Regulating Monopolies: A History of Electricity Regulation - Learn Liberty
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- Опубліковано 9 лют 2012
- Prof. Lynne Kiesling discusses the history of regulating electricity monopolies in America. Conventionally, most people view regulation of monopoly, such as the Sherman Antitrust Act, as one of government's core responsibilities. Kiesling challenges this notion, and finds that government regulation of monopoly actually stifles innovation and hurts consumers.
The American electricity industry was booming in the 1890s, with several small firms competing against one another. Over time, Kiesling argues that the fixed costs began to escalate, increasing the cost of entry into the industry. Put another way, large competitors gained a significant competitive edge over smaller competitors through economies of scale. Eventually, in places like New York and Chicago, Kiesling claims that the competitive process led to one large firm.
These monopolies were feared by the public, and led to demands for government regulation. The electricity industry, knowing that regulation was coming, used these demands for regulation as cover to construct legal barriers to entry. Ultimately, the regulations passed by the government reduced competition by granting legal monopoly privileges to powerful firms within a certain geographical territory.
In modern times, we are seeing the real cost of these old one-size-fits-all regulations:
1) People aren't adjusting their energy consumption behaviors. For instance, in peak hours, technological solutions that could smooth electricity consumption are being ignored.
2) The electricity industry doesn't evolve and account for new types of renewable energy.
3) Innovations have been discouraged.
If these archaic regulations were removed, innovations and improvements beneficial to consumers would flourish.
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We have a supposed separation of Church and State. Why can't we have a separation of economics and state?
true, sometimes i think about it. But when there's an economic crisis, even in ancient times, people expect the government to do something.
Some say thats why the south rebeled in 1860. And after Napoleon said who writes the his-$tory books... Probably.
@@williamadiputra2850 not if people were more self reliant
Because the Austrian School created a parallel universe in which governments did not appear except as a burden, not as playing a key role in industrial development as historically has been the case, above all in Germany, the United States, and Japan.
@@Anti-CornLawLeague industrial development is not necessarly allways a good thing: The early industry countries were so eager to ramp up their production that they ended up colonizing and eslaving many people... much of early industry was devoted to meaningless wars that did nothing to improve anyone's well-being... govenments have allways suffocated inovation and the free market, they only ever help the industry to suit their own needs and even then they face the ecconomy calculation problem that keeps them from doing it efficiently. But none of that even matters because we know for a fact that free economies prosper more than state controlled ones, and therefore government should stay out of peoples bussinesses
I was a conservative, and that's how I defined myself, this channel has made me describe myself as a libertarian thank you LearnLiberty you offer logical arguments in a time of fallacies.
In the 1920x and 1930 rural areas developed small electric systems for one or a few farms. Some used pretty advanced windmills some used gas engines, to charge batteries some even use car engines, one system my father spoke of used the water power from a deep artesian well. Most of these systems stored electric energy several batteries which were plentiful because railroads had to use only new batteries then discard them.
Then in the middle of The Great Depression, when farm prices had dropped so low many farmers went bankrupt local officials showed up on my grandfather’s farm with a court order declaring their private electrical system illegal because a large corporation had been given a county-wide monopoly to generate power. In less than a half-hour deputies with axes in hand destroyed our family farm’s electrical system. For over 2 decades this was played out all over the US, as local officials, without due process, compensation or regret came on private property and destroyed thousands of private electrical systems. Making electricity to light your barn, yard, home, or play a radio was suddenly a criminal act. That is the ugly side of monopoly electric. Now again laws are being passed against solar and soon Utility companies want a monopoly on all vehicles so their high carbon footprint large heat engines will put everyone in an EV.
I always think of the government when I think of monopolies . All Government programs run as monopolies and, only governments hold monopolies over nay length of time.
Government itself is a monopoly, the monopoly on legal aggressive violence in a geographic area.
@@kourakis Would you prefer a free market of aggressive violence?
@@manuam98 - I prefer that we abolish all legalised/institutionalised aggression.
With respect to your premises: By definition, 'free-market' refers to 'non-coercive' relations, so your notion of a freedom that condones aggression contradicts itself.
@@kourakis And how do you exactly abolish aggression without an institution that enforces such abolition? By legalised aggression, do you refer to only the aggression used by State institutions, or does that extend to private institutions and individuals?
If you only refer to the abolishment of State violence, there would basically be no criminal responsability for any violent act done by individuals or private organisations and the levels of violence would rapidly rise, with the strongest corporations being the ones with the best ability to enforce their interests via violence.
