The Price of Power
Playing Monopoly With Power
The Blackout and Deregulation
Annual General Meeting
Date: Saturday November 1, 2003
Time: 9:00 AM – 4:30 PM
Place: Travelodge Hotel Toronto Yorkdale
2737 Keele St. (north of 401),
(formerly Triumph Hotel)
$50 at the door or $40 before October 25, 2002.
If you live in one of the ridings listed below you will be able to vote for a Libertarian. Check our website for the latest list. Please support them, not only with your vote, but with your time and/or money. Running as a Libertarian candidate is often a lonely job.
If you don't have anyone to vote for, you can vote for "None of the Above." Go to your polling station and when they give you a ballot, hand it back and tell them you decline your ballot. These are reported separately from spoiled ballots.
Durham Bill Turley 905-697-2340
Davenport Nunzio Venuto 416-651-8378
Oxford Kaye Sargent 519-469-3581
Scarborough East Sam Apelbaum 416-283-7589
Simcoe-Grey Philip Bender 905-702-1277
Trinity-Spadina Judson Glober 416-629-6145
Vaughan-King-Aurora Paolo Fabrizio 905-851-7953
“We had a terrific time this year,” wrote George H. Smith to me in an email, “I think this was the best conference thus far. I was especially pleased with the high quality of participants.”
George H. Smith was a speaker at this year’s annual Liberty Summer Seminar—the pre-eminent event of its kind in Ontario, the only one of its particular kind in Canada and, quite possibly, North America. The event, held on the August 9-10 weekend, was an incredible success by all accounts.
Here’s a look at some of the numbers: 49 “high quality” participants including those who came for one day only; Five “incredible” headline speakers: Five “surprisingly generous” meals for which my mother received many compliments: Two incredibly intense days of talks, campfires, chats, hugs, and discussion.
This year the OLP didn’t stand idly by while an incredible opportunity to defend liberty materialized—once again the Party contributed, with $750 to help defray another Speaker's Fee.
Saturday afternoon saw George H. Smith give an historical discussion entitled “The Ideas of Liberty” that introduced the crowd to libertarian principles and ideas as well as to George’s incredibly vast and thorough reading. Jan Narveson then defended the market on ethical grounds in a talk entitled “Liberty and the Market.” Jan’s talks, which he gives in bare feet, demonstrate why he is this country’s foremost libertarian philosopher.
After a quick break, Marni Soupcoff, in a talk entitled “Liberty and the Law,” gave all of us practical examples of government violations of property rights that sparked conversations well into Saturday night (or, rather, Sunday morning). Claudia Hepburn followed with a speech about “Educational Freedom” that had all of us rooting for the Children First: School Choice Trust program operated by the Fraser Institute.
Sunday saw Louis James give an adventurous and original talk entitled “Why Fight the Culture War?” that has since led to numerous new sign-ups for www.bureaucrash.com. Jan Narveson then eviscerated modern-day environmentalists for their senseless prattling. Our panel discussion featured activists, intellectuals, writers, and campaigners (including Ontario Libertarian Party leader Sam Apelbaum). George H. Smith brought the Seminar to its conclusion with a surprising talk, “Liberty and Sociology,” that attempted to show sociology as a discipline where liberty can and has flowered—in contradiction to the sociology departments of today!
So I say it was the highlight of the summer. But don’t take my word for it. Louis James, for instance, had this to say, “…the Seminar itself was a gift. I greatly enjoyed meeting so many intelligent and enthusiastic young people, as did my sons.” John Durant, a second-year student at Harvard University, said “I emerged from the two-day Liberty Summer Seminar reinvigorated by the speakers, participants, food(!), idyllic location, and, of course, by the ideas of liberty.” Jan Narveson told me it was the best year yet by far. Kevin Kane, a student at the University of Waterloo wrote, “Thinking about it, all of the speakers were first rate!! I was really impressed with the quality. I would love to spend time individually with all of these people, including a lot of the attendees. Congratulations on such a fine run event, and attracting such high-calibre people!”
All of which is to say: Make absolutely certain you are there next year.
On the evening of the Great Blackout, I reached home with an hour of sunlight left. My wife and I quickly took inventory. She had loaded up with water, in case the pumps failed. We had candles, and a new flashlight (thanks to my attending the Liberty Summer Seminar earlier in August). We had two battery-operated clocks for the time, and two portable radios - with plenty of stations broadcasting.
We even had a battery-operated CD player; but (oops!), no C size batteries for it. No problem; said my wife; "I’ll go see if I can find some." She took the flashlight and left.
