On that neo-liberalism thing

The neoliberal revolution combines the free markets of classical liberalism with the income transfers of modern liberalism. Although this somewhat oversimplifies a complex reality, it broadly describes the policy changes that have transformed the world economy since 1975. Markets in almost every country are much freer than in 1980; the government owns a smaller share of industry; and the top MTRs on personal and corporate income are sharply lower. The United States, starting from a less-socialist position, has been affected less than some other countries. But even in the United States there have been neoliberal reforms in four major areas: deregulation of prices and market access, sharply lower MTRs on high-income people, freer trade, and welfare reform. Many other countries saw even greater neoliberal policy reforms, as once-numerous state-owned enterprises were mostly privatized.

There is an unfortunate tendency to associate the term \”neoliberal\” with right-wing political views. In fact, the quite liberal social democracies of northern Europe have been among the most aggressive neoliberal reformers. Indeed, according to the Heritage Foundation\’s Index of Economic Freedom, Denmark is the freest economy in the world in the average of the eight categories unrelated to size of government.1 The Nordic countries2 have begun to privatize many activities that government still performs in the United States. These include passenger rail, airports, air-traffic control, highways, postal services, fire departments, water systems, and public schools, among many others. These countries do have much larger and more comprehensive income-transfer programs than the United States has, but are not otherwise particularly socialist.

It\’s worth reading the whole thing.

But in that nugget there is part of what so annoys me about the British left. OK, sure, I don\’t share some of the ideals (I\’m a lot less worried about equality and \”social justice\” for example).

But given that what they say they want is something like those \”liberal social democracies of northern Europe\” (Polly\’s \”We must be more like Sweden!\”) why in hell won\’t they take the effort to work out what it is that makes those places work?

They are classically liberal economies with lots of redistribution on top. So, if we want to be more like them we\’ve got to be a classically liberal economy with lots of redistribution on top. We need the classically liberal economy in order to generate the moolah to be redistributed.

I\’m not in favour of that lots of redistribution, this is true, but why is it that they cannot see the point about the classically liberal economy? Whether we do the lefty thing of redistributing or the Worstall thing of not doing so, we still require the classically liberal economy.

That is, if the lefties really did want what they say they want (or, to be less charitable, understood what it is that they want and how to get there) then we\’d all be in agreement about how to structure the ecnoomy. The only argument left would be about how much of it the government gets to redistribute.

25 thoughts on “On that neo-liberalism thing”

  1. combines the free markets of classical liberalism with the income transfers of modern liberalism.

    this isn’t what most of the users of the term neoliberal mean by it at all. Most of ’em mean, “New Liberalism, now with extra evil!”

  2. I suspect The Left, once push comes to shove, does NOT want economic freedom for the individual, believing it alone can control and order society to provide better “outcomes” than the horrid randomness that comes from individual freedom and the market.

    The work by Leon Leow provides empirical correlation to the effect, not of levels of taxation, but Rule of Law – Economic Freedom and property rights – that align with outcomes of wealth and success.

    If the State is not permitted to operate health and education provisioning and other areas, welfare is one of the few directions it can operate in and even then, it will crowd out Friendly Societies and other mechanisms for self-help and mutualism.

  3. An even better example would be Singapore. Lee Kuan Yew started as a socialist & has even been described as doing “Stalinist central planning”but recognised exactly what free markets can do & how government really can be competent rather than parasitic, but got read out of the movement for being succesful.

    I think that is the real answer – back when socialists believed in progress they had a future but in recent years they let the eco-Nazis in as “anti-capitalist” & it corrupted the whole movement,

  4. if the lefties really did want what they say they want (or, to be less charitable, understood what it is that they want and how to get there) then we’d all be in agreement about how to structure the ecnoomy. The only argument left would be about how much of it the government gets to redistribute.

    Exactly. And this little lefty would redistribute quite a lot, in various ways.

    Mostly by treating inheritance as taxable gains, and putting a tax on the unimproved value of all property, bugger this taxing income lark…

    And yes, my forehead does get rather sore trying to explain this to others at times.

  5. @Martin “Tim, it’s going to be utility customers here, with all that juicy real money that they have to spend to keep the lights on.”

