The familiar complaint of market failure by critics of decentralized (nongovernmental) decision-making must be coupled with realistic discussion about any government “solution.” This is why market failure must be considered alongside two other failures:
Intellectuals, practitioners, regulators, and the public far too often resort to see-a-problem, pass-a-law rather than:
A century or more ago in the electricity market, state after state set up tribunals to set rates and establish terms of service. The regulated companies accepted self-regulation–in fact they lobbied and got regulation–in exchange for exclusive franchise rights.
The peculiarity and problems of addressing monopoly power with monopoly status is not the subject of this post. Rather, it is to let Jim Clarkson, libertarian voice of the beleaguered ratepayer in the Southeast, have his moment of calling and concern.
Free marketeers can either lobby or pray against the powers of government gone wrong. Less a lobbyist, Jim Clarkson is given the floor.
We have placed our trust in regulators instead of markets to protect us from utility abuse. Alas, these mere mortals succumbed to temptation and have betrayed us. Now we are left with no choice but to beseech thee for the courage to make the needed reforms.
When they sought office, we heard their promises of relief. We were assured the money changers would be driven from the temple. Instead we have seen plans and conspiracies against the people and their fruits. Overtly and covertly the utilities have diverted our incomes for their own wasteful practices and high profits, with the very approval and eager participation of the regulators. We have contained our wrath, but we need thy divine intervention to calm our hearts.
We have heard the regulators and utilities say they have our interests at heart, but they meet secretly and plan ways to oppress and exploit us. These usurpations have multiplied over the length and breadth of the land. They have become a plague. Deliver us O Lord from the clutches of the monopoly regulatory system which systematically steals our daily bread, earned by the sweat of our brows. Recognizing that the lust for power and unearned riches is a powerful drive and encouraged by their past success, we see them pressing on with all the double talk and trickery necessary to attain new heights.
The time has come. We need change. Stay the wicked exploiters! Exorcise their greed and restore them to rational behavior! The abuse increases as the monopoly privilege grows. We have seethed in justified anger at the blatant domination, wanton spending and unrestrained pillaging. Knowing the utilities will never willingly leave the banquet of monopoly for the competitive picnic of austerity on their own accord, we implore thy intercession on behalf of your humble servants.
Brother Clarkson, petitioner