She returned, empty-handed and in a rage. No luck? No, she told me, she had found an open gas station, with plenty of C batteries in stock; but with the price raised to $9.00 for two. "That’s gouging!" she declared. I agreed; there was no way we were paying $45 (after taxes) for 8 batteries.
Two days later, the local mall open, my wife stocked up with batteries of all kinds (including C’s, at four for $1.00). By then, we could look at the ‘gouging’ incident more reasonably, and realized a few things:
(1) The ‘gouging’ hadn’t hurt us. My wife had walked for an hour, for nothing, but she was prepared to do that anyway: she might not have found an open store with batteries. It cost us no money at all; just as the station was free to demand too much, we were free to say, "No."
(2) If the station had not hiked its price, my wife probably would have bought the batteries; but so would everyone else who had got there first. They could well have been sold out, leaving us in the same situation we chose to be in anyway - except, in that case, we would have had no choice.
(3) All of us who refused to be gouged, in turn gave later shoppers a choice. Anyone needing batteries more urgently, or needing fewer, would have some available. By raising the price, the station effectively rationed its batteries - telling shoppers to conserve them for those most in need. By saying no, we agreed to conserve them. The station didn’t want to conserve batteries, but to sell them. Nor did we care about saving them for more needy consumers; we don’t even know those people. Yet thanks to the ‘invisible hand’ of the price system, that is exactly what we did by our own choice.
Then we turned on the TV news: and there was Premier Ernie Eves, warning of more blackouts and pleading with us all to conserve electricity. We had to laugh. We had just seen the effectiveness of the price system as a way of conserving scarce resources. Yet, thanks to Premier Eves, there is no price system for electricity in Ontario.
Last year, in a burst of desperate opportunism, Eves unilaterally reversed his party’s policy and capped the price of electricity. Residential consumers pay a maximum of 4.3 cents per kilowatt/hour, no matter how much they use; Ontario taxpayers subsidize the rest. Eves has pledged to continue his subsidy for at least two more years.
After the blackout, Eves knew that electricity was scarce and had to be rationed. Yet he himself had prevented the most effective (because purely voluntary) means of rationing - price increases. All he could do was beg us to us less power - which we were free to obey or ignore - and threaten us with the involuntary rationing of brownouts.
If Eves seriously wants us to conserve power, he should let the most effective system operate - which means acknowledging his mistake, and ending his subsidy. But don’t expect that to happen. For, judging by his performance to date, the one thing Eves will never do is acknowledge a mistake.
The kid screams into the back yard - says the power is off! I think little of it at the time as minor power outages are all too common in Newmarket and we are enjoying some sun on a day off anyway. Leave the DVD and come join us for five minutes I say. Hours later it’s beginning to look a tad more serious – but still a festive air breaks out in town. In a scene reminiscent of ‘The Simpson's’ show when TV gets censored into such blandness people will not watch TV and the people are out in the streets in numbers rarely seen. At night the camping lights come out and life goes on even if not everything in the fridge will survive as well as the people did.
While the technicians scramble to come up with reasons “why” and the bureaucrats likely try to hide what they find if the “why” is inconvenient the answer is very simple. A power outage this total only happens if there is a government enforced monopoly. In a free market there would be multiple suppliers – excess capacity that could be diverted – and only the people who had the misfortune to use the incompetent distributor would be affected. If the supply disruptions continued people would leave the incompetent distributor, it would go bankrupt and the more effective companies would take over. However, since electrical power has been deemed to be essential the government has mandated a monopoly on supply and we have a very different situation – with the attended much higher risks of the lack of diversity that a monopoly implies.
Consider what would happen if Sobey's went out of business tomorrow. Despite some government regulation the food industry is by and large a very competitive free market. While there would be a minor inconvenience for some customers the people needing food would simply go up the street – that is how the free market works. The socialists cry but that is not the same and electricity is an essential service – then but how is food less essential than electricity? They say the unique means by which electrical power is distributed makes it more cost effective to have a monopoly - but if anyone has read a balance sheet you can see that the local distribution costs are low compared to the other costs in the system under a monopoly.
The politicians now with one voice explain that the (incompetent) distributor just did not have enough of a monopoly. In Ontario, despite the system being 100% owned, controlled and regulated by the government it is deregulation that is the culprit? It’s as if the Iraq minister of misinformation is alive and well in North America – except in this case, many people do not see how obvious the lies are.
