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Editorial: System change is what’s needed to end speculation and price-gouging

THERE is no crazier illustration of the crackpot capitalist economics than Britain’s privatised energy business with its runaway energy costs and soaring profits.

Our energy comes from the North Sea, from coal, flows from nuclear power stations, arrives as liquid or compressed and frozen gas in ships or is transported via pipelines far away in the east.

Some of it — not enough — comes from renewal sources. It is a technically complicated process to deliver power to industry, commerce and the domestic consumer but human ingenuity has successfully tackled these challenges.

The big energy monopolies present themselves as disinterested guardians of the natural world and our planet. 

A whole shoal of energy enterprises who compete for our custom have gone bust after their artificial market collapsed. 

This occurred when the contract prices which they offered to customers proved inadequate to meet their future obligations when the wholesale price of energy went through the roof.

More human ingenuity has been expended to make the transactional mechanics of this delivery as opaque as possible and, at the same time, obscure the reasons for the massive rises in the cost of energy and thus of living.

This is set to rise beyond our wildest imaginings and over the next year the purchasing power of our wages are set to fall by an amount unprecedented in this century and the last.

Wages, especially in the public services and the NHS, have been held down for a decade. This makes it especially difficult for bosses to blame the rise in inflation on “unsustainable” pay claims.

Nevertheless, profits will not suffer. We already have a stark illustration of the way ruling-class power has ensured that energy company profits surge.

At every stage of the energy business there are opportunities to speculate and profit — and profit is sacrosanct whenever private ownership exists. 

Take out private ownership and immediately governments have an instrument for shaping the economy in the interest of people before profit.

We can bet that if France’s President Emmanuel Macron had not faced a re-election battle over the last weeks, and if EDF/GDF were not still in public hands that French consumers would be facing the same price rises as us.

Yesterday the Bank of England hiked up interest rates “to manage inflation,” which is set to reach 10 per cent soon. 

Raising interest rates means that millions with variable mortgages will faced a call on their already devalued wages, piled on top of the tax increases, benefit cuts and soaring fuel bills. This will feed through in rent rises and more price rises.

Set against Chancellor Rishi Sunak’s policy — to signal corporate tax cuts that benefit the rich — the class character of the the system could not be made any clearer.

There is a story, possibly apocryphal, but nevertheless convincing, that the New York gangster Frank Costello found himself banged up with a trade unionist.

The workers’ leader, imprisoned for his Communist Party membership, naturally fell into conversation with his cellmate to reflect on their various encounters with the bourgeois state that led them to share a cell.

“Why do you rob banks?” the gangster was asked. His reply: “Because that is where the money is!”

Today the energy companies might be a better target, but attractive though this idea is it would be only a temporary setback to the rich and powerful.

To make permanent the redistribution of wealth to the people who create it, we need system change in which public ownership is coupled with a planned economy and there is no opportunity for speculation and price-gouging.

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