At the end of the previous section, it was stated that an Azadist government was a “small” one. This is not referring to the number of officials (although it can include this), but to the level of influence a government has in an economy. This naturally means that Azadism is placing more responsibility on the people themselves to provide most of society's services. In other words, public services are replaced by the private sector. Initially many who are reading this may have a negative reaction to a larger private sector and may look to examples of the UK’s NHS and compare it to the “private” healthcare system of the USA in order to highlight the failure of privatising industries. Another criticism may be that monopolies may enter and take over the market, thereby exploiting the consumer. This section will explain the fallacy in this way of thinking and will present a view that the private sector can not only outperform the public sector, but also do it in a way that maintains individual freedom and provide the best outcome for both consumers and producers.
To help break the negative connotations associated with private industry, this section will begin by explaining why the institution of “Langar” is indeed a private enterprise¹ and not a public one. Langar is an effort where private individuals in a community come together and contribute voluntarily to provide free meals to whoever wants it. This forms the basis for the spiritual purpose of Langar as being a communal kitchen designed to not only just feed the community, but also provide an avenue to express and develop spirituality in a real way in terms of seva.
Using the Oxford dictionary definitions of private sector and public sector, it is easy to see that Langar is designed as a private effort and operates absent of any state intervention². There is no need for government involvement. There are no taxes that must be paid, there is no state mandated diet or regulation enforced on the process. Langar is managed solely by the private sector, or in other words, the community themselves organise this through voluntary action. People choosing to participate in this are free to donate as much or as little as they want or help in a variety of other ways absent of any state pressure or threat of punishment. The only authority in this is the private religious institution itself which may own the building and sets the dietary requirement or run the day-to-day management of the Langar. The reason why this authority is different from the government is because it is completely voluntary to participate in. Being private means that it has no legal authority over people who have decided through their own choice not to participate in it. The Gurudwara cannot forcibly collect donations or allocate labour, instead it relies on the community to take this up through their own individual choice. If the Gurudwara management recognises the need for more funds or help it can only ask its community. Unlike the state, the Gurudwara does not rely on the threat of force in order to coerce people into participating.
Whereas having a government managing this means that everyone must participate regardless of individual choice. This is because this effort would have to be funded through taxes instead. The core essence of Seva is eroded when people are forced to contribute, rather than contributing out of their own compassion. Deciding to sacrifice their own time, money and/or effort should be a decision made independent of state influence. Otherwise, in principle we are suggesting that the state must enforce its ethics on others. The first section already briefly mentions the dangers of giving the state a monopoly on setting ethics beyond a non-aggression principle, and this will also be expanded in a later section. In addition to this, we must ask ourselves whether forced ethics is truly what Sikhi promotes? Does the state forcing participation in Seva increase the spiritual benefit of it? Would paying for Langar through taxes hold the same personal spiritual satisfaction as paying for Langar through a voluntary donation? Gurbani actually already clearly provides us this answer, however this will be saved for the later section delving deeper into the nature of taxes.
It may be argued that the Gurus themselves had “taxed” the Sikh’s through the concept of Dasvandh, but this is a critical mistake. One of the most important points that we must distinguish is the difference between taxes and Dasvandh. Dasvandh is a voluntary donation whereas tax is a non-voluntary payment that is collected either through force or the threat of force. There are no examples in Sikh history of the Guru forcibly collecting Dasvandh off Sikhs³. It may be said that Dasvandh is an obligation for every Sikh, the same way how tax is an obligation for every citizen. However, there is no obligation to be a Sikh. The Guru has never forcibly converted anyone into Sikhi, they instead relied on the veracity of their argument and lived what they preached in order to inspire and persuade the population to live a certain way. This is supported through the story of 40 Mukte where Guru Gobind Singh permitted the apostasy of 40 of his Sikhs (who later repented, returned, and achieved martyrdom). Additionally, Bhai Gurdas Ji in his Kabit Svaiye communicates the effort made by the Guru in order to reach his Sikh. However, the initial step in that direction is always down to the Sikh, thereby highlighting the voluntary, non-coercive nature of adopting the path of Sikhi.
An individual has the complete freedom to join the Sikh faith and part of the expected traditions may include paying Dasvandh. Since the initial decision to be Sikh was voluntary, any other obligations that stem from this, such as keeping Kes, taking Khanda Di Pahaul and Dasvandh, are also thereby a voluntary decision at its core⁴.
In brief, Charles Darwin’s theory of natural selection outlined that organisms on earth have been constantly competing to survive for billions of years. The constant struggle to survive and reproduce has propelled life on this planet from simple microbes to the complexity of human beings. None of this would have happened without competition. Organisms compete for food to survive and compete for mates to pass on their genes. Only those organisms that were able to adapt to their environment adequately and out-compete members of other species as well as their own, were best able to survive. Due to their adaptations, these organisms were able to obtain nutrition as well as reproduce to pass on those features that allowed them to out-compete. Those that were not able to do so died out. This meant that only those organisms with the right adaptations passed down their advantageous genes. The best characteristics from the previous generations were passed on and unhelpful features were eventually filtered out. This process of natural selection fuelled the evolution of the microbe with its simple biology, to eventually give us human beings with sophisticated systems and features such as eyes, brains, and even higher levels of consciousness. All this evolution was achieved through competition.
By seeing the economy similarly as an ecosystem, parallels can be drawn between natural selection and competitive free markets. The businesses are the organisms, and the competition between them is the natural selection. Only those businesses that are able to provide goods and services at a price and quality that there is a consumer demand for are able to survive and out-compete. Businesses compete by inventing new technologies, adapting and improving existing ones, or by finding more efficient methods of production. This constant striving to get ahead of competitors drives innovation and leaves consumers with products and services of a better quality and at a better price. In this sense, innovation is evolution.