    Yep, this is the problem of trying to be Libertarian surrounded by all these Statist Corporatist regimes, which is why Energy Security is considered a part of Defence by the Libertarian Party.

  6. Another definition would be the pillaging by the rich of assets once held by all citizens, and the restriction of civil liberties to prevent protest against it, cheered on by mental defectives like KayTie and hypocrites like Dearieme who hate the idea that they might in any way be beholden to other people.

    Tim, here’s a thought about how marvellous neoliberalism is. Say a company from the Eurozone regions buys a UK utility. They get illegal state aid in the form of a tax break from their own government for mega acquisitions. Our government knows it’s illegal state aid, but goes ahead and allows it anyway. Everything’s hunky dory for all concerned – we get to be pillaged, while those then in charge of our government feel better about themselves for making us expiate non-existent guilt over our colonial part; we did it to others, so it’s time for it to be done to us, etc.

    Scroll forward a few years, and the Euro’s gone tits up. Now, just who gets to pay when that Eurozone company gets a knock on the door from their own government looking for the tax break back? It’s not going to be their own citizens, Tim, it’s going to be utility customers here, with all that juicy real money that they have to spend to keep the lights on.

    That’s the kind of thing that might start revolutions, if they were not banned under health and safety

  7. Martin, I don’t follow your example.
    Let’s take the standard economics assumption that companies maximise profits and don’t care about anything else, and apply it to your Eurozone company. So under this assumption the Eurozone company that’s bought a UK utility is going to raise prices as high as it can, as quickly as it can, in order to maximise returns back to its shareholders. (As, indeed, a UK company buying the UK utility, or any other country’s company). What limits a business from raising its prices to infinity? Well, that at some point enough customers will stop buying the products so that the shortfall on volume offsets the gain in price so total revenue falls (or that a regulator will step in, but for the sake of brevity I will assume that all regulators are useless in this example). What point customers stop buying the products varies depending on competition, but even if there is no competition, at some price it makes sense to switch off the electricity and light your house by candles, or emmigrate to somewhere cheaper, or, if nothing else, you eventually are paying your entire income to the company in question and just can’t pay a cent more. So there’s an upper limit to how much money the company can charge. And if the company is a profit-maximiser, it will raise its prices up to this point, whatever it is.

    Now let’s say that the Euro country comes along and demands its tax subsidy be paid back. Under our assumption of profit-maximising behaviour the Eurozone company can’t raise prices in its UK utility to do this, it’s already charging at the maximum in order to transfer money back to its shareholders. So it either has to pay the money back out of its profits, or go bankrupt. Your idea that the Eurozone company would raise its prices yet again has to be based on the belief that the Eurozone company wasn’t all that profit-maximising to start with. Which is a bit hard to believe.

    Now let’s say that the UK utility had been sold to a UK company with no tax subsidy that profit-maximises. The UK company would raise prices to the same point as the Eurozone company (having lived in the UK, as far as I can tell companies here are as cold-headed as anywhere else in the world). So the difference between selling to to a Eurozone company with a tax subsidy is that the UK government earns more money from the sale, since the subsidy allows the Eurozone utility to bid more. Basically the tax subsidy is a transfer from the Eurozone country’s taxpayers to the UK government. Whether that is a good thing or not depends on what you think the UK government will likely do with that extra money.

    This I find is the problem with most leftist critiques of most neoliberal ideas, leftists tend to assume that companies are far nicer and less greedy most of the time than neoliberal economists do.

  8. Johnathan Pearce

    “Mostly by treating inheritance as taxable gains, and putting a tax on the unimproved value of all property, bugger this taxing income lark…”

    Well, if you are in favour of property rights, which includes the right to transfer to whom you want without hindrance, then taxes on the rise in the “unimproved” value of land and inheritance would rather seem to be at odds with said property rights. If we are going to take away property from those who, in the eyes of the redistributor, do not “deserve” it, to those who do, then that pretty much is a killer for freedom to own, acquire and transfer property.

    So you have a sore head explaining your views. Well, the soreness may be due to your having the wrong ideas in the first place, I am afraid.

