Is monopoly a good thing?
If you have a lot of money, it seems the government will change its course
While Haim Ramon is proposing to cut off the electricity supply to Gaza, the government is negotiating a deal that would enable Gaza to produce its own electricity. One hand doesn't seem to know what the other is doing. We should, however, remain positive: Our government is demonstrating open-minded thinking; all options are open, even if they contradict each other. There is no such thing as "in your face" ideology but rather ideological flexibility.
The said negotiations are being conducted with British Gas – an international company that has franchised a natural gas field along the Gaza coast. Israel is now seeking (for some reason, during Ariel Sharon's term as prime minister the topic was taboo) to diversify its gas suppliers and allay fears over dependency on Egypt. Palestine is willing to sell as long as Israel approves and commits not to cut off the supply of gas from the offshore field to the power station in Gaza. The big dispute is over the price.
And here is where ideological flexibility, which symbolizes the Olmert administration, pops up again.
We, the people, are constantly being lectured about the benefits of free competition, free trade, privatization and the other benefits of "piggish capitalism" – as Shimon Peres described our economic policy. Yet whenever the capitalists themselves are concerned, those with the big bucks become flexible. Here is where clear government intervention is required. For the sake of profit, of course.
British Gas wants a lot of money for gas. At the price it is demanding any common capitalist - even a fan of electricity produced from natural gas - would find it hard to compete in the sale of electricity. Compete against whom? Against Israel's giant electricity manufacturer, the epitome of ineffectiveness with its free electricity to employees, high salaries and nepotism – ie the Israel Electric Corporation.
By lack of choice, the wealthy have turned to the government. Save us from the British lion's snarl. Establish a government monopoly, they said, which would buy from the British. You, our dear government, have the power to fight the horrific lion. Use this power to purchase gas for us – cheaply. And lo and behold: The ideology of a free market got lost on the wayside, free trade was abandoned and the government of Israel engaged in Bolshevik negotiations: One monopoly against another.
Dream on
Let's go back for a moment to the Israel Electric Corporation's lack of efficiency – which was the key finding by a foreign consultancy firm hired by the government. In economics, lack of efficiency means that the product, electricity in this case, can be manufactured at a cheaper price. However, our wealthy are power hungry. They find it difficult to manufacture cheaply, even in comparison with the Electric Corporation. And that's how a solution was found: The government will not only buy cheaply, it will also raise the cost of electricity to consumers.
The mere existence of the negotiations prompted the vice pesident of British Gas to find time to meet with Israeli journalists to share his international experience. "You must increase the price of electricity" – that's the motto. The government was happy with the British assistance. The capitalists are happy. Even the Electric Corporation is happy, because this may solve the hardships that stem, according to the government – from lack of efficiency. What a wonderful solution. Electricity will cost more, British Gas will agree to sell us gas, Palestine will have a gas line that Israel would commit not to cut off. Paradise in the making.
If this is so good, why not learn from this positive experience? Why shouldn't the government create a monopoly that would buy bread cheaply from the bakeries, while asserting the government's economic power as a single buyer? And why shouldn't the government sell the bread to the public at a price that suits all? Why is there justification in creating a government monopoly just for the benefit of the wealthy?
What about a government monopoly that would rent apartments cheaply and rent them out to those seeking rental housing?
Dream on – that's the answer you'll get from our preachers of economy. To create a monopoly that would ensure a nice profit for capitalists – that's good and effective. To set up a monopoly that would ensure the same for all – that's ineffective, wasteful and bad.
Where do we draw the line between good and bad? The line is where the money is. Lots of it. If you have a lot of money, the government, it seems, is willing to switch course. To demonstrate flexibility, to recognize special needs. Who said our government was capitalist and lacking compassion?
