New Energy Bill Is A Disaster
Press Release from The Global Warming Policy Foundation
London, 23 May: With the publication of its draft Energy Bill, the government has announced its intention to reverse the course of energy deregulation.
The Global Warming Policy Foundation warns that any attempt to turn back the clock to the dark period of centralised energy planning will not only damage Britain’s economy, but will almost certainly end in failure, just like other attempts to impose a centralised system of energy controls have failed in the past.
Nigel Lawson, the GWPF’s Chairman, who as Energy Secretary was the architect of Britain’s energy market deregulation in the 1980s, warned:
“The Energy Bill constitutes a disastrous move towards a centrally planed energy economy with a high level of control over which forms of energy generation will be favoured and which will be stifled. The government even seeks to regulate the prices and profits of energy generation.”
The government bases the case for green – and more expensive – energy in large part on the assumption that gas prices will significantly rise in the future. This argument is no longer credible in the light of the growing international abundance of shale gas, not to mention the likely shale gas potential in Britain itself.
North American gas prices have dropped from $15 per million British thermal units to below $2 in just 7 years. This price collapse is an indication of things to come in Europe, once its own vast shale deposits are allowed to be extracted.
“At a time when most major economies are gradually returning to cheap and abundant fossil fuels, mainly in form of coal and natural gas, Britain alone seems prepared to sacrifice its economic competitiveness and recovery by opting for the most expensive forms of energy,” said Dr Benny Peiser, the GWPF’s director.
In any case, the complex and inconsistent measures of the draft Energy Bill are unlikely to provide investors with the certainty they require to make substantial investments.
The proposed contracts for difference (CfDs) are extremely complex and convoluted. Neither the profit guarantees offered for different technologies nor the duration of CfDs is known. The government has not provided any numbers and price guarantees for its favoured green technologies. Investors are therefore thrown into limbo since they cannot calculate whether expensive renewables or nuclear reactors are viable and can compete with less expensive conventional power plants.
This lack of clarity will inevitably lead to constant government amendments and continual intervention, which will act as additional barriers to new entrants in the UK electricity market.
In light of government indecision and investors’ uncertainty, the Energy Bill proposes to give the Secretary of State the exclusive authority to offer green energy companies ‘letters of comfort,’ promising them that they will be guaranteed profits once the specifics of CfDs are finalised and introduced. This is both arbitrary and unconstitutional.
Moreover, it is doubtful that what is proposed is actually workable, let alone economically viable. After all, similar interventions in the past have proved inept and uneconomic. They will almost certainly prove to be highly unpopular when the costs of these measures are reflected in energy bills.
I believe the thinking behind centrally planned energy production and distribution in the UK is to reverse the deregulation that has allowed energy companies to massively overprice energy for consumers leading to rises in fuel poverty throughout the UK. Whilst the Conservative led coalition continues to cut away at peoples’ benefits, including fuel allowances, it actually makes sense to centralise energy production and distribution so as to bulk buy energy and sell it on at a cheaper price whilst maintaining high profits. This would help to lift the poorest out of fuel poverty and ensure that every Briton has an adequate amount of fuel to, for example, heat their houses in the winter, a time when many OAPs suffer illness and sometimes even death due to inadequate heating. For too long Britain’s energy market has been run by an oligopoly of energy providers whose prices and porofits continue to raise. Moving to a centralised energy policy would put a stop to the abuses of the energy market and allow British consumers access to cheap fuel, a neccessity for too many.
It must be very discouraging for the Brits to see these bills come out of a Parliament Conservatives control – (ok, sort of). The greens hold all the parties in the UK hostage. It already costs too much for gas and electric in the UK (way more than here). Pity the poor fellow with a meter – he’s going to have a whooper of a bill to pay.
Didn’t you read the above? In the U.S. the gas price has fallen due to market forces. We (the UK) do not need or want socialism.
Government never did anything right, until now when just a little is being put right – especially reviewing welfare benefits that are often wrongly dished out.
This plan makes no sense at all.
youngleftie says:
May 23, 2012 at 2:08 pm
And who pays for this ‘cheap fuel’? Youngleftie, you are both: The young part says that you don’t have a good grasp of history, and the leftie part is certainly that. So you can ‘believe’ what their ‘thinking’ is, but it will have to remain in the realm of a belief. The reality, on the other hand, is failure-in-the-making.
Well in a perfect world, this ‘cheap fuel’ would be paid for by the rich in society, why should they have more than plenty, far too often tax free, whilst OAPs and the poor live in fuel poverty. If not, perhaps a tax on the banks who dished out ridiculous amounts of bad debts and brought the world economy crashing down? Either would be fine.
Perfect world? We all noticed that ain’t gonna happen. Why not a free market in energy? Where competitors strive to serve consumers by providing them best value and consumers (spending their own money) decide what best fits their means and ends. The customer chooses who gets to serve them. Free markets have a pretty good record at delivering the goods (down here in this less than perfect world) Communism didn’t work out too well – it only works in a perfect world I guess
youngleftie says:
May 23, 2012 at 2:08 pm
Spot on youngleftie, add to it the privatisation of the railways and the expensive, complex private bureacracy that has created, the mess banks made of misselling payment protection insurance, the proven scam that casino banking has been shown to be.
I have no problem with private companies providing services and manufacturing of consumer goods but I find it more and more difficult to believe that the combination of public, private and environmental vested interests that we now have will be able to keep the lights on in anything like an efficient way.
Let me see the UK have cut of their nose, toes and fingers for the Jolly green Eco giant, now they are putting the next bullet in the chamber for the kill shot to the UK economy. The people of the UK are being screwed, blue and tattooed, and it doesn’t matter who’s in power anymore, it’s a race to the bottom.
WTF – talk about madness on a grand scale.
youngleftie
the basic cause of Britains problems is that the labour govt had no energy policy for a decade so new and economcally sensible sources of energy have not been planned for. Couple that with the soaring costs of going green made worse by their gross inefficiency, and you have a perfect recipe for the energy companies to make money.
Personally I would build coal fired stations-everyone else is- and the temperature reduction of emitting less carbon is so vanishingly small it can’t be sensibly expressed.We also need to urgently examine shale gas. If we can get that safely it would solve a lot of our economic problems
tonyb
Hey, I like that idea. Can I have a ‘letter of profit’ promising me that I will be guaranteed profits? That would be really, really nice to have.
Meanwhile, back in the real world ….
youngleftie:
in just a few lines you have loudly climbed on a soapbox and announced that you cannot discern your rectum from a rathole.
go and read a history of the Union of the Soviet Socialist Republics.
then feel free to stay away.
C
I’m not sure if this got through on my first try….
In related news
http://www.dailymail.co.uk/tvshowbiz/article-2148557/The-Voice-judge-Will-goes-Oxford-University-climate-change-debate-gas-guzzling-helicopter.html
It is sad, very sad. I drove much the length of the UK last week and the amount of windmills since this time lst year have gone gangbusters but just as frightening is the amount of subsidised solar panels placed on the roofs of obviously wealthy houses.
So called green energy is making a lot of money for the rich and is being funded by the poor.
When is the next election in the U.K.? Not all the politicians will be thinking green (even if they seem to). It’s your job to find the best there is to pull the people out of the mire (if necessary, the best of a bad batch and, if push comes to shove, ANYTHING is better than what you have in power now). Good luck, guys, I lived in the U.K. for a few years. I have a lot of good memories.
The proposed Energy Policy from our Tory-run government is even worse than the bad Energy Policy of the Labour government it replaced.
But history shows the Tories always muck-up our industrial, fiscal, economic and energy policies, so I suppose this was to be expected.
Sad, so very sad.
It seems David Cameron is determined to supplant Ted Heath as the worst UK PM since the Napoleonic Wars.
Richard
The obvious choice is for Britain to forbid private energy generation and monopolize it as a state service. That would have the advantage of knowing exactly who to hang from which windmill when it all comes crashing down.
The UK government appear to be ignoring the electorate, (vested interests ?)
From bishophill
May 21, 2012 Energy
As we saw yesterday, some details of those of those invited to the Downing Street seminar on prospects for shale gas in the UK have now been revealed. The involvement of only the oil and gas majors, whose investments in conventional gas are threatened by shale developments made the seminar look decidedly dodgy.
No Hot Air blog has now obtained a comment from Cuadrilla Resources, the company that is at the forefront of efforts to develop a shale gas industry in the UK.
No, we were not invited. Nor were we consulted about potential shale gas production in the future. I was surprised to see negative statements from people who have never seen our core data or open hole log data. They may consider getting their facts in line next time since this is such an important issue to the country.
This makes the the seminar look like a sham. I wonder which civil servants were responsible for issuing the invitations?
http://bishophill.squarespace.com/blog/2012/5/21/cuadrilla-were-not-at-no-10-seminar.html
This is the same Dept. of Energy and Climate Change that recently told us that our electricity bills would not rise by more than £100 (~$160) a year by 2030.
http://www.telegraph.co.uk/earth/energy/9282705/Households-to-pay-around-100-more-a-year-for-electricity-by-2030.html
Also, “…Officials from the Department of Energy and Climate Change said they could not provide up-to-date estimates of how much all green measures will raise the price of electricity…”. This does not give us much confidence that yet more centralised intervention is the answer.
Nigel Lawson’s got a cheek, he was a lousy Chancellor and had the benefit of North sea gas. By de- regulation he means selling off the family silver. My impression is that Cameron’s trying to end an era where energy company’s have a blank cheque to write any bill they want.
youngleftie says:
May 23, 2012 at 2:24 pm
“Well in a perfect world, this ‘cheap fuel’ would be paid for by the rich in society, why should they have more than plenty, far too often tax free, whilst OAPs and the poor live in fuel poverty. If not, perhaps a tax on the banks who dished out ridiculous amounts of bad debts and brought the world economy crashing down? Either would be fine.”
I disagree completely. In a perfect world, I’d get a free ride for everything and never work a day in my life, just like everybody else.
You really gotta work on those utopian desires, “youngleftie”.
Speaking of a leftist utopia, here’s 3 hours of BBC programming for you.
I’m hardly advocating a complete centralisation of all big business and sectors of the economy, so a history of the USSR would be almost null and void. What I am advocating is that the government looks into initiatives that ensures that the little people don’t get screwed by a few energy companies who have effectively monopolised the energy sector between them and thus can keep raising prices until the poor find fuel unaffordable.
I don’t quite understand. I was under the impression that in Australia these things have always been centralised, and now we are fighting against the government who wants to deregulate everything because the prices will inevitably go up. Why is government control of fundamental societal resources like electricity, gas, phone, water a bad thing?
Of course ‘Letters of Comfort’ are being issued to ‘green power companies’ the families of both the Prime Minister Cameron and the Deputy Prime Minister Clegg are profiting from green power companies. As stated before these ‘green power schemes’ are just money laundering operations to pass tax payer money to politicians families, friends and supporters. They have nothing to do with being green or generating power.
“The proposed contracts for difference (CfDs) are extremely complex and convoluted. Neither the profit guarantees offered for different technologies nor the duration of CfDs is known. The government has not provided any numbers and price guarantees for its favoured green technologies. Investors are therefore thrown into limbo since they cannot calculate whether expensive renewables or nuclear reactors are viable and can compete with less expensive conventional power plants.”
=====================
Among other questions, who are the concerned “investors”.
Taxpayers or those with inside information/political pull.
youngleftie,
Got a question for you. In the U.S. the top 5% of taxpayers paid 59% of all federal income taxes. Question: how much is enough? You want the government to have it all?
How much is enough? Give me a number.
youngleftie says:
May 23, 2012 at 4:06 pm
“What I am advocating is that the government looks into initiatives that ensures that the little people don’t get screwed by a few energy companies who have effectively monopolised the energy sector between them and thus can keep raising prices until the poor find fuel unaffordable.”
When it’s “a few companies” it’s not a monopol; it’s an oligopol. And if these companies have a covert deal with each other it’s called a cartel. Cartels are illegal in the EU (even in the UK, as it’s EU wide regulation) and when one is uncovered hefty fines are issued.
So, you are suspecting a cartel? Prove it.
The total illiteracy of leftists in all terms economic is stunning yet it’s up to them to fix it by reading stuff that doesn’t come from the Guardian or Indymedia.
You might just as well start here.
http://mises.org
“The proposed contracts for difference (CfDs) are extremely complex and convoluted.”
Synchronised swimming with sharks!
Smokey says: May 23, 2012 at 4:25 pm
[How much is enough? ]
If you took 100% of all the wealth from 100% of all the billionares in the whole world, and gave all of the money to the European Union, then the European Union would Still owe over 5 Trillion Euros (they currently owe about 9.4 Trillion Euro).
So clearly 100% is not enough.
Perhaps zero is enough, good money after bad and all that.
When will the Five Year Plan be announced? Will it be called the Green Leap Forward? Will the Green Guards be put in charge of compliance? Will the British monarchy survive when the UK collapses into chaos being brought on by the Destroyers?
youngest – – – In a free market, there is no “effective monopoly” So why not try a free market? – free markets work. Centralized government control of markets always creates shortages. Inefficient, in a word. The poor suffer – they don’t get the energy they need – you want the Government to protect the poor, but it never can, it never does. Centralized economies do assure that poverty is more widespread. Maybe if everybody was poor it wouldn’t matter so much that there isn’t enough juice to keep the lights on or the house warm.
The method for dealing with this is.