For organisms, their success could be measured by the food or mates they obtained; the private sector hinges on the ability to generate profit. This inevitably leads to a private sector that is based on a profit maximising motive for the most part. Considering common conceptions of the term, this may initially seem unethical. However, looking at what profit actually is measuring, it is simply how well a particular enterprise or effort is able to minimise costs and raise income. If something is costing too much and simultaneously returning too little, this is an inefficient use of resources. The same way, if an animal spent more energy in obtaining food than it received from the consumption of it, then it will not last very long with this energy deficit. A loss is the market’s way of communicating that this use of resources is inefficient and that the organiser of this venture should probably stop⁵. Similarly, the profit is also signal showing which use of resources is meeting the market's demands. As well as this, two businesses of similar nature can be assessed for their efficiency to manage the same resources by looking at how much profit each makes. The one with the most profit generally indicates a higher degree of efficiency. This does not then mean that a company can act in socially unacceptable ways to achieve maximum profits, such as cutting costs that dramatically reduces working conditions. In a highly competitive industry where there are low barriers to entry, the labour force has more of a choice in where to work and so a company offering too low wages, poor working conditions, minimal benefits (as compared to the rest of the market) will naturally cause people to have less incentive to work there. The company must reach a balance between cost reduction and maintaining competitive, all the while raising a profit. If it is unable to do so, it will be outcompeted by those that can. Again, over time, this harbours an environment of constant improvement since those that cannot meet this standard are filtered out.
Another example we could highlight is that companies may use unethical methods to acquire resources in the first place. Under Azadism, there are two possible solutions to this scenario. Firstly, if the means of accessing resources breaks the aforementioned “non-aggression principle”, then it is the government’s duty to stop this and prosecute the offenders. This shouldn’t be some petty fine that they could easily pay and consider as just another business expense. It should be strict enough that provides a negative incentive towards breaking the law in this way. Secondly, these methods of production must factor into the decision making of the consumers themselves. The product is the result of the process of manufacture. If a clothing brand uses unethical means in its production process and consumers continue to buy the products despite knowledge of this, then they also must take the blame. The company also cannot legally hide this information either and so when it is inevitably exposed it will be punished through the justice system. Establishing when and where the NAP is broken is the sole role of the courts of an Azadist state.
On the other hand, public sector institutions break this framework entirely. When industries are “nationalised” and become part of the public sector, the state takes ownership over where the resources should go. This is putting power of resource management into the hands of a small group which would have otherwise been in the domain of the private sector, or in other words, the people themselves. Nationalised industries can then offer the illusion of a “free” service since the income of a public enterprise is coming from taxpayer’s money instead. Since tax is obtained through force and not choice, there is no true way to gauge demand for public goods and services and adapt supply, because a public organisation receives an income regardless. The laws of supply and demand that gave way to price signalling is no longer present in a public company, and so it is far more difficult to use resources efficiently and allocate them to where they would be used best. The costs are also passed off to the taxpayers, which leaves very little incentive for a public company to be efficient or innovate. In a private competition model, if an organisation was misallocating resources, another private company could offer an alternative and capture demand instead. The same is true for the quality of a service or product. For a private enterprise it must constantly strive towards providing the best possible to avoid being out-competed, however a state-backed enterprise has no similar incentive. Under competition, if a business was better able to reduce costs to provide the same or a better quality product, they can reflect that saving in the price they charge. Thereby outcompeting the more inefficient business whilst providing the same or a better option to the consumer. The incentive to make a profit and to remain competitive by providing the best product available remains best realised in the private sector. Public sector organisations do not have this same drive since they have no competition. If they do, it is very difficult for a private firm to compete with something that provides a “free” service due to the state’s “business costs” being paid for by the taxpayer and its income generated through the forcible acquisition of funds. If anything, it is unfair competition in this case, propped up and supported by the state using money they forcibly collect off the same consumers they sell to through taxes. It is essentially taking away the ability for the people to decide themselves where best to put their own money and putting faith in the government to best meet their needs. To re-emphasise, the ideal government’s role under Azadism is to maintain a healthy, competitive, and fair free-market economy that functions within the boundaries of the law. As soon as it overextends its role as a safeguard for the market and instead becomes a participant, the rise of unfair advantages is an inevitability.
For the Sikh Panth, competition is nothing immoral nor even a foreign concept. As Sikhs we have been competing in every aspect since our inception. From Guru Nanak conversing in debate with the Yogis and Siddhas (which later on formed the basis of Jap Ji Sahib), Guru Angad Dev establishing the Mal Akhara at Khadur Sahib, encouraging the Sikhs to wrestle with each other and become familiar with combat⁶. Guru Hargobind Sahib “competed” with the Mughals in multiple battles, Guru Gobind Singh also followed this example, as well as promoted competition between his court poets through offering vast rewards of land and gold. Competition is nothing unethical in of itself, it is only the people competing who can engage in moral or immoral methods. Competition is merely the nature of things.
This may seem destructive and selfish initially, however when applied within the context of the law it can bring about great leaps in innovation and human flourishing. Often great achievements are produced in times of hardship. When a human being is in a competitive environment they strive to work harder and unlock levels of success previously thought to be unobtainable. It is for this reason that Sun Tzu in his 'Art of War' suggests the strategy of placing your forces in deadly situations, where they have nowhere to run (something that Robert Greene calls the death-ground strategy⁷). By putting your forces in a position where they cannot escape, they have no other option but to fight. This inevitably makes them fight harder than they otherwise would and creates a better odds of success.
“For it is precisely when a force has fallen into harm's way that is capable of striking a blow for victory.”