If you extend the abolishment of violence to every individual and collective, which entity would enforce the legal punishment to those who make use of illegal aggression? Is there a way to abolish something without it's prohibition, and is there a way to enforce a prohibition without institutional violence?
@@manuam98
I did not say that we could abolish aggression; there will always be individuals who do evil.
I said that we should cease institutionalising aggression, and that we should stop making it legal for some people to commit. (You correctly note that only people in the institution of the State can legally use aggression to get their way.)
Nor did I propose abolishing all violence. I proposed abolishing legalised aggressive violence; I did not, and would not, propose abolishing self-defence.
As with the top comment - you posit natural monopolies exist in a free market where you example markets that are government controlled.
Electric companies took government grants of transit over property, for example - which government then prevented others from obtaining.
With no surprise, government action created the monopoly.
Having recently found this channel and these videos I'm trying to catch up on them. In this video I think a significant aspect that was missed is the situation where the government (federal, state, or local) has felt the need to take control of the service provision to ensure the proper regulation of the utilities be it electricity, water, or anything else. The end result is over time the bureaucrats in charge of the service see no need or reason to take any action that may reduce the usage and cost of the service, thus the encourage more use. This approach results in local laws and regulation stopping people from using alternative options to the regulated service provider.
Industry embraced regulation because they knew that they will be able to buy off the politicians and have them raise prices eventually.
All the points in this video are so fantastic: the history, the policy analysis, the forward vision. Thank you!
One major point this video didn't cover regarding monopolies is even if a monopoly could come into existence, as soon as they try to raise the price to increase their profits, the monopoly would be susceptible to competition again. Once profit margins get too high, it invites competitors back into the market thus driving prices back down. The only way a monopoly can stay a monopoly is to keep profits low enough to discourage any new competition.
Makes sense that economies of scale is the reason why electricity got cheaper. Good point on regulation and its dangers.
Free market would work it all out if Gov would let them. After the consolidation she spoke of happened and the prices climbed to high, some smart bank somewhere would see the opportunity and give a loan to start another company smack in the middle of the "giant" companies grid. Nearly overnight, entire towns would switch over to the new cheaper service, thus forcing prices back down again. It's a cycle that happens over and over until many companies agree on a standard price and hope another smart bank doesn't finance a new company at even lower prices again.
And if you had listen to what it was told, that wouldn't happen. The problem is that there was only one company, and the anti-trust law wasn't past overnight, so that fictional company could have been born in the mean time but, guess what, didn't.
Very interesting take, always wanted to know about this specific kind of government regulation. Not a perfect explanation but better than anything else I've ever heard.
I love this channel's videos!
One of the best portrayals of regulation and deregulation in the electricity industry. I would love to learn more about solutions in our current situation with renewable energy portfolio standards by states; with and without deregulation. It seems we should have enough information by 2023 to better understand how this is affecting pricing and environmental impact of electricity generation.
@WeeManFoo She is saying that back in the day, there was huge overhead for little price gain. There still is even today, but I don't think nearly as much. You don't need huge plots of land, you can rent the roof of a building now to generate solar (something the company I work for helped). Small companies own roofs, generate solar, and sell it to the grid.
Professor Kiesling reckons that people who used government to impose monopolies on others did so due to 'misunderstanding' (6:18).
...What a cute 'understanding' of human nature.
Actually, the regulated price to beat in Texas was 10 cent per kilowat hour. And, the start up cost of the small firms drove the prices up to 16-18 cents per kilowat hr, back in 2002-04. But, after all the small firms entered the price per kilowat hr started to go down in 2011, and is finally below the regulated price to beat 10 cent per kilowat hr. So, a success story for now. I worry about the lack of workers now in place from direct competition, putting our energy sector at a greater risk
@voll4239 Biggest flaw in your analysis is that corporations are not free market enterprises. These huge corporations grow and over-leverage because of irresponsibility due to corporate personhood and limited liability on the management and shareholders. Regulations also serve to insulate an industry from smaller enterprises creating less competition so when these oversized firms inevitably fail there is a huge hole left which induces government to inflate and tax in order to save them.
Enron was a great example of an unregulated power company. Anyone know if it is still operating?
No, it went bankrupt and was liquidated and other companies took over it's spot on the market.
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I make my living helping people save money through deregulation. I love Deregulation!!!
