintain their technological leadership that drives the monopoly. There is nothing particularly wrong with natural monopolies. When a natural monopoly does become problematic, entrepreneurs respond by offering different or better services; the natural monopoly is usually lost if it is abused.
• Artificial monopolies are when competition is forced out of the market by government intervention. Artificial monopoles are what harm consumers. Unlike natural monopolies, artificial monopolies can persist indefinitely which huge opportunity costs to socierty.

‘Free things’ vs ‘free choice’

• State-provided services are never ‘free’
• State-funded services, like healthcare, are paid for by people, even if those services cost nothing at the point of consumption. In healthcare, as for any business, money builds sufficient trust to motivate professionals to assist complete strangers. One way or another, caregiver salaries, medicines etc. need to be paid for, assuming patients continue to seek quality care. We, the citizens of that society, pay via taxes, inflation and reduced competition. As with most such methods requiring coercion, there are unintended (occasionally intended) sub-optimal consequences.