  9. Roger,

    Your explication of Libertarian Party policy is illuminating, if of absolutely no interest. Thak you.

    Tracy W,

    Let’s take William Hazlitt, the best bloody essayist ever to write in English, would have called an ‘ultracrepidarian’ approach to your effusions (incidentally, the word I think you’re thrashing about for is ’emigrate’, not ’emmigrate’; ultracrepidarianism in action).

    “So under this assumption the Eurozone company that’s bought a UK utility is going to raise prices as high as it can, as quickly as it can, in order to maximise returns back to its shareholders.”

    It would do if it didn’t have Ofgem to deal with.

    “What limits a business from raising its prices to infinity? Well, that at some point enough customers will stop buying the products so that the shortfall on volume offsets the gain in price so total revenue falls (or that a regulator will step in, but for the sake of brevity I will assume that all regulators are useless in this example)”

    Or enough low IQ widows stop believing the lies told them by the drongs with one eye in the middle of their foreheads, ie doorstep energy salespersons, about how much money they’ll save if they switch suppliers.

    “What point customers stop buying the products varies depending on competition, but even if there is no competition, at some price it makes sense to switch off the electricity and light your house by candles, or emmigrate to somewhere cheaper, or, if nothing else, you eventually are paying your entire income to the company in question and just can’t pay a cent more.”

    In some postcode areas of the UK, this has probably already happened.

    “So there’s an upper limit to how much money the company can charge.”

    Thank God for Ofgem.

    “Your idea that the Eurozone company would raise its prices yet again has to be based on the belief that the Eurozone company wasn’t all that profit-maximising to start with”

    Foggy and unworldly bullshit of the type that gives economics a bad name.

    “Now let’s say that the UK utility had been sold to a UK company with no tax subsidy that profit-maximises.”

    That was not part of the argument’s parameters. so discussion of whatever pet scenario you are able to concoct is pointless.

  10. Johnathan, my skill-set and my labour is just as much my property as is my house or my car. It is no better or worse in terms of respecting property rights to tax me on the money that I make through selling my labour than to tax me on the money I make through appreciation in the value of my house.

    If you’re saying “all taxes are theft”, then awesome, have fun in Somalia. But if you’re trying to make some kind of substantive point about how a government that does need some tax revenues to survive (even if it’s just a minarchist one with an army and courts of law) should raise them, then you’ve failed.

    Martin, are you being deliberately obtuse? For your argument to be valid, you need to explain why, prior to the foreign tax bills coming through, your foreign utility would have been running its UK operations in a way that failed to maximise profit (subject to the market and regulatory constraints it was facing). That isn’t “unworldly bullshit”, it’s the whole point of running a company.

  11. It would do if it didn’t have Ofgem to deal with.

    I assumed that regulators were toothless for the sake of simplifying my argument. But if you wish, then the company will raise its prices to the maximum that Ofgem lets it get away with. Then the Euro government comes looking for its taxpayer subsidy back. Why would Ofgem suddenly let them raise prices now, if it wouldn’t before? If there’s some pressure the company can put on Ofgem to let it raise prices, why wouldn’t it have already?

    Or enough low IQ widows stop believing the lies told them by the drongs with one eye in the middle of their foreheads, ie doorstep energy salespersons, about how much money they’ll save if they switch suppliers.

    And a profit-maximising company will do this to the extent that they can (taking into account the costs of hiring the doorstep energy salesperson) even without any tax subsidises involved. If profit-maximising companies could raise prices to the point that their customers are spending all their income and every single pence that they can borrow on it, in my workd they’ll do so.

    Foggy and unworldly bullshit of the type that gives economics a bad name.

    If it’s foggy and unworldly to assume that companies are always greedy and profit-maximsing, then I will be foggy and unworldly. I care about being right, not about what words are used to describe the right position.

    That was not part of the argument’s parameters. so discussion of whatever pet scenario you are able to concoct is pointless.

    On the contrary, it is entirely part of the arguments parameters and discussion of it is entirely pointful. Your initial argument was that there was something bad about selling a UK utility to a foreign-owned company with a tax-break from their own government. In order to address that I covered off the case of what would happen if the utility was sold to a UK-owned company. Calling my argument irrelevant doesn’t make your initial argument any less wrong.

