A winter's tale

A:     My fingers are numb. This is horrible, trying to create my own fire. I feel like a cave man.
S:     I have electric heaters and blowers sprinkled all over the house Ameen. It’s quite ridiculous.
A:     I really feel for poor people. They can’t cook, they can’t stay warm. I was thinking, that when there are clearly markets, when there is a clear demand, why isn’t a supply created.
S:     Because of Say’s law, Ameen. The production of goods creates its own demand. The key to economic growth is not increasing demand, but increasing production.
A:     This is not about producing new things, this is about basic needs…
S:     No but it is. I think that the producer may actually drive the economy. Why else would people be buying a German sports cars, when a Japanese car can accomplish the same task.
A:     You are being silly. We need gas, and electricity fast. A supply is missing!
S:     What I am trying to suggest is that with the current problem, private enterprise has not taken any initiative. We know the government is useless, why not take the opportunity to fill the supply gap? Solar power, electric heating… these should have been locally produced by now. We have domestic demand; we have just never built an industry around it.
A:     Once you hand over the management of public goods to the private sector, the poor man still loses. If something like electricity is privatised, properly privatised, with no government regulation, it