Privatized electricity providers are not markets but collusive rentier devices

Evidence

Think about it: only one electricity cable enters your home or business. It is the definition of a natural monopoly. Naturally, if governments were to advocate that such a monopoly be sold to a privateer, who would then have monopoly power over everyone, people would rise up. So, following Margaret Thatcher’s lead, governments intent on privatisation promised magically to create competitive electricity markets around the single grid and the lone cable coming out of your wall: a handful of energy providers, the promise went, would compete in some auction house daily to provide you with the cheapest possible electricity. These pretend auction markets, in which a handful of firms collude to fleece consumers and lesser capitalists, are a rentier capitalist’s delight. (Exhibit A: their immense profits during the energy crisis following the pandemic and Putin’s invasion of Ukraine.) But that’s not all. The rentiers that now own the privatised power generation stations gamble their future revenues in a global casino, borrowing against future revenues in order to hedge against future losses. In plainer terms, our energy systems have been surrendered to oligarchs with a vested interest to entangle energy in the web of financialisation. — Yanis Varoufakis, Technofeudalism, 632

Categorization

• ADDENDUM: Direct follow-up to ‘On Sacrifice: The Real Kind, with Corpses’ — privatized electricity rent extraction is another face of how rentier elites extract value from captive populations.
• SEED: Article angle: the natural monopoly hiding in plain sight — every electricity ‘market’ is a fiction because the grid is structurally monopolistic.
• corroborated: 2 independent passages support this claim — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 632
• XREF: connects to: Electricity markets can never be genuine markets due to natural monopoly — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 631; Monopoly rent arises from low competition, not production cost — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 803; Monopoly power is not a market flaw but a market-driven outcome — Clara E. Mattei, Escape from Capitalism, 281

Broader Connections

• Electricity markets can never be genuine markets due to natural monopoly #corroborates (0.85) — Yanis Varoufakis, Technofeudalism, 631
• Monopoly rent arises from low competition, not production cost #expands (0.75) — Yanis Varoufakis, Technofeudalism, 803
• Monopoly power is not a market flaw but a market-driven outcome #expands (0.72) — Clara E. Mattei, Escape from Capitalism, 281