    …and which, in my opinion, would see an energy regulator caving to any request for any price rise rather than let this fiction be challenged … Now, what I think would happen if said Eurozone company got tapped for its tax break back is that it would run off to the regulator and request permission to raise prices to cover the cost of it

    You are making a contradictory argument here. If energy regulators will cave to any request for a price rise, the Eurozone company will request price-rises until it’s raised prices so much that people are using candles in preference to electricity, or are paying their entire bill to the company. Whether or not the Eurozone company gets a subsidy is irrelevant to the level to which the Eurozone company will try to raise prices.

    And a UK-owned utility will have exactly the same incentives.

    To quote Edward Said, the idea that there might be any other way of organising the utilities industries is ‘virtually unmentionable, a narrative that has no permission to appear’.</i?

    And yet said narrative appears all the time. Another feature of leftists, along with their muddled thinking about the motives of companies, is that the first moment that the government disagrees with them they start crying "oppression! oppression!", regardless of any rights and wrongs.

    Anyway, Martin, to sum up, I am rather disappointed. You said that you were going to take an "ultracrepidarian" approach to my effusions, and yet you haven't pointed out one single area where I have ventured beyond my own knowledge. Are you aware of what the word "ultracrepidarian" actually means?

  12. Now, what I think would happen if said Eurozone company got tapped for its tax break back is that it would run off to the regulator and request permission to raise prices to cover the cost of it

    And what I think would happen (based on actually, y’know, both having studied regulatory economics and having worked on strategy projects for regulated companies) is that the regulator would tell it to fuck off.

    At which point the parent company would be faced with the choices of raising the money elsewhere or declaring bankruptcy.

    If the latter, the UK assets (which, remember, are profitable in this example – it’s only the parent company that isn’t) would be sold to someone else who wasn’t bankrupt, and we’d all carry on like before.

    The fact that my version is what happened when TXU nearly went bust while owning Eastern Electricity and when Enron went bust while owning Wessex Water, whereas your version has never happened at all, suggests that I might be onto something.

  13. John,

    “For your argument to be valid, you need to explain why, prior to the foreign tax bills coming through, your foreign utility would have been running its UK operations in a way that failed to maximise profit (subject to the market and regulatory constraints it was facing). That isn’t “unworldly bullshit”, it’s the whole point of running a company.”

    Gee, thanks for the sermon. It’s a pity that instead of Tracy’s foggy and unworldly bullshit, yours seems like mere senseless bullshit instead, driven perhaps by an innocence of how some parts of the world work. Castles in the air crap derived from classical economic theory – it was not me who wrote ‘for the sake of brevity I will assume that all regulators are useless in this example’ – don’t really work in the face of an economic model founded upon the article of faith that private ownership is always more efficient than public, a fiction which must be maintained by any means necessary and which, in my opinion, would see an energy regulator caving to any request for any price rise rather than let this fiction be challenged. To quote Edward Said, the idea that there might be any other way of organising the utilities industries is ‘virtually unmentionable, a narrative that has no permission to appear’. The British people must not be allowed to own anything in common. End of.

    Now, what I think would happen if said Eurozone company got tapped for its tax break back is that it would run off to the regulator and request permission to raise prices to cover the cost of it. It would be you and me and Uncle Tom Cobley who would be paying back the tax break, and previous rationalisations of profit-maximising behaviour be damned. The only alternative way of doing it would be to lower its already low bar on delinquent debt, which although less certain of recovering all costs would certainly hit the poorest people in our society the hardest. Yet again.

  14. John B, I am saying that tax is basically a form of theft, so thanks for paying attention in class, give yourself a donut, etc.

    Seriously, all taxes are bad, the issue is to have the least bad and at the lowest level possible. I am a pragmatist about that. But when I see people attack inheritance, or landowership etc, I tend to generally regard such folk as hostile to property rights, a key bulwark of liberty.

    It is not rocket science. Excuse my tone, I have a hangover.

  15. Mr Pearce,

    While unpleasant I’d dispute your allegation that all tax is theft. If a group of people has agreed (in a manner in which they all they all believe and agree) that certain things are better done centrally then the raising of revenue to get those things done cannot be considered theft.