Actually, I took issue with what she said about the low pricing. The government monopolies often increase the pricing rather than decreasing it. Another example would be the phone company. Once regulations were lifted the costs dramatically dropped and innovations & services increased.
I noticed that too. Her notion that people didn't use government to impose monopolies for their own gain, was as pollyanna as it was unbefitting a professor.
With such a view of human nature and the 'good' attainable by coercion (ie, government), I wonder what she teaches her students about the morality and prosperity of people with freedom vs statism.
True the 111 year phone monopoly ended in 1983 finally the Cell Phone Age was able to begin... It could have happened decades earlier...
@@kourakisfun fact. People who use the word Pollyanna have no friends.
Seriously. wtf. Who uses that word. You understand that everyone who read this comment had to open up a dictionary because of you. Asshat
THANK YOU NIKOLA TESLA.
@UncleIrv I don't know what your politics are but your comments demonstrate a reasoned and rational point of view that appears - thankfully - divorced from ideology and dogma. I'm left of center and I find myself agreeing with you. I applaud your resolute ability to debate with some of these people.
Why doesn't this video have more views?!
electric company charge customers per kilowatt/hour used. Thus the incentive becomes lower bills (that is why you pay more on winter or summer, depending of where you live). The average proposed by government is the price of kilowatt/hour itself; not the mean price for households.
@DrunkenGodMode yep, i agree, corporatism is not freemarket. BTW how is a patent diffrent from a monoply?
New construction is one thing. I think you do have to pay some if you build a new house in the middle of nowhere. I'm talking about people who have lived on the same plot of land since the early 1800's. If you build a house within a couple hundred feet of a public road you should be able to expect power, without having to spend a quarter of a million dollars to put up line.
@Draanor You're truly pleasant and bright. First-off: It was a joke and reference you just didn't get. Secondly, "not how the video presented its information": This channel's videos are generally long-winded and made overly intricate by cherry-picking details out of desperation. I don't simply convey unconditional, blind loyalty or optimism out of bewilderment. Lastly: the speaking isn't on par with the message, which is good. I never said I disagreed, if that's your real problem.
The phenomenon described around 3:10: did it ever really happen?
@SquashDog01 And you prove my point yet again. Thank you.
Bit like the land phone, energy and railway system in the uk.
It makes sense to have one cable and one rail track - but no restrictions on who can provide the elec, the phone service or train.
I cant see any alternative but for some kind of social institution to provide the track and cable - can you??
Not ideal as that would stifle innovation - fibre optic cables etc
But how else would that work - 10 cables down the street to each house?
Yes, of course, it's clearly *impossible* for competing companies to work out contractual agreements to share track and cable. In fact, early phone companies in the U.S. were negotiating to share phone lines so that multiple phone lines wouldn't be necessary, until Bell Telephone successfully argued the alleged "natural monopoly" argument to the politicians.
Just because you can't figure it out doesn't mean that other people can't figure it out, especially if they have a strong motivation for figuring it out.
david lloyd-jones, no.. AC can alternate currents on constant if need be, and wires are obsolete. The way it is now yes very hard to let multiple companies send power.. but there were never supposed to be wires and AC currents can pass through the human body... electricity is supposed to be wireless in a sense, capacitor on one side sending to the receiver on the other .
People will seek alternatives. Let’s say that phone company A charges a uncompetitive price. Consumers can choose to use something like, satellite or cellular instead. If the price is bad enough, you probably could get your neighbors to chip in to get a big enough market size to justify another company buying right of way and giving you better service.
We often look at monopolies as, a single product. When in fact there are multiple. There isn’t just 1 solution to a problem. When the train company fucks with prices. Bus companies rush in to cash in on the new floor. Other train companies seek to invest and buy rights to offer service. And the best thing you can do. I’d simply vote with your money. Stick it to the bad business. By not giving them money
I thought competition promotes innovation. This doesn’t address choice and censorship by companies and much more
would be much harder thing for company's to get away with in the modern information era i feel
@kamiyoko It's actually quite true, and if you need a more recent example (because I doubt you were alive during those days), just look at the state of cellular phone providers. In the 90s, we saw a huge boom of cell phone companies in the mid-late 90s, each offering "better" service at a lower price. The smaller ones priced themselves to death, and when they didn't have the money to upgrade or maintain their equipment, they sold themselves to a bigger company. At the height in the US, there were around 10 cellular phone providers: AT&T, BellSouth, Sprint, Nextel, Cellular One, AirTouch, VoiceStream/T-Mobile, and Verizon are the ones I remember, but there were probably others. That number has shrunk to 4: AT&T, T-Mobile, Sprint, and Verizon. It would have been shrunk to three (with AT&T buying T-Mobile), but the DOJ stepped in and said no. On top of this, the prices for cell phone plans have gone up since most of the cell phone companies have started merging. They claim the price went down, but they break everything up now to include additional fees for things you don't even use.
