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For a moment, let's consider a local coffee shop (or, for that matter, Starbucks). As a libertarian, I believe the pricing model for a cup of coffee is the own
by ShabbyDoo 18y ago
For a moment, let's consider a local coffee shop (or, for that matter, Starbucks). As a libertarian, I believe the pricing model for a cup of coffee is the owner's decision, not the government's. Pay for each cup, pay less for subsequent cups, free refills...none of my business. If I don't like it, I can go to another coffee shop or open up my own.
Pipes and wires to my house are a different manner. Unlike with the coffee shop, my local government gave a company an exclusive right to serve my house. No competing companies can run redundant pipes or wires if the original companies aren't offering up good deals. While its debatable whether or not government should offer such exclusivity, it has. So, without government intervention, the companies granted these rights will raise prices to the point of profit maximization -- a level of profit that would lead a rational bidder to pay tons for the exclusive license to serve my town. Think cellular frequency auctions. Instead of auctioning off rights as a means of indirect tax collection, most towns (or states) granted basically free exclusive licenses with the caveat of pricing and service oversight. The natural gas monopoly has to petition the state (at least in Ohio) to raise rates. And, I think the cable companies have to petition the local municipalities. So, I don't blame these companies as they're just doing what their contracts (might?) allow. Instead, I find fault with the local governments for selling their citizens short with bad contracts or oversight boards. Who's watching these government-imposed monopolies?