    If however the motivation is simply to redistribute money based on spite or envy – socialism, in other words – then this is indeed theft, and of the worst kind.

  16. I tend to generally regard such folk as hostile to property rights, a key bulwark of liberty.

    Fair play. I’d tend to regard rights over one’s own labour as higher than rights over your possessions (broadly, “slavery is worse than having your stuff nicked”), but as long as we’re clear on the philosophical distinctions between ourselves that’s all gravy.

  17. Tracy,

    “Why would Ofgem suddenly let them raise prices now, if it wouldn’t before?”

    Because there wouldn’t be an Ofgem –

    “David Cameron’s quango-hunters have Ofgem in their sights. The Tory leader has warned of a massive quango cull that would see many of the creatures’ responsibilities brought under ministerial control” –

    David Wighton, ‘The Times’, 21st October 2009.

    “If profit-maximising companies could raise prices to the point that their customers are spending all their income and every single pence that they can borrow on it, in my workd they’ll do so” –

    Or their computer systems would do it for them. Do you seriously think that every debt recovery rate applied to every newly installed prepayment electricity meter is individually negotiated? And do you know how much a default DRR on a prepayment meter actually is, regardless of ability to pay?

    “Your initial argument was that there was something bad about selling a UK utility to a foreign-owned company with a tax-break from their own government. In order to address that I covered off the case of what would happen if the utility was sold to a UK-owned company.”

    As a relatively literate and even occasionally sober English speaker, I have no idea what relevance that comment has to what you originally. On the other hand, I do remember that what you originally wrote seemed to be foggy and unworldly bullshit.

    “If energy regulators will cave to any request for a price rise, the Eurozone company will request price-rises until it’s raised prices so much that people are using candles in preference to electricity, or are paying their entire bill to the company” –

    Do you know how many prepayment meters one household name utility provider was replacing with more efficient ones in the autumn of 2008? You won’t ,so I’ll tell you. It was 3,000 a week. That’s not a typo. It was 3,000, 300 times 10. The installation of prepayment meters serves a number of different purposes. It serves the utility company’s purposes by ensuring that the number of credit customers is strictly limited – from their point of view, you’re not usually allowed to run up a tab at the supermarket, so there’s no reason why should be allowed to run up a tab with your electricity supplier. But it also serves what might be described as a theological purpose, and before you try and nip my ankles like a fractious Yorkshire terrier I would suggest you read what I am about to say very closely.

    The installation of prepayment meters suits the whole ‘climate change’ agenda’. Let’s say the worst doom mongers are correct, and the lights start going out in, say, 2012, because we haven’t renewed generation capacity satisfactorily. What better way is there of rationing scarce electricity than to privatise the rationing process, it, by having prepayment meters in peoples’ homes and making it so expensive that they won’t be able to buy it? Those who operate the meters will be able to say ‘We’re doing our best to preserve supplies’. Those responsible for taking tough planning decisions will still be able to avoid them by putting the blame on the utilities. The greenies will love it because for the first time in 150 years, a generation of British children will grow up in darkness.

    In 2020, having a credit electricity meter will be a status symbol to rank alongside the ownership of a video recorder in 1980.

    “Whether or not the Eurozone company gets a subsidy is irrelevant to the level to which the Eurozone company will try to raise prices” –

    But it does matter a hell of a lot to whether they can buy the company in the first place, don’t you think?

    “Anyway, Martin, to sum up, I am rather disappointed.”

    Like I give a shit.

    “You said that you were going to take an “ultracrepidarian” approach to my effusions, and yet you haven’t pointed out one single area where I have ventured beyond my own knowledge” –

    You have given no indication of possessing any knowledge to venture beyond.

    “Are you aware of what (sic) the word “ultracrepidarian” actually means?”

    Ah, I see I drew blood. Temper, temper!

    John,

    “based on actually, y’know, both having studied regulatory economics and having worked on strategy projects for regulated companies”

    Cue Frankie Howerd – Oooohhh!!OOOOOHHH!!!

