The political economy of electricity

I remember some stories about communist Romania (specifically the late decade of communism when the loan pay-back policy of Ceausescu impoverished the tovarasi  of the country and brought the economy to collapse) from my parents when the electricity would stop running in the evening to make people save money. The night time was conceived as non-productive, perhaps the planning committee, obsessed with regulating the life of the Romanians, decides that people should go to sleep early so that they would be fresh in the morning to make the needed contribution to the advancement of socialism. This type of forced regulation of the intimate life was one of the cruel facets of Romanian communism.

Stories about communism are meant to frighten any citizen of the West and living without electricity would be inconceivable. However, not very long ago I saw that some people in Britain that are living at the bottom of the economical pyramid are left without any option regarding the choice between electricity and food. I am talking about pre-paid electricity cards that are used for topping up (same as you top up your pre-paid phone sim card). The mechanism is simple. Instead of having a monthly bill, you top up your card with how much money you have and then when it runs out the electricity stops. Of course, people who don’t have a lot of money could be forced to have their lights turned off in the middle of the night if they didn’t have enough money that day.

Let me tell you why this form of rationing is no different than what happened in communist Romania more than 30 years ago. First, the possibility that in an advanced country someone should face the choice between food and electricity is ridiculous and shouldn’t be accepted. The price of energy has dropped so considerably that electricity should  be freely available to the poorest citizens and the entire burden of costs should fall on the very big consumers. The reason is that big consumers are driving the over-exploitation of natural resources for the personal gain of the owners of the big companies. If you are the main beneficiary from the infrastructure that was set up by the state for the collective use then you should have a bigger contribution to the system. This should translate in supporting the burden of the energetic system and finding ways to reduce the production costs of energy to the level that they are insignificant.

Second, the idea that someone is facing discontinuity in such a basic service as energy at random times of the day should be inconceivable and is obviously one that is forced upon an individual in the same way the planning committee of the communist regime forced their ideas onto the Romanian citizens. Just that the committee is now replaced by the executive board of an extremely powerful corporation that decides to commodify electricity to the extent that it is not anymore a basic need but a tool of making large amounts of profits often using the public infrastructure. If you are not able to pay then you shouldn’t enjoy to fruits of technological advancement. If you are not able to pay your huge debt acquired by the communist-dictatorial regime then you are not able to enjoy the fruits of technological advancement. See the similarity? We have just shifted the collective debt burden to the individual debt burden, without much shift in the relative standard of living.

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