Showing posts with label the free market. Show all posts
Showing posts with label the free market. Show all posts

Thursday, 18 July 2013

SMALL IS BEAUTIFUL


Small may very well be beautiful in relation to energy in Germany (2012), 22% of the countries energy came from small scale green entrepreneurs.  Community co-operatives (both urban and rural), farmers and homeowners are part of the 1.3 million renewable energy producers. Small scale electricity generation is having a knock on effect; the energiewende is encouraging change throughout the energy system. In Berlin a community cooperative Is aiming to take control of the capital's electricity grid with some 35,000 km of underground cables. Co-operative members have taken on the established energy companies and are attempting to fight off the Chinese state grid which is trying to get a foothold in the German energy market. Around 1,300 Berliners have invested their cash in the venture. This is grass roots energy generation that has potentially the power (no pun intended) to change the nature of the energy supply system (in Germany and elsewhere). They aim to build an energy grid that is better handle the rise of green power and allows local use of locally produced energy. This development is a million kilometres away from the so called ‘Free market’ for energy that exists in the UK, which is pretty much dominated by the ‘Big 6’ energy cartel members. With the way the current monopoly is set up, it is difficult to imagine ‘Government’ at any level in the UK buying into the concept, let alone the practicalities and possibilities of genuine community owned and community beneficial energy generation projects even crossing the collective mind of Westminster and Whitehall. 

Friday, 19 August 2011

ANNIVERSARIES...

Yet another anniversary, this time the twentieth anniversary of the failed Soviet Coup attempt which brought about the final demise of the Soviet Union. At the time I watched most of it live on TV in my office in South London with my colleagues, the defining moment was, at least from where I was sat was the moment when Boris Yeltsin walked boldly out of the White House, and climbed up onto the tank, shook hands with the tank crew and turned to speak to the crowd and the world, declaiming to the assembled Moscow residents and representatives of the worlds media, saying:

Boris Yeltsin outside the White House
 "The clouds of terror and dictatorship are gathering over the whole country. They must not be allowed to bring eternal night." and “You can make a throne of bayonets, but you can't sit on it for long.”

Twenty years down the line, and with the benefit of hindsight it's pretty clear the botched coup merely speeded up the demise of the Soviet Union. With the people on the streets (the defiance was not just confined to Moscow for example 10,000 protesters flooded the square in provincial Sverdlovsk and there were no arrests) the forces of reaction stalled, blinked, drank and crumbled.

Soviet communism was finally exposed live on TV as the repressive force it was, it ended up discredited in the eyes of the Russian people and proved itself unequal to their hopes and aspirations. A one party tyranny based state that emerged from the chaos of the first world war, two revolutions and a bloody civil war some 74 years previously, quietly rolled over and died as Russia was reborn.


People and Tank in Moscow 
 Yeltsin and the democrats were helped by the fact that the Soviet Coup plotters might well have had Stalinist impulses, but they thankfully lacked both the competence and the cruelty of their predecessors. The fact that the generals and the soldiers on the ground lacked the will to bathe Moscow in blood, write it up in orwellian newspeak as a victory for soviet socialism. The KGB leaders on the ground (it emerged afterwards) point blank refused to storm the White House (in St Petersburg the KGB apparently supported the Russian democrats), they were unwilling to spill so much blood, and two Generals threatened to bomb the Kremlin in retaliation if the White House was stormed.

By the time Gorbachev came back to Moscow he was literally coming back to another country. Boris Yeltsin, was now running the show and the state, Russia was back. I remember the live defining theatrical moment, when Yeltsin forced the then Soviet leader to sign the all-powerful Soviet Communist Party out of existence. The reality was that after more than 70 years the Soviet Union was rapidly dissolving day by day and moment by moment, as the various republics declared their independence and their independence was recognised by Russia and the Western powers.

What followed was a high speed and shockingly chaotic transfer of the old institutions of Soviet state to the new Russian state. On the 8th December, Russia, Ukraine and Belarus renounced the (1922) treaty that had created the Russian dominated Soviet Union. On the 25th December (our Christmas Day), Gorbachev duly resigned in a tv broadcast and accepted the dissolution of the world's second superpower, the Russian flag was duly raised over the Kremlin and the party was well and truly over, but, one mother of a hangover was to follow.

