Handout of Proposed Planks for LPMN Platform

                            By Mike Holly, Americans Against Monopolies

The American electorate wants to know how each political party intends to solve the nation’s enormous economic problems in industries like health care, prescription drugs, education, energy and public utilities, tech and banking. Libertarian Party political candidates have failed to promote economic freedom for those trying to compete in the private sector of the major industries, and for consumers that could benefit from competition.

Similarly, the current platform of the Libertarian Party of Minnesota fails to direct party principles and candidates toward support for free markets. Although the industry planks of the current platform oppose many specific monopolies in the public sector, they fail to oppose specific government regulations favoring monopolies and oligopolies in the much larger private sector. This applies to health care, education, public utilities, energy and banking, and also to the less significant public transportation, public entertainment and postal industries. Meanwhile, there is predictably no plank for prescription drugs and tech since these industries lack much of a public sector.

HEALTH CARE

The Party advocates eliminating tax-support for insurance plans which clearly includes the Medicare and Medicaid buyer monopolies in the public sector, while avoiding the specific government policies limiting the supply of practitioners, hospitals and insurance companies in the private sector, as well as the outrageous prices demanded by these oligopolies.

The health care plank doesn’t call for repeal of licensing laws or the need for competition, like does the education plank, perhaps because doctors work mostly in the private sector, while teachers work for public schools. The call for deregulation doesn’t mean much since the term can mean the elimination of one or all government regulations. The next sentence saying “government intervention, restriction, and protectionism in the health care industry has driven up costs” doesn’t even explain how or what to do about it. There is also no explanation for how it has “decreased the supply of doctors, nurses, technicians, hospitals, and medical insurance” or why that is a problem.

The proposed platform seeks to allow the supply of doctors and hospitals to increase to create competition that forces these providers to cut prices. Doctors and hospitals account for most of health care costs. The “health care cost crisis” started in 1965 when increased private and government health insurance coverage increased demand while government continued to restrict the supply of doctors and hospitals. In 1972, the AMA reported, “The average patient load and the average volume of units of patient care for the average physician has increased dramatically in the last five to six years. Medicare, Medicaid and the increased coverage of medical and hospital insurance have produced a skyrocketing rise in effective demand for medical services.” Mark Pearson, head of Division on Health Policy at The Organization for Economic Co-operation and Development, notes continental Western Europe has 40% more physicians and hospital beds per population than the U.S. and their health care prices and costs are less than half as much.

PRESCRIPTION DRUGS

The Party is ignoring the unreasonable costs for prescription drugs caused by the government awarding long-term drug monopolies to pharmaceutical companies in the private sector.

Law professor and author Robin Feldman claims the government is awarding pharmaceutical companies with monopoly power through overly generous drug patent protections from competition. Libertarian author Hunter Lewis writes that FDA approval is a monopolist's scheme to limit competition.

The need for drug monopolies arises because development is expensive, while mass production is much cheaper. This creates the market imperfection that new drugs may need to be awarded temporary monopolies to recoup their development costs. But most of the cost is due to clinical trials whose costs are inflated by working with the outrageously expensive health care delivery system. If health care costs were reduced through competition (as prescribed in the health care plank), protections from competition for prescription drugs could be reduced or eliminated without sacrificing development.

The proposed plank seeks to make prescription drugs affordable by eliminating monopoly protections granted by government.

EDUCATION

The Party is advocating for bringing competition to the monopolistic public schools, while ignoring the monopoly power granted to the non-profit private schools of religions and the rich through tax incentives. The Party is completely ignoring the skyrocketing costs of higher education offered by oligopolies similarly created with appropriations to public schools and tax incentives for non-profit private schools.

It could be argued that the repeal of taxpayer financing would also include tax incentives for non-profit private K-12 schools, but the next sentence advocates for tax credits. Perhaps, the Party ignores higher education because the private sector is much larger than that in K-12 education.

Like the current health care plank, the current education plank fails to recognize the skyrocketing cost and also quality problems at K-12 schools, and also colleges. However, the current platform appears to agree with most policymakers that students and their families can’t currently afford education and thus some funding is needed in the interim. But the fourth sentence advocating for “tax credits for any individual or business sponsoring a person’s education” would allow the wealthy and businesses to control the K-12 education of students from poor and middle-class families. The fifth sentence advocating for reforming public schools with open enrollment and charter schools is contrary to the goals for privatization and real competition. The sixth sentence is outdated.