So there's a real world example of competition pricing themselves out of the market. Want another? Research ISP providers (specifically DSL, but it happened with dial-up too) in, you guessed it, the 90s and early 2000s. It doesn't take a genius to see what's going on...just research.
Iowa is weird, I guess. Where I live, I think the utility company pays for the infrastructure up and down existing roads. Anything new (whether it is to a new house or an existing house) that leaves the road and crosses private property becomes the burden of the private property owner. I could be wrong, of course, but that's my understanding.
"This is america I shouldn't have to sell a kidney to get electricity."
No, you should have to work for electricity.
@gnomechomskylives Again, there is a significant lack of understanding the definitions of words.
@UncleIrv I didn't say they are "purposely doing the opposite", I said they are doing it without care. That is not the opposite, that is in the middle of between what you are saying and what you think I am saying.
I am saying either they are not making an effort to minimize collateral damage or they are doing a very poor job. Notice I left that second option open as well. Hundreds of thousands of innocents are dying, regardless of which of those two options are true.
@DrunkenGodMode so what is a patent other then a socialy accepable government enforced monopoly?
Pretty explanation, but if I believe it's fatally flawed, here is my argument. The supossed "economies of scales" are allowed to operate with competition, eventually a few big firms should remain and still compete with each other. Funny how it is just accepted by the speaker and most people that a monopoly must exist for this industry. We can argue that other industries "should" also be monomolized economies of scale, but they aren't, example aviation, computers, etc.
One thing I totally agree (cause I don't know too much history on the electrical industries) is that there is no incentive for people to use less electricity if they are gonna get charge a almost fixed price and the effect that that has environment.
You can't have multiple companies running power lines all over the place. It is dangerous and impractical. This is why utilities were allowed to form monopolies, with heavy pricing regulation. This sort of regulation, however, makes it impossible for accurate electricity market discovery, as she gets into. It is a trade off.
That's how it should work, but in practice it does not. From Standard Oil to Microsoft, the example of what happens is that the largest company starts to use its market power (and other powers, like legal, and even force of arms or crime) to shut out competitors.
This is the correct use of government, to keep the market fair. Unfortunately, government frequently does the opposite, that is, aiding and abetting monopolies.
You can indeed have multiple companies running power lines all over the place. Why is it dangerous and impractical? Different cable companies run their cables all over the place.
Visda58, you can have multiple companies running power lines, but companies can also agree to share lines, so that multiple lines aren't necessary. That was essentially what was happening in the early telephone industry before government intervened on the basis of the alleged "natural monopoly".
@arerix That's the impression I got, too.
On the upside, government isn't drumming up $8/hr line technicians to put electricity where it is unwelcome. 'Did you not want 1600v service? We have a bundle...'
@Butmunch666 about 4:27 she stated ' we will regulate the profits will earn on your assets and in that process regulate the prices you can charge'. Which is bass-ackwards to reality. The reality is they regulate the prices they can charge, while how much profit they can earn is based on how efficiently they can deliver electricity.
Actually public utilities don’t have a said how much they can charge for their services it’s control by PUCO and if they want to increase their rates it has to be approved by them . If you ever have a problem with a utility company or you think you are getting overcharged you can always contact PUCO and they would look into and if the company it’s found in the wrong they’ll get a fine and I’m sure you’ll get a reimbursement.
maintenance yes but who pays for construction? The problem if you have to pay for constructions is that they will not let you do it yourself or hire someone, you have to use their company.
If a natural monopoly really exists, as many argue, then why does government need to step in and grant a legal monopoly? Why do anti-monopolists only think that market monopolies are bad, but government-granted monopolies are good?
Okay some of what she is saying is just wrong, where I live there is a time of use option for electrical use where the utility does charge you more during the day than during the evening.
That is what the “rational learn liberty” types do ... just ignore the facts that do not work with your world view. Next time they talk about going back to the gold standard ask them about the implications on having the value of your currency depends on something that is mined in other countries
Here's what I know our electric company gets to check on a $600 deposit because they refuse to pay make the arrangements that people need to keep their power on because they are the only game in town
@RKAddict101 Sounds fine to me!