Sadly the fledgling Russian democracy was in no condition to deliver on peoples hopes and aspirations, the democrats found themselves rapidly pushed out of the corridors of power and the era of the oligarchs began. The much trumpeted privatisations brought in millions for the privatisers (and some of the former state officials) but brought in a flood tide of chaos, corruption, poverty and misery to millions of ordinary Russians. All of this may go some way to explaining why there so much disillusionment and cynicism in modern Russia today.

The Russia that emerged was quite different from its new independent neighbours, and not just in scale, but in historical experience and character. The country had suffered waves of emigration (some voluntary, some not) with the departure of aristocracy, the business and educated and professional classes. Stalin's terror, the great patriotic war and the inertia of the late 1960's, the 1970's and the 1980's all left their mark in memory, attitude and expectation.

If we are being honest, some of this is our fault, certainly in the early 1990's there was a marked failure in the West, to accept that Russia, was not the old Soviet Union. The West never reached out to Russia either economically or politically. Russia by way of comparison with the largess that was handed our to the old Soviet-bloc countries waiting to join the EU, did rather badly. The Western leaders desire to create 'a new Europe' oddly enough did not stretch to include Russia.

Instead of support and help to build democratic intuitions all Russia got was an ill-thought out hurried crash course in free-market economics not to mention a degree of criticism over Russia's failure to meet Western democratic and judicial standards. It was consummate arrogance on the part of the West to think that the western European trans-atlantic model of 'free market' capitalism would work in Russia, one size does not (and did not) fit all. When the Russian democratic system belatedly began to throw up popular choices that the West did not like then help to tweak the election results in favour of Boris Yeltsin was duly forthcoming.

The combination of institutional corruption, selective intolerance of democratic opponents, extra judicial murder of journalists (and critics of the regime), suspicious deaths in custody and occasional bouts of hyper inflation (which eradicated ordinary peoples savings), border wars and terrorism have left modern Russia and different and a depressing pseudo democratic state. Throw in the activities of the pro Kremlin media moguls (who would make News International look like a bunch of cack handed woolly headed amateurs) buying up or closing down opposition news organisations and is it any wonder that democracy in Russia stalled.

Perhaps if the Soviet Union had lingered longer and gone through more of transition to representative democracy then things might have been different. Russia was half-way through its own revolution when the Soviet Union collapsed around it. Things were different in middle and eastern Europe where the Baltic peoples and the East and Central Europeans literally overthrew the old system and started things with a reasonably clean slate. Poor old Russia was left to muddle through and to attempt to sort out several things at once.

The welcome exposure of communist ideology as the empty shell it was helped to bring about the collapse of the Soviet Union. However, it's important to remember that the overthrow of communism and the dissolution of the Soviet Union were two different but intertwined processes. The events of 1990 and 1991 were as as much a clash between Russia and the Soviet Union, as visibly portrayed by the personal struggle between Yeltsin and Gorbachev, as they were any meaningful argument about any form of ideology.

In middle and eastern Europe the former Soviet client states were able to start anew, with new institutions and (in most countries) new people, Russia's revolution focused on a recovery and restoration of it's lost sovereignty. Russia has, amongst other things been over the last twenty years recovering its history, borders, statehood, and its historic mission. All this took place while Russia was also attempting to find its place in the new neighbourhood (near abroad) and the new world (far abroad).

With Russian statehood came a wave of re-branding and re-imaging as former Soviet institutions emerged as all Russian institutions. The old KGB for example was reborn and re-branded as the Federal Security Service (FSB), the same process took place in a host of other organisations. Yet old Soviet habits died hard and old Soviet mind sets lingered on, if not clawed back some of their previous prestige and power. Despite everything that has happened Russia has not turned into Upper Volta with nuclear weapons and no gunboats have appeared on the Volga as was predicted by some commentators in the 1990's.

Russia has not gone backwards, things are different both significantly and more subtly, modern Russia is not the former Soviet Union, we are all somewhere different. Any half baked partial restoration of the Soviet past will not work as every year that passes a new generation who have no memory of the CCCP comes through the school system. Putin, despite his faults and the work of the Kremlin spin doctors, is no Stalin, no Yeltsin, yet may be more of a Brezhnev. Personally he is one of the generation that crosses the great divide - the latter years of Soviet Union, the turbulent years of the economic and political transition from 1989 to 1992, and the free market chaos of the mid-1990s.


