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Winter Heating Bills and Socialism

         by Stephen Donahue

December 27, 2000

The following notice was recently sent out to Entergy-New Orleans gas customers: "The wholesale gas market has been deregulated by Congress; so the price of natural gas is determined by unregulated market forces."

Supply and demand dictate prices.  When gas consumption is less, prices are lower, and customers benefit.  When gas consumption is up, prices are higher, and customers pay more.  It is important to note what Entergy did not include in their notice. The notice mentioned nothing about the fact that those who produce natural gas have been deliberately allowing supplies to shrink in order to insure high wintertime profits.   As one economist recently put it, "We had a hiatus in the effort to boost supply."

The oil and gas producers know that people need to keep warm in the winter so what better way for them to drive up the price than to create a short supply just in time for the first blizzard to hit the Northland.  When the OPEC nations reduce production so as to drive up prices of crude oil there is outrage and excited calls from U.S. politicians for sanctions and military strikes.  When our domestic producers stick it to us we are supposed to quietly pay the bill and attribute our gouging to "market forces."

This winter the dominant market force in action is greed.  Not wanting to offend capitalist sensibilities it is nonetheless important to point out that there are ethical concerns around this issue.  Manipulating supply for the sake of profit is one thing but to do so with fuel for wintertime heating is quite another.  It merits our complete and total condemnation for here the capitalist system shines with all its ugliness.

Capitalists argue that government control of oil and gas production will result in such things as rationing of energy and low energy reserves.  Well, the poor and working class are already forced to ration their home heat by the extremely high fuel costs.  While free marketeers attack all government intervention, except for tax abatements and other incentives one must question whether the government could do any more of a lousy job with our natural gas supply than private enterprise has done.

The business pages have been full of reports about lower than expected retail sales over Christmas.  I wonder how many parents just figured that the best gift which they could give to their children this year was some heat.

I have long been intimidated by the heady economic arguments I have tried to read in various socialist journals and magazines.  It seems to me that this winter would be a good time for socialists to be shouting from the rooftops about the simple truth that capitalism is robbing us.

All we need to do is examine our heating bill to see that.


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