The money you get from that access electricity is very little. Like very little. I would know because I am actually in that situation. Luckily I live in Idaho, a state that does have good sun and somewhat good wind, but I do pay around a good chunk of electricity per year. Since my house isn't part of their deal I get charged hell of a lot more if power does go out. I do pay, just not as much as others.
@UncleIrv I respect that, even if - in another place and time - we might disagree on other issues. I suppose (to paraphrase Goldwater's "moderation in the pursuit of justice is no virtue" belief in an empirical fact is no dogma; but I follow your meaning. Cheers :)
@cooljj82 In my state, we have a power company that exists as a "cooperative" with the people.
In reality, it's just another statist monopoly. Prices continue to rise, even as I and everyone I know cut usage. Rates just arbitrarily go up month to month, and there is little any of us can do about it as there is no threat of competition.
Our energy sector, telecoms, medicine, insurance, liquor, media, etc., are, or were all state owned and controlled here in Canada. They lagged behind in innovation and technology so much, that we are the #1 polluters per person in the world, despite being a whopping 2% of global emissions. Our telecoms are so far behind that my home town didn't get on 3G until 2016. Prior to that no cell phones worked, except old first gen flip phones from prior to the turn of the millennia. Our healthcare times were, and still are skyrocketing, insurance, while low payments in many aspects, covered very little and left many behind (my father's farm was burned to the ground by a neighbour who thought he put out a bush fire, but didn't. The state insurance told my dad he wasn't going to receive an insurance payout because they do not cover intentional fires...yeah...) Liquor stores are a tax burden in many regions, where they do not sell more than they pay out in public employee wages. Our national broadcasters, the Canadian Broadcast Corporation (CBC) costs tax payers over $1.2 BILLION dollars annually, and still turns a $70 million a year LOSS (Don't worry, the CEO and 3 other reporters still make over $1 million a year salary though), The rail industry was a crown corporation as well. The lack of necessity to innovate and compete made the state the monopoly. Trains routinely run through the capital city in my province where I live, during rush hour, holding up traffic for hours. There was one day where the train started at 3:30 in the afternoon, blocking a major freeway turnout, and another major road through the industrial section (this is an industrial city, where many of the 1.4 million residents work). The station where they load cars is off this section, meaning the trains stop to load up....during rush hour. It wasn't until 7:20 that the train finally moved off the roadways. Nearly 4 HOURS of blocked traffic. Was the train company, CN, held to account for this? Nope. Why? Because CN stands for Canadian National. That's right, the company was a crown corporation until recently, and still has deep ties to political influence and leadership.
No private company could abuse the workers, charge for such lackluster services, lose money every year, and still remain the ONLY company to deal with, if not for the government propping them up. Over the past 10 years, there have been strikes almost every single year here. Every one of them, has been a government industry. All public workers. Go figure.
In the 1990s, Alberta decided to rid itself of the toxic government control over industry. It privatized the energy sector, telecoms (insurance and liquor had always been), and allowed for private medical companies to compete against the government owned state healthcare provider. When the Alberta Government Telephone Company was sold to private investors, who do you think could afford the multi billion dollar price tag? Telus corporation was stood up, and created a legitimate monopoly on the industry. They owned 100% of the phone lines, and until competition from Eastern Canada newly privatized phone companies came in, 100% of the cellphone towers as well. My phone bill a few years ago was over $100, for 1 GB of data, and 5 phone numbers I could talk to unlimited, with 10 cents a minute calling after that. Data roaming charges for travelling to the US cost upwards of $500 a day. Did the energy sector fair any better? The company was sold to private investors who formed Epcor. To date, all of Alberta north of the Calgary region is controlled by this single company. Power bills are set by them and them alone, who milk customers for insane amounts. Your options are to do automatic monthly withdrawals from your bank account, or pay them $1000 up front to not have to. Those monthly payments are sporadic, random, and never the same days. What days will they withdraw? They don't say. Affordable? Hardly.