—Sun Tzu's Art of War, ss. 11.59: The Nine Situations⁸
However, this does not just apply to life and death scenarios. Competition in general creates a sense of urgency, which is crucial for driving human beings to success and being productive in general. Consider the motivations of someone who has no sense of urgency compared to someone who does. How many students would complete their assignments with no hand in date? It is far more likely if you have a goal, someone to beat, deadlines to meet, an obstacle to overcome that you will use your human potential to its fullest⁹. Even the Guru employs this strategy in Bani when trying to get people to do their bhagti¹⁰:
Additionally, competition isn’t always a game of trying to defeat others. Instead, it is possible to foster an environment of good sportsmanship and mutual benefit from competition. Competition naturally results in highly effective forms of cooperation, they are not opposing ideals. Companies are organisations full of individuals constantly working together within a voluntary framework. The better those individuals can work together, the higher the chances of them all collectively outcompeting other collaborations. In fact, even by saying “outcompete” it wrongly implies that there must be one “winner”. When choosing what phone to buy, you may have gone through many different options, comparing each with your budget, or the features you want. However, the one you finally decided on was your own personal winner. There does not need to be one universal winner for everyone since everyone has different preferences. Chairman of the Ayn Rand institute, Yaron Brook, commonly uses the example of Apple and Samsung¹¹. Although these are both fierce competitors in the smartphone industry, the iPhone still uses many components manufactured by Samsung. Both parties benefit from this, and so do their employees who receive a regular income as well as the consumers who receive the products. The products would have been more expensive if this collaboration did not exist, since Apple would have had to build those components from scratch. The products are also constantly improving as a result of competition constantly innovating, and those innovations get used by everyone. Instead, both Samsung and Apple benefit from this trade, as well as the consumer.
Trade in general is a form of societal collaboration and cooperation. To illustrate this, an essay named "I, Pencil" written by the founder of the Foundation for Economic Education, Leonard Read explained the sheer complexity of producing a simple pencil¹². This meditation of sorts explored the process and ultimately concluded that no one person on their own can produce even one modern pencil from scratch. The wood may seem reasonable to carve into the correct shape, but what about inserting the graphite? What about obtaining that graphite in the first place and getting it into the right size and shape? The metal that holds the rubber too is an insanely difficult process, where you would need to mine the ores and produce the right alloys. How would you do that without the foundries and heavy machinery? The rubber needs to come from somewhere too. In fact most of these raw materials come from all over, you would be extremely lucky to find them all in the same place, so factor in the cost of travelling as well. So many production processes would have to be mastered. Even if one person could know the entire process, it would still cost millions to extract, process and combine all these materials. This is just one pencil, imagine trying to produce another one that is identical.
However, through trade, we are able to produce billions of these pencils every year. Each part of the process is instead handled by different groups of people around the world. Countless people are involved in the process, each working on a specific area, specialising in their craft. This often involves hundreds working together to produce just one element of a pencil. However, no central planner determines any of it. Each person in this process only looks after his own self-interest. The lumberjacks cut the trees with no knowledge of where it will go and how it will be used. That wood is then processed by another group of people, equally clueless about the many uses of the wood after them. All these people are just trying to get paid for their work. Getting the tree to the wood processors is in itself a mystery. How were the trucks made, or the rope to secure the timber? Even basic things, like the clothes the workers wear or the food to feed them. These themselves have countless processes to get them too - a central planner would go insane! Yet, through this decentralised process, with everyone only needing to focus on their own tasks, innumerable pencils are produced and sold at a price that is only a fraction of the cost. Competition further streamlines all of this and encourages producers to be more efficient and satisfy not only the requirements for a pencil, but countless other things in order to generate a profit.
You cannot make everything yourself. Even the simplest things we take for granted are a result of worldwide collaboration between diverse groups of different religions, cultures and ethnicities. Through trade, people who would have otherwise killed each other now work together, whether knowingly or not. They have no combined purpose, nor need for a central planner to organise their efforts. If there is a demand for something, they will supply it in order to meet their own needs. Therefore, Azadism recognises competition as a form of cooperation as opposed to the coercive elements of when government interferes with the everyday transactions of the people. It is an alternative to just killing and stealing what you want, and instead encourages people of all walks of life, around the world to collaborate together whilst maximising human potential.
To most, an unregulated free-market would be considered a nightmare of exploitation and corruption. Regulations may seem necessary to moderate the so-called “chaos” of the market and force people to behave in a desired way. In fact, a lot of blame is placed on the government for not regulating enough, so to have avoided “market” failures in housing, pollution, banking and elsewhere. Consequently, regulations may seem like an obvious solution to help protect the consumer. But let’s pick one of these market failures to see how regulating them worked in the real world¹³.
Housing has become increasingly unaffordable. Prices have risen at a rapid rate whilst home ownership is in decline, leaving many with fewer options. On the surface, this may seem like an obvious failure of the market and that government needs to step in and regulate this. However, let's first recall how prices are determined. If a supply of a good is limited, but the demand for it increases, this inevitably corresponds to increased prices. With the current housing markets, supply has not been able to grow fast enough to meet the greater increase in demand for them. But why is this? Government regulations actively hamper the freedom of building homes or restructuring existing ones to accommodate different living circumstances. Builders need to factor in costs of complying with regulations such as materials or the extra time and effort spent on meeting these standards. This inevitably gets passed down to the homeowner since these costs are incorporated into the final price they must pay for purchasing property or renovating. Alongside this, strict planning permission and zoning laws further increase the difficulty in making appropriate property types available. Through these restrictions the supply is actively suppressed to meet the market demand¹⁴.
Under normal market conditions, a sudden rise in demand may in the short-term raise prices, but those responsible for building houses would now have more of an incentive to build more of them (i.e. new entrants enter the market). This is because the rise in prices translate into higher returns. As the supply rises to meet the demand, the price begins to fall and return to a natural level. As the price falls, the suppliers make less, thereby rebalancing the rate of construction. The problem is that regulations actively inhibit this process. As population is increasing, the demand for houses is going to inevitably rise, and so the supply needs to match this increase if society wants reasonable prices. A government regulating this process manually without the system of price-signalling already integrated in the market, leads to inefficiencies. Making too many homes will lead to low prices but many empty properties and a huge waste of materials that could have been used more productively elsewhere. Making not enough houses available is the situation we are in now, with decreasing affordability and fewer options.