1. Have a coal or wood stove (Install one if you do not have one already)
2. Have flyers, pamphlets, regulations and any other government or NGO printed presentations sent to you for free.
3. Burn this free fuel in your stove.
4. Do not tell your friends because you do not want the government to figure it out.
Didn’t the UK get the memo on the failure of central planning in the 20th century?
hopefully CAGW will unravel before more billions are wasted:
23 May: AFP: EU warns climate talks at risk of floundering
Europe warned at climate talks in Bonn on Wednesday that efforts to forge a new global pact to avert environmental disaster were in danger of floundering, and some pointed fingers at China.
Nine days into talks meant to set the stage for a United Nations gathering in Qatar in December where countries must adopt an amendment to the Kyoto Protocol on climate change, negotiators complained that procedural bickering was quashing progress hopes.
With only two days left in this negotiating round, the parties have failed to appoint a chairperson or agree on an agenda for a newly established body dubbed the ADP tasked with overseeing the drafting of a new pact by 2015.
“If this slow pace of negotiations continues … it poses the risk of unraveling the Durban package,” Danish chief negotiator Christian Pilgaard Zinglersen warned on behalf of the European Union…
Pilgaard told the Bonn gathering that some parties, which he did not name, wanted to rehash issues that have already been settled…
And Wael Hmaidan, director of activist group Climate Action Network, said China was “blocking the ADP” out of fear that rich nations were trying to shift more of the emissions curbing burden onto poorer states than was historically fair…
***As countries bicker, researchers recently predicted Earth’s temperature rising by as much as five degrees Celsius (9.0 degrees Fahrenheit) from pre-industrial levels, instead of the 2 C (3.6 F) limit being targeted…
But Zinglersen said Wednesday: “We are very concerned that success in Doha is currently far from certain. With only two days left in Bonn we have made very little progress on a number of key issues.”
***The United States had never ratified the Kyoto Protocol, while Russia and Japan have said they did not intend to sign up from next year. Australia and New Zealand have not confirmed their positions, while Canada withdrew from the protocol last year.
http://www.google.com/hostednews/afp/article/ALeqM5izDD4Hvuc840J7zG_PdlRSCs9M0A?docId=CNG.2a8f1c6c6ae3e9293d9ab2d9d9238115.271
the unilateral EU carbon dioxide aviation tax is dead as well, it seems:
23 May: Xinhuanet: Aviation conference sees EU carbon tax concern
An aviation conference in Beijing on Wednesday saw leaders of the industry voice strong concern over a European Union (EU) plan to tax international airlines for carbon emissions, and an EU official signal a more flexible attitude from the bloc.
Chinese and U.S. aviation authorities and industry associations reiterated opposition to the EU Emissions Trading Scheme (ETS) at the 2012 China Civil Aviation Development Forum, urging the EU to take a global and comprehensive approach to the issue.
Chinese airlines have not submitted the emission data required by the EU to assess the levelling of carbon fees and will not do so, Li Jiaxiang, head of the Civil Aviation Administration of China, told reporters at the event, taking place on Wednesday and Thursday…
New EU flexibility was shown at the forum, however, when Matthew Baldwin, director for the EU’s Air Aviation and International Policy, told reporters that the bloc, in recognition of the concerns, is committed to dialogue to seek a multilateral solution.
He said the EU is ready to “review and amend the ETS initiative” if a global solution can be reached…
Roberto Kobeh Gonzalez, president of the ICAO council, told Xinhua that the ICAO was not invited by the EU to join negotiations over the ETS…
http://news.xinhuanet.com/english/business/2012-05/23/c_123181562.htm
youngleftie says:
May 23, 2012 at 4:06 pm
It seems that you have stumbled into a conundrum. We don’t want the government to stifle the free market but at times it is the duty of the government to protect it’s citizens from corporate domination. Some people would call these unscrupulous or greedy corporations but this wrong. Corporations are merely a mechanism for a group of people to pool their resources to accomplish things that they could not as individuals. These people may be greedy or unscrupulous but the corporation is not. For our civilization to succeed we must be able to form corporations or we will always be limited by our individuality and our separate resources. When you talk about the government taking over any sector you are trading multiple corporations for ONE. After all, by the definition above, the government is just another corporation. The problem of the government corporation is that they don’t have to show a profit. If they did, you could understand and be prepared for their actions. What is the motivation of the government? To protect you? To make sure that you are not unjustly treated? Maybe in the beginning. However, once you start a government corporation, its goal quickly becomes to sustain itself. The importance of all else will fade into oblivion. So if people in the UK need the protection of the government from corporations so be it. But don’t replace four corporations with one all powerful master…unless you want to be a serf…again.
As an escapee from the socialist utopia of the former great britain I would like to point out that the so called right wing government there has little power it can exercise without direction from the real rulers in Brussels, this smells strongly of EU diktat. Last year the country was saved from viscous power outages by cranking up the old coal fired stations, at odds with the EU rules. I cannot see any other way but for England to follow Greece down the tubes, a bankrupt country that has next to no manufacturing won’t need a lot of power!
youngleftie says:
May 23, 2012 at 2:24 pm
Well in a perfect world, this ‘cheap fuel’ would be paid for by the rich in society, why should they have more than plenty, far too often tax free, whilst OAPs and the poor live in fuel poverty….
____________________________
SIGHHhhhh…..
First who do you think actually CONTROLS the government??? The rich in society who pour money into election campaigns.
Second who do you think actually pay taxes???? The poor and middle class. The very rich have their money very nicely socked away in tax free havens, often in other countries.
Third how efficient do you think government is??? A study in the USA showed 1/3 of taxes were not collected, 1/3 were wasted in inefficiency and the other third went to pay interest to the BANKS who lend money to governments. A government can run up a huge tab before it actually bankrupts. Corporations do not have that option.
Fourth who do you think benefits from regulations? I will give you a hint. In the USA one of the biggest donors to both political parties was ADM who now reaps over $2 billion in ethanol subsidies. While the US economy is on the rocks ADM has record breaking profits.
SEE:
http://www.crocodyl.org/wiki/archer_daniels_midland
http://www.grain.org/article/entries/716-corporations-are-still-making-a-killing-from-hunger
And then there was the new banking laws Democratic (leftwing) President Bill Clinton signed into law along with the biofuel law above… http://www.foreignpolicy.com/articles/2011/04/27/how_goldman_sachs_created_the_food_crisis?page=0,1
Breaking up monopolies and encouraging competition helps the little guy. Too much regulation means only the big dogs are left and everyone suffers except the very rich.
http://www.usatoday.com/news/opinion/forum/2010-10-21-mellor26_st_N.htm
http://www.ij.org/ijs-new-city-studies-want-to-create-jobs-remove-red-tape
The movie, in that form: Quite. Unwatchable.
With the book at least one had one’s imagination to get by with …
.
The above is at odds with this:
Gail? Where do you get your numbers?
.
Since WWII Britain gas been governed by socialists, with brief exceptions. The British on the whole prefer it that way. And it will continue with the decline of Britain as an industrialized nation. Just have a nice cup of tea.
By which time it may be too late.
The competition within the EU between UK and Germany to implement the dumbest energy policies proceeds apace. The Booby Prize will be spectacular economic and social implosion.
Robbie Burns, where are you now that you are so needed?
“O wad some Power the giftie gie us,
To see oursels as ithers see us!
It wad frae monie a blunder free us,
An’ foolish notion: “
youngleftie says:
May 23, 2012 at 2:24 pm
“Well in a perfect world, this ‘cheap fuel’ would be paid for by the rich in society”
And when you have taken the money from the rich so they too become middle class, who will pay then?
_Jim says:
May 23, 2012 at 6:47 pm
========================
So, have you anything to say ?
In your own words.
William Abbott says:
May 23, 2012 at 5:09 pm
youngest – – – In a free market, there is no “effective monopoly” So why not try a free market? – free markets work. Centralized government control of markets always creates shortages.
=======
Deregulation and privatization of public utilities in Australia has not produced a single benefit to the consumer. Privatized electricity is more expensive and less reliable. There were less “shortages” of electricity under the public system. Private industries do “risk management” and “damage control” instead of forward planning.
We didn’t want our public utilities sold to private profiteers in the first place. See the comment by Jarryd Beck, for it is correct.
Russ in Houston says:
“These people may be greedy or unscrupulous but the corporation is not. “
=======
A corporation comprised of unscrupulous decision makers will exhibit unscrupulous behavior.
Self-regulated industries not accountable to anyone will inevitably exhibit unscrupulous behavior.
Around half a million Americans were killed by VIOXX…
http://www.theamericanconservative.com/articles/chinese-melamine-and-american-vioxx-a-comparison/
Not following … (literally: please bring a point saliently to the fore)
.
I read elsewhere today that the US wholesale contracts for 2015 electricity supply were between 8 and 20 times as expensive as the previous auctions…I just can’t wait for my $3200 electric bill in August of 2015. But it is a successful campaign promise for the Obama administration. “Prices will necessarily have to skyrocket…”
So Britain isn’t alone, all this because of the EPA’s war on coal.
to give the Secretary of State the exclusive authority to offer green energy companies ‘letters of comfort,’ promising them that they will be guaranteed profits
===
Fantastic. Everyone and I mean everyone in the UK can quit work and jump on the green energy bandwagon. Guaranteed profits. You sure can’t get that working for a living where they can declare you redundant. Guaranteed profits, why work at anything else?
I’m in favor of the UK this bill if only to prove (in a tragically compelling example) that a green base load will decidedly fail ratepayer expectations. And the world wouldn’t have to wait too long to witness the failure. By 2020, close to 25% of the UK current electric base will have been retired; this includes “dirty” coal burners and a few aged nuclear plants (and assumes that the growing number of windmills are actually maintained). Yet with the draft energy bill, the UK boldly asserts they can have their green and make the world cooler, too! After all, there is a consensus on cAGW, you know!
By incentivizing a desperately desired green base load (as if such a beast does or could exist), as well as tolerating the CfDs to support the still “dirty” gas plants as a supplemental load for when the intermittent (at best) renewables fail to provide a base, the UK (and please let it not be Ofgem that does the regulating) will have effectively reversed 120+ years of applied power engineering. That engineering has asserted successfully that cheap, reliable, and plentiful fossil fuel and later nuclear plants be used for base load and more costly fuels and renewables be used for peak load. This has consistently made economic sense and has resulted in the cheaper (if not cheapest) electric prices – government tinkering (e.g., a mandatory renewable component, “free” energy audits, and means-tested income subsidies) is what tends to drive the price upwards for the great majority of ratepayers.
But to accomplish this reversal, the UK needs to pretend that certain technologies (and unicorns) exist. The draft energy bill introduces an emissions cap for new, electric plants. The cap exists solely to ensure that any coal-fired plants are built with carbon capture and sequestration (CSS) capabilities – even though the UK pilotsmodels on the same have been abandoned as technologically infeasible – at this time, of course. The brilliance of this logic is… inspiring – and thoroughly British!
So, let the UK reverse more than century of sound engineering application. Providing it’s willing to wait and let the Earth warm another 0.084 deg C by 2020 (only the IPCC can claim such accuracy on a global anomaly for it is an august body devoid of hubris), the world will benefit from this “pilot project’s” preordained failure. To modify a wrongly-phrased quote (to support a wrongly-crafted bill) “Qu’ils mangent de l’vent” or “Let them eat wind!”
Economic illiteracy exemplified (literally: “on display”)?
Do you think ‘the rich’ (like, the Ford family, Bill Gates, Andy Grove, Michael Dell etc):
(a) Have stacks of silver certificates or Gold coins stashed in their mattress or perhaps laid-away in Swiss bank accounts
or
(b) Have ownership of companies represented in the form of stock(s) and bond(s) in on-going operational concerns and businesses like Ford Motor Corp, Microsoft and even Intel (NYSE, NASDAQ and NASDAQ respectively listed) which in turn own property and employ people in order to make and sell things?
.
Natural Monopoly from wordig.com:
“In economics, a natural monopoly is a persistent situation where a single company is the only supplier of a particular kind of product or service due to the fundamental cost structure of the industry.
This applies where the largest supplier in an industry, or the first supplier in a local area, has an overwhelming cost advantage over other actual or potential competitors. This tends to be the case in industries where capital costs predominate, creating economies of scale which are large in relation to the size of the market, and hence high barriers to entry; examples include water services and electricity.”
We can deregulate, but the result will be higher prices to the consumer. Market participants will have excess economic profits because of barriers to entry, as outlined above, and the fact that the market will assign a cost/value to capital placed at risk. It has never made sense to deregulate electrical power production. Maybe someday it will, but it doesn’t now.
_Jim says:
May 23, 2012 at 7:45 pm
u.k.(us) says May 23, 2012 at 7:19 pm
…
So, have you anything to say ?
In your own words.
Not following … (literally: please bring a point saliently to the fore)
==============
Nicely worded response, while avoiding the question.
.
Just sayin, look for the roots of what we currently see in front of us.
http://www.un.org/esa/dsd/agenda21/
Ya think this is real yet? Think about it…………
Doug, If you have a free market in energy then electricity has to compete with all sorts of other sources of light and power. True enough that electricity does some things very well. But it is never the most efficient source of power. Natural competition exists for the electrical grid. Yourr natural monopoly has severe limits. Charging the highest possible price will reduce sales, so an electric utility is always seeking to sell the most electricity it can at the highest price which is a completely different animal than solely the, “highest possible price.” Once the generators are turning you might as well sell the last kilowatt for something – the sunk costs in generating electricity are immense. Where energy markets are the most free, all energy prices are lowest.