The politicians try to claim that a minor failure of one supplier caused the problems – maybe a lightning strike as Jean claimed or a failure of one shoddy supplier in the US. Clearly they are unable to see the forest for the trees. This monopoly was a problem waiting to happen – and it will happen more as any hope for deregulation now fades and as government regulations make it increasingly hard to install new capacity. The lack of supply is not being addressed so we are asked to cut back and conserve, clearly with the current mood in Ontario the situation will get worse before it gets better. Best get out you camping equipment – you may need it till a libertarian government is elected.
It was bad enough that some of us had to go 26 hours or more without power during a heat wave. But there were a few other things on radio and TV that really annoyed me.
First was the attitude of the IMO (Independent Electricity Market Operation). One woman was asked on TV if she was conserving energy. She admitted that she had her air conditioner running in her one bedroom apartment. Terry Young of the IMO was highly critical of such an attitude and commented that if everyone thought like she did, we would be in deep trouble. And of course there was the ever-present threat of "rolling blackouts" if demand exceeded supply. This is typical of a monopoly organization. It is never their fault. We the customers are to blame for wanting too much of their product !
Second was the suggestion that deregulation of energy in Ontario and New York might have contributed to the problem. "Let's see if we can blame private enterprise." However, only power generation has been deregulated in Ontario (sort of) and so far 70% is still owned by Ontario Power Generation (OPG), part of the old Ontario Hydro and still a crown corporation. The transmission lines are still owned by Hydro One, the other part of Ontario Hydro, and also a crown corporation. And it was the transmission lines that caused the problem. I don't mean the transmission lines in Ohio that are thought to have initiated the problem. The real question is why a failure in Ohio caused the Ontario system to shut down. Why doesn't Hydro One have some mechanism in place to disconnect from the grid when a sudden power surge occurs? We can't blame deregulation for Hydro One's failure.
Some argue that as a result of deregulation the system is carrying more power and it is traveling much further than it was originally designed to handle. If you've seen the Ernie Eves ads on TV (paid for by taxpayers), you know it is the million new jobs created in Ontario during the last seven years that has added to the demand for power. Did Hydro One fail to upgrade the transmission facilities to handle the increased load? We can hardly blame deregulation for the increased demand for power. In fact, if Ernie hadn't capped retail electricity rates, demand might have been lower as consumers found ways to reduce their consumption and costs. We might as well forget about private investment in power generation in Ontario. Who would take the risk that that rates for power generation won't be capped when the cost of subsidizing electricity gets to onerous for the government of the day?
Finally, OPG has not been doing a good job. Two of the nuclear reactors at Pickering are months behind schedule getting back into operation and millions of dollars over budget. The US has more of their electricity generated from nuclear plants, but they were back to full capacity in a couple of days while we waited over a week for our nuclear generators to become fully operational. When asked why we were taking so much longer, the president of OPG claimed he was putting safety first. The implication was that US power companies were being reckless.
Get ready for more regulations and restrictions as the government tries to "fix" the problems they created.
The idiot gun control law – espoused by Ottawa Liberals – is having a very negative effect on people who thought of themselves as law abiding upright citizens. They still think that way, but because of the propaganda going around are starting to see themselves as second-rate citizens who are now hunted by Liberals. But what is even scarier is the attitude of some police forces in Ontario.
There was a time when we thought of the police as our friends. Many of us have started to think that police are now the enemy. There are more and more incidents where police use a sledgehammer to squash a fly - and its not good. This is happening elsewhere in Canada, but also in Ontario where the provincial government is trying to tell gun owners they are friends.
Take the case of Jonathon Logan. In May, the 29-year-old Barrie-area resident was strip searched in front of his home by a dozen armed OPP officers simply because he was previously seen shooting groundhogs in a nearby field at the request of the farm’s owner. Although the police had no grounds to arrest him at the time (he had all the registrations and licenses and the 22 calibre rifle he was using had been properly cased and unloaded) he was coerced into signing a consent to search his home without warrant because the police would not allow his family enter his home to provide the hourly feeding and medication to his 3-year-old son Joshua who was recovering from a heart transplant. There the police discovered a single unloaded 22-caliber rifle and 22-caliber ammunition, providing them the grounds to arrest him for the unsafe storage of firearms. See the details at website http://www.helpjonathan.com.
This is a total disgrace; the officers (if you can call them that - thugs is a better word) should be behind bars for a long time. It offends all decency.
The problem is this is not an isolated incident - it is becoming the norm. A few weeks ago the local police showed up at a house looking for someone - guns drawn. The problem? The person they were looking for had never set foot in the house. They did search the house with no authority, as far as I understand. With kids playing there and guns drawn - ask yourself - what if that had been my house?