Has CBC's funding helped boost Canadian content like promised? Hardly. The top rated Canadian shows are all from the private sector, with the number one comedy show being aired on CTV, CBCs main rival, and a 100% private corporation. In fact, our media has become so obsessed with milking tax dollars, that they routinely report and lobby in favour of the political parties that support their unions, and demonize the others. The push back from this created website media sources like the Rebel, The Post Millennial, etc., to fight back. And so, government, under Justin Trudeau, had decided to step up actions to combat "Fake news". How did they do this? By throwing another $600 million tax dollars at the media, standing up a panel who decides which media companies get a slice of the pie for toeing the government line. And who was picked to head this panel? Why none other than Unifor, the union of CBC, much of the journalists in Canada, and a well known, and outspoken political lobby group for Justin Trudeau's Liberal party. Unifor, who called themselves the Conservative party's "Worst nightmare" (their words) funds "Engage Canada" which is, to quote their own website: "a non-partisan, independent project with the mandate to increase democratic participation in the electoral system in Canada", and whose mission, according to their own website is, and again I quote: "To make sure no conservative government is ever electable". Non-partisan eh? Oh, did I mention that Engage Canada is a "grassroots" organization staffed by political advisers and campaign strategists of non other than Justin Trudeau's Liberal party? Funded by the Union that is the "worst enemy" of rival political parties to Trudeau, who happen to be in charge of deciding what media is accepted as true and what is "fake news", through funding that they give to their own $1 billion tax funded corporation. This is the nature of government in business. Corrupt, abusive, authoritarian, and destructive. It is the worst monopoly of all.
Take it from me, do not EVER trust any politician who wants to enact anti monopoly legislation, and control the free market. The solution to free market domination by a company is government control, which becomes absolute control of the industry, at the expense of the tax payers, to fund the weakest services in the developed world.
FYI, I should mention the only reason that my home town got that 3G tower was because 2016 was the year that the provincial government decided against privatizing the state phone company, and instead opened the doors to allow private companies to compete. It was Telus that built that first tower in order to compete with the state owned provider.
ok here is the deal, power lines cost 50k per mile for low voltage 67k for med-high voltage and around 250k for the huge high tension lines that feed power to large cities. even if I'm only a mile away from an existing service it would cost me tens of thousands.
@UncleIrv Documented means yes,those are the bodies that have actually been counted. AKA they are also cited in newspapers,etc.
I am not saying there is a motive, I'm saying there doesn't have to be a motive. The motive only has to do with killing terrorists and innocents die needlessly at the same time while the government lies to the people.
@masluxx It isnt.
The only deviation is that you can technically purchase the rights from the patent holder.
But force is still used if you reverse engineer a product.
@NecxZhor9 now i have given that same example for the 3rd time.....really no example? ....
@cooljj82 that is typical of government regulation. Look at what happened to railroad prices before and after the ICC took over in 1887. Before there were different rates depending on destination. Afterward, the commission raised all prices to a set level. Who won? The Railroad industry. Who lost? The customer.
Well you still have to pay for maintenance and of times when there isn't any wind or sun to provide electricity for you.
It’s funny actually, 2 car alternators could power an entire 2500 sq ft home... yet it’s “costly” ... btw for those who don’t know, with the know how an alternator can be made into a magnet motor, put some blade wings on and wind will do the rest, don’t believe me or maybe u tried and didn’t work? Use the Fibonacci sequence for blade calculations, one car alternator.. if done properly and carefully can produce several kilowatts of power..
The costly part is storing the electricity. What some people do is plug their electricity generating device into an outlet in their home, and as long as you don't overload the circuit breaker you can feed electricity back into the grid which basically reduces your electric bill..
Good replay!
You have no clue to the nature and existence of law and its purpose, nor the function of government.
But you certainly have a strong grasp of ad homenien.
@JoeJC the high prices would provided the impetus for competition and innovation. Imagine how easy it would be to find venture capitalists to fund your innovative way of providing cheap electricity if you lived in a city which had its electricity provided by a monopoly company charging excessive prices. Regulation maintains the monopoly.
It cost a lot of money to maintain power lines also you have it if safety issues and btw to get into this industry it cost millions of dollars not just to build or buy a company but you also need millions in order to operate . I don’t know many people who were willing to invest the kind of money knowing it takes a long time to see any profit since it’s heavily regulated and you can’t charge your customers whatever you want .
I'm not sure I understand what you just said.
Let the Free Market take care of it. Stop all interventions!!!!
@UncleIrv Understanding gravity is not dogmatic, it's self evident.
Now, if using Gravitational Theory, you made some other argument by extension, say all bodies seek the path of less resistance, and then went to say something akin to "Therefore all human beigns will seek the path of perpetual motion, will avoid resistance, any man who goes against a grain is not being true to his nature," THAT would be dogmatic.
Who could be against renewable energy? ._.
@joshfultondotblogspo "It" being the concept of a "natural monopoly."