At this point it may be reasonable to suggest price-controls, where the government sets the prices instead of the market forces of supply and demand. But this too is a critical error. Economists almost universally agree on this issue, that implementing a regulation on the prices of goods and services lead to shortages or surpluses¹⁵. By imposing a price floor too high, the quantity supplied increases even though the demand is not there. In this case usually government has to buy the product creating a guaranteed income for suppliers, who then continue to produce as much as possible and create wasteful surpluses. The government too can only buy these surpluses using tax-payers money, so ultimately the consumer has to pay for it anyway, just not directly. On the other hand, setting a price-ceiling too low, the supplier has less incentive from producing those goods since they can either not cover their costs or generate a substantial enough profit to justify the effort. Usually then the products that are supplied are of lower quality to reflect cost saving behaviour. Applying this to real life scenarios, cities and states around the world have experimented in implementing rent controls to control the rising prices in their rental markets. Inevitably, this led to far worse outcomes than before as affordability declined even further alongside a degrading of quality of the homes offered. In cases like New York city, this has been eased in over the decades so the harmful effects did not materialise immediately. However, both property prices and rent continued to rise to unprecedented levels. Those rental properties that were not subject to rent controls actually rose in price too, far higher than they otherwise would have without regulations. The reason being that rent controls actually ended up further exacerbating the issue of limited supply by taking more properties off the market and into the scheme. With the demand still increasing, the price in the market had to rise. Not only did this policy harm the affordability in general for everyone, but also harmed the very people it aimed to help. The tenants of these rent-controlled properties are effectively stuck as the market prices rise around them and price them out. Their only options are then to stay in their current property and continue to pay below-market rates or leave entirely. Since landlords cannot raise profits as easily through rent either, they cut corners and keep quality at a minimum to save on costs. This isn’t just because they are greedy but often are unable to raise enough income to outweigh their outgoings. The tenant is then living in worse conditions than before, and they cannot force the landlord to do anything since the waiting lists for these homes are so large they can be easily replaced. In some places these lists have queued up to a level where people have to wait up to 20 years¹⁶!
So instead of this being seen as market failure, after drilling down into the details, this is actually one of many cases of government failure. First through stringent regulations in building homes the supply was artificially restricted. Then to fix this problem that they created, they tried to implement regulations on prices which further contributed to the shortages and led to lower quality housing for the poor as well as other social issues . Regulations caused the issue, and then they suggest more regulation will solve it.
But then how do we manage the harmful effects in the market? Many of these regulations must have come in the first place for a reason, how do we protect the consumer? Take the case of builders doing the bare minimum to the level that they cause structural instability and put people’s lives at risk. Under Azadism a few measures are in place to help prevent this. The first measure is the NAP, upon which all law is based on. If the builders’ work causes a collapse of a structure and lead to the damage of personal property or life, then they are liable for punishment. Under Azadism, this should be strict enough as to create a negative incentive for builders to erect such a weak structure in the first place. There is no need for state inspectors, since the builders themselves have an incentive to create safe structures so to avoid legal repercussions. The second measure is the builders' own market reputation. If a building company creates something that is of poor quality or ends up collapsing, then their reputation is tarnished. This directly effects their ability to generate future income since no one would want to hire them. The builders themselves have an incentive then to maintain quality and safe standards. This directly links to the third measure - private regulators. By privatising regulations, a market for trust develops. Instead of a government official acting as an inspector, the private sector establishes many independent inspectors competing to secure trust through exposing faulty practices. Now, the builders need to factor in a trust component as well when selling their services, and so would seek accreditation from these private regulators. By getting recognition of their standards from these independent bodies helps secure their reputations in the market as well as gives customers a sense of security¹⁷. The incentive to cheat and bribe inspectors may be compelling for some of these builders, however this is a risky strategy for all involved. Firstly, it would reflect badly on them if the inspector refuses the bribe, essentially dooming the company. Secondly, if the inspector is caught taking the bribe then the inspectors own reputation is destroyed and the market adjusts to avoid them both. Thirdly, the presence of many inspectors, all independent from one another increases the risk of being exposed, since all it takes is one inspector to call out a breach in standards. Compare this with government where if a private regulator is caught taking bribes, it will lose trust, fail and face legal charges. But if a government is caught, all it has to do is fire the employee. Private regulators therefore have a greater incentive to build and maintain trust and may find many innovative ways of proving themselves as they compete to increase reliability and truthfulness in their assessments. This may mean private certifications, licences¹⁸ and other methods, all without the need of state interference.
Much of this already exists in terms of independent bodies and trade associations¹⁹. However, attention must also be given to simpler systems of regulation in the form of reviews. With the growth of the internet and social media, the medium in which reviews of products and services can be communicated has never been easier to access. Consider restaurants for example, a barrage of negative reviews can cripple the business. Great effort is put into maintaining a high standard in order to preserve and improve their reputation. Those restaurants with low quality food, poor hygiene and rude staff do not tend to last very long. Also consider, many of these review factors are also subjective. Some will cater towards different audiences and diets, and so reviews help communicate this too. Customer reviews have already formed a large part of the consumer's decision making process when purchasing goods, it is taken for granted how easily and widespread this practice is. From phones to clothing, almost every commonly sold item has a set of people leaving their opinions about them either on mediums like YouTube and Reddit, or even directly on the product's webpage itself. The role of reviews in a privately regulated system should not be understated nor restricted²⁰.
There are indeed market failures, but in the grand scheme of things, these are often rare, short lived and concentrated in small areas. Most of the time, by doing nothing the market resolves these itself. What tends to prevent this is politicians capitalising on the opportunity by convincing the people it is a failing of the private sector and that they must step in to help, even though it tends to be their fault in the first place. By even abusing the term “private-sector” they have successfully demonised it and implanted images of greedy businessmen. Private refers to the people directly, absent of state involvement. Farmers, entrepreneurs, charity workers, even our own Gurus are all private entities, acting separate from state influence. In fact, the Gurus fought hard to maintain this distinction and resisted state control in order to keep the public sector out of people’s lives²¹. What the politicians are doing by blaming the private sector is saying to the people that it is their own fault for these things and only we can fix it. The reason why this works so well is that regulations are often “sound-good” policies designed to win over voters. Economist and Nobel Laureate Milton Friedman puts this best when urging attendees of one of his lectures to consider the consequences of regulations: “… we have to look at the actual consequences of policies not at the names of them”²². People often look at policy names rather than what they actually do, and this is what grants government greater and greater power. Also, note the similarity here with the Cobra Effect story from the first section. Often policy enacted in good faith leads to undesirable and unforeseen consequences when incentives are not considered.