Prices will fall with shale gas?
This is the most outrageous of the misunderstood shale gas. Prices in the US/Canada have dropped to under $2/mcf due to oversupply, not cost of production & transportation.
Think! Shale gas was not pursued earlier because it was more expensive than conventional supplies. The technology did not exist to produce it in significant volumes, but that technology did not create a low-cost process. Shale gas production is expensive!
Shale gas will be 3X or more the cost to the consumer than whatever it is he is buying right now if the supply-demand is out-of-whack as it is in North America. The price you will pay is cost plus profit.
Look to the companies profiles! Work out the cost base and then double it: long-term costs are greater than short-term.
Shale gas is NOT a low cost energy source. It is a good energy source, but not low cost.
May 23, 2012 at 4:06 pm, youngleftie says:
[ … ] What I am advocating is that the government looks into initiatives that ensures that the little people don’t get screwed [ … ]
—————————————
Weird, ay ? So what’s the government been doing forcing inefficient and expensive ‘renewables’ energy onto everybody’s energy bills ? The market left to its own devices would ensure that the energy source cheapest to exploit would be exploited … and consequently “the little people don’t get screwed”.
Green eco-fascism is the cause of high energy costs and the subsequent escalating fuel poverty.
Just remember to vote this year !
This arrived to me via the e-mail, source unkown:
” Ineptocracy ( in-ep-toc’-ra-cy )
A system of government where the least capable to lead are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers. “
So “green” electricity is to provide base load is it?
At this moment wind is supplying 0.1% of the supply (http://www.bmreports.com/bsp/) 44 mw
Wonder if enough people will vote UKIP at the next election? i can only hope so as they seem to have the only sensible policy on energy along with most other things. Otherwise the UK will be more like North Korea
John Whitman says: “Didn’t the UK get the memo on the failure of central planning in the 20th century?”
In the insane world of Socialist thought, the solution to the failure of central planning is…{drum roll}…more central planning.
Richard said;
‘It seems David Cameron is determined to supplant Ted Heath as the worst UK PM since the Napoleonic Wars.’
Ha! Yes, i thought that Ted Heath could never be beaten although Blair gave him a fair run for his money. Brown would comfortably occupy that spot if he hadnt kept us out of the Euro but he did, albeit that he didnt want to lose imfluence. Cameron will really need to raise his game if he is not to wrest the prize from Heath, not easy though when you have someone like Clegg around your neck.
tonyb
_Jim at 8pm
Perhaps Gail is referring to foreign tax havens such as the Cayman Islands.
http://abcnews.go.com/Blotter/romney-parks-millions-offshore-tax-haven/story?id=15378566
Don’t get me wrong. I am happy for anyone to pay 15% in taxes, as was finally reported after months of pressure. I just think that should be a flat tax for all Americans.
The increase in wealth of the wealthiest 1000 people in the UK over the last 10 years is more than enough to pay off the UK national debt. That’s just the ‘increase’ in their wealth over the last decade not the actual total wealth.
“Forget the double-dip recession, ignore record unemployment, the rich are getting richer.
The combined wealth of the richest 1,000 people in the UK rose 4.7 per cent last year, surpassing a previous high set before the 2008 financial crisis. The result is a new global elite, living lives of luxury and privilege the rest of us can hardly fathom.
The UK’s capital has become a haven for the world’s super-rich, thanks to attractive tax laws for those who can establish an overseas “domicile”. A trend towards tax cuts for high earners has also given the wealthy, wherever they reside, increased freedom to decide how their riches are allocated.
So what do they spend it on? Super-yachts, super-prime real estate, and large philanthropic donations (tax arrangements dependent).”
http://www.independent.co.uk/news/factfiles/fact-file-the-superrich-7746617.html?origin=internalSearch
good news from Queensland Australia:
24 May: Ninemsn: Govt scraps northwest Qld solar farm
The Queensland government has pulled funding for a solar farm in the state’s northwest to save money.
Minister for Energy Mark McArdle on Thursday said the government had withdrawn its financial support for the Cloncurry Solar Farm to save Queenslanders about $5.6 million…
“These are savings which will benefit all Queenslanders rather than localised climate initiatives,” Mr McArdle said in a statement on Thursday.
***It was up to the private sector to decide whether to invest in such projects, he added…
http://news.ninemsn.com.au/article.aspx?id=8472810
***what a novel idea!
——————————————————————————–
Solar panels in the UK. Just where is the simple real science. Millions installed, so where is the real data, how much does output really decline over time, how much to maintain, how long do the batteries and inverters last. Huge rail locomotives are stopped in their tracks by leaves on the line. So how are panels cleaned positioned as they are on roof tops.
Wind, how much output does a selected bunch achieve against rated output. How much real actual time off line. How much to maintain and repair. Where is the real operational data. Commercial secret maybe. Hell no, they where bought and paid for with subsidy, paid by the people and run by extorting high prices from consumers. public domain data.
We need to know and know now. Publicly and very visibly, not hidden in some arcane paper, behind a paywall.
@tonyb
The mere fact of repealing the Labour Party’s fascist Identity Card legislation means that Camoron will fail to wrest the number 1 slot away from Heath and will have to be content with joint second with Gurning Gordon, who, as you say, did at least keep us out of the Euro. Blair was never quite bad enough to match this dynamic trio. It’s a close run thing all round though.
Sigh. The quality of politicians has been, with one or two exceptions, tragically low for most of my life.
“richardscourtney says:
May 23, 2012 at 3:32 pm
But history shows the Tories always muck-up our industrial, fiscal, economic and energy policies, so I suppose this was to be expected.”
You have to be kidding right? Don’t you remember the rolling blackouts, power/car/nurse/teacher worker strikes, the winter of discontent?
Germany pulls the plug on emissions trading.
http://uk.reuters.com/article/2012/05/22/us-bavaria-emissions-idUKBRE84L0SN20120522
Just in time for Australia’s carbon tax. Thanks Gillard!
youngleftie argues that it is deregulation that has thrown people into fuel poverty. Utter rubbish!
Fuel poverty is caused by the rising costs incurred paying for the subsidies that green energy attracts. Until the waltz for wind electricity prices in the UK were controlled at a low level by competition. Government insisted on the green route which required the subsidies to encourage companies to build the wasteful windmills. Scrap that plan and prices will fall.
We have another problem with the Secretary of State Edward Davey MP who has carried on where Huhne left off, claiming more and more stupid things about a subject he is totally ignorant about. Well he is a Liberal.
OK firstly, I know someone pointed out i used monopoly instead of oligopoly, but I did use oligopoly earlier, I do know the difference and it was a slip of the tongue for which i apologise. Secondly, people are saying that, were the government to take over energy production, they too would turn into a ‘corporation’ just like those currently running the market. Well ok, maybe that is true (altough i doubt it), what if we turned the ‘corporation’ running the energy sector into a worker’s co-operative, as well as intoduce a constitution into this corporation that only allows minimal profits to be made out of the public, if at all, and that guarantees government funding for those too poor to pay for their own energy?
It really makes little difference for the UK. Their long energy winter started a few years ago. One wouldn’t be surprised to see them tearing apart their homes in all those “snowless” winters they’re having. The issue is whether they even can even decide toclimb back up from their diastorous foolishness at the alter of environmentalism. The choice is stark – cheap energy or mass die off. You simply cannot support the population on the wisp of the wind. That’s not even considering the lead times to build what is needed just for them to survive.
Gives an updated meaning to “mad dogs and Englishmen”. The land of the Enviro Nutters.
Nigel Lawson is as wholly wrong to disapprove of this as he was to be a major part of the flogging off of this country’s formerly publicly owned infrastructure in the 80s/90s. This is the first halfway sensible thing this dreadful government has done since they were elected (?).
Perhaps, if the “free market” were in any sense as “free” as its very vocal supporters seem to think it is, it might work, who knows. However, since the real “free market” simply involves the richest parasites freely buying everything in sight at bargain basement prices, freely stripping the assets for their personal gain and freely racking up the prices paid by the public, also for their personal gain, it is simply legalised theft. Oh, and freely paying their bought-and-paid-for politicians to pass laws to legalise more of the same.
Now let’s see the same approach on water, railways, and all the rest of our stolen infrastructure.
If anyone thinks ‘green’ energy is a good idea, take a look at
http://www.bmreports.com/bsp/bsp_home.htm
which gives a breakdown of the UK’s energy generation.
Earlier this morning all of the UK’s windmills were generating a pitiful 22 MW, and the percentage figure for the last 30 minutes was actually zero. As I write, they are putting out a massive 21 MW.
I don’t kniow why, but the phrase ‘completely barking mad’ comes to mind….
Chris
“youngleftie says:
May 24, 2012 at 2:52 am
Well ok, maybe that is true (altough i doubt it), what if we turned the ‘corporation’ running the energy sector into a worker’s co-operative, as well as intoduce a constitution into this corporation that only allows minimal profits to be made out of the public, if at all, and that guarantees government funding for those too poor to pay for their own energy?”
There are many example of this in what was called the USSR. It didn’t work. Any “profit” went to the elites and nothing was re-invested. But I don’t see why someone else should be bound to pay for the energy I cannot afford to pay. Have you checked out what is happening in Italy and Greece recently?
Having been there at the time the government “flogged “off the infrastructure I saw that after the socialists stole said infrastructure from private hands, at a time it was well maintained and working well, they then failed to maintain it or ready it for the increasing population, this was most obvious in the case of water / sewage and railways, the gas and electricity boards were diabolical to deal with. After privatization money flowed to upgrade services to fit the times. Please dont make unfounded statements based on private prejudices and ignore the facts!
Sic transit gloria Britannia.
Chris,
The link you have posted, on its own, should be enough to blow the whole ‘renewable’ energy b*llsh*t industry out of the water. How can anyone of sound mind look at zero windmill output and claim it is part of a credible energy policy. It beggars belief. Wake up Britain.
meanwhile, Aussie voters even less willing to pay for green energy.
http://www.theaustralian.com.au/national-affairs/opinion/voters-strain-at-paying-for-even-small-carbon-cuts/story-e6frgd0x-1226364958029
John Marshall says:
May 24, 2012 at 2:42 am
youngleftie argues that it is deregulation that has thrown people into fuel poverty. Utter rubbish!
Fuel poverty is caused by the rising costs incurred paying for the subsidies that green energy attracts. Until the waltz for wind electricity prices in the UK were controlled at a low level by competition. Government insisted on the green route which required the subsidies to encourage companies to build the wasteful windmills. Scrap that plan and prices will fall.
We have another problem with the Secretary of State Edward Davey MP who has carried on where Huhne left off, claiming more and more stupid things about a subject he is totally ignorant about. Well he is a Liberal.
——–
I agree that youngleftie and Davey are liberals therefore they say and do really dumb things. Being a liberal may be their reason but it is certainly not an excuse and imo offers no justification. How one feels about this subject must not replace logical thought.
If one had to choose between Workers’ Co-operatives running the power industry and the crony capitalism of Cameron (which is simply a continuation of the crony capitalism of Thatcher which caused the Energy privatisation’s in the first place) I think I would go with Workers’ Co-operatives as marginally less deleterious to public welfare and economic well-being.
But, sadly, we don’t have the opportunity to make a choice, do we?
Anthony, I gotta hand it to you. You’re very good at fishing for trolls. You hooked a couple with this post. 😉
Friends:
This is the first WUWT thread which contains posts all of which I agree that state such divergent views as those from Grey Lensman, John Marshall, youngleftie, cedarhill, Steve C, and Chris Wright.
Chris Wright provides data showing how the UK’s investment in windpower is – as he suggests – ‘barking mad’: windpower has cost but never provides much power and often provides none.
And Grey Lensman rightly says that much important data is concealed so we cannot know the true costs of UK wind and solar projects.
Cedarhill points out that the policy of investing in wind and solar is long-standing and has been implemented by successive UK governments (both red and blue) so the UK has almost run out of time to avoid the inevitable resulting national disaster.
John Marshall is right when he says of the present situation in the UK
However, he fails to understand that the “deregulation” imposed at privatisation of the electricity supply industry was so misconceived that it has resulted in those subsidies.
Steve C expresses dismay (that I share) at the privatisations of which the electricity supply industry was a part. Indeed, I add (as an aside for interest and not to induce discussion) that the problem we are discussing is not the major problem caused by ‘selling off the family silver’ in the 1980s and 1990s: even more damage to the UK has resulted from the deliberate switch from productive industries to over-reliance on ‘service industries’ (i.e. banking).
He rightly points out that Nigel Lawson was a prime mover in those privatisations. But so what? “There is more joy over one sinner that repents… etc.”.
And it seems to me that his regret at what was done “in the 80s and 90s” has blinded him to the true nature of what the present government is now proposing so he says
NO! This is not a retreat from what was done in the privatisation of the UK electricity supply industry: it is an extension of what was then done.
The electricity supply industry was sold to the private sector and an electricity ‘market’ was established. This was always going to be difficult because electricity is not a commodity (it cannot be stored in significant amounts and has to be used as and when it is produced so e.g. cannot be sold as ‘futures’). This problem caused the government successive failures in its attempts to sell the electricity supply industry and, therefore, the government retained a major ability to distort the ‘electricity market’ as insurance against failure of the electricity market.
Successive governments have used that ability to distort the market with the resulting problems of fuel poverty and imminent loss of adequate generating capacity.
