Yes. Services like gas and water are natural monopolies - it doesn’t make sense to roll out two or three separate lots of distribution pipes, so you always just have one service available to you. The best option is to have them as government owned services.
You’re choosing from vendors to deal with the regional vendor. You’re just paying someone to pay the company in your area. The company you pay in this scenario literally offers you zero value. They simply exist to extract money from you.
Alternatively, these services could be provided to you at a lower cost as part of your annual tax bill under a collaborative cooperative.
You’re choosing from vendors to deal with the regional vendor. You’re just paying someone to pay the company in your area.
That’s not how it works.
The price you pay has 2 main components: a fixed component for network costs. This part is always the same and only depends on the type of hookup you have (e.g. an industrial power connection would cost more than a residential one). It goes to the owner of the physical power network (this depends on where you live) who uses it for things like maintenance (and of course a little profit). The network operator does not provide power themselves.
The variable component is based on your usage and goes to the power company. The power companies provide the actual power to the national grid. While it may be true that the power coming out of my outlets wasn’t produced by the company I’m contracted with, that doesn’t really matter. Electricity is electricity. What matters is that each power company has to provide the amount of energy used by their customers to the national grid. Say company A has 100 customers that on average used 1 kilowatt-hour each, and company B has 50 customers that used the same amount on average. Then company A has to provide 100 kilowatt-hours to the national grid and company B has to provide 50 kilowatt-hours.
How they provide that power is up to them, and usually varies. The larger energy companies have their own power plants, wind and solar farms. Smaller companies may buy energy in bulk from the larger ones and try to sell it at a profit to consumers. Energy companies may also buy or sell to/from other countries, depending on capacity and demand.
Point is that they don’t just forward you the bill from a local company, they actually have to provide the power and outside of a few small ‘virtual’ energy companies they do produce that power.
Quite simple actually. The supplier knows how much water it puts in the pipes, and consumers have meters that measure how much water they take out of the pipes.
Water is water… It doesn’t matter if you’re not getting the exact same water molecules put in by your supplier.
Think of it like this… You have a jug of water. The supplier puts in a glass of water, and you (the consumer) take out one glass of water. The quantity of water in the jug stays the same, but you pay the supplier for how much water you took out.
Tap water is not just water. Water has a bunch of other things in it besides water. The main reason I can think to choose a different water supplier than the cheapest is the water quality. If the cheap supplier is gonna crap up all the water for everyone else, what’s anyone incentive not to go with the cheap supplier? Doesn’t that pretty quickly devolve into a monopoly?
With electricity, it is just electricity and people have opinions about how that electricity is generated. But even there, it’s usually not a good thing. It leads to high pressure, scammy sales tactics that result in higher bills for no benefit.
If you’re all using the same wires, you’re subjected to those problems even if you don’t contract with them. So multiple suppliers doesn’t fix the issue. It just introduces more suppliers who can have those problems.
That would destroy the entire grid and a lot of equipment. It’s why texas had rolling blackouts a few winters ago, it’s a fine balance between supply and demand to maintain stable voltage and frequency. Failure to do so can result in a LOT of damage. If you don’t have enough supply, you have to reduce demand.
Can be solved by putting a certain quality requirement for putting water into the pipes. Suppliers can compete on price.
It’s not realistic to have multiple pipe systems covering the same area. Digging pipes is very expensive. Digging multiple networks of pipes is insane. This solution is the best compromise to have multiple suppliers serve in the same area.
If the only difference is price, how does that not just devolve into a monopoly or shitty sales tactics to try to trick people into paying more for the same product?
Nothing says punk more than enabling for profit corporations to hold sole ownership of the utilities that we need to continue living in a bare minimum standard of living. /s
Please enlighten me on how I can start a utilities company? Make sure you give me details on how I can maximize profits to my shareholders while fucking over my customers.
Or maybe I should start a non-profit utilities company, and the cost of your services is subsidized by taxpayers’ money. That way, I don’t have to constantly chase capitalism and make life better for my community instead of my shareholders.
Good point but I would say it’s hard to monopolize solar power since it’s easy to just buy your own panels.
Wheras it’s not feasible to buld your own power plant.
I never said that. Small scale power is always the way to go! Be it small hydro or solar panels!
It’s very different to have small localized power and distribution networks than controlling a whole country’s power and then giving that whole network to a private company to manage.
If the government decides to privatize utilities like electricity/gas or whatever, then sure it is freedom for some rich business owners to open up new businesses. However, this also results in those utilities becoming profit driven (as opposed to being for the public), and literally everyone in the country having to pay much more than they were paying previously.
My country had electricity privatized around 4 years ago, and in result we have to pay a lot more, not to mention about numerous fraud cases that were all over the news during and after the privatization period.
If you think that rich business owners being able to open up a couple of business at the expense of fucking over the public is a good thing and being against it is some weird hexbear delusion, then I’d advise you to get out of the libertarian bubble and look at the real world instead.