“One of the great mistakes is to judge policies and programs by their intentions rather than their results.”
― Mayagyani Sri Baba Milton Friedman Chicagowale
Whether this is done intentionally through nefarious actors, or simply as a result of incompetence, the outcome is the same. The people suffer and those who cause it offer more suffering to solve it. To stay protected against either, ignorance must be dispelled and replaced with knowledge. The more influence the state gains, the more it chips away at individual freedom until it is so inflated as an institution that “private” actors can infiltrate and use government as a tool to secure their own interests.
In economics, a monopoly is characterised as an organisation that has exclusive control over the supply of a particular good or service. Although, in reality there are very few examples of pure monopolies, this term usually refers to those corporations with large market shares. The primary concern with such entities is that they have overwhelming power in determining prices for their products and so nothing stops them to maximise their profits at the expense of the consumer. As a result, the people are worse off as they must potentially pay way above the natural market price.
By its nature, monopolies have few or no competition. Therefore, the remedy to a few firms controlling the market is to make it easier for new firms to enter it and compete. It may sound simple and obvious, but it is important to highlight that the real problem here is a lack of competition. If consumers were given more choice, then any one firm cannot simply hike up prices, since the consumer has the ability to go elsewhere. Or alternatively, they would also be free to set up their own enterprises. This provides an incentive for competing firms to provide the best price possible to consumers, regardless of their market share. In a free market, the only way they can maximise profit is by either increasing efficiency (lowering costs), offering a better-quality product, and/or convincing consumers to buy from them rather than someone else. Consumers are best protected from price manipulation and poor quality products in a competitive market in which there are many alternatives to choose from.
Hence, in order to combat and prevent monopolies, we must ask what exactly is preventing competition in the market? What is restricting the amount of choices available? A lot of this is down to the high barriers of entry into industries imposed through government intervention. These can be through such measures as discussed in the preceding subsection, namely: regulations, licenses, patents and tariffs. Initially, this may seem counter-intuitive, that regulations are exactly what we may need to curb the power of big corporations. But this is a mistake. Regulations are often the reason why such large corporations are able to exist at all. When introducing legislation backed by a threat of force (government), this creates a more difficult environment to compete in. The ability to pass through policies that grant an advantage now becomes a valuable resource, and so corporations seek to leverage this for their own benefit. Therefore, it is often the case that these barriers are set up by corporations themselves who influence government through a practice known as corporate political activity, and lobbying in particular²³. This is where corporations are able to give money to the government in order to implement policies or grant exemptions that benefit them and give them an unfair advantage over the competition. Smaller businesses and entrepreneurs are unable to do this as effectively or at all, and so are more uncompetitive as a result. Rather than relying on the quality of their products or services, by adding a lobbying component into the mix, large companies are able to secure their market shares by actively hampering everyone else’s ability to compete with them²⁴.
However, all the blame cannot just be placed on the companies. Politicians themselves use threats of legislative action to force companies to pay up too. Microsoft had resisted the use of lobbying for the longest time, until it was ultimately commercially infeasible to do so. The use of antitrust laws²⁵ by government were threatening Microsoft after they accused it of being a monopoly. These laws had the potential to impose crippling fines or even break up the company entirely. Acting similar to a protection racket run by Mafias, the government was giving them the choice to either pay-up or die. This inevitably led to Microsoft also engaging in these lobbying practices as a necessity and then the line of fire was directed elsewhere to other companies²⁶. Now Microsoft has fully embraced corporate political activity and hire specialists devoted to lobbying²⁷. Do not be confused about who is using who here. The lines between private and public sectors are blurred at this level as both the corporations and politicians benefit at the expense of the people.
By permitting lobbying, instead of solely competing for the consumer's demand, they compete for government favour. Small businesses cannot compete in this way, leaving a situation where large firms are left engaged in a bidding war to buy politicians or pass policies granting them advantages. If they don’t their competitors will, or the government cripples them. The reality is that modern democracy can be bought and sold to the highest bidder when a government allows for lobbying. It is nothing other than an erosion on personal freedom and choice. Under Azadism, lobbying would be considered on the same level as bribery and so punished as a crime. Professions such as “corporate lobbyist” would be seen equal to the profession of a thief. Corporate interests should not translate into law, since this a disintegration of the distinction between the private and public sectors. When corporations are given the ability to set policy, they have essentially lost their “private” status. They are using tax-payer money to further their own interests and use the government to enforce their will on others, either directly or indirectly. This gives them an unfair advantage in the market over competitors and so lobbying is an active hindrance to the competitive free markets that Azadism is based upon. These practices in whatever form should be made clearly illegal as per the constitutional law of an Azadist nation. Whether its corporations influencing government, or the other way around, the very fact that one interacts with the other in this way should be avoided at all costs. Punishments should be severe for any violation in this area as it threatens the freedom of markets and ultimately harms the consumer.
Due to the restricted involvement of government in the market under Azadism, a government would not have the ability to enact many of these policies that the monopolies want in the first place. There are no government contracts, no special licenses nor regulations available for these corporations to manipulate. Large firms are forced to compete in the same free market environment as all other firms. If they cannot provide a service at a good enough price or quality, then they cannot continue to exist (as determined by the people, not the state). The sole reason why many of the largest corporations of our time are able to do so is purely due to their links with the state²⁸. The only way to gain a large market share in this environment would be to offer a better product and a better price than all the rest. Given that value is subjective to each individual and dependent on everyone’s own unique circumstances, so that preferences are almost always different, it is very difficult for a single entity to become a sole provider of a good or service. There are many factors that go into determining the subjective value of something for each individual which may go beyond the price of the product. This may include how the product was made, customer service, the goals of the enterprise, who is the provider or even the current mood of the consumer. This highly competitive environment, where anyone can set up a business, makes it far harder for monopolies to sustain themselves or become that large in the first place. The constant stream of competition is what best protects the consumer, not regulations that can easily be bypassed through lobbying. Especially not those regulations set up by corporations themselves. Any regulations that do exist should be private and not public.