If the proposed energy policy were renationalisation of the electricity supply industry then I would support it: the nationalised UK electricity supply industry worked without problems for decades. Or if it were true deregulation the industry then I would support that if it could be achieved.
Bu the proposed UK energy policy is neither of those.
The proposed UK energy policy intends to leave the electricity supply industry in public hands but to place complete control of the industry into the hands of the government. That is fascism.
Youngleftie has chosen an unfortunate alias and uses unfortunate language. But I am with him. This fascism is plain wrong.
Richard
youngleftie says:
May 24, 2012 at 2:52 am
what if we turned the ‘corporation’ running the energy sector into a worker’s co-operative, as well as intoduce a constitution into this corporation that only allows minimal profits to be made out of the public, if at all, and that guarantees government funding for those too poor to pay for their own energy?
————————————————————————————-
That looks good on paper but the real world just doesn’t work that way. As soon as you put someone in charge of the co-op, their job is to protect their job. This happens quite a bit in private corporations also. The best answer is the free market with a well educated population. By “well educated” I mean well rounded education. If all the educators are of the leftist persuasion, the whole system fail.
Reversing deregulation is a GOOD idea by itself. Bear in mind that energy deregulation is EXACTLY how we got cap-n-trade, and it’s also how we got incompetent and expensive energy production and wind “power” and all this other nonsense.
Enron and the Carbon Cult are the same thing. Green energy and securitized energy came together, and we can’t eliminate the green part without eliminating the securitized part.
The real question is whether THIS PARTICULAR version of re-regulation is appropriate or productive. I don’t think we have enough info yet to answer this question.
The problem of the government corporation is that they don’t have to show a profit.
The problem is that governments award themselves monopolies. And monopolies are always a mandate for inefficiency and corruption.
One only has to see what happened when monopoly telephone suppliers in the UK and Australia had their monopoly taken away and competition introduced. Prices fell year after year and service dramatically improved.
Youngleftie,
I sympathise with your sentiments. In an ideal world it would be nice to imagine there can exist an omniscient Government that runs strategically important industries for the benefit soley of the people. Unfortunately, history suggests that this does not happen.
Remember British Leyland? Perhaps you are too young. But there was a case of state owned car manufacturing that failed because a) it was under no economic pressure to innovate and 2) as a consequence could exist only on taxpayers subsidy. By any reasoning BL destroyed what was a large chunk of British motor industry – Austin, Morris.
The situtation at the moment gives us privately owned utility corporations, under the price control of OfGen. Would it not be simpler to just make OfGen do their job properly and regulate prices?
But if prices are still to high despite OfGen, who we would expect are doing the job mandated to them, what is the reason for the sharp rises in energy prices over the last few years? The answer, in fact, if you care to look, is to be found under a piece of legislation that mandates energy companies to purchase electricity generated from certain sources at fixed prices that are much higher than the cost of energy that is generated by conventional means. I’m talking about wind and solar mainly. These hidden subsidies appear in the bottom line of our energy bills.
As a socialist, perhaps you would care to consider whether it is ethical to transfer wealth from poor people into the pockets of rich land owners. Twenty years ago, I would never in my wildest dreams have imagined that a Labour government – Labour! – would be complicit in the most regressive wealth grab in the history of the modern world.
So youngleftie wants workers cooperatives. i seem to remember that the USSR failed partly due to workers cooperatives failing to produce their work quota. Food production failed because to supplement their poor pay the cooperative farmers grew crops to feed their families not the state population. Cooperatives fail to give any incentive to work hard only produce under the bare minimum.
Communism failed. It only lives in China, where the government has actually changed direction away from the dogmatic political arena, and North Korea and Cuba where dissent is quashed and the perpetrators imprisoned or shot.
Workers Cooperatives? NO.
As I write, wind is providing LESS THAN 0.1% (36MW) of UK electricity demand (just under 40000MW).
More wind farms, anyone..?
May 23, 2012 at 4:06 pm, youngleftie says:
[ … ] What I am advocating is that the government looks into initiatives that ensures that the little people don’t get screwed [ … ]
I have been looking at IPADs and they are expensive should the government get involved and force the price down so the little people don’t get screwed? Oh, I forgot the little people were willing to pay high prices for IPADs etc which made the rich folks rich. Except the rich folk didnot start out rich they (Apple) started in a gargage dirt poor like most of us.
Green ideas transfer money from the poor to the subsidized weatlthy. Green/socialist ideas wreak havoc on all.
Jim says: @ May 23, 2012 at 6:47 pm
Gail Combs says May 23, 2012 at 6:24 pm
…
Second who do you think actually pay taxes???? The poor and middle class. The very rich have their money very nicely socked away in tax free havens, …
The above is at odds with this:
Smokey says May 23, 2012 at 4:25 pm
… In the U.S. the top 5% of taxpayers paid 59% of all federal income taxes. …
Gail? Where do you get your numbers?
___________________________________
SIGHHhhhh,
_Jim, you and Smokey are making the same mistake everyone else makes. You are not watching the pea under the shells. I would have thought you would have seen through this one.
WHO pays taxes? WAGE EARNERS not the rich who have their money safely stashed in tax free bonds and tax free “Foundations” or whole corporations. Remember good old General Electric PAID NO US TAXES. General Electric, one of the largest corporations in America, filed a whopping 57,00 page tax return earlier this year but didn’t pay taxes on $14 billion in profits….
This very cunning deception fools most people and it is done deliberately. Tax codes with loop holes are written so the middle class pays the lions share of the taxes. Remember if you are a wage earner of any type, such as a wealthy doctor or CFO you are not “The Rich” you are still upper middle class. Even if you are a CEO you are only paying taxes on your WAGES and not all the wealth safely tucked away elsewhere.
The other part of the shell game is where an international company “takes” their profits. I worked for a plant in Massachusetts that never made a dime in its entire history and therefore never paid tax. Raw materials were always bought from a sister plant outside the country for an obscene amount. Therefore all the profit was transferred to the sister plant that resided in an area with a much lower tax rate than the USA. THAT is how it is done.
Anyone who thinks “The Rich” who control our governments would actually allow a tax code to be written that taxes THEM to any extent is an utter fool. Even if they work as a CEO their “wages” are a drop in the bucket compared to their other wealth and earnings.
And Yes _Jim I am aware that the bulk of taxes on WAGES are paid by the upper middle class. However if you are the working poor every dime you pay in sales tax and income tax and SS tax and state tax and property tax (through the property you rent) and phone tax and energy tax…. HURTS a lot more because you do not have much in the way of discretionary funds and that is what those taxes hit. All those taxes are never shown on the charts of WAGE EARNER tax either. Most information is presented in a manner to deceive especially when it comes to the subject of taxes. Try finding a chart showing how much money you actually shell out to the government (do not forget licenses, registrations and fees). You are never going to find it.
Sorry for the mess in the other post. My computer is having fits.
Dumb, and dumber.
The point being missed is that energy policy in the UK is directed from the EU. The same place that is pouring cold water on shale gas exploitation. The UK government does not govern the UK.
All the UKs’ actions have to be within the framework set by the EU. In fact, the UK governments do not seem to want to be in control.
Steve C,
Your post is the usual rant against “asset stripping” capitalists who are “buying up everything in sight” etc etc.
In short, it sounds like you want to have your cake and eat it. You either believe in free markets and capitalism – warts and all – as the best system to create wealth for humans, or you believe that a socialist command economy is better.
Well, which is it?
Youngleftie,
“what if we turned the ‘corporation’ running the energy sector into a worker’s co-operative, as well as introduce a constitution into this corporation that only allows minimal profits to be made out of the public, if at all, and that guarantees government funding for those too poor to pay for their own energy?”
Ok, so you want people to invest in an industry but you then say they are only allowed to make a minimal profit. Let me know how that turns out!
Then you say that people who are too poor to pay for their own energy should be funded by the government. But shouldn’t we be addressing the real causes of their poverty in the first place? How abou this idea – radical I know – remove all the renewable, “green” subsidies, and allow the most efficient energy production methods. This would lead to lower energy prices for these poorer people, and boost manufacturing too, creating wealth and jobs and lifting them out of poverty.
Since when did it become so warm in the UK that they needed to stop global warming? How many Brits travel north to retire/vacation as compared to traveling south?
Isn’t the bigger problem in the UK heating the house in winter? Since when did the Brits have a problem with air-conditioning bills?
What is the problem the government is trying to solve? Except perhaps the one they created through their green energy policy?
Louise, What are you smoking? You really believe the top 1,000 earners in the UK can pay off the national debt? How did all these simple solutions escape us. One thousand souls can fund the UK’s budget and deficit – and our friend, Youngest Left-Us, will personally oversee the Goodwill Grid – where power is cheap for all except the poor – the poor will get it free.
The method for dealing with this is.
1. Have a coal or wood stove (Install one if you do not have one already)
2. Have flyers, pamphlets, regulations and any other government or NGO printed presentations sent to you for free.
3. Burn this free fuel in your stove.
4. Do not tell your friends because you do not want the government to figure it out.
English Progressives have created the penultimate surveillance society in the world (second only to NK), so is it any wonder that these insatiable statist busy bodies want to regulate just about everything?
Gail Combs says:
May 24, 2012 at 6:31 am
WHO pays taxes? WAGE EARNERS
=======
Correct, the bulk of the taxes are paid by the people that have no other choice.
Otherwise, you will structure your affairs in such a fashion that the bulk of your income is made off-shore into tax free trusts. These trust cannot be attached by the government because of the way they are structured. There is hundreds of years of legal precedent behind this.
Once your affairs are structured in this fashion then on paper you are relatively poor, as you have very little owned in your name and your annual income for tax purposes is relatively modest. Your income comes mostly from capital gains, dividends and tax free bonds, much of which is taxed at preferential rates.
The beauty of this sort of structure is that you are relatively immune to law-suit. Even if someone wins a huge settlement against you there is little chance they will collect (think OJ).
William Abbott says:
May 24, 2012 at 7:45 am
Louise, What are you smoking? You really believe the top 1,000 earners in the UK can pay off the national debt?
========
The top 1,000 in the UK didn’t get there by handing out money to other people, without first making sure that they took the lion’s share off the top. Do you really expect they would willingly part with this money? Try and take a kill away from a lion. You will lose an arm unless you first kill the lion.
Gail Combs,
Your reply does not contradict Smokey et al, but supports them. Having originally said “… In the U.S. the top 5% of taxpayers paid 59% of all federal income taxes. … ” you then replied that “Remember if you are a wage earner of any type, such as a wealthy doctor or CFO you are not “The Rich” you are still upper middle class. Even if you are a CEO you are only paying taxes on your WAGES and not all the wealth safely tucked away elsewhere.”
What you have done, is redefined “rich.” Smokey used the top 5%. You say these are not the “rich” and admit that they pay their share of tax.
I think this is just about semantics. Your “rich” is presumably referring to what most people call the “super rich,” – hundredmillionaires and billionaires. Nobody would disagree with your assertion that these people (and some corporations) pay little or no tax. Indeed, read “The Firm” by John Grisham for a brilliant picture of how tax dodging works. The question is, what is to be done about it? As soon as a government tries to close tax loopholes for the super rich, there is a flight of capital out of that country. This is why super rich athletes and celebrities mostly live in tax havens like Suisse and Monacco – often despite marginal tax rates being modest in countries like the UK (45 %).
But, perhaps it is inevitable. Isn’t that what being super rich is all about? Power, influence, money? The only way to get money out of these people is to appeal to a sense of philanthropy, a culture that interestingly enough, was a lot stronger in bygone days. This won’t satisfy the “Healyite, tax them till the pips squeak” socialists, but it’s easy to criticise without coming up with realistic proposals.
Many commenters here are clearly American and so don’t know the two facts that are ingrained in UK energy costs. Therefore you mistake “skewing the market” for “freeing the market”. The market is not free in the UK
The two facts that dominate the energy price paradigm are:
1 There ain’t much option where you go. You can switch provider daily and the costs don’t change as no-one can follow what each of the six providers is doing like the other five can. Most people give up and just concentrate on turning the lights off. This is a win for the stated aim of the Government and the freeloading energy barons who have everyone over a barrel. (Unless you do have a wood burning oven or maybe fur and a taste for raw food but most voters aren’t bunny rabbits).
2 We have a petrol (gas) fuel escalator in the UK for years that has gradually pushed the cost of energy in cars up to a significant percent of people’s wages. £1:40 a litre (about $8:33 a gallon, I think). This has made everyone feel that energy is precious and rare. No-one complains about home energy rip-offs when it’s cheap compared with filling the car.
And they are both twin aspects of the same Government aim: to reduce energy usage.
If that happens to be by starving industry, so what?
Indeed, the switch to services from manufacturing could even be considered a success.
Vince Causey:
Your post at May 24, 2012 at 7:06 am goes to the heart of the issue under discussion when it suggests;
That does not work for electricity supply.
And it is why UK electricity costs and prices rose with privatisation of the UK electricity supply industry and have soared since.
There are several reasons for this, but the following few should indicate the issues.
A business exists to obtain profits. It will only – and should only – maximise energy efficiency if that maximises profits.
Most efficient (i.e. most energy efficient AND most economically efficient) generating technology differs for base load, most load following, and peak load supply. Hence, a balance of supply technologies is needed for most efficient supply that matches varying demand. However, the economic return on equipment differs if it is used for base load, load following or peak matching.
