Video: The Perverse Incentives of Utility Companies

There are a lot of ways in which our political and economic system is set up to prevent effective environmental action of an type. It’s one of the reasons why I think we actually need “revolutionary” systemic change. As things stand, the most powerful entities in the world are fighting against climate action, which means that until we take their power away, we will not be able to change course. We might be able to slow down a touch, or make slight changes in direction, but everything about our world is designed to block radical change in a leftward direction. It’s pretty obvious that moving things to the right is easier at this point.

This video breaks down how that problem manifests with utility companies in the United States, and I have to say that while I knew the situation was bad, I didn’t know it was this bad. I think a key thing to understand going into this is that “The Free Market” has always been a myth. It never existed, and never could exist. Even if we reset everything to zero tomorrow, under the right-wing libertarian model, you’d quickly see people accumulating wealth and power, and using that to manipulate the market just as they do today. That means that from the beginning of capitalism, the boundaries, freedom, and incentives of “The Free Market” have always been set by the government, generally following the interests of the capitalist class.

With that as an introduction, the TL:DW of this video is that all of the profit incentives for utility companies, combined with corporate law, basically require them to oppose distributed power generation, renewable energy, grid maintenance, and a whole host of other things. The end result is that the incentive structure is set up based on the circumstances and thinking of the 1930s, and the U.S. government has become too dysfunctional to change course since then. This is one of many reasons why capitalism needs to be replaced with something that actually values life and freedom, if we want humanity to survive, which I do.


  1. lorn says

    IMHO it helps to remember that economic/ government/ social systems are all just options. All of these individual systems tend to present themselves as the ‘best’, sometimes the only, or the only rational, option. Sometimes this might be mostly correct but independent of context and situation all options can, conceivably, have a time and place.

    On relatively boundless frontiers with little need to be concerned for resource over exploitation and serious pollution a raw, and less regulated form of capitalism will rapidly explore the main economic options and quickly establish relatively stable flows of labor, capital, and resources. Without regulation or countervailing forces, like unions, labor will be hard pressed and externalities are likely to be unaddressed and building up but to get things going a less encumbered free market capitalism seems to be a good option.

    In a more confined environment, like a remote colony, particularly if there are real-time existential threats, a more socialistic, possibly even an autocracy might be advantageous.

    In the case of a lifeboat with very limited supplies a fairly strict communistic structure with democratically chosen leaders might be more effective. Particularly when dissent might be disastrous for everyone.

    The point here is that all of these systems should be thought of as tools and/or options. Perhaps the biggest question is how, exactly, does one transition from one system to another. It’s not so bad when the population is just a few hundred people. When you get into nation/state entities which may have remained relatively stable for many generations, developing traditions and deeply vested interest groups which are going to tend to resist change things become more fraught.

  2. says

    First off, I reject the notion that more socialistic is in the direction of autocracy. My preference for “more socialistic” in the confined environment of this planet, would involve bringing democracy to the economy, not replacing capitalism with state capitalism. That means stuff like worker cooperatives/self-directed enterprises. That means investing in communities rather than police and prisons. That means viewing ourselves as a part of the ecosystems we inhabit, rather than in conflict with them, and acting to steward those ecosystems, for our own benefit.

    All of that means LESS authoritarianism, and LESS enforcement of conformity.

Leave a Reply

Your email address will not be published. Required fields are marked *