However, it must be stated that there are indeed a few rare situations in which a “natural” monopoly can form under these conditions. And in these cases, it would not necessarily be undesirable for these firms to operate as a monopoly. Examples of this include:
Lastly there is the argument of predatory pricing. This is the claim that when firms get large enough, they can undercut competitors on prices by taking a loss for a period of time. When the other firms are unable to compete and leave the market, this leaves the predator firm free to raise prices. However, economist Thomas Sowell argues that this a flawed argument since the predator needs to have raised extra profit after the other firms leave the market in order to recuperate the losses it would have incurred using this strategy. When it raises prices to do this, competitors would enter the market again and offer the lower natural market price once again. Furthermore, if competitors go bankrupt, this does not mean all the equipment, buildings or workers suddenly "pop out" of existence. Instead, these are usually sold or hired at a discounted rate, and so other entrepreneurs are ready to take on this opportunity to compete. Lastly, if these tactics fail and competitors survive, all it does is leave the predatory business in a huge loss. These factors make it a huge risk for the predator firm to enact this strategy in the first place. What is more likely to occur are “price-wars” where firms compete to undercut each other by reducing prices, meanwhile benefiting consumers, as goods or services become more and more affordable²⁹.
To conclude, there are very few (if at all) purely private monopolies. What there are, is varying degrees and methods of state involvement in large market share organisations. It must be made absolutely clear that privatisation is not politicians passing on contracts to their friends. True privatisation under Azadism is the successful detachment between the private and public sectors entirely, where the strive is to meet consumer demand. I.e, winning the people’s favour, not the politician's. Many industries of modern economies suffer from this sort of collusion between state and so-called private actors. Those who advocate for “Nationalisation” or to make private enterprise into public ones, are effectively promoting the formation of state-backed monopolies directly. In the following two parts of this section, two major examples of state-backed monopolies will be discussed in more detail.
One of the most important examples to discuss of state-backed monopolies is nationalised healthcare. Initially, private healthcare may seem like a worse offer than what is already present with public healthcare services around the world such as the National Health Service (NHS). It may be argued why replace a “free” system with a paid one? As mentioned previously, there is no such thing as a “free” government service. These are still paid for using taxes levied off the population. Although there is a moral problem with forcing people to pay for the healthcare of others, the same way as there is an issue with forcing any other forms of charity, there is another economic issue with having the state manage healthcare. Nationalised healthcare is a monopoly by definition, but in this case it is the government as the owners, and not a private entity.
Since any monopoly is in principle opposite to competition, there is less incentive to innovate and provide the best possible quality service. Due to the guaranteed income in the form of tax revenues, a public health system is paid for regardless of the performance or quality of service. By removing competition from the industry, market forces are no longer able to drive down prices and provide a better quality product. Innovation and efficiency suffers due to the lack of alternatives otherwise provided by a competitive free market, where drawbacks in one service would have led to opportunities for entrepreneurs to improve on. Instead, this allows mismanagement of resources to fester, and any failures with the service are often blamed on a lack of funding. What use is more money when the money being used currently is not being employed effectively or efficiently already? Simply throwing more money at a problem doesn't necessarily fix it, and so further resources are wasted in this pursuit.
In a market environment where healthcare providers must compete to provide the best quality service at the lowest possible price, those organisations that underperform are replaced by those that do. Only in a competitive market for healthcare is the wastage of resources best avoided, which is the same principle applied to all other industries. Healthcare should be no different, especially considering the longer lifespans of people, the emergence of deadlier viruses and new diseases. The societal need for healthcare to be constantly innovating to stay ahead these issues is paramount. Additionally, it is in the people’s best interest to have the ability to decide between multiple alternatives. For example, if one healthcare provider fails to provide a quality service, and is plagued by poor doctors, racist nurses and long wait times, it is unlikely to exist for very long as people would generally avoid risking their health with a low quality provider. In addition, no two people have the exact same issue, and so having a system in which specialist practices can emerge to focus on treating specific problems would be desirable. This competitive environment may radically transform how healthcare is delivered in general. Allowing everyone to enter this industry increases the choices patients have, as providers are free to solve healthcare problems in unique and constantly innovating ways. It would then be up to the market to determine what works and what doesn't.
Entrepreneurs in India have already begun revolutionising the industry of healthcare in order to reduce costs and increase accessibility for even the poorest in society. The organisation Glocal Healthcare have done this by leveraging new technology and critically re-evaluating how primary and secondary care functions should be managed. They have set up small units in rural areas that provide key services such as check-ups and a digital pharmacy, which would have otherwise been done by hospitals in the cities by doctors and other professionals. Instead, these units can provide the same primary healthcare function at a fraction of the cost as well as relieving the pressure on doctors so they can re-allocate time in better ways for their patients. Rural populations have easier and cheaper access, and the issue of long wait times is tackled through the use of online video consultations directly with specialists and doctors from far away. Contrast this with the NHS in the UK which suffers notoriously long waiting times, lack of beds and general inefficiency³⁰. It is clear to see how removing competition here drastically reduces its quality and capacity to innovate³¹.
The US system should not be seen as the ideal alternative either. The reality is that the US government actually spends more on their supposed “private” healthcare system than the UK does, putting into question its private status entirely³². The obscene costs involved with healthcare in the US can also be quite clearly attributed to government intervention again, albeit in a slightly less direct way. For example, one of the reasons why medicines are so expensive is due to the government granting monopoly power to pharmaceutical companies through patents. This is a legally binding contract in which no other firm is allowed to produce a patented medicine for a set period of time. This means that when one of the pharmaceutical companies release a new drug, they become the sole provider of it and so have very little reason to keep prices low³³. Another major problem is the barriers to entry into the healthcare industry set by heavy regulations. This reduces competition by increasing the difficulty of new healthcare entrepreneurs to enter the market and offer alternatives³⁴.