Another Ontario election campaign is in progress. From election to election different actors perform more or less the same show. Once again we hear the same dreary accusations and phoney displays of indignation about what the other party’s reprehensible candidate has done or is likely to do. Once again the usual ridiculous arguments about who can best fix government medicine and education. The issue of electrical power or, more precisely, its absence and expense in a centrally planned and government-regulated environment, is a new twist.
Although shallowness, mediocrity and waste are common wherever and whenever the government is involved, the public carries on electing politicians who, whether motivated by conviction, ignorance or power lust, advocate socialism in one form or another.
Thereafter, the same public continues to expect, demand and ultimately suffer from their incompetent and pernicious interferences with almost every aspect of peaceful life. Those nurtured and sustained by collectivist culture continue their relentless assault. The busy bodies, the envious, and the groups seeking unearned rewards and privileges at the expense of others diminish and destroy future possibilities not only for others, but also for themselves. Our party mission is to enable endless possibilities through recognition of, respect for, and protection of individual liberty.
Elections present opportunities to enlighten and attract people who are inspired by our mission statement. I urge you to support those brave and dedicated persons who are participating as candidates for our party in this election. Volunteer some of your valuable time to them. Support them financially and take advantage of the generous tax credits. It can be a lonely experience to be a libertarian candidate, and your help will be appreciated.
I admit to repeating myself often in columns such as this one with regular requests for assistance from our supporters. We are not numerous enough to afford inactive libertarians nursing their thoughts in private. Every one of you who is in action will influence future outcomes far more than those working in the camps of your rulers. To achieve that you will have to leave the sidelines and participate to the extent you are able. Working together within an organization such as our party will allow you to accomplish far more than you ever could on your own. In spite of everything, we are still, for the most part, able to express ourselves freely. Act while you can.
The World Health Organization has identified depression as the fourth heaviest burden to society and predicts that it will become the second leading cause of disability worldwide – after heart disease - by 2020 unless strides are made in prevention, diagnosis and treatment.
Today, more than 340 million people worldwide, 18 million in the United States alone, are estimated to have depression at any one time. Experts calculate that 13% of men and 21% of women suffer severe depression sometime during their lives. This, at a cost to the economy calculated in billions of dollars in lost productivity. Not to mention payments in short-term disability the insurance industry must endure for its treatment.
When we look into the causes of depression we find in, many cases, it is a psychosomatic illness caused by the reduction of nerve transmitters, such as serotonin, which occurs when individuals essentially “turn themselves off”. By turning themselves off, we are really talking about suppression of one’s true nature. As Abraham Maslow put it: “When this inner nature is not allowed to develop, if it is denied, or suppressed, we get sick, sometimes in obvious ways, sometimes in subtle ways, sometimes immediately, sometimes later."
For many, this suppression of self is a resignation response that occurs when individuals are victimized by authoritarian figures, to conform to societal standards at the expense of the self - under immense pressure or threats of punishment. Abraham Maslow quipped that these individuals were “well-adjusted slaves”. Of course, there’s no such thing as a well-adjusted slave.
Maslow also stated, “sick people are created by sick cultures”. A sobering thought as ever-increasing authoritarian governments take away individual choice and suppress individual freedom and expression, essentially making our culture more sick thus creating more sick people.
It is therefore not surprising that depression will become more prevalent as authoritarian governments force us to become more “well adjusted”.
Educational Freedom - By Jim McIntosh
Education is one of the issues the Ontario Libertarian Party will be focusing on during the election, so it was fortuitous that Claudia Hepburn of the Fraser Institute was at the Summer Liberty Seminar to talk about their "Children First: School Choice Trust" program. This is Canada's first privately funded program that helps parents in financial need send their children to an independent school of their choice.
The Fraser Institute, with the generous support of The W. Garfield Weston Foundation, launched Children First this past January, offering 150 grants for children in low-income families entering Junior Kindergarten to Grade 8. In two months, with a very small marketing budget, they received 4,263 applications. Each grant will pay 50% of tuition up to a maximum of $3,500 every year until the student completes Grade 8, as long as they remain eligible. Grants may be used at any independent school registered with the province of Ontario.
The average tuition for successful applicants was $6,300 for the 2003-04 school year, compared to a cost of about $7,000 for government-run schools. The average family income for the participants is $25,300. Children First will offer additional grants to another 150 students in each of the next two years.
The Fraser Institute hopes that in addition to making a difference in the lives of the participating students, this program will bring the issue of educational freedom to the attention of public policy makers, and demonstrate that all families, including those with very limited financial means, want the best for their children.