Energy companies are getting it in the neck here in the UK for their recent price rises of 10%. It’s an interesting one this and really shows that when it comes to certain things, it’s not just a matter of ‘getting the prices right’. I was at a seminar with visiting Hallsworth Professor Mike Muller on water regulation last week and one of the central contentions we were discussing was around attaching prices to things people have a ‘right’ to. At some point down the line this lands you in trouble. Thus energy companies are caught in the conflict between a regulatory system set up in the 1990s that mediates value (what some thing is worth to people or a society) through a single metric: price, and a social expectation that the poor should not die of cold simply because they are poor. We’ve got to be able to find a better way of managing this tension than shifting the burden of decision making entirely onto the private sector.
It is delicious irony that a former oil executive is leading the charge arguing the companies must be “conscious of their social obligations” and “behave with generosity and not merely to maximise opportunity”. Read the full interview over at The Daily Mail, see also their ‘Morals not Markets’ leader column to get a clear sense of the changing expectations on companies in the UK. The Daily Mail making a forceful case for socially responsible companies? You saw it here first.
To get a smidge academic for a moment, this really reminds me of Karl Polanyi’s ‘The Great Transformation’ which (spoiler alert) argues that a key limit of liberalised capitalism is people’s appetite for the suffering of their fellow citizens. People don’t want to see their compatriots starve. Thus there is a ‘double movement’ where the thrust of liberalised capitalism is pushed back by the moral outrages of a society that believes all have the right to live. We could say this is what’s happening here. Not that I expected The Daily Mail to be at the forefront of the Polanyian ‘push back’, but I am happy to be surprised.