Texas Isn’t a Failure of Capitalism

The stories out of Texas are horrific. Rolling blackouts. Burst water pipes. Icicles dripping from ceiling fans. Electricity bills as high as $17,000. And to make it all worse, idiots all over Twitter claiming this is a failure of capitalism.

Capitalism is nothing more than an economic mechanism that allows markets to match supply with demand. In most countries around the world, the government tries to manage this. But governments are horrible at matching supply with demand. So here in the United States, we let the market figure that out.

A $17,000 electricity bill is actually unfettered capitalism working. It means that when supply is at its lowest and demand is at its highest, prices go up. But capitalism also assumes that consumers have choice and knowledge, and in many cases they do not, including this one.

The failure in Texas isn’t capitalism. The failure here is government.

Electricity, like lots of markets, is one where the company has way more knowledge and power than the average consumer. It is also a market where consumers have no choice.

The government of Texas, meanwhile, sells deregulation to unassuming consumers as a guise for “get the government off our back.” But all deregulation is doing in this instance is giving electric companies unfettered access to screw consumers.

The act of regulation is a critical role in capitalism. The act of regulation is the act of leveling the playing field between consumers and companies. But in Texas, and many other places across the country, government has failed to do its sworn duty to protect consumers. Instead, it has abdicated its role, throwing in with the companies, and screwing over those who voted.

You want a better country? Don’t throw out capitalism. Throw out the elected officials who aren’t working for you.