The balance of technologies for maximum energy efficiency differs from the balance of technologies for maximum economic efficiency.
And security of supply requires that there is great financial risk in overdependence on a single technology. A nuclear power plant has high capital and decommissioning costs but negligible fuel cost. A CCGT gas-fired power plant has negligible capital and decommissioning costs but high fuel costs. A coal-fired PF power plant has moderate capital, decommissioning and fuel costs. Gas price has high volatility and coal has good price stability.
A power station has a scheduled life of at least 30 years. Hence, choice of technology has future supply risk. Building nuclear is an expensive build but there is negligible risk that the costs of its output electricity will escalate with time. Building CCGT is cheap but there is high risk that the costs of its output electricity will escalate with time. Building coal-fired is a ‘safe’ option but risks imposition of ‘environmental’ impositions that could escalate the costs of its output electricity.
There are two extreme options for addressing these issues. They are
• nationalisation (which the UK’s Central Electricity Board, CEGB, proved works)
and
• a completely free market (which economic theory says should work).
Unfortunately, any compromise between these extremes would provide the ‘worst of both worlds’ while failing to provide the benefits of either.
Richard
Blackouts are definitely not a vote winner.This government is producing yet another inept policy on top of all the recent disasters including its failure to reduce government expenditure (It’s significantly higher than when the previous bunch of incompetents was in power).
I find it deeply worrying that Cameron is ensuring that he will be kicked out at the next election. What does he know that we don’t?.
In the US the due to tax rebates and the like, the bottom 50% of wage earners pay almost not taxes at all. As in zero dollars per year. The top 10% of earners pay 70% of the total tax load. (http://www.ntu.org/tax-basics/who-pays-income-taxes.html) People with enourmous sums of cash, lets use MItt Romney as an example, even if it is overseas, must pay the going capital gains tax (15%)on their profits. The days when the US govt let that type of thing go are gone. They have just inked a deal with the Swiss banks to ferret out what US citizens have in their banks so they cannot dodge the taxes on it.
That being said, GE should never have been able to get away with paying nothing. The CEO is in Obama’s cabinet, so I can’t see that changing for now.
Caveat: The National Taxpayers Union states that it it “non partisan”, whenever I see that the BS pings a bit. Take it with a grain of salt.
That is to say …..”MY BS meter pings a bit”. Sorry.
Perhaps it would be best for all if the politicians who are going to run this scheme were guided at each step by scientists. Not just any rogue scientists, but a clear consensus of scientists who have a noble cause, several well-recognized models of the ideal, and who are members of a trusted global organization and funded by a consortium of interested nations from all corners of the world.
What could go wrong?
Everybody in the US pays a base tax rate…the corporate tax. It is always passed on so its priced into everything.
Vince (May 24, 2012 at 6:55 am) – You ask “which is it?” of warty “free markets and capitalism” and equally warty “socialist command economy”. OK.
Point 1: I have never seen a working free market, anywhere. As I said above, the system which goes by that name these days gives freedom only to the already rich and powerful, a freedom which is routinely abused to screw everybody else. It may have existed, even worked well, once, but it has been so compromised that it no longer does – hence my comment above that “it may work, who knows?”.
Point 2: I have also never seen a socialist command economy. The command economy, like the modern free market, just hands more wealth and power to the already wealthy and powerful, etc., etc. as per point 1. Socialism involves devising a society in which everyone can benefit from it (as I’ve mentioned in comments elsewhere) and, like capitalism and the free market, has been monstrously compromised in its modern instances.
I suspect that the reason so many foul things come from systems with “socialism” in their name – the “socialist” command economy you mention, National “Socialism” etc., is that every one of us accepts that we are social animals, and that too many believe that the wielder of the word is proposing something which will lead to more-or-less what I have already mentioned – a system which is good to all.
For the record, I see nothing good in the command economy, nor in what passes for a “free market” now. Both now are merely different faces of authoritarian centralism which, although very popular with the authoritarians at the centre (UN, EU, IMF, and a shower of other unelected, unaccountable acronyms) is not, and never can, work to the benefit of those not at the centre, and who only get to suffer under the authoritarianism.
You sound as though you approve of the asset stripping which I have seen destroy my country over recent decades. I do not. Those were our assets and, though the system wasn’t perfect before, it used to work a darn sight better than it does now0 – and cheaper.
So yes, I’m a socialist and proud of it. I want to live in a society which works well for everyone, not just for those who are sharp financial operators or clever power mongers. And I have never yet seen such a society either. Being now in my 60s, I doubt I ever shall, unless the human race finds – very quickly – a way of dealing with the greed-fuelled cunning *******s at the top of the current heap. If you support either “side”, you’re just helping them screw us all.
Which is it? Neither. That’s the point.
IIRC, it was Victor Yakovenko (U Md) who found a link between the laws of physics and the laws of economics by treating ‘money’ as an analog to ‘energy.’ In this model, taxation is dissippative of resources, much as friction is, and government regulation diverts resources away from productive applications. In an unforced economy, the distribution of resources rapidly and naturally achieves a Boltzmann distribution equivalent to thermal equilibrium.
All arbitrary efforts to alter the distribution are doomed to fail because the microeconomics (statistical mechanics) remain unchanged, save for the dissipation of resources through misdirected efforts to alter the equilibrium. The primary effect is to reduce productivity in direct proportion to the amount of resources expended in the wasted effort.
We are now seeing rapid growth in careers related to ‘compliance’: specialists in every industry are spending their entire productivity in maintaining current knowledge of government regulations and insuring that their employers are not in violation of some minor rule imposed, with the best of
intentions, by unelected bureaucrats “for the public good.”
We all know that Good Intentions make excellent pavement – for certain roads.
Steve C, why not just aim for the possible? Like a good law-based, mixed market economy with effective checks and ballances, a truly free press, transparency and open information, restored liberties and a protected free enterprise? Brief periods of such conditions, even partial ones, is what brought all this wealth and development. Hoping for a never-will-happen “good” socialist system run by “philosopher kings” or a Chicago-style populist rabble is a dead end.
Also, in your group of “greed-fuelled cunning *******s at the top of the current heap”, do you nclude the tousands of saintly-looking, but very greedy and corrupt NGOs and busy-body groups that have been siphoning more that the corporations and not producing a single item of use to boot?
Well,
as I said,
http://www.letterdash.com/HenryP/fracking-for-gas-is-okok
Steve C,
You say “You sound as though you approve of the asset stripping which I have seen destroy my country over recent decades. I do not.”
Actually I was just quoting what you said in your earlier post, which was part of a general invective against capitalism, in order to draw you out into saying whether you supported the capitalist or state run model. And you answered “neither” quite convincingly.
Asset stripping should be a force for good, in that industries are only “stripped” if they are unprofitable. The process of stripping is like a bacteria that breaks down waste or unusable material and returns it in a form that is good for the ecosystem. It should be the case, that the process of stripping, frees up valuable resources of land, labour and capital, that can be recycled into producing something that is more highly valued by society. That is the basis of capitalism, and my point would be that it has got us to a level of prosperity that would have been unimaginable to our nineteenth century ancestors.
Let us therefore not be in too much haste to cast out the baby with the bath water. Because capitalism harnesses the baser human instincts of greed and power, does not render it unfit for society. I have yet to see a model of socialism of which you speak, to have delivered a like for like increase in prosperity.
To borrow a description that was originally intended for democracy – capitalism is the worse economic model – except for all the others. But to believe that there must be a better way, is also a laudable aim, and I salute you for that.
Steve C:
Thankyou, and well done.
WUWT is US based and several who post here have no understanding of socialism. Some of them think socialism and communism are the same (yes, I know it is hard to understand how anybody could think that, but they really do and they will admit they do).
Old fashioned British socialists like us love our country and adhere to the socialist principles that owe much more to Methodism than to Marxism. But the American hard right can give us a hard time here.on WUWT.
You have stated our views bluntly, clearly and forcefully. Thankyou.
Richard
Vince Causey:
I read and liked your post addressed to Steve C at May 24, 2012 at 11:46 am.
Your post induces me to suspect your views may have much more in common with those of Steve C and me than you seem to think they do. And, as I said, I appreciated your post.
Richard
@ Steve C says:
May 24, 2012 at 10:01 am
Steve, re your comparison of free-market vs. socialism. The fundamental difference is the former adheres to ‘equal opportunity’, the later to ‘equal outcomes’. Focusing on outcomes in the forlorn hope that equality of outcomes will reign supreme is a Utopian fantasy that has been thoroughly dismantled. It has never existed, and never will. Life (human or otherwise) is a competition, often violent and fatal. I think what you and many others wish for is life without competition. It won’t happen, because competition is the essential ingredient that drives both cultural and biological evolution.
In a forest, every tree has an equal opportunity to grow and flourish. But not every tree will. Get used to it.
Looking through the comments, there are some serious misunderstandings of the reforms, the current operating environment, and the history of the UK industry.
First thing – the reforms DON’T immediately replace the existing subsidy regime for renewables (primarily the Renewables Obligation). The RO will continue to apply for eligible schemes that start operation before 2017-2019 depending on technology. So, for example, and elegible offshore windfarm that starts operation will get 1.9 Renewable Obligation Certificates for every MWh generated – each ROC is currently worth about £55 in total, as opposed for about £50 for an MWh on the wholesale market. The operator will have the option to opt out of the RO scheme onto the CfD scheme (see below) , but it’s unlikely that anyone will for reasons I’ll explain.
The actual components of the reforms are (assumimg the eventual model is as per the white paper):
1 – there will be an absolute limit on the amount of CO2 per MWh from any power station. At the limits proposed, this will effectively close down any non Carbon-Capture equipped coal-fired capacity by 2025, even new supercritical plant.
2 – there will be a floor to the carbon price (as traded through the EUETS). The EUETS has so far mostly delivered prices below €15/tonne – this measure will set a minimum price of €30/tonne by 2025. Given measure (1) it will mainly penalise CCGT gasfired generation.
3 – National Grid will be empowered to make payments to operators of generating plant to keep the plant available as reserve capacity. Most of the benefit of this will go to operators of gas-fired plant (for reasons of plant economics). There are two reasons why more system reserve is needed – first because plant unit sizes have increased (each unit at Hinkley Point will be 1600MW – the largest single unit on the system at the moment is 1200MW), hence more capacity is required to satisfy the need to have enough reserve to compensate for two large units going off-line simultaneously. Secondly, large amounts of wind on the system needs rapid response (spinning) reserve equivalent to average production, which means around 25% of nominal capacity, and 100% reserve dispatchable in 3-6 hours.
4 – the big item – the “Contract for Difference”. CfDs will be auctioned periodically, equivalent to (probably) about 20-25% of average load. They’re basically a hedge – if wholesale prices fall below the CfD price, the government pays the difference to the generator; if prices are above the CfD price the differential is paid by the generator to the government. CfDs will theoretically be open to any low-carbon generation. In practice, it looks likely that the majority of the allocation will be taken up by nuclear operators. There are a couple of reasons for that. First, it’s likely that nuclear will be the cheapest low carbon output, and will hence be best placed to win the auctions. Second, the probable nature of the contracts will mean that anyone operating intermittent generation will be at very high risk of not being able to supply in any given settlement period, and hence face penalties. It might be that at some future point CCS generation is cheap enough to take up part of the CfD allocation, but that looks unlikely at the moment.
To be honest, items three and four are arguably justified in terms of security of supply, as much as on carbon grounds (without something like this, the market would probably end up being 80% gas-fired). It’s also worth noting tht although there are remaining coal supplies in the UK, little of it is in economically exploitable seams – Selby was the last eaasily workable, decent sized reserve identified, and that was back in the late 1960s. It’s exhausted now – most of what we still have is deep, wet or in small faulted seams.
DECC is aiming at having about 16,000MW of nuclear in the UK mix. Allowing for the fact that that would almost certainly be operated as baseload (plus a small amount of loadfollowing), given average demand of about 40,000MW that would leave us with about 40% of production being nuclear, 40-50% gas, and the remainder renewables (including non-intermittent hydro and landfill methane).
Contrary to the GWPFs view, as a former nuclear engineer who’s worked around the sector for the last three decades, that sounds actually like a well balanced policy to me.
Curiousgeorge:
At May 24, 2012 at 1:46 pm you stay to Steve C:
Sorry, but that is very, very wrong.
Socialism equates to
From each according to ability, and to each according to need.
It is an extreme form of individualism that attempts to provide ‘equal opportunity’ in so far as that is possible; e.g. if possible, those with reason to compete are assisted to obtain their needs for entry into the competition.
Free markets do nothing to provide equal opportunity: e.g. those with inherited riches can operate in any competition they desire, but others cannot.
In either case, their abilities and diligence will determine the ‘winner’ of the competition. But the larger pool of abilities provided by socialism enables more people with ability to compete.
Using your analogy, socialism attempts to provide every tree in the forest with access to sunlight. Get used to it.
Richard
@ richardscourtney says:
May 24, 2012 at 2:36 pm
Your use of the word “provide” tells me you just don’t get it.
Jarryd Beck says:
May 23, 2012 at 4:15 pm
I don’t quite understand. I was under the impression that in Australia these things have always been centralised, and now we are fighting against the government who wants to deregulate everything because the prices will inevitably go up. Why is government control of fundamental societal resources like electricity, gas, phone, water a bad thing?