Prime Minister Putin
 Putin as president and prime minister may, when the dust settles and we look back in hindsight from another twenty years in the future, have provided Russia and the Russian people with some hard earned breathing space and settled things down, but at what cost? The last twenty years have been rough for the Russian people, who have lived through a lot since 1914, war, revolutions, Stalin's terror, the great patriotic war and the gulags, not to mention Kruschev, Brezhnev and the demise of the Soviet Union. There is also the loss of Soviet Empire to consider, a Russian acquaintance once told me that the British had sixty years to get the loss of their Empire (and some have not got over the loss), while the the Russians had a fortnight - ouch!

The West and the Europeans have clearly missed opportunities (some of which were loudly pointed out at the time) to help Russia. Russia should have been offered the hand of friendship, not to mention NATO membership and in my opinion some sort of most favoured nation trading status within the European Union. There should have been real support (financial and otherwise) for the transition of Russia's economy and institutions towards a fully fledged democracy. Had this been more forthcoming than not only might modern Russia have been different and more democratic but the European Union might well have been different as well.

As for Russia, the ball is firmly in their court, perhaps the children and grandchildren of the people who courageously stood up to the attempted coup in August 1991 will finally reap the full benefits of a fully democratic and free Russia rather than the fragile democracy that exists now. Some terribly grim things were done in the name of Soviet state Socialism, but, not everything the Soviet Union did (as least domestically) was bad. That said, a rose tinted nostalgia for the past won't butter bread or fill your petrol tank or keep a roof over your head.

And here in the West, as well as in Russia, there are those who have also not adjusted to our new common realities, the fall of the wall and the demise of the Soviet Union should have led to the loss of those tired old (and now pointless) labels of 'left' and 'right.' The new game is called globalisation, and people, communities and nations are mere commodities and as it's largely bereft of ideology - it's now about how we deal with the worst of its social and economic consequences.

Friday, 15 July 2011

A POVERTY OF IDEAS?

It's official, more than a fifth of all households in the UK were affected by fuel poverty in 2009, so says the Department of Energy and Climate Change (DECC). Repeated increase in fuel bills mean that the number of homes affected rose by one million, or 22%, to 5.5 million. The government defines fuel poverty as being when a household is has to spend more than 10% of its income keeping warm.

DECC noted that "between 2004 and 2009, energy prices increased: domestic electricity prices increased by over 75%, while gas prices increased by over 122% over the same period" and this led to the rise in fuel poverty. They (DECC) also predict that the numbers for 2010 and 2011 will have increased because of further rises in the price of energy.

Apparently the answer is more competition and the free market... Hmm...isn't that what we have all been living with (and paying for) over the last twenty plus years. An unregulated 'free market' or more accurately an largely unregulated privatised effective monopoly has clearly not worked. Surely to continue to repeat the mistakes of the past is a bad idea to say the least...or is HMG too busy thinking about windfall taxes on excessive profits...

Sunday, 22 May 2011

SAT IN THE DARK?

Human society, has never been so energy dependent throughout all of human history as is it is now on energy. Electricity in one from or another helps to make our urban (and not so urban) communities run, think how many labour saving devices we have in our homes, or rather think what we have that's not electrically driven. Electricity helps to make a more equal society a distinct possibility, otherwise we are literally sat in the dark. Once in the dark, there is a risk that notions of fairness and quality go out the window, taking us somewhere quite unpleasant.

Our domestic (and business) energy prices can go up and down in the short-term, yet the long term trend is always (at least for hydro-carbons) going to be upwards, this is something that is unavoidable due to increasing demands for more energy, a growing population and the relative short term limit to the earth's hydro carbon fuel reserves. It's important to recall that in the 1950's people were actually told that in the future by the end of the 20th century energy would be too cheap to meter...oops!

In hindsight perhaps this was before so complicit idiots (in this case a Conservative Government) decided to purse a headlong dash to gas in the 1980’s and to throw our energy resources to this wolves, sorry the free market. In Norway, being no doubt of slightly sounder mind, they chose to sell their gas overseas (to the UK) and to pocket the profits, whilst massively investing in sustainable renewable energy sources (in Norway) which gives the Norwegians control of their own secure energy supplies.