  18. Martin: Because there wouldn’t be an Ofgem –”

    You are contradicting yourself again. First you criticise my argument for dismissing regulators as foolish, then when I include regulators for your sake, you suddenly want to ignore regulators. Anyway, as you now want to treat regulators as non-existant, then go back and read my original response and reply to that.

    On the remainder of your post, I notice that you have stopped trying to defend your earlier argument. Before I start in on your new arguments, do you agree with me that a firm, regardless of how it financed buying the UK utility, or what price it paid for it, would seek to raise prices as much as it could get away with?

    “Anyway, Martin, to sum up, I am rather disappointed.”

    Like I give a shit.

    Yes, given that you replied this way, you indeed do.

  19. “Before I start in on your new arguments, do you agree with me that a firm, regardless of how it financed buying the UK utility, or what price it paid for it, would seek to raise prices as much as it could get away with?”

    Of course – duh! And having no regulator will give you a very good reason to raise your prices to a level where people will be forced to pay for it in advance, thereby providing sundry interested parties a fig leaf for inaction while trumpetting their ideolgy’s advance. See above.

    I await the next stage of your argument with baithed breath.

    “Yes, given that you replied this way, you indeed do.”

    Er, no, I don’t. I might be a blowhard, but I do try to avoid the practice of hypocrisy (apart from the obvious example of using supermarkets, but even I need to eat).

  20. Of course – duh!

    Thank you, I am glad that you now agree with me that your initial argument was wrong. Don’t be too hard on yourself though for your initial mistake, many other people have failed to understand companies always as greedy profit-maximisers. Just keep practising it and the neoliberal thoughts will come to you.

    I have thought of another way of making you possibly understand why I mentioned UK companies buying UK utilities. However it does require some thinking in your part. I suggest that you explain to me, in your own words, why you mentioned that it was a Eurozone company that bought the UK utility in your original comment.

    In your second hypothetical example you do depart from the normal leftist economic analysis, in that in this case you appear to be thinking that eliminating the possibility of getting in debt makes it easier for companies to make more profit, while the standard leftist analysis is that companies adore getting people in debt in order to make more profit. You now appear to be arguing that the utilities are not being motivated by profit-maximising behaviour, but by some desire to serve a green agenda. I will have to leave the Greens to argue that one.

    Er, no, I don’t. but I do try to avoid the practice of hypocrisy …

    Yeah right. You told me that you were going to take an ultracrepidarian approach, when I noticed the absence, you contradicted your earlier claim and told me that I had given no indication of possessing any knowledge to venture beyond, and now you contradict yourself again and admit I am right with your “Of course – duh!” This is not a good starting point to try to convince someone that you are trying to avoid the practice of hypocrisy.

  21. “Thank you, I am glad that you now agree with me that your initial argument was wrong. Don’t be too hard on yourself though for your initial mistake, many other people have failed to understand companies always as greedy profit-maximisers.” –

    Manuel, Fawlty Towers – ‘I know nothing!’ Is this your best shot?

    “I suggest that you explain to me, in your own words, why you mentioned that it was a Eurozone company that bought the UK utility in your original comment. ”

    Because a few of them have, you know, done it in recent years.

    “In your second hypothetical example you do depart from the normal leftist economic analysis, in that in this case you appear to be thinking that eliminating the possibility of getting in debt makes it easier for companies to make more profit, while the standard leftist analysis is that companies adore getting people in debt in order to make more profit.”

    Well, they do, don’t they?

    “You now appear to be arguing that the utilities are not being motivated by profit-maximising behaviour, but by some desire to serve a green agenda”

    In this respect I must consider myself to be classical conservative, in that I assume that the utility companies are in the business of selling utility services, and will do whatever they can to stay in the utility business.

    Now, let us scrabble towards the point we might both be trying to make, our fingers tapping on the keyboards like a tunnelling mammal’s powerful front paws paddling through the earth –
    If what we are told is true, within a few short years the UK will begin to feel the effects of not having made sufficient provision for energy supply by building or renewing electricity generation capacity. This failure has had several causes. One is anti-nuclear hysteria whipped up by Greens. Another has been a serial lack of political will to make the case for electricity strong enough to confront said Greens.

    Electricity may soon become more scarce than it is now. When that happens, a privately owned utility can take on the role of rationing it without making any significant impact upon its profits.