Education is probably the most difficult sector to incorporate libertarian principles, especially considering children and young adults are involved and the schools that spend the most money appear to achieve higher quality (e.g., test scores). The rich spend much more than others on their children’s education in private schools. In state K-12 competition programs, public schools generally receive more subsidies and score higher on tests than most non-profit private schools, who in turn receive much more subsidies and score higher than for-profits.

The proposed plank seeks to bring competition to both public and non-profit private schools for both K-12 and higher education by eliminating subsidies. The plank would delay the need to find a financing solution for students until it is proven that funding from families and charity will be insufficient. Any financing solution must provide schools with equivalent subsidies (e.g., vouchers). The plank opposes state programs that are subverting the move to privatization and competition by preferentially subsidizing public and, to a lesser extent, non-profit private schools.

PUBLIC UTILITIES (B13 - Public Utilities and Energy)

The Party is advocating for the elimination of government monopolies established for utilities in the public sector, while ignoring government-granted monopolies awarded to utilities owned by the private sector. The Party is even tacitly supporting current state deregulation efforts that are allowing privately-owned utilities to create deregulated monopolies.

Partial deregulation in electricity, natural gas and communications has largely been a failure (e.g., California Energy Crisis). Transmission and distribution have been badly constrained, and ineffective regulatory policies have failed to compensate to create real competition. Minnesota’s so-called “competitive” bidding of electricity and natural gas allows utilities monopolies and regulators to use subjective bidding criteria to discriminate in favor of higher-price bids from themselves and cronies.

The proposed platform opposes both government and government-granted monopolies, and supports more complete deregulation that removes government barriers to building alternative distribution networks. Many companies have sought to build their own distribution networks, but have experienced resistance from utilities.

The Price Anderson Act is not a government or government-granted monopoly, or regulatory agency, and belongs in energy policy.

ENERGY

The Party is allowing the government to block the development of many alternative technologies with energy policies favoring the dominant Big Oil & Gas industry, utility monopolies, wind and solar energy companies, and electric vehicles in the private sector, and even OPEC.

Besides policies related to public utilities, the only energy policy in the current platform opposes the Price Anderson Act. It is also the only industry plank opposing a specific government regulation favoring companies in the private sector. It doesn’t make sense to pick solely on nuclear power, which represents less than a tenth of U.S. energy consumption. It is also strange because Libertarian Party Presidential Candidate Jo Jorgenson promoted nuclear power as the main solution to climate change.

Oil and gas account for 67% of total U.S. energy use. The U.S. government favors Big Oil & Gas companies holding fracking patents with preferential environmental exemptions. This problem is compounded by the states, who ignore regulation and make it difficult to sue the polluters. Meanwhile, the use of coal and nuclear are declining rapidly due to severe environmental regulation.

Wind and solar energy dominate new additions of renewable electricity even though they will not replace much oil and gas without breakthroughs in battery storage. The government has forced usage with preferential mandates and subsidies, regulations that shift the costs of backing up the intermittent generation onto reliable power sources, and back-up from favored natural gas-fired power plants. The advantages have rendered other reliable renewable technologies like bioenergy uncompetitive. Moreover, the government favors electric vehicles with preferential mandates and subsidies, even though most automakers believe hydrogen cars are the way to address climate change.

By preventing fuel diversification, innovation and competition, politicians are risking economic and environmental crises, and even war. OPEC, which has the world’s lowest-cost oil reserves, destabilizes global oil markets by not allowing their citizens to produce oil. OPEC has caused cycling of oil prices by limiting production for gouging with high prices, and after that causes overproduction and low prices, by increasing or maintaining production to wipe out competitors. Since 2015, OPEC’s low oil prices have been discouraging energy investments, even in the favored U.S. shale oil and gas industry. The increasing reliance on OPEC is again increasing the possibility of oil and natural gas price spikes, which have preceded 10 of the last 12 recessions. The U.S. government has sanctioned these actions by granting OPEC immunity from antitrust lawsuits.