It’s not the people in the solarpunk community (because of federation posts get federated throughout the fediverse) but rather people not noticing the community
Those things are natural monopolies, so the choice isn’t monopoly vs free-market it’s profit-driven-monopoly vs public-good-driven-monopoly.
Unlike what’s said by the mindless pseudo-Economics bollocks a lot of prople have been indoctrinated with, the upsides for consumers of a Free Market only exist in the subset of markets were there are natural conditions for high levels of competition - which is most definitelly not gas provision to households - and even in those there are still systemic problems such as negative externalities that require some level of regulation.
Distribution is a natural monopoly. Supply is not. Every supplier is putting the same, standardized product in the pipes. If they put a cubic foot in, and I take a cubic foot out, I can call them my supplier, even if they are putting it into the pipeline a thousand miles away from me and there is zero chance I will ever be burning the actual gas they supplied.
Indeed, and separating distribution from production is how decent competition is introduced in such markets (there are still barriers to entry related to infrastructure, but they’re nowhere as bad as the ones when the distribution infrastructure is owned by the gas company).
However, often that’s not how things are in the markets for gas, power and water supply as well as internet access.
Not only that but in markets were those things are separate the supply companies will try as hard as they can to get their hands on the distribution side (for obvious reasons), and, well, neoliberal politicians are usually happy to let them. The natural tendency in an unregulated market in those things is for sooner or later to end up in a winner-takes-all situation were one of the suppliers got it’s hands on the distribution side and used it to create a monopoly position, if only locally.
It’s a funny thing about the so-called “Free Market” in domains were it is possible for businesses to directly or indirectly create the conditions for natural monopolies: without actual intervention from an outside strong and independent actor (i.e. a governmental power with the will to intervene) such markets sooner or later end up naturally not being free anymore.
Market actors activelly and constantly seek a dominant position so if there are conditions for a monopoly (the most dominant position there is) one will eventually succeed and if there aren’t but there are for the next best thing (a cartel) a handful of them will eventually succeed.
deleted by creator
Yes. Services like gas and water are natural monopolies - it doesn’t make sense to roll out two or three separate lots of distribution pipes, so you always just have one service available to you. The best option is to have them as government owned services.
And yet, I can choose from dozens of different energy companies for electricity and gas.
You’re choosing from vendors to deal with the regional vendor. You’re just paying someone to pay the company in your area. The company you pay in this scenario literally offers you zero value. They simply exist to extract money from you.
Alternatively, these services could be provided to you at a lower cost as part of your annual tax bill under a collaborative cooperative.
That’s not how it works.
The price you pay has 2 main components: a fixed component for network costs. This part is always the same and only depends on the type of hookup you have (e.g. an industrial power connection would cost more than a residential one). It goes to the owner of the physical power network (this depends on where you live) who uses it for things like maintenance (and of course a little profit). The network operator does not provide power themselves.
The variable component is based on your usage and goes to the power company. The power companies provide the actual power to the national grid. While it may be true that the power coming out of my outlets wasn’t produced by the company I’m contracted with, that doesn’t really matter. Electricity is electricity. What matters is that each power company has to provide the amount of energy used by their customers to the national grid. Say company A has 100 customers that on average used 1 kilowatt-hour each, and company B has 50 customers that used the same amount on average. Then company A has to provide 100 kilowatt-hours to the national grid and company B has to provide 50 kilowatt-hours.
How they provide that power is up to them, and usually varies. The larger energy companies have their own power plants, wind and solar farms. Smaller companies may buy energy in bulk from the larger ones and try to sell it at a profit to consumers. Energy companies may also buy or sell to/from other countries, depending on capacity and demand.
Point is that they don’t just forward you the bill from a local company, they actually have to provide the power and outside of a few small ‘virtual’ energy companies they do produce that power.
deleted by creator
How do you send different supplier’s water down the same pipes while making sure customers get the supplier they’re paying for’s water?
Quite simple actually. The supplier knows how much water it puts in the pipes, and consumers have meters that measure how much water they take out of the pipes.
Water is water… It doesn’t matter if you’re not getting the exact same water molecules put in by your supplier.
Think of it like this… You have a jug of water. The supplier puts in a glass of water, and you (the consumer) take out one glass of water. The quantity of water in the jug stays the same, but you pay the supplier for how much water you took out.
It works the same way with electricity.
Tap water is not just water. Water has a bunch of other things in it besides water. The main reason I can think to choose a different water supplier than the cheapest is the water quality. If the cheap supplier is gonna crap up all the water for everyone else, what’s anyone incentive not to go with the cheap supplier? Doesn’t that pretty quickly devolve into a monopoly?
With electricity, it is just electricity and people have opinions about how that electricity is generated. But even there, it’s usually not a good thing. It leads to high pressure, scammy sales tactics that result in higher bills for no benefit.
Hypothetically, what if my electricity, in my shitty profit seeking corporation, cycles inconsistently?
What if my equipment at my rinky-dink substation fluctuates between something absurd like 40hz to 70hz.
This would be extremely dirty electricity\ electromagnetic pollution.
