The global energy price shocks of the past two years have made it painfully clear that energy cannot be treated as an ordinary commodity. They also offer an opportunity to rethink the push to liberalize energy markets over the past forty years, and particularly the use of markets for electricity provisioning.
Due to the Russian invasion of Ukraine, food prices are higher in real terms today than at any point since the early 1970s. Yet it is the underlying political economy of the global food system that has created the conditions where hundreds of millions of people don’t get enough to eat.
To explain soaring energy prices, we must look beyond supply shortfalls and bottlenecks to the choices that governments have made about how to price energy.
What the "deregulation" of electricity provision--and the ideology of marginal cost pricing that buttressed it--has to do with the catastrophic failures of electricity provision in Texas.
Once we recognize (yet again) that price making cannot be understood in neutral, functionalist terms, efforts to design new markets become impossible to separate from politics and political economy. Viewed in this way, prices are not simply signals or pieces of information that emerge from markets, but also objects of struggle—an insight that one can find in Max Weber’s understanding of markets and prices, in Joan Robinson’s vigorous mid-century critique of mainstream economics, as well as in the work of institutional economists and legal realists, such as John Commons and Robert Lee Hale who viewed prices and price relationships in the context of a broader economy of mutual coercion structured by shifting sets of background entitlements.