***********************************************************************
Economics 101. Competition. Tends to drive prices down, quality up, gives consumers freedom of choice. If two people are offering the same product and competing for the same market share, they have to do things to make their brand attractive to consumers – more features, lower price, better coverage, a free toy in every box, whatever. I agree that LOCAL governments should have a (small) hand in regulating basic utilities for their citizens – mainly in the areas of quality assurance, safety, and reliability of supply. Most municipalities still control necessities for life; at least water, sewage, and trash, for example. Electricity deregulation is interesting. Extras like internet service, cell phone service, etc., leave it alone. Companies are doing an okay job. If anything, MORE competition is warranted, not less.
Price will dictate everything if people leave markets alone. Economics is not some hard-to-understand enigma. Honestly. Supply versus demand equals price. As someone so eloquently put it on this website some time ago:
1. Government is force.
2. Good ideas don’t have to be forced on people.
3. Bad ideas shouldn’t be forced on people.
4. Freedom is essential to determine good ideas from bad.
If people wanted something like wind power, for example, some enterprising fellow(s) would research and develop it into a product for market. If it was ready for market and the S/D ratio was good, it would live. If not, death.
Instead we have government and government-run “science” creating (forcing) artificial demand for wind power (CO2 is bad etc.), artificial price (subsidies, guaranteed profits, renewable mandates, etc.), and of course people are signing up in droves to produce supply for their share of cash.
So we have a very expensive and not very good product that is forced on people.
Contrast this with the fracking boom.
Control is such a strong word, and should never be paired with government on principle. Governments legislate, regulate, enforce, tax, but shouldn’t control. And none of these, or other, measures should overreach and become a controlling factor, as they unfortunately tend to do (or purposefully become – carbon tax being an underhanded method of energy, and economic control).
In short, why is government control of ___________ bad?
Because it is government control.
It doesn’t matter if you would trust your life even to the current people in power – one day they will be replaced (this is why things like line item veto should never be passed).
Remember that government is not some benevolent or malevolent entity. It’s just a bunch of dudes whose words carry more weight than ours, and we should be very mindful of how much power we give them over our lives.
Freshman reading: http://www.amazon.com/Should-Consent-Governed-Introduction-Philosophy/dp/0534574165
You can probably find a used copy locally for super cheap.
Curiousgeorge:
At May 24, 2012 at 2:56 pm you reply (in total) to my post at May 24, 2012 at 2:36 pm by saying;
Oh, but I do “get it”, and your reply tells me that you also “get it” but you don’t like it and you have no answer to it.
Richard
Curiousgeorge says:
May 24, 2012 at 1:46 pm
“In a forest, every tree has an equal opportunity to grow and flourish. But not every tree will. Get used to it.”
Except in Yamal, where it only takes one tree to make a hockey stick.
@William Howard Abbott May 23, 2012 at 8:40 pm
Sorry so long to respond.
Once the producer has a market for all of their available product then they can and will raise the price until finally the market clearing price justifies additional capital investment. Where a capital intensive industry like electricity production is concerned this will result in significant economic profits. This is doubly true since potential investors know that building additional capacity will lower the market clearing price and electricity is fungible. This will act to further delay capital investment until prices are very high. IMO this market clearing price will produce profits higher than the 8-10% ROE allowed now under state regulation.
Also, producing 1Mw is not the same as producing 1000Mw. Power plants do have variable operating costs, primarily fuel costs. They are very different based on fuel source though. Hydro is very low, then nuclear, then coal and nat gas. Right now nat gas has lower fuel costs in many cases than coal. That is not typical though, and I personally expect that to change in the next year or so back to the more normal advantage to coal.
I agree completely that deregulation will make sense when, and if, competition for energy types advances enough to eliminate these natural monopolies. We are becoming a society that is more reliant on electricity though NOT less. Remember, other forms of energy are less regulated than electricity. If it made sense to power TVs directly with gas, nat or otherwise, then there is no reason we wouldn’t be doing it now. In fact, electric cars are a good example of this now………right now they don’t make economic sense.
“Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights.”
—Albert Einstein – Our of My Later Years, pp.123-131
Also, most of these subsidies will go to nuclear power, which evidently can’t compete on the “free” market.
Doug – WE are agreed; it does not make sense to power the TV with natural gas. We are not agreed that the term natural monopoly refers to something very hard and real. I understand the natural efficiency of a singular, real, distribution network for electricity and gas, at the moment. (we would have included cable and telephone a few years ago but wireless technologies imploded the value of those networks) But there are all sorts of uses for electricity that compete with other energy sources. A free market in energy does limit the “whatever the market will bear” price in grid electricity. I realize that all grids have to answer to some level of government oversight (usually overbearing & politicized oversight) so totally free markets in energy don’t exist. But the more free the market – the more efficiently it will serve consumers. If you sight Enron and California as examples of freee market gone bad, I’ll think you are truly unobservant. California deregulation was anything but deregulation. Enrons can only thrive in the crony capitalist fever swamps. They disintegrate in free markets. You say “deregulation will make sense when, and if, competition for energy types advances enough to eliminate these natural monopolies.” I say, we will not be harmed if we deregulated before the “natural” monopoly is eliminated because, one, these natural monopolies are inherently weak and vulnerable to competition, and two, the regulators add so many layers of insulation and inefficiencies trying to protect consumersthey end up costing us more than if they had done nothing at all. It isn’t because the regulators aren’t well-intentioned. But they can’t know the future and they are always making wrong assumptions about it. When capitalists make that mistake – they lose their money. When regulators make that mistake they lose our money.
Andy Dawson – thank you for the timely post – it was very informative and we have a much better idea of what CfDs are and how they will work – (still think free markets are best)
Louise says:
May 24, 2012 at 12:19 am
The increase in wealth of the wealthiest 1000 people in the UK over the last 10 years is more than enough to pay off the UK national debt. That’s just the ‘increase’ in their wealth over the last decade not the actual total wealth.
You, of course, have a reliable source for this claim! Care to share?
richardscourtney says:
May 24, 2012 at 2:36 pm
Socialism equates to
From each according to ability, and to each according to need.
Excellent news. I need cocaine and dancing girls. When will you, as a self confessed”socialist”, provide me with them?
Richardscourtney is looking at the UK energy market pre privatization with rose coloured specs. The old nationalized companies were unable due to government dictat, to renew any power stations or infrastructure and this fell onto the new privatized companies to pay for. This led to a price rise but prices leveled out and then became probably the cheapest in Europe. Then came ‘green’ energy and the rest is history.
Richard Courtney,
thank you for replying to my post. Your observation on the similarities between our viewpoints is probably true – I would be a socialist if I thought it worked and would provide for better prosperity. Unfortunately, my experience tells me the opposite is the case.
For example, in your response to curious george, your quotation of “each according to his needs, from each according to his ability” tells us nothing about how either of these goals is to be acheived. That is the problem with socialism as far as I see it – nobody has successfully taken these goals and engineered them into a working system. Though, on a brighter note, I do recall an episode of “Star Trek – next generation” involving a Gordon Gekko type business man who was frozen and reawoken in the 24th century. Captain Picard carefully informed him that all want, and needs have been abolished and painted a very utopian socialist picture.
But then I’m thinking – how dull would that be?
Mr Green Genes:
re. your post addressed to me at May 25, 2012 at 1:21 am.
This is a serious discussion. When you were 3 years old your mother should have instructed you on the difference between desire and need. Please return to the discussion when you learn the difference.
Richard
John Marshall:
At May 25, 2012 at 3:33 am you say;
That is absolutely untrue.
There were no “nationalized companies”: there was only the monolithic Central Electricity Generating Board (CEGB).
The CEGB built the existing UK power stations and immediately prior to privatisation the CEGB built CCGT power stations in the ‘dash for gas’ – using your words – due to government dictat.
After privatisation no new power stations have been built and government subsidies have created the pointless building of windfarms.
Electricity prices in each EU country are conveniently tabulated at
http://billothewisp.blogspot.co.uk/2011/06/european-electricity-prices-compared.html
Part of its summary of the tabulated data it presents says;
* Highest prices are in Denmark closely followed by Germany. France is the lowest in Western Europe and Bulgaria is the lowest overall.
* The Danish pay well over twice the price for their electricity compared to the French.
* The Germans pay 190% more for electricity than the French, i.e. nearly double.
* The Italians pay 49% more for their electricity than the French
* The Spanish pay 43% more for their electricity than the French. Half as much again.
* The British pay 12% more than the French.
Richard
youngleftie says:
“Well in a perfect world, this ‘cheap fuel’”
Wind and solar are not cheap. When the government, which essentially controls the power companies through their regulatory boards (Golden Rule #3 – “Never piss off the person holding you by the throat”), says buy, you don’t complain to the courts, you just say “YES, SIR”
“would be paid for by the rich in society, why should they have more than plenty, far too often tax free, whilst OAPs and the poor live in fuel poverty.”
The rich (and their business) can afford to move to avoid taxes. And that may not be far if Scotland plays it smart. There goes your tax base and job base. So now you have high unemployment and have to increase the taxes on the middle class and poor to replace the lost revenue and pay for increased welfare subsidies. This in turn causes the economy to spiral ever lower.
“If not, perhaps a tax on the banks who dished out ridiculous amounts of bad debts and brought the world economy crashing down? Either would be fine.”
Fine. Need a loan, forget it. Need a business load, forget it. No funds available, the government took it all, go ask them for the money. Except the government doesn’t have any left because of growing welfare payments because young cannot find jobs because of the lack of business growth because they can’t get loans and the housing has tanked because no one can get a loan to buy a home.
Vince Causey:
I appreciate your post addressed to me at May 25, 2012 at 7:54 am.
I think we have each said sufficient to demonstrate for others to understand our views and the differences between them. So, I am writing this to show that I genuinely do appreciate your post and to provide a clarification.
Your post says to me
There is no overall “system”. There is only recognition that individuals have different needs and abilities. Hence, socialism decrees that – in so far as is possible – each individual is entitled to what he or she needs to flourish in society and is expected to contribute what he or she can for society to flourish.
The origins of this are the struggle of the ‘Tolpuddle Martyrs’ who were a group of Methodist lay workers who – under the battle cry, “Christ said the labourer is worthy of his hire” – objected to reductions in the pay of farm workers. They were deported to Australia as punishment and their struggle is the origin of British socialism and trade unionism. Much later Karl Marx attempted summarise their ideal in the phrases, “To each according to need, from each according to ability”. The Martyrs are honoured each year by celebrations in the Dorset village of Tolpuddle, and this rally is attended by socialists from around the world. The Martyrs’ Methodist Chapel is now a museum of them and their struggle.
Please note that this ideal does not decree any specific system but asserts that people should be treated on their merits.
To avoid proliferation of examples, I will stick with the one I presented to Curiousgeorge. The socialist ideal says that – in so far as is possible – every individual should be provided with the education that would benefit him or her. Thus, if he or she wants to obtain a university education in e.g. medicine then – if capable of obtaining the academic entry qualifications – society should provide the education (i.e. to each according to need). Society would then expect the resulting qualified physician to perform to expected medical standards (i.e. from each according to ability).
Extending that illustration, the medical student may have ailing dependents (e.g. parents) whose care would prevent him or her from studying. In that case, care for those dependents would be a need which – in so far as is possible – should be provided to enable the student’s studies.
Please note that there is no stipulated system to obtain these objectives. There is an infinite number of possibilities for needs of individuals in my illustration and many ways of meeting those needs, but there is no ‘system’ which decrees how they should be met.
And this is why democracy is so very, very important to socialists. Elections give society as a whole the ability to decide who can get what, and how they can get it, within the available social, fiscal and economic constraints.
It is also why socialists like a ‘mixed economy’. Socialists rarely see one solution as the right solution for every situation. So, they don’t have a stipulated system that applies to everything all the time.
Importantly, socialism inhibits the kind of political disaster that has happened in Greece. There the politicians promised whatever they could think of to offer as a method to ‘buy’ votes. And the populace fell for it with the inevitable resulting economic bankruptcy. This cannot happen when sufficient of the electorate understands there needs to be a balance between what society can provide to people and what people provide to society. People who recognise this will vote against politicians of the “Greek kind’ because they know those politicians are offering the ‘fool’s gold’ of a small immediate benefit followed by immense cost.
I hope that helps understanding.
Richard
Richard,
In a free market economy the workers and the owners/managers reach an voluntary agreement on what “worthy of his hire” will amount to. In a free market workers freely contract – no one is bound in a master/servant relationship – they freely agree to work for a certain wage – and they remain free to quit and sell their labor to someone else for a better return. All the parties are “free” there is no coercion.
Socialism has to interject an arbitrator (government), a third party to determine what the “worthy of his hire” ought to total. Socialism used to be a big advocate of public ownership because it made the task of arbitrating so straightforward. Unfortunately public ownership doesn’t have a very good record as an efficient business model. So Socialism will settle for government indirectly arbitrating what is “fair.”
Here’s the rub: We are less free and less competitive with a third party imposing conditions and rules and costs on our enterprises. Every enterprise has to compete for customers. Enterprises have to compete for the privilege of serving. Your catchphrase… “each according to his needs, from each according to his ability” …it’s not a catchphrase about customers. Free markets force both the workers and owners to place serving the customer in front of their respective immediate interests. Socialism pretends customers are not free, that they simply exist and participate in stasis.
