How the Free Market Rocked the Grid

sean_nestor sends in a story at IEEE Spectrum that begins: "Most of us take for granted that the lights will work when we flip them on, without worrying too much about the staggeringly complex things needed to make that happen. Thank the engineers who designed and built the power grids for that — but don't thank them too much. Their main goal was reliability; keeping the cost of electricity down was less of a concern. That's in part why so many people in the United States complain about high electricity prices. Some armchair economists (and a quite a few real ones) have long argued that the solution is deregulation. After all, many other US industries have been deregulated — take, for instance, oil, natural gas, or trucking — and greater competition in those sectors swiftly brought prices down. Why not electricity?"

Comments

No More Deregulation

[DarkVader]

No, the solution is MORE regulation, not less.

The rates need to be regulated, and the private companies need to be taken over by nonprofit public organizations.

Every time deregulation is tried, consumers get shafted.

Re:No More Deregulation

[hedwards]

I'm sorry, but you're wrong. What you're describing is a well regulated market. Definitely not a free market. Adam Smith was quite clear that a free market will lead to the sorts of behaviors that the GP was complaining about unless somebody steps in and puts in place regulations which prevent it.

Re:No More Deregulation

[gtbritishskull]

You free market nuts are just like the communists. You claim that your system is the best but there are tons of examples where it has failed but none of where it has succeeded. I would ask you why you expect that it would work differently this time, but I know what your answer would be. You would point out in all the failures how it didn't follow your "perfect" free market system. Communists do the same thing (Russia did not follow the ideal communist model). The fact is that if your system does not correct itself, then it is a bad system.

Here is a metaphor for you... You can balance a ball on top of an upside down bowl, but if you push it just a little bit off of its "perfect" position then it will tumble off of the bowl. While the ball can stay balance at the top of the bowl forever, it will only stay balanced if it is in its "perfect" position. On the other hand, if you turn the bowl the other way around and put the ball exactly in the center of the bowl, it will stay there. But, if you give it a small shove, it will move back towards the center of the bowl. If your system cannot deal with imperfections in implementation, then it is useless. It has to be able to deal with corrupt politicians/businessmen, crashes in the stock market, and just people being stupid. Show me where your system has succeeded and I might give your argument some credence. But the only argument that you have is to have "faith" in your ideology. I prefer science.

No such thing as a free market

[geek]

For the same reason "life isn't fair"

As long as 1% of the total population controls 90% of the wealth, there is no such thing as competition or free market capitalism.

I like competition and I dislike government intrusion but there is a reason FOR government and that is to protect it's citizens, that includes protection from economic crimes as well as physical ones.

The middle class is shrinking regardless of which ideology is popular that month. People are losing their homes left and right, jobs are going over seas and yet still so many people are ignorant to the real issues.

Deregulating natural monopolies doesn't solve the problem. It just hands a blank check to a corporation chosen by the government to fuck it's customers however it chooses.

Free market is an oxymoron to anyone that actually understands what the two words mean.

Re:There are no free markets

[sjames]

There are also markets controlled by cartels. That's what happens when barriers to entry are high and government regulation is lax.