Although, it is important that medicines are trusted and should go through the necessary safety tests, it is not so essential that the government should be in charge of this. In fact, it may even be undesirable in many cases considering the track record of government “protecting” its citizens³⁵. What Azadism offers as an alternative market solution is the private regulators mentioned previously. These act as reviewers who independently test and set their own safety standards of the drugs released by firms. The private regulators have an incentive to be truthful since their reputation and income depends on their ability to provide an accurate assessment. The pharmaceutical companies also then have an incentive to get their drugs passed by as many of these private regulators as possible in order to gain people’s trust.
Under Azadism it is likely we would see an insurance-based approach to healthcare. People themselves would have to take the responsibility to purchase health or life insurance. Not only is this smart financial planning (especially for younger people³⁶) but it also maintains the freedom of choice, as well as allowing for competition to flourish in both the healthcare and insurance industries. This may manifest in specialist packages that cover a variety of insurance options, for example whole family packages, or even the workplace offering plans as an incentive to attract employment. Market forces being free to work in this sector will also naturally drive down prices and increase the quality of the services offered, given that the government does not stifle competition. Furthermore, for those who still cannot afford this on their current wages, there are alternatives which will be discussed in a later section regarding social security. There is also nothing wrong with a town or community collectively deciding to finance an all-encompassing healthcare system either, given that all funds are raised as donations and not taxes. This way they can similarly maintain a “free” service that is actually free because donations are a choice, whereas taxes are not. As long as people have the ability to choose and are not coerced in any way, the voluntary nature of this particular solution is more than acceptable under an Azadist system. All those who do not want to participate are free not to, and it is up to that particular healthcare provider to determine whether they will still offer assistance to them or not. This is in contrast to the current system in the UK where you have to pay “national insurance” regardless, and if you refuse you are kidnapped and thrown into a cage. The government has no need to be involved in any of these voluntary transactions. All it needs to do is step out of the way.
Education for adults is another sector that should be constantly improving and innovating and therefore competitive markets here are also encouraged. However, for children this industry may need to stray away slightly from the free-market principles which underpins Azadism. So far, individual choice has taken the utmost priority, allowing the people to decide for themselves how best to spend their own money and live their own lives. However, this sovereignty over action can only apply to adults over an agreed age limit. In general, children are not completely developed mentally enough in order to make their own decisions without support from their parents. A child cannot rationally consent in market interactions, simply because they do not have the mental capabilities in order to make logical enough decisions for themselves³⁷. Under Azadism, this diminished capacity to think means that they cannot enjoy the same right for self-governing and to exist within a NAP framework until they are over a certain age. Otherwise, a parent would have no legal way of forcibly managing their own child, as parenthood would demand NAP being broken all the time. How else can a mother feed her newborn? Would she have to first get consent, or draw up a contract and get the baby to sign it? Until the child has developed to a certain agreed age, they cannot have the same access to freedom in the sense that adults do. However, in the meantime to compensate, these rights are swapped with the right to education³⁸. By Azadist law, every child born in an Azadist nation must be provided with schooling in the following fields as a minimum:
The first reason as to why these must be provided to every child is that a child had no choice in being born. Therefore, Azadism would consider that it is the parent's duty to the child to give it the best possible opportunity to get to a stage where they are able to make their own decisions. By providing these basic fields of education, a child will be best able then to get to that stage of competency required for a sovereign lifestyle. The second reason as to why every child needs to attend a school is for their safeguarding. Azadism considers every child in part, the shared “property” of both the community as well as the parent until adulthood. This is because a child cannot realistically defend themselves from their own parents (whether through neglect or ill intent) and so in order to prevent harm to the child, attendance at a school must be necessary. It may seem odd as to why a human child is referred to as “property”, however this is only being used in the sense that there is ownership over them on behalf of their parents. When we say that a particular child belongs to their parents, we are inherently saying they are also property of them however not in the sense that they can be traded as a commodity³⁹. Ingraining this understanding then allows us to apply the NAP based protections in the sense that any child that is harmed, is as if the property of the entire community is being harmed. Therefore, legal action is justified for these circumstances. This property status only lasts till adulthood, or cases of neglect where the parent half of the shared ownership contract is transferred to another set of guardians. Once reaching adulthood, the standard rights for protection under the NAP is applied as normal.
A school not only acts as a centre for learning, but a safe haven in which teachers have a dual role in teaching as well as ensuring the well-being of every child. If there are suspected cases of abuse, then it is the school’s legal responsibility to raise this with the appropriate state authority in order to investigate. Those schools that actively ignore signs of neglect will be liable for legal action against them for the reason stated above. In addition, there will be a market reputation that a school has the incentive to maintain. If it is found out that a school is not able to protect its students from harm, the market is likely to adjust to this and move their children elsewhere. From a purely economics perspective, it is uncompetitive for a school to ignore abuse.
None of this requires any sort of public schools however, the only factors preventing this sector from being defined as truly private is the necessary laws set by the state to safeguard children and the minimum subject requirement. Beyond this, parents have the freedom to negotiate or find schools that offer curriculums they believe is best for their own child. To further enhance competition and facilitate freedom of choice under current systems, economist Milton Friedman popularised the idea of a voucher system. Instead of the state funding public schools, they would use that money to offer discounts to parents directly which can be used on sending their child to a school of their own choice. Friedman argued that the public schools should have nothing to worry about if they are providing a good enough service, and if they are not, why should anyone advocate that they should continue to exist⁴⁰? Again, competition will allow those schools who best satisfy the demand of the people to prosper, and eliminate substandard schools which has been so damaging to so many, especially minority communities in the US and UK such as the Black diaspora⁴¹. However, despite this, Friedman still recognised a voucher system as only a “step” towards a free market solution to education⁴². Similarly, Azadism is not a static philosophy and so it also agrees with this as part of the inherent tendency to trend towards decentralisation and an eventual elimination of all government intervention. Although, a voucher policy may be an initial option for a state that wishes to transition into an Azadist economy, eventually even this should be abandoned to mitigate risks related to government intervention and involuntary funding of a programme through taxes. However, this does not mean the poor have to miss out. As will be expanded upon in a later section, the implementation of a form of universal basic income for low earners can act as an alternative to vouchers as another step towards the ultimate goal.
