Friday, December 17, 2010

21st Century Feudalism

The 2010 household survey by the Independent Pricing And Regulatory Tribunal shows that 16% of low income families are having difficulty paying their electricity bills. That’s not exactly surprising, but it is rather surprising to learn that this is the case even though average consumption of electricity has fallen by 6% over the last four years. It’s even more alarming to consider that the figure for low income families with a mortgage is 53%. That means that any further increase in interest rates is going to have a dramatic impact on the ability of those people to pay their bills. But even without any change to interest rates, the one thing we can count on is that electricity prices will continue to rise, putting more and more pressure on people who are already stretched.

The problem has become so bad that people who have already done everything they can to reduce their consumption, turning off lights, abandoning airconditioners and dishwashers, upgrading to low consumption appliances, and eating less hot food, are still seeing their power bills go up, not down. And despite all of the advice from government agencies about the need for investment in the renewal of the infrastructure, nobody can really understand why? Power company executives are getting big juicy salaries, driving around in big fancy cars, and the energy providers are delivering big juicy dividends to the government, so why are the people who can least afford it being asked to pay so much, even though they are actually using less power?

Despite the promise that privatisation will create competition and deliver better deals, nobody actually believes it. Most people expect that privatisation will only lead to price increases as the new purchasers of the assets seek, quite rightly, to achieve a return on their investment. Then of course, there is the expectation that climate change policy will lead to either an emissions trading scheme or a carbon tax, pushing power prices up even further. And to cap it all off, most of us lack the expertise to decipher our power bills anyway, so it’s difficult to determine whether we are being billed correctly anyway, leading to the suspicion that power companies, like banks and the oil companies, are all just taking us for a ride.

Something about all this just doesn’t add up. Every other form of technology gets cheaper as it evolves and becomes more efficient. A pocket calculator in the seventies would have cost you hundreds of dollars, now you can buy a whole computer for the same money, despite the fact that inflation has made the money worth less. So why is the technology of power production getting more and more expensive? Surely, over the decades, we should have been getting better and more efficient at it, so that energy in the 21st century would be cheap as chips. Sure, there are costs involved in developing new technology, and we tend to use more energy than previous generations, but it’s easy to develop a suspicion that consumers are becoming 21st century feudal serfs, lured into a state of perpetual indebtedness to big corporations.

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