In the UK, upon privatisation, there were 22 electricity companies and 19 gas companies, now we have six. Energy planning has by and large been left in the hands of the private sector, who have been far too focused on squeezing profits out of us to give any thoughts to the future. While other countries attempted to protect themselves against external shocks to their energy needs; the UK’s market driven approach has been proven to be entirely inadequate. France can store 122 days of gas and Germany 99. Yet the UK had as of April 2009 a gas storage capacity which would last only 15 days; the New Labour Government took almost a decade to recognise the need to increase storage capacity.

One direct consequence of this was that the UK has to sell gas during the summer because they could not store it, leaving UK energy suppliers scrambling to purchase gas again when it is needed in the winter. Massive investment in gas storage facilities to hold gas imported from Qatar has taken place, but, with the best will in the world, that gas supply could hardly be described as secure as it sits in one of the more volatile and unstable regions of the planet. David Cameron can sell all the stun guns, cattle prods and baton rounds he likes to some of the most repressive regimes on the planet, but, over longer term he is not backing a winner (as recent events in the Middle East with the Arab spring clearly show).

Anyone with slightly more than half a brain (even the Con Dems) should actually be capable of plot this trend and be able to note the medium and long-term consequences of being dependent upon energy resources that you don't actually control and that are running out. Over reliance on an an increasingly self interested private sector, who's behaviour has been repeatedly flagged up as cartel like, has not helped to safely plan the energy future of these islands.

Self interest has been compounded by a real failure in basic strategic energy planning and made worse by the last New Labour government and the current Con Dem Government's perverse decision to half-heartedly look at developing diverse reliable alternative energy sources, whilst doing its best to try and hide a whopping great subsidy for the much favoured (at least by the UK Government) Nuclear industry.

Being reliant on that nice Mr Putin's for our energy supplies is not the brightest of ideas, especially as having Russia's hand on our gas supplies can be a tad risky - just ask the Ukraine. Over the longer term, Russia will have potentially declining cash reserves and an economy that is heavily reliant on its trade in gas for export, as Europe grows more dependent on Russian gas then the risk of artificial shortages as a consequence of Mr Putin's (our his successors) geopolitical games will be something all of us in Europe can all do without.

In Scotland, the SNP government is actively driving Scottish energy policy, something that will benefit the Scottish people. Energy consultants and developers are busy mapping specific locations where water that flows down steep enough slopes and ravines to allow it to generate an increasingly precious resource: energy.The Loch Lomond and the Trossachs National Park is actively supporting and encouraging the development of hydro power schemes within the park's boundaries and local communities are also planning to build their own local schemes (something that will deliver sustainable cheap energy and other financial benefits as well).

One of the reasons why the hydro rush will work in Scotland (and could work here in Wales) and should deliver long term sustainable benefits is the new feed-in tariff that came in 2010. The subsidy for producing green energy has been increased and it makes schemes more viable, which when combined with a progressive Government that is actively driving the growth of sustainable non oil and gas and non nuclear dependent energy supplies'- means that plans to develop sustainable renewable energy supplies are proceeding apace.

The question is will Labour in Wales step up to the plate and grasp the opportunity to drive and develop energy policy in Wales?

Monday, 20 September 2010

MAXIMISING THE PROFITS...

News that Southern Railway (one of the privatised rail franchise holders) has opted to forget the facilities on its latest trains running on the Portsmouth to Brighton service should not come as a surprise. The company said trains would run in areas with short journeys where most people travel for less than half an hour. For the record (on a good day) a journey from Portsmouth to Brighton can take up to an hour-and-a-half. Southern Railways said the new trains, which should be introduced in December, have been designed to create more space for passengers (and boost profits).

Oddly enough this news has not gone down particularly well, with the Independent rail passenger watchdog Passenger Focus saying that the decision was a blow for passengers who were elderly, had medical conditions and travelled with children. The Rail, Maritime and Transport Workers' union (RMT) said on a journey of that length it was "unacceptable". Once we abandoned control of key elements of the public transport infrastructure to the whims of the market then this is part of the price that we all will begin to pay. Watch this space for future developments...