"Government provided the incumbents with right-of-way access" Incorrect, gov't did do this, however as I pointed out it wasn't until after the company was already a monopoly. And that is the debate you seem to be missing.
Hey, if you don't want to believe the history books that even this Prof talks about then of course you are going to disagree with the basic premise of monopolies. However, the contention of facts seem to be at play here and you disagree with the general consensus of history
I live in a small town in Iowa, if the government hadn't poked and prodded electric companies I wouldn't have electricity. Free markets work for most things but not this. Do you know how much money it would take to build a second infrastructure to deliver power? Things do need to change, but if we take government completely out of the power equation some people will literally be left in the dark.
But I think this is an example of the free market working perfectly. You're not willing to pay the money to get electricity strung to your house, so it doesn't happen. Isn't that how the free market is supposed to work?
I can't send this to big government folks. Ultimately it sounds like her entire argument is "we only focused on the benefits of regulation, and not the costs. We need to make the regulation better."
"Better" regulation is not the answer. The solution to big government is not improving its efficiency.
@gnomechomskylives Kettle calling the pot black is ironic.
One of most flaws of today, jea just sent someone to mess with my meter.. I’m on the brink of AC electric discoveries aka free energy and the monopoly of jea wants to know exactly how much power I’m using... they’re watching but they can’t just wipe us all out .. most are waking up by now, once I release my book and first prototype to North America, then the world.
Let me clarify. Do I have to work for it now or in the next 30 years? no.....
Free market works for ALL things - men in voluntary trade.
And, no, to your last demand. How's that for freedom!
Is a monopoly bad if it happens naturally because everyone in that community likes the cost or the rates, whatever?
No, in the case of public utilities, a monopoly is cheaper than competition. There are two main reasons why this happens 1) there are physical barriers to market entry that do not exist in any other industry. Without any government intervention, a company would have to buy physical access across every property they wanted to run a line. If no property owners would allow them to cross a road, then they could not sell electricity to any house across that road. Big companies could and would buy leases in strategic places just to keep competition out of key areas. Imagine that you owned your own store, except your competition owned all of your doors and kept them locked 2) Competition only lowers prices if prices can be lowered. Almost the entire cost of electrical supply is construction and maintenance of physical power lines and equipment, and there is no possibility for one competitor to transfer electricity any cheaper across a copper cable. Hence, multiple companies running lines in the same area could produce a redundancy of what amounts to quite literally the entire cost of the electrical supply. Imagine that a load of widgets cost 1 cent to produce, but 9, 000,000 cents to transport to the market regardless of how many you transport. There is no way to lower the cost of production, transportation or sell price. In such a scenario, an increase of competition can only mean a decrease of market share for each company, and since the cost is fixed for each company, the cost and supply is effectively fixed and the price each company must charge to break even goes up as their market share goes down.
Regulating Monopolies, or, Manipulating Regulations
I agree with jeffiek's response. By using your own argument, rich dudes who want to build McMansions out in the boonies, away from the urban sprawl, ought to have taxpayers pitch in extra to run the new lines out to their construction site. Would you agree that rich dudes, seeking living circumstances beyond the existing grid, deserve subsidized utilities?
Aka The crazy 24 year old, moving mountains in his spare time 👁🌍
@masluxx well a patent allows its owner to gain royalties for other businesses to use. Monopolies are considered a super structure that takes every aspect of production. For instance, a business runs its own mining operation, processing plant and sells that product. There was a fear that this would decrease competition and raises price gouging. Now tell me how that's different from government regulating business aka special interest.
@SquashDog01 Government is there to protect the liberties of the people (reinforcing laws) not taking away liberties of individuals and meddling with the free market.
Oh i'm sorry I didn't know owning my own power made me less of an expert...
@arerix "thus locking upstarts out and sharing the market between them."
This is a distinction without a difference unless you can show otherwise. Once a monopoly has majority control of a market, they can simply undercut upstarts by leveraging their product. The way steel and coal giants did by selling their product below market value that competitors cannot compete.
This question needs to be addressed before anyone raises their pitchforks and torches against the Sherman Anti-Trust Act.
That's simply a myth. The idea that companies can just sell at a loss indefinitely to keep out all potential competition is economically absurd. Especially when you consider that their rivals could simply buy the product, which has actually happened in the past.
@@KonzonThey don't have to sell at a loss indefinitely, or even at a loss at all, but enough to keep the barrier of entry high enough that it assures their position in the market.