The proposed plank seeks to prevent another energy crisis by opposing all government efforts to pick winners and losers.

TECH

The Party is ignoring the many societal problems resulting from the government awarding the tech giants in the private sector with intellectual property protections from competition over excessively long lifetimes.

Throughout the history of the U.S. technology industry, tech monopolies have been created by intellectual property (IP) protections from competition, patents and more recently copyright. It started with the founding of AT&T, followed by IBM, then Microsoft and the Big Four today. The first three monopolies had to be stopped with antitrust actions that led to next monopolies created with IP.

The tech industry has received excessive IP protections from competition from government, especially considering the technology is advancing rapidly. More than any other industry, tech has dominated patents and copyright. Patents, granted for 20 years, are often general and trivial, and block even largely unrelated inventions. Copyright, which is awarded for the life of the author plus 70 years, blocks even obvious solutions by others.

Big Tech hires large legal staffs to accumulate broad IP protections and sue competitors for violating them. They also take technology from smaller businesses that can’t afford to defend patents by invalidating them in court and administrative hearings, pressuring sale of their company or technology, and copying them if they won’t sell. Tech monopolies often use monopoly power and profits to expand into related markets.

Obama promised patent reform, but the Leahy–Smith America Invents Act of 2011 created an administrative patent review process employing politically-appointed judges favoring Big Tech. During the past three years, Congressional hearings have been held to consider the STRONGER Patents Act, but it would largely just undo the 2011 act. Since tech IP has proved too political to regulate, the obvious solution is to shorten the lifetimes of patents and copyright.

Libertarians should not be supporting the government preventing many tech companies from competing in the marketplace and developing new technology for decades, just because the tech giants have filed patents and copyright with the government. Competition is needed to incentivize tech companies to produce what consumers want at a reasonable price, including privacy.

The proposed platform seeks to shorten the lifetimes of patents and copyright to create competition.

BANKING (B3 – Money and Inflation – replace with Money and Banking)

The Party is advocating for the elimination of the Federal Reserve central bank in the public sector, while ignoring government charters restricting competition for “too big to fail” national banks and cartels of state banks in the private sector.

The title should be changed to from “Money and Inflation” to “Money and Banking,” and the first sentence should be eliminated. The manipulation of interest rates causes many problems besides inflation such as recession and depression and even deflation, these outcomes change with policies, and are too difficult to separate from government policies in all of the specific industries. Although low interest rates clearly lead to asset price inflation (e.g., stocks and homes) benefiting mostly the wealthy, it leads to consumer price inflation only when it increases demand. Before 1965, inflation was largely caused by war. Since 1965, the root cause of inflation has been skyrocketing health care and education costs.

The second sentence of the current planks is split into the first and second sentence of the proposed plank. It refers to the term “free banking” because it is considered the main alternative to central banking and better describes these proposed policies than “standards set in the free market.” The third sentence of the current plank is not needed because nothing prevents such voluntary arrangements from being made now if both parties agree on a value for the commodities.

A new third sentence is needed to oppose federal and states laws requiring privately-owned banks to secure charters. Regulators have used charters to restrict entry and competition in the industry in favor of cartels of state-chartered banks and nationally-chartered banks of which some have been considered “too big to fail.” Fixed federal deposit insurance allows state regulators to permit local banks to engage in excess risk taking and impose the costs on banks in other jurisdictions. The promise of bailouts has allowed “too big to fail” national banks to continue to loan to unregulated shadow banking firms like Blackrock that are buying up homes, creating another housing bubble and setting up the country for another bailout.

The proposed plank would eliminate federal and state laws requiring privately-owned banks to secure charters.

CONCLUSION

The current platform states “Efforts to … restrict honest trade is slavery.” The Party is effectively prioritizing monopoly profits, and supporting the inflation of prices and deterioration of quality for consumers, and wealth disparity. All seven of these industry planks are needed to provide liberty to businesses and consumers. In addition, the current platform is political suicide since the Republican Party already leads support for monopolies in the private sector. Both the Republican and Libertarian parties are providing political fodder for Democratic Party support for monopolies in the public sector. The proposed changes that would finally support free markets in the private sector.