Unions are a great example of how socialism inevitably depends on coercion. Unions wither away where workers are free not to join. Unions constantly seek the state to compel owners and workers to negotiate solely with the union in all matters dealing with employees. The idea of workers free to negotiate on their own, independent of the union is anathema to Unions. Unions ought to be totally free and voluntary associations – but they NEVER end up that way. Socialism always ends up being, not “power to the people” but, “power to the aribtrator
I want to be free – socialism will rob me of my freedom – socialism is the enemy of my freedom. I most of all want to be responsible for myself. I don’t want the government to protect me, to arbitrate for me. I want to be free. I will decide whether or not I’m worthy of my hire.
William Abbott:
Thankyou for your post addressed to me at May 25, 2012 at 1:47 pm.
I think I have clarified my views in my discussion with Vince Causey. Also, there is clear danger that this thread will be completely diverted from its subject if I continue debate of British socialism.
However, I am replying to you with this brief note for two reasons.
Firstly, and most importantly, I appreciate your trouble in sharing your disagreement with my views, and my failure to make any response could imply that I am not grateful for your interest.
Secondly, many who post on WUWT are right-wing Americans with completely delusional misunderstandings of socialism. There is no reason why people of all political views cannot unite in opposition to the pseudoscience of the AGW-scare and in support of real science. However, misunderstandings of differences can hinder that unity; e.g. “communist” is probably the worst possible insult that can be thrown at a socialist, but I have lost count of the number of times socialism and communism have been equated in posts on WUWT.
So, my brief response to your post is to say that I think my fundamental disagreement with your arguments is clear from what I have already written. Indeed, I think your world view is plain wrong; e.g. you say;
Perhaps you are not aware that I have held every elected office up to and including the National Vice President of a TUC-affiliated trade union. Clearly, knowing that, you would not expect me to ignore your false statement about trade unions.
In reality, employers treat their employees well otherwise they face potential union action, and employees seek union protection when they are not treated well.
Industrialists have learned the hard way that union action is more costly than treating their employees well. For example, Henry Ford employed Al Capone to use terrorism as a method to break a strike: no sensible employer would now do that because it is not cost effective.
The crux of our difference is when you assert;
No! On the contrary. Socialism liberates people to fulfil their potential. I am British: I live in the land of the free. I suspect you are American: if so, then you live in the land of people who like to think they are free.
I hope my two above responses demonstrate that you and I do have different world views.
And I hope this brief response to your post shows that I respect our differences and that I have not ignored your post.
In my opinion, the value of this discussion is that it shows it is possible to disagree without being disagreeable, and – if we choose – we who oppose the AGW-scare can maximise our unity so we can utilise the variety of views we encompass (e.g. to understand all those who promote the scare).
Richard
Richard; Courtney and courtesy are a close match. You are indeed courteous. WUWT is full of interesting, thoughtful people. You are right we are a bit off-topic and we oviouslyhave much to argue about. Perhaps when I come to England I can stop by & we will go at it over tea. The UK’s government is making an expensive mess of electric power, but surely somehow – you’ll get the water hot.
Cheers, William
Well, at least they can serve as a bad example…
May it come quickly enough that the USA learns and does not follow.
“If you sight Enron and California as examples of free market gone bad, I’ll think you are truly unobservant.”
What a relief I haven’t. I know the difference between deregulation and simply being regulated in a different, more idiotic manner.
richardscourtney says:
May 25, 2012 at 10:42 am
Mr Green Genes:
re. your post addressed to me at May 25, 2012 at 1:21 am.
This is a serious discussion. When you were 3 years old your mother should have instructed you on the difference between desire and need. Please return to the discussion when you learn the difference.
Richard
Oh dear. Cut and paste /sarc to the end of my post. Then you might get it!
Or then again, maybe not.
William Abbott:
At May 25, 2012 at 5:53 pm you say to me;
I would welcome that: it could be fun for both of us. Let me offer to provide a Cornish cream tea.
And I fear that the proposed UK energy policy makes it likely that we won’t “get the water hot” but will be sharing our tea in the dark.
Mr Green Genes:
Your post at May 26, 2012 at 1:00 am tells me you will never “get it”. That is sad.
Richard
Doug Badgero:
At May 25, 2012 at 6:21 pm you say;
I strongly agree. And this thread shows that many fail to understand the difference which you so clearly state because they are blinded by their ideology.
I remind that my post at May 24, 2012 at 8:38 am concluded saying;
A sensible debate would discuss preferences for either option. Instead, ideologues – on both ‘sides’ – ignore the fact that either option is practical, and they assert their desires for a political instead of a pragmatic decision.
The proposed UK energy policy adopts – indeed, increases – the mistaken adoption of a compromise between the options.
Richard
Here in the UK the government now says there is very little shale gas and they know this because they have had a presentation from Shell and Centrica. They say there are only reserves to supply 5% of our needs. Can someone write back to tell me what the truth is as I don’t believe this stuff. My guess is that Shell and Centrica can see little profit for themselves from shale gas. I thought the UK was thought to have enough for 200 years.
ANH:
The answer to each of your questions is, Yes.
The apparent dichotomy derives from the difference between ‘reserves’ and ‘resources’.
A reserve is the amount of a mineral that can now be obtained at economic cost using existing technology. And – as you quote – concerning UK shale gas “there are only reserves to supply 5% of our needs.”
A resource is the total amount of a mineral that can be obtained using foreseeable technology. And the UK has a shale gas resource equivalent to more than 200 years of usage at present UK usage rate.
Consider this simplified illustration.
Three people each own a field.
Person A has a diamond on the surface of his field.
Person B has 10 diamonds 10 feet below the surface of his field.
Person C has 100 diamonds 100 feet below the surface of his field.
The resource of diamonds is (1+10+100) = 111 diamonds.
But the reserve of diamonds is 1. This is because Person A can recover his diamond from his field at less cost than Persons B and C can recover any of their diamonds. Therefore, Persons B and C cannot compete against Person A in the sellers’ market: Person A can offer to sell at lowest price.
Person A recovers his diamond and sells it.
The resource of diamonds reduces to (10+100) = 110 diamonds.
And the reserve of diamonds increases to 10 because person B can now provide competitively priced diamonds. But the price has risen (in the jargon, ‘low hanging fruit are picked first). And Person C still cannot sell his diamonds because the cost of his diamonds is too high.
Then Person B recovers his 10 diamonds and sells them.
The resource of diamonds reduces to 100 diamonds.
And the reserve of diamonds increases to 100 because person C can now provide diamonds at most competitive price. But the price has risen again.
So, as the resource depletes the reserve increases but the recovery cost and the price both increase. This can mean that an alternative to the resource (e.g. synthetic diamonds) may become cost and price competitive with the resource.
Therefore, it is possible that the diamonds of Persons B and C may never become reserves because their sales price may not be able to compete with the price of an alternative to diamonds.
And additional economic complexities are …
I hope this brief answer is sufficient response to your question.
Richard
Richard Courtney,
Thank you for taking the time to reply to my comments. I always appreciate your comments, and seek them out first when scanning the responses on WUWT. Like you mentioned earlier, the thread is not about socialism per se, and I won’t add anything more that takes it off topic, other than to say that I agree entirely about your ideals, though I put myself in the free market camp and cannot yet call myself a socialist.
However, I would enjoy a full thread devoted to the subject, as it is a matter of some interest to me.
VC
Vince Causey:
Thankyou for your kind and overly generous comment addressed to me at May 27, 2012 at 6:24 am.
Only Anthony can decide what can be or should be the subject of a thread on his blog. Considering the blog rules, I think the thread you want would be difficult for WUWT.
About a decade ago a US right-wing free-marketeer anti-socialist blog hosted a debate about socialism between David Wojick and myself. David is an anti-socialist free-market libertarian, and he is a Marxist. I am a socialist, and I am an anti-Marxist. The first few essays from each of us seemed to cause total confusion for several regulars on that blog. And the debate lasted months because of the interest it generated. Indeed, it would have continued but I insisted that David should have the ‘last word’ because the blog was anti-socialist. Of course, the debate probably failed to change any minds, but it clearly informed many. And if people want to oppose something then I think they are entitled to know what they are opposing.
Richard
Richard,
I cannot see any difference between Socialism and Communism [Marxism]. Communists are just Socialists in a hurry.
The antithesis of Socialism/Communism is not the right wing, it is freedom from tyranny; freedom from those who would steal the labor of honest citizens under the guise of do-gooderism. In fact, the do-gooders are conniving bastards whose ultimate goal is to control the lives, and to thieve the property of the working class.
Economist Frederic Bastiat [formulator of the Broken Window fallacy] explains how Socialists and Marxists loot the citizenry for their own self-interest:
Bastiat died in 1850. There is nothing new under the sun.
Sorry, I should have said Deficit rather than National Debt in my earlier comment regarding the ability of the richest 1000 people to pay this off by their increase in wealth. I also mis-remembered that this was from the increase in their wealth over the last 3 years, not 10 but I now have traced the source – that well know commie/leftists publication the Sunday Times Rich List.
“the 1,000 richest persons in the UK have increased their wealth by so much in the last 3 years – £155bn – that they themselves alone could pay off the entire UK budget deficit and still leave themselves with £30bn to spare which should be enough to keep the wolf from the door.”
http://www.michaelmeacher.info/weblog/2012/04/britains-1000-richest-persons-made-gains-of-155bn-in-last-3-years/
smokey:
You know that I do not ignore your comments. However, on this occasion you ‘have come to the party late’. And the diversion on socialism has been exhausted within the context of this thread.
You are plain wrong because socialism and communism are exact opposites. Please read the thread to understand.
And please read my reply at May 27, 2012 at 9:31 am to Vince Causey to understand why I am refusing to answer your post in a proper manner. I am willing to do it, but not here. Sorry.
Richard
“Communists are just Socialists in a hurry.”
nice quote.
they simply want to dispense with the negotiating phase and keep the guns drawn instead of hidden in a briefcase.
now they have armed the drones. they prepare war against us.
mr courtenay:
smokey is correct. institutions that exist to negate rights are identical in principle and differ only in ‘style’ or degree.
as this entire thermageddon issue merely used mimicry of science as a catspaw to further deprive human beings of their liberty and property, discussion of rights and their defense and protection is, in fact, the only important issue i can see.
leave the job of distracting from the central issue to myles and others who imagine they are in charge of overseeing the narrative. you don’t get to define the issue for anybody but yourself.
gnomish:
Clearly our posts crossed.
Equating me (who has been opposing the AGW-scare since the early 1980s) with Myles Allen (an AGW-promoter) is as daft as equating socialism with communism.
Hold whatever delusions you want, but do not expect me to reply to your ignorance and insults with anything except disdain.
Richard
richardscourtney says:
“…on this occasion you ‘have come to the party late’.”
No, Richard, my first comment was made shortly after your first comment a couple of days ago, and I have read every comment in this entire thread. My first comment to ‘youngleftie’ was never answered, although it generated about a half-dozen comments by others. I had asked ‘youngleftie’:
In the U.S. the top 5% of taxpayers paid 59% of all federal income taxes. Question: how much is enough? You want the government to have it all? How much is enough? Give me a number.
I’m still waiting to hear what a ‘fair’ number is. How much is enough? And when ‘the rich’ have had their assets confiscated to pay for one more year of government profligacy, who will pay for the year after that? The Socialists will insist on making others pay, until the money runs out. Then what? Equal poverty? Is that what you are advocating? If not, give me a number: how much is enough, if the 5% paying 59% of all federal taxes is not enough? Give me your number. Be specific. How much is enough?
As Frederic Bastiat wrote: See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. Then abolish this law without delay…
Is there any doubt that the Government is acting immorally when it forcibly expropriates the property earned by one citizen, and hands over that property to another citizen as a reward for political support, and for which there is no real survival need?
I will not argue against government action in fairly and equally regulating commerce. There are some legitimate functions of governments. But governmental power is now completely out of control. One example out of many is the Obama Administration’s arbitrarily forcing out of business almost all the registered Republican owners of G.M. car dealerships in the U.S., based on it’s claim to be supporting General Motors [which the government now largely owns].
Likewise, the Administration has broken with more than two centuries of established precedent, and stiffed G.M. bondholders — while handing over $billions in GM stock to the United Auto Workers union. This is nothing but official government gangsterism; it is officially sanctioned public theft.
Solyndra is another example out of many. I can drive to it’s one single building in 5 minutes and see the empty parking lots. Obama’s cronies took more than $550 million of taxpayer loot, and ran. No one is being prosecuted for that theft of taxpayer money. That is where Socialism and Marxism lead: the excuse for theft from taxpayers is always ‘to each according to his need’. But it always morphs into legalized theft from the productive working class.
I suspect that things are even more corrupt in the UK. And I stand by my view that Communism and Socialism are essentially the same, based on Bastiat’s example. Every self-serving action by government and it’s favored special interests is based on one overriding principle: to shield favored groups and individuals from competition.
That goes against the way the Universe is designed. Competition is the basic force that drives all progress, whether it is biological competition, or business competition, or the competition for an electron based on an atom’s valence. To the extent that society allows competition to be smothered, society is poorer and worse off; and immorality thrives. I didn’t make those rules. The Universe did.
Smokey:
To my surprise, the moderators have not stopped this political discussion.
[REPLY – Yet, if you put you ear to the frozen ground, you will hear the rumbling of an approaching armor column. ~ Evan]
I apologise if I missed a post from you which you feel I should have answered, but I think I have replied to each post addressed to me in terms appropriate to each of them. So, to show good faith, I am responding to points in your post at May 27, 2012 at 1:12 pm. Much of what you say (e.g. about excessive and/or silly regulation) has been addressed in my previous responses above. I will try to give brief answers to your other points, but I am sure you know that many books have been written about each of the points so I do not claim my responses are complete and definitive.
