Overview
- Free trade is the best way to maximise prosperity.
- 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 always 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 currency and taxation, both of which breach the Legal Principle.
The power of businesses competing to serve us
- Like any monopoly, when the state is the only provider of a service, the lack of alternative choices means less incentive to compete to attract customers. 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.
‘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.
- The fruits of our labor are our private property. Rational people will only perform labor if they can trust they will be able to enjoy the benefits of it. This applies to all economic activity, from planting a tomato, to manufacturing, transportation, running a shop, etc.
Pollution not tolerated in a truly free market
- The ‘free market’ is often criticised for its detrimental impact on the planet. But the 3L Philosophy does not tolerate aggressing in the form of polluting other people’s property.
- Therefore, a free society, one that adheres to the 3L Philosophy, must not pollute. This may add to the costs of some goods and services, but we can never make an exception to the Legal Principle without compromising its integrity.
History
- At this point in human history, we don’t need to speculate that more freedom equates to more prosperity and a better society for virtually everyone.
- When the Soviet Union collapsed under the weight of its crushing debt due to its government-controlled economy, it was evident that a more free society works better than a less free society. Indeed, the new countries that emerged due to the Soviet Union’s collapse also demonstrated that freedom works better.
- We saw the same result when East Germany and West Germany were reunited. Among other things, the more-free West Germany produced fantastic automotive brands such as Porsche, Audi, Mercedes-Benz, Volkswagen, and BMW. The less-free East Germany produced nothing of interest. If you visit the area where the former Berlin Wall stood today, you can witness the stark economic differences between the two former countries.
Conclusion
- Not surprisingly, free and peaceful places generally have the best living standards. People routinely risk all manner of harm to immigrate to more free countries from less free countries.
- We can confidently say that services provided by the state monopoly are much more expensive than those provided by the ‘free-choice’ economy.
- Standards of living rise in a free society due to people being free to pursue win/win outcomes.
