Freedom to Choose?

Following on from yesterday's post, I was musing this morning on just how insane the concept of 'retail' electricity, gas and water, etc. is. As someone who grew up in the era of nationalized utilities, post Second World War, the idea of wholesale/retail suggests commodification and competition; not exactly a natural fit where these services are concerned, and just plain bonkers to my mind.

Nationalization was always the logical direction in which to go with utilities, even in the days when production - certainly of gas and electricity - was extremely localized. There are two main points of contention here: commodification of what are life-essentials, and competition in a single-supplier market. The first point is essentially a moral objection, and the second concerns the basic mechanics of 'free market' capitalism.

Everyone needs, to more or less the same extent, certain basic things, not just to sustain life, but for that life not to be unbearably spartan: heat light and water/sewerage being the primary ones, along with food. While it is possible to live effectively, off-grid, it's an option that generally pre-supposes a level of expertise and initial investment not available to all. Secondly, one of the basic tenets of capitalism is that of competition. A single supplier to a closed market is a monopoly.

Simply farming out the sale of utility 'products' to third party 'suppliers' doesn't alter the fact that, at the sharp end, it's the same gas, water and electrons that get consumed by the 'end-user'. The 'suppliers' in fact are merely billing entities, passing on the wholesale price as determined by the general energy markets, with greater or smaller margins wrapped up in tariff options labyrinthine enough to disguise the fact that they are all basically selling the same thing.

As I said yesterday, the country will be slowly waking up to a fifty-percent hike in their energy costs. That kind of jump in any normal market with any other line of product would see customers jumping ship for alternatives at the very first opportunity. Except that we can't jump ship with this one, short of leaving our house cold, dark and devoid of any practical means of producing hot food and drink for our families. We just aren't offered any choices here: wherefore the much-vaunted 'invisible hand'? Wherefore competition and the open market ethos?

The truth is that, at least as far as utilities are concerned, there's no normal wholesale/retail pathway and no real competition. Like the diamond market, it is stitched up at source by a hegemony of source suppliers and brokers. The truth to this situation is that a market needs both sides of the equation to function: a seller has to have buyers to stay in business, and normally this symbiotic relationship is self-governing. The lie about privatized utilities as a commodity market is simply that the end-user is a prisoner of, and not a participant in, a fixed market.