You say
Much of that is irrelevant. For example, what is “fair” is asserted by children in school playgrounds and is not relevant to serious discussion of the subject. Please remember my explanation to Vince that socialism does not decree a “system” but asserts pragmatism and democracy. And socialism is an extreme form of individualism which says each individual should be assisted to fulfil his or her potential so people should not be treated equally.
If the “rich” are taxed too much then they will leave and take their money with them (I note that some Americans – e.g. George Soros – have done that). Clearly, one of their ‘needs’ is an ability to grow their wealth. And society as a whole would be poorer if they chose to depart because they were denied that ‘need’ . Hence, your questions are pointless because they are based on a denial of socialism.
What is “enough” taxation of the rich is a practical consideration based on existing circumstances at any time and place. So, no socialist can define a specific answer to your question. If the rich start to leave then it is far “too much”. And if their ability to grow their wealth is curtailed then it is too much.
Indeed, the error of your understanding is exemplified by your question asking me if I want “equal poverty”. I remind that socialism was developed in England when the French were devising republicanism and beheading their “rich” (i.e, their aristochrats). England had – and still has – a ruling monarch. HRH Queen Elizabeth II is one of the richest people on Earth. When the ‘Diana Affair’ threatened the popularity of the Monarchy in 1997 then a socialist Prime Minister, Tony Blair, came to the rescue. (As an aside, I note that socialist PM Blair had a very good personal – as well as professional – relationship with Republican President Bush).
Bastiat was plain wrong. For example, he says public education is a drain on the economy. Try operating a modern economy with an illiterate and innumerate workforce then see how the economy performs. I could continue to demolish his assertions, but that illustration is sufficient.
Socialism works because it attempts to provide everyone with the ability to fulfil their potential then attempts to obtain the benefits of the greater potential they each achieve (to each … and from each …).
And you ask
There is no doubt of any kind. That is the antithesis of socialism.
It is clear that you have not read my previous comments in this thread and I considered ignoring that question because I have already answered it. But on reflection it is so very, very misguided that I think an explicit answer is needed.
There is no ‘need’ provided and there is no ‘ability’ recovered in that scenario. It is pure political corruption. Indeed, in the UK the law defines maximum expenditure on elections by individuals and by political parties. But the problem blatantly exists in the US because the US is devoid of socialist principles.
Of course competition is good. As I explained to Curiousgeorge, socialism enables many more to compete so enables the best available winners.
And I really, really do wish American right-wingers would at least learn enough to understand that communism and socialism are opposites.
Richard
Evan:
Thanks for your interjection and for your correcting my error.
Richard
richardscourtney says:
May 25, 2012 at 12:00 pm
For example, in your response to curious george, your quotation of “each according to his needs, from each according to his ability” tells us nothing about how either of these goals is to be acheived. That is the problem with socialism as far as I see it – nobody has successfully taken these goals and engineered them into a working system.
There is no overall “system”. There is only recognition that individuals have different needs and abilities. Hence, socialism decrees that – in so far as is possible – each individual is entitled to what he or she needs to flourish in society and is expected to contribute what he or she can for society to flourish.
———————————————-
Richard, statism, of all kinds, is simply put an abuse of power. “Govt is a necessary evil.” Who are you or any one group to decide what I need. It is thought by many that Max Weber’s main ideals mostly closely reflect what Europe has become today, but he never achieved much influence during his time, being somewhat between various extremes, and so had little practical applications of his social ideals. Weber’s writings were however actually used by Adolf Hitler to institute rule by decree, allowing Hitler’s government to suppress opposition and obtain dictatorial powers.
And thus Weber and you also, fail to understand human nature, and so set up a sytem whereby power is given to central authority. The US system WAS designed to prevent any group, be it religious, coorporate (here they intitially did a poor jop, Robber Barons and all) or goverment from having to much power.
In “Science of Religion” Partamahansa Yogananda stated that there is an inescapable form of selfish desire in the actions of all men. The removal of pain and suffering and the attainment of lasting happiness. “Someone may say I do not care anything about pleasure or happiness. I live life to accomplish something, to achieve success.” Another says : I want to do good in the world, I do not care weather I am in pain or not.” But if you look into the minds of these people, you will find the same working toward the goal of happiness. Does the first man want a success that has in it’s achievement no pleasure or happiness? Does the second want to do good to others, yet himself get no happiness in doing it? Obviously not. They may not mind a thousand and one physical pains or mental sufferings inflicted by others, or arising out of situations incidental to the pursuit of success or the doing of good to others; but because the one finds great satisfaction in success, and the other intensely enjoys the happiness of doing good to others’ the former seeks success, and the ladder seeks others good, in spite of incidental troubles.
Even the most altruistic motive and the sincerest intention of advancing the good of humanity, for its own sake, have sprung from the basic urge for a chastened personal happiness approaching bliss.”
Capitalism is in many respects fundamentally honest, and a reflection of the above. It is an admittance that personal gain is never absent, even in the most altruistic, and so capitalism makes no pretense of removing personal gain. It also makes no moral judgment of personal gain being bad. It is a neutral admittance that desire for personal gain exists, and cannot be legislated away. Social systems that vainly seek to legislate selflessness only condense the personal gain aspect into the most powerful people within the government, and in removing liberty and personal power from the common man, engender helplessness in the masses. The one who prospers in capitalism has the freedom to become a philanthropist, or the freedom to use his wealth in a narrow selfish way. Capitalism however has a basic tenant stating that even the purely selfish accumulation of material goods, if acquired in the honest production of a good or service of value to others in society, produces good for that society.
It is stated by many “Power corrupts”. This also is fundamentally flawed. No reasonable persons seek to be powerless, to be a victim subject to the discretion of others; to have no control over there own lives and decisions. So others refine this saying, “The love of power corrupts” Yet this has the same problem. All love to feel empowered. Even the one who willfully submits to one in authority wishes to feel that it is both their choice, and that in that submission, they will gain the power to attain some end, either personal or to some benefit of society. The one who submits within a system does not mean he wishes to have no power or influence. All seek power, and in some ways all love power. A far better statement is that “Power reveals corruption” or alternatively, “love of power over the free will of others is corruption.” The corruption that power reveals is the use of power to compel others against their will, the desire to exercise tyrannical control of other people to accomplish some objective.
So in this sense we see that both the desire to have power, and the desire to achieve personal gain are not inherently evil. It is the desire to exercise tyrannical power over others in connection with the desire for personal gain (even if one portends it is only for the protection of the less fortunate) that is fundamentally immoral or dishonest and which is evil and destructive to a society. “This and no other is the root from which a tyrant springs; when he first appears he is a protector.” (Plato) Almost always the manifestation of seeking power in an immoral way involves exercising a form of tyranny, however petty it may be, over someone else or some other group. Thus what is immoral is the practice of seeking gain via an expression of tyranny over another person. Murder, as a blatant example, involves both the removal of another’s same right for seeking self gain, and is an expression of tyranny over another person. Almost all crimes which are common to societies are a reflection of this fundamental abuse of power which can manifest in either a personal or group expression.
Those social systems which mostly easily engender tyranny should be rated poorly in their chance of producing a prosperous and happy society. To try to enforce selflessness, requires a strict application of the verb in this sentence, force. A society that so fundamentally distrusts the common people of the governed that strict central planning of economies and wealth is required, is in high danger (100%) of eventually falling victim to the revelation of the corruption which such consolidated power reveals, as well as becoming overburdened with inefficient bureaucracy. The current British threatened prosecution (because the were not licensed care providers) of two professionals who were each taking care of the other’s child while the other was at work, is a literal example of “The Nanny State” , and such examples will only get far worse with the environmental fascists recently trying for one world government in Copenhagen.
The love of power for the purpose of subjugating others for one’s own end cannot be removed by any system. It just operates less effectively within a system built expressly for protection from such tyranny. The responsibility of the US form of government is to prevent the formation of such tyrannies: Corporate monopolies that unfairly drive out competition, lobby groups looking for special privileges, banking methods that rig the monetary system and allow leverage of assets tantamount to gambling, fractional reserve banking on steroids, government decisions making risk public but profit private, government sponsored enterprises that, under direct supervision of government regulators do all of the above, are not caused by a capitalist / republic, but are a sick perversion of it caused by the love of power over others, and the lack of wisdom as revealed by satama dharma. It is the failure of the US government to police the above which is dereliction of their primary responsibility, the protection of individual freedom and power, from the tyranny of those with group power.
No form of government can be free from intrinsic ignorance, but the evaluation of all systems should be based on their ability to resist the corruptions power reveal. Since WWII the US has been the most powerful nation on this planet. Despite its flaws, the US has demonstrated a far greater resistance to exerting tyranny over others then any other nation, relative to the power possessed. Remember that if power reveals corruption, the US has passed this test far better then any other nation. Many on the left often repeat the mantra, “live and let live,“ but remain ignorant of the danger of the system they wish to implement which is inherently duplicit to this maxim. The US system is the best “live and let live” system, specifically due to its republic / capitalist system, and within any society but particularly a large non-homogenous society this has many advantages. The “let live” part is easily forgotten in socialism, and both the “let live” and the “live” part are discarded in murderous communism.
David,
that was an interesting response to Richard’s points on socialism. However, with your descriptions of governments forcing this or that behaviour, I think you may be barking up the wrong tree.
As far as I can ascertain, Richard is talking only about ideals – the ideal that each individual is free to achieve his or her potentials for example – and emphatically rejects any talk that tries to pin these ideals down to concrete systems for acheivement thereof. Even the iconic “from each . . . to each” is an unsubstantiated statement, and is left to the reader to fill in his or her inferences – usually that it is an advocation of some form of government coercion. This may or may not be true, but there is no way of knowing for sure.
Indeed, without further information, I cannot see what the great difference between these ideals and capitalism is, and there is certainly not enough substance in them to enter into any kind of debate – which is one of the reasons I ceased to add comments – thread dilution not withstanding.
Of course, I am making these deductions based only on what Richard has said, and have no great knowledge of Socialism or how it is supposed to work. You may be correct in your assumptions, but I will have to admit to my own ignorance on this matter.
Vince Causey and David:
I confirm that, have in his post at May 28, 2012 at 8:53 am, Vince has given a probably better answer to David than I could. Vince, thankyou.
This pleases me not least because it confirms that what I have tried to say has been understood by at least one person; viz. Vince.
I have only one addition – really, a clarification – I wish to add.
Vince says;
Actually, there is a big difference between socialism and what Americans like to call ‘capitalism’ which directly affects government. I addressed it in my answer to Smokey at May 27, 2012 at 2:13 pm and your conversation indicates that I need to expand on that. I do that here.
American ‘capitalism’ sees free and unfettered competition as desirable in all things including democracy. But socialism sees competition as a useful tool to provide the needs of people.
Therefore, in the US there is no constraint on moneys that can be expended by candidates and political parties when campaigning for elections. Socialism sees this as a constraint on the ability to compete in the election by those with less than average wealth. And, socialism desires the ability for ideas – not money – to be the major factor competing in elections.
Different countries endeavour to achieve this desire in different ways.
As I told Smokey, the desire is addressed in the UK by the law setting a maximum limit on the moneys that can be expended by candidates and political parties when campaigning for elections. One candidate in our last General Election overspent significantly: the election had to be re-held for that constituency, the offender was prevented from standing in that re-held election, and he was fined. The maximum possible penalty for this offence is a jail sentence.
I recognise that similar constraint on election expenditure is culturally unacceptable for American ‘capitalists’. However, it inhibits political corruption of the kind that Smokey so clearly explained happens in the US.
Please note that such corruption is inhibited but is not not prevented by the constraint. This is because e.g. industrialists find other ways to influence politicians who use other ways to re-pay their benefactors (e.g. by providing Honours and Titles which don’t exist in the US). A well-known example is Sir Alex Ferguson who is Manager of Manchester United Football Club (ManU). Sir Alex was awarded his knighthood for services to charity, but most people think it was really a reward for services to the Labour Party (n.b. a socialist party) by being a high-profile socialist with a large following (i.e. ManU supporters).
Socialists see the award of Titles as preferable to the financial corruption so clearly related by Smokey. Of course such corruption can happen. In the context of this thread, the privatisations of the electricity and gas industries in the 1980s being by far the greatest example of such corruption in the UK in recent decades. But such financial corruption is relatively rare and at a much reduced rate from when e.g. industrialists can invest much money in a political campaign with a view to gaining a financial reward from the winner of an election.
Richard
richardscourtney says:
May 27, 2012 at 2:13 pm
“Smokey:
“To my surprise, the moderators have not stopped this political discussion.”
Following your comment, moderator Evan Jones warned:
[REPLY – Yet, if you put you ear to the frozen ground, you will hear the rumbling of an approaching armor column. ~ Evan]
Following the moderator’s warning, I ceased commenting here entirely. So why are you continuing to argue with my post from two days ago? Four times in your post above you unnecessarily cited me by name, continuing to argue with what I had written [and which I would not change]. You seem to be goading me.
I’ll turn the other cheek. This time.
Smokey:
I apologise that I have offended you. I have not “goaded” you and I AGREED with what you said: I did not “argue” with it.
Richard
Richard,
My apologies if you were agreeing. I always thought we agreed on most things anyway. Sorry for any misunderstanding.