Monopolies and Public-Private Partnerships
Monopolies must be avoided as much as possible, as they are a form of economic privilege, which are typically detrimental to the broader economy (namely in the form of lower efficiency and incomes, and higher prices).
In many countries, even with so-called natural monopolies such as the electrical grid, policymakers have found ways to create competition, to the benefit of consumers. These competitive markets must be encouraged as much as possible. However, in instances where a natural monopoly cannot be avoided, the monopoly businesses must be majority owned by the public, at arms-length from the government. This can be done through majority ownership by the country’s sovereign wealth fund, with a constitutional cap on private ownership (likely to approximately a quarter of the shares). Profits would be regulated (as is standard with monopoly enterprises worldwide), and would be taxed at the top rate (of 24%); distributed evenly to the Three Pillars and Sectoral Banks, under the same regime as financial sector profits. The remainder would be reinvested or returned to the shareholders. By operating at arms-length from government, with some limited private ownership, and perhaps private management, it would help discourage resource waste. Yet the effects of monopoly would be mitigated through this form of compensation.Public-private partnerships can theoretically be beneficial to taxpayers by introducing the most recent methods and technologies, and operate more efficiently, at lower cost. In contrast, government workers are theoretically more expensive and unionized, less responsive to change, and less efficient. However, in practice, public-private partnerships are often not as transparent as they should be, with tenders offered by friends and supporters of the politicians, and large cost overruns. Private bidding for public projects is sometimes necessary and should be an option. However, the government should retain the means to take on contracts themselves, and the public (along with the publicly elected anti-corruption agency) should hold have the right to veto public-private partnerships that are on the table. Furthermore, with union activity removed from public enterprise, public works companies would be more flexible, inexpensive, and able to compete on the market with private contractors.