    Ofgem is an obstacle in the path of this goal. If we’re in the business of making assumptions, let’s assume Cameron makes good on his promise to abolish Ofgem. Bingo – no inconvenient regulator! It’ll be Gaidarism all over again, but who cares about peasants sitting in the dark?

    Now, the price of electricity will then rise to whatever is claimed to be its natural level, no matter how specious that claim might be. The provisions of the Electricity Act which enable your utility to come and break down your door to fit a prepayment meter if you don’t (or even can’t) pay your bill, they won’t be abolished; that would introduce a shitty factor called ‘risk’ into the equation, and we can’t be having that.

    Now, when the price of electricity goes up, more prepayment meters will be installed. Falling wages and rising living costs will mean that people will buy less electricity. In turn, this will mean that those who lacked the political will to confront the Green lobby will still be able to continue doing the Gaia Shuffle, because the less electricity is bought, the less demand there is for generating capacity. It’s a perfect neoliberal win-win; business wins, government wins, people get shafted.

    As far as the Eurozone element is concerned, the only unknown factor is the speed at which a Eurozone country might move to reclaim a tax break used to purchase a utility. That might be the critical factor in dictating the speed at which any move is made to abolish Ofgem.

    I don’t really fancy sitting in the dark – do you?

    “In your second hypothetical example you do depart from the normal leftist economic analysis, in that in this case you appear to be thinking that eliminating the possibility of getting in debt makes it easier for companies to make more profit, while the standard leftist analysis is that companies adore getting people in debt in order to make more profit. You now appear to be arguing that the utilities are not being motivated by profit-maximising behaviour, but by some desire to serve a green agenda.”

    Perhaps not, but I was getting bored.

  22. Manuel, Fawlty Towers – ‘I know nothing!’ Is this your best shot?

    Oh, stop being so harsh on yourself. Yes, you contradict yourself a lot, and you use words that you show no signs of understanding, but it’s silly to say that “I know nothing” about yourself. At the very least you deserve credit for changing your mind and now agreeing with me because you were convinced by my arguments. A lot of people never get to that stage. For a start, you are right about one thing – this is my best shot at comforting you under the circumstances.

    Because a few of them have, you know, done it in recent years.

    Millions of things have happened in recent years. Why did you chose to mention the case of Eurozone companies buying UK utilities with tax credits, and, not say, the winners of the Melbourne Cup over the same time period?

    “In your second hypothetical example you do depart from the normal leftist economic analysis, in that in this case you appear to be thinking that eliminating the possibility of getting in debt makes it easier for companies to make more profit, while the standard leftist analysis is that companies adore getting people in debt in order to make more profit ”
    Well, they do, don’t they?

    So now you disagree with your earlier analysis of pre-paid credit meters? I find this hard to believe, as you type it all out over again later on.

    In this respect I must consider myself to be classical conservative, in that I assume that the utility companies are in the business of selling utility services, and will do whatever they can to stay in the utility business.

    Well then you’re not a neoliberal, as neoliberals assume that companies are in the business of maximising profits, and thus will go into whatever line of business they think they can get more profits from (this can take into account the company’s existing skill base of course).

    Now, let us scrabble towards the point we might both be trying to make, our fingers tapping on the keyboards like a tunnelling mammal’s powerful front paws paddling through the earth –

    This analysis you’ve put after this is contradicting what you said earlier in your very own comment. Earlier you were ageeeing with the idea that companies adore getting people into debt in order to make more profit, but then you go off and build an assessment based on the idea that companies put in pre-paid meters to avoid getting their clients into debt.

    As I’ve said, taking the neoliberal approach that firms are always greedy profit-maximisers is a change in thinking patterns from the woolly-headed leftist approach, I suggest not giving up at this point, but practising it a bit further before you comment again.

  23. “Well then you’re not a neoliberal” –

    The most insightful comment I’ve seen you produce thus far, Tracy. Viya con Dios, muchacha.

  24. Pingback: Greg Philo replies. And a Bit about Teh Interwebz and this whole Damn Dirty Game we call ‘Blogging’ – Malcolm Bracken

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