"Modern man still is anxious and tempted to surrender his freedom to dictators of all kind" - Erich Fromm
"This will only affect businesses, not ordinary people" - that's what I hear from people in Europe when I ask about their electricity bills. The person continues, "most of the people here are ready to sit in the cold just to break from dependency on Russian gas."
Saifedean Ammous wrote in The Bitcoin Standard that government money only serves government officials. This is especially true with regulations. The government regulations only serve government officials. Rules are only applied to people who are not writing these rules. So, let's talk about the Energy Crisis and how ordinary people are going to pay for it.
First of all, if businesses are affected, everyone is affected. Large companies and corporations have deeper pockets and can survive through various market shocks and crises. However, it's different for smaller businesses which will have two choices. Either shut down or drastically increase their prices to cover growing expenses.
Both of these options will lead to even larger price increases. Firstly, due to reduced supply (since some businesses will have to close down), and secondly, due to growing expenses that will be passed on to consumers.
Each household has a limited budget. An electricity price increase (even a slight one) reduces the share of free capital that you would spend on something else. That share will be reduced even more when you go grocery shopping and realize that the price of basic products you need has increased.
As your spare budget decreases, you’ll start rejecting other unnecessary purchases such as vacation traveling, clothing, entertainment, etc. Your spending reduction strategy will directly affect the businesses that are offering "unessential" (for you) items. These businesses will either close down or increase their prices even more.
How did we end up here with only two poor choices on the table? When you have a poor choice or a poor deal that means someone else may have gotten a good one. If you've lost that means someone else has probably won.
If it was a free economy (market), prices would be decided based on supply and demand. Losers and winners would be constantly changing. However, we don't have a free economy. What we have is a government-regulated economy.
Russia stopped its gas supply to Europe indefinitely causing an immediate energy crisis and electricity costs to increase in Europe. Why in 2022, with a massive amount of oil and gas reserves worldwide, do we suffer an energy crisis?
First of all, the oil & gas industry is heavily regulated. According to the AGI, there are a few primary reasons for such heavy regulations: "protecting the environment, protecting cultural resources, protecting workers’ and the public’s health and safety, and reducing wasted resources."
This is outrageous. The real objective to impose such regulations is price manipulation and wealth accumulation.
Let's be honest. Renewables are not even close to replacing fossil fuels that, for example, generate 60% of electricity in the U.S. and all of these "emission-free" Teslas.
The current energy crisis is a result of the government's interference with the market. They later come up with ridiculous solutions like "Mandatory demand reduction targets for electricity consumption".
I want to see them following their own rules. They won't of course. We all know it. Remember Boris Johnson’s quarantine parties? Well, this winter, we're about to witness the hottest summer in European politicians' apartments.
The government regulations only serve government officials. You're either in the club enjoying your life or you're working for the club making sure everyone in the club is having fun.