If you’re all using the same wires, you’re subjected to those problems even if you don’t contract with them. So multiple suppliers doesn’t fix the issue. It just introduces more suppliers who can have those problems.
Exactly! A shitty race to the bottom even for electricity is my point.
Never under estimate capitalism’s ability to create a shittier alternative, is all I’m saying.
That would destroy the entire grid and a lot of equipment. It’s why texas had rolling blackouts a few winters ago, it’s a fine balance between supply and demand to maintain stable voltage and frequency. Failure to do so can result in a LOT of damage. If you don’t have enough supply, you have to reduce demand.
Why would this electric company care? Would the company not sell the customers a solution?
Can be solved by putting a certain quality requirement for putting water into the pipes. Suppliers can compete on price.
It’s not realistic to have multiple pipe systems covering the same area. Digging pipes is very expensive. Digging multiple networks of pipes is insane. This solution is the best compromise to have multiple suppliers serve in the same area.
If the only difference is price, how does that not just devolve into a monopoly or shitty sales tactics to try to trick people into paying more for the same product?
deleted by creator
Um… I’m perfectly OK with a “monopoly” for my fire fighting services. Why would I feel differently for my utilities services?
deleted by creator
Nothing says punk more than enabling for profit corporations to hold sole ownership of the utilities that we need to continue living in a bare minimum standard of living. /s
deleted by creator
Make sense before you comment next time
Please enlighten me on how I can start a utilities company? Make sure you give me details on how I can maximize profits to my shareholders while fucking over my customers.
Or maybe I should start a non-profit utilities company, and the cost of your services is subsidized by taxpayers’ money. That way, I don’t have to constantly chase capitalism and make life better for my community instead of my shareholders.
Put a solar panel on your roof.
deleted by creator
Insightful.
We’re talking about basic utilities though. Do you think the average person can start or run such a business? I’m honestly interested in the answer.
Solar power, yes definitely. Is power not a basic utility?
Good point but I would say it’s hard to monopolize solar power since it’s easy to just buy your own panels. Wheras it’s not feasible to buld your own power plant.
Wasn’t that the point though? You’re arguing that small scale power doesn’t exist when it clearly does.
I never said that. Small scale power is always the way to go! Be it small hydro or solar panels!
It’s very different to have small localized power and distribution networks than controlling a whole country’s power and then giving that whole network to a private company to manage.
I apologize. I misread your comment!
If the government decides to privatize utilities like electricity/gas or whatever, then sure it is freedom for some rich business owners to open up new businesses. However, this also results in those utilities becoming profit driven (as opposed to being for the public), and literally everyone in the country having to pay much more than they were paying previously.
My country had electricity privatized around 4 years ago, and in result we have to pay a lot more, not to mention about numerous fraud cases that were all over the news during and after the privatization period.
If you think that rich business owners being able to open up a couple of business at the expense of fucking over the public is a good thing and being against it is some weird hexbear delusion, then I’d advise you to get out of the libertarian bubble and look at the real world instead.
It’s not the people in the solarpunk community (because of federation posts get federated throughout the fediverse) but rather people not noticing the community
Freedom to be enslaved is negative freedom.
It is replacing a privately owned, for-profit business with a public utility owned by… the public.
Those things are natural monopolies, so the choice isn’t monopoly vs free-market it’s profit-driven-monopoly vs public-good-driven-monopoly.
Unlike what’s said by the mindless pseudo-Economics bollocks a lot of prople have been indoctrinated with, the upsides for consumers of a Free Market only exist in the subset of markets were there are natural conditions for high levels of competition - which is most definitelly not gas provision to households - and even in those there are still systemic problems such as negative externalities that require some level of regulation.
Distribution is a natural monopoly. Supply is not. Every supplier is putting the same, standardized product in the pipes. If they put a cubic foot in, and I take a cubic foot out, I can call them my supplier, even if they are putting it into the pipeline a thousand miles away from me and there is zero chance I will ever be burning the actual gas they supplied.
Indeed, and separating distribution from production is how decent competition is introduced in such markets (there are still barriers to entry related to infrastructure, but they’re nowhere as bad as the ones when the distribution infrastructure is owned by the gas company).
However, often that’s not how things are in the markets for gas, power and water supply as well as internet access.
Not only that but in markets were those things are separate the supply companies will try as hard as they can to get their hands on the distribution side (for obvious reasons), and, well, neoliberal politicians are usually happy to let them. The natural tendency in an unregulated market in those things is for sooner or later to end up in a winner-takes-all situation were one of the suppliers got it’s hands on the distribution side and used it to create a monopoly position, if only locally.
It’s a funny thing about the so-called “Free Market” in domains were it is possible for businesses to directly or indirectly create the conditions for natural monopolies: without actual intervention from an outside strong and independent actor (i.e. a governmental power with the will to intervene) such markets sooner or later end up naturally not being free anymore.
Market actors activelly and constantly seek a dominant position so if there are conditions for a monopoly (the most dominant position there is) one will eventually succeed and if there aren’t but there are for the next best thing (a cartel) a handful of them will eventually succeed.