Furthermore, having private schooling mitigates one of the major risks involved with state education - propaganda. Private education minimises the risk of state propaganda and indoctrination techniques used in authoritarian regimes around the world, such as North Korea⁴³. An Azadist government should have no role in determining what it feels that people should or shouldn’t know, and especially how they know it⁴⁴. This also helps reduce the power of states performing cultural genocide on minorities, by removing its power to set certain language requirements. It is down to the private sector, the people themselves, to determine what they want themselves or their children to learn (in addition to the basic requirements above). Countless times anecdotes of people are heard wishing they taught us this or that at school. In a private system, curriculums are set by parents (or students) and teachers communicating with each other directly, or even indirectly through price signalling. Just like any other business adapts to meet consumer demand, schools should also adapt to meet its clients demands also. If they can’t, then people have the freedom to choose another school, same way if one business can’t provide a service another can. Taking the state out of these negotiations gives this freedom and vastly mitigates the risk of state propaganda. The state should have no role in restricting ideas or history, and all subjects should be available for study as provided by the private sector. Market forces of supply and demand will be the governing factor in what is taught. For example, if companies start to increase their demand for engineers compared to a relatively low supply, the wages for engineers will rise. Seeing this, people may have more incentive to pursue those careers and therefore this increases the demand for education in that sector. Schools then in turn, seeing a rise in demand for this also make more courses available in order to make higher returns. In time, the supply of engineers rises to meet the demand and fulfil the skill shortage. This is simply the forces of supply and demand in action.
Since the market is free to provide education in a variety of formats, they will naturally compete to create the best possible way of disseminating knowledge. This does not even have to be in the form of diplomas or degrees in the traditional sense, and instead could be different certifications all together. Companies themselves can establish tests that potential employees must pass and so specific courses could be designed to concentrate on these rather than less relevant topics. This already happens to an extent amongst large firms who test candidates as part of the application process. This moves society away from one which encourages simply acquiring pieces of paper saying you spent a few years in a university, to one that values the actual skills and knowledge you acquired. Giving the education sector a profit incentive means that it has to focus on results, otherwise why would anyone go to a school with poor performance and low rates of employment for its students⁴⁵? If no students go there then it simply cannot continue to exist since it cannot cover its costs. The end goal of creating a well-educated, employable and highly skilled student will take precedence. A state funded school has no similar motivation, since they are paid for regardless of performance. In fact, those with worse than average performance may be applicable for more funding, which completely reverses the incentive. Rewarding bad outcomes, perpetuates bad outcomes. Another potential system that is free to arise (or re-emerge), if there was sufficient demand, is the ‘Gurukul’ system of ancient India. This was where students went to live with a Guru and become their disciple (Shishya) and was primarily aimed at teaching scriptural knowledge, but would have covered other lifestyle aspects such as arts and music depending on the Gurdev⁴⁶. This may be a great way to bring up children who were neglected especially, and give them an opportunity to learn about a variety of aspects of life, and not just the academics.
A final point must be raised about universities. Although on the surface these may seem like private institutions, they are indirectly funded by the state. The government provides guaranteed loans to students who then enrol on degrees with the hope that they will pay them off with the higher salaries they will earn as a result of the education they get. However, due to this the university realises that it will receive a guaranteed income regardless of their performance. This is the exact same danger that threatens innovation, quality service and natural prices as with state backed monopolies. Universities now have decreased incentives to compete for lower prices and better service, since they know they will get paid anyway. This is the primary reason why university education is so expensive, and rising. It is essentially free money from the government, and therefore the taxpayer takes the hit. The students are the ones taking on the inflated debt for this as they make repayments over the next thirty years of their working lives if they earn over a certain amount in the UK. If they are unable to pay it all back (which most don’t)⁴⁷, the cost is further thrown on the taxpayer. Alongside this, there has been a societal push to get people into universities in order to capitalise on this scam⁴⁸.
Taking market forces out of the equation have left many students who are starting their lives with tens of thousands in debt and degrees that may not be in demand in the job market. Governments producing these loans may have had good intentions for doing so, but the outcome is turning into a disaster. University students themselves will highlight the struggles in finding work after graduating, even with in demand degrees. Since almost anybody can get these degrees, there is nothing special about having them anymore, meaning that students need to gain even more qualifications on top to be able to compete for jobs⁴⁹. Additionally, companies are asking for work experience especially which further shows that having a degree in many cases is simply not enough. Apprenticeships are designed for this very reason, as they provide on the job experience and instead of accumulating debt, you are paid a wage.
Originally, getting a degree was a personal investment of time and money that was not pushed on to everyone to achieve, the risk was on you. It was a personal sacrifice taken on by the individual and not paid for by society as a whole in the form of taxes. Similar to healthcare, universities should not be another forced charity for people, and should be accessed just like any other business. As a result universities should be exposed to a market, where their price is determined by the quality of their service. Just as before, through competition, the quality will rise and the price will drop to the natural level. Students would be in a much better position financially and could realistically work part-time to help pay off any debts they may incur. Alternatively, there may be many other options to the university system in general. Similarly to the previous section, if people still desire a free education system for members of their community, nothing is stopping them from pooling their money together to fund the education of their members. As long as it is done voluntarily, through donations and not taxes, it is perfectly acceptable under an Azadist system.
To summarise, an Azadist education system is a private one and is free from state intervention. The only exception is the law requirements which mandates all children have to attend a school to study the minimum required subjects. Giving the people the choice is paramount in creating an effective education system under Azadism, however it must also be balanced with the correct safeguarding for children which can only be guaranteed through a mandatory schooling law in the beginning. Despite this, education providers must compete like any other industry and in the process this will create better service and lower prices for all. One way to encourage this at the start of a transition into a Azadist state from an existing system, may be in the forms of offering school vouchers to parents, or a form of basic income. The central government should not set any curriculum beyond the basic requirements for children. Even with this, it can be devolved into the state level or lower aggregations in order to further de-risk and decentralise power over time.
