“People who pride themselves on their ‘complexity’ and deride others for being ‘simplistic’ should realize that the truth is often not very complicated. What gets complex is evading the truth. – Thomas Sowell

Imagine a self-described classical liberal that cannot define classical liberalism (a real free market) in their area of specialty. Imagine a self-described “directionalist” who cannot define the end-state. And imagine this person telling me, as her critic, “I will not dance to your tune.”

Political Economy 101 deals with the difference between a free market and governmental intervention. For months, I have begged this person to get to the essence of electricity policy, only to be rebuffed as ignorant and out of step. Meanwhile, this person traffics in hidden assumptions, deep jargon, rhetorical flourishes, and technicalities intended to obscure the fundamental questions.…

“You really not have addressed my criticisms about your accepting, at face value, climate alarmism, forced energy transformation, and a technocratic solution to the current grid problems brought on by the wind/solar takeover.” (Bradley to Kiesling, below)

“You clearly disagree with my synthetic theory of regulation and technological change. I synthesize institutional and transaction cost economics, Schumpeterian innovation economics, economic history, public choice, and yes, Austrian economics….. I think this theory … does a better job of helping us understand the institutional and organizational, and technological, reality of what’s feasible in liberalizing the electricity industry and its regulation.” (Kiesling to Bradley, below)

More than a century of increasing government intervention has created today’s crisis in electricity. It is not only a crisis of performance (affordability, reliability). It is a crisis where the cumulative interventionist process is now coming to your home or business.…

“… the economist is looking for the why-behind-the-why. And that is where negative pricing for wind and low margins in general from the regulatory setup ruined the economics of the [natural gas] industry, resulting in premature retirements, a lack of new capacity, and cost avoidance. Are you saying that there was a ‘market failure’ with natural gas in [the Texas blackout of February 2021]?” (Bradley to Kiesling, below)

She engages and then disappears. She is the “classical liberal” who refuses to question the climate alarm and favors the government-forced energy transformation to wind, solar, and batteries–and demand control from the political center. And she is all-in with the centrally planned wholesale power markets, better known as Independent System Operators and Regional Transmission Organizations (ISOs and RTOs).

She trumpeted the Texas ISO as the national model until it imploded in February 2021–and now blames natural gas, not wind and solar or central government planning.…

“Totally forgotten in this transformation [to mandatory open access] was a simple removal of the regulatory covenant to allow a real free market and genuine entrepreneurial discovery process…. Instead, we were told the ISO/RTO model worked: the planners knew how to price for volume and for reliability with Texas as the national model.”

Classical liberal theory explains market coordination and governmental discoordination, even “planned chaos.” The same intellectual tradition notes the propensity of government intervention to expand from its own shortcomings. Electricity is no exception. The rise and fall of the Texas grid is a case study–just the opposite of what some claiming to be classical liberal thought (see yesterday’s post).

The history of electricity in the U.S. is supportive of an undesigned order, beginning with inventor Thomas Edison and his business protégé Samuel Insull in the 1880s.…