The thing is, under American Law, being a monopoly on its own is _not_ illegal. Monopolies can form naturally just because someone offered a product or service that no one else bothered to offer. Anti-trust laws are designed to stop monopolies from using their power in one sector to influence others. In the 19th century it wasn't unusual for the industry leaders own the network of businesses for their industry, from the mines, to the mills, to the railways. They produced the raw materials and the finished product, they were economies unto themselves which gave them great sway over the costs of raw materials, labor etc.. Things that a new comer in the same sector would not have.
This isn't a myth, it's literally history. I bet you deny man-made climate change too :b
Thing is, no private firm should have any profit without competition with at least three players in the same market. Of it is not possible or not practical to do this with a particular industry, it is prudent then to nationalize it, removing profit from the equation. For those who automatically assume government is not capable of efficiency, I suggest ting or currency to electricity production, efficiency (that is, output to waste ratio), and consumption. A surplus would always be sought and effective means to increase surplus, due to the budget being tied to it due to currency in circulation limited by the surplus of electricity, would be prioritized in economic policy. We strengthen the dollar, puts of fortieth markets benefiting from a weak dollar, and pull back outsourced jobs to the states to take full advantage of a strong dollar. There's your America First policy.
@masluxx you cant compare free market principles to corporatism, which we are under now. consumers don't necessarily have market power when the Government bails out failed companies.
The fault lies not with her, but in LearnLiberty posting what are clearly either lies, or completely missinformed opinions.
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LearnLiberty is very good, and I have watched almost all of their videos, and this one stands out as an eggregious bit of dissinformation.
@SquashDog01 I suport freemarket. However i suport the truth more. The question i ask you is why do you like lies that support what you want to believe over the truth that suports what you want to believe? Yea i know the truth is some times more complex but if you try you just might find it serves you better.
@UncleIrv Let me feed that for you: killing innocent people is evil.
Oops I mean
Not Clean
Not Green
Not Cheap
You realize it's U.S. regulation to sell off access electricity back to the electric companies even though it's your own?
thats not the big problem though. Companies don't plan past five years in the future. That is why no oil refineries or natural gas, regasification plants have been built in decades. If I live a couple hundred feet of way, it would still cost a thousand dollars and they won't pay for it because it will take more than 5 years to recoup the cost.
Was there already power coming down that public road you referred to? The one that was hypothetically just a couple hundred feet away? Would it really cost 1/4 million to put up a couple poles and some line? Or were you exaggerating for effect?
As I sit here thinking about this, it seems that in a proper world, the electric company should be the one to pay for the line. Not the consumer. Not the taxpayer. I say this because they will profit from monthly fees for years to come.
@gnomechomskylives No real argument. When i say you clearly do not understand the definitions, you retort by saying "NoU!"
People could technically all have solar if they lived close to the equator and had good credit. To bad people are not altruistic or smart enough to make it work. =/
our government is very bad at maintaining efficiency with in its self. and our stagnant over grown government is causing businesses to be stagnant and inhibiting growth and innovation.
but its strange that government can regulate everything but its self, and the large corporations can pump an infinite amount of money into the government and control the laws and regulations being passed.
@SquashDog01 That was a travesty but that doesn't trump the philosophy that every man is entitled to his own life. We have corrected that mistake and made united states better for it. The constitution protects our liberties and that's whats important.
@RKAddict101 So you believe in no government?
I also make good money from the excess energy. Face it, I actually used my head and am richer for it. =P
You realize it is excess and not access right?
3:40 Woodrow Wilson's dirty old man face as he says "Now watch her come".
@gnomechomskylives Thats like saying there are multiple theories or ideas on the Scientific Method. The theory is either correct, or it is not. If there is interpretation, opinions or subjectivity-- ITS NOT SCIENCE.
There arent "forms of capitalism". Capitalism is simply allocating accumulated capitol in the most efficient manners possible. Because a thing called profit exists.
You dont distort capitalism and then call it "my theory", a distortion of capitalism, isnt capitalism anymore.
So you can just snap your fingers and solar panels magically appear on the roof of your house? Wow! That's amazing! OH WAIT, you can't, so you have to work for the money to pay for the solar panels, for someone to install them, and for someone to hook them up to your house. Unless you build and install the panels yourself, and even in that case you still have to work for it. If you didn't need to work for solar everyone would have solar.
But how about the money to get that solar panel? Or how about the money to get some electrician to hook it into your house? That money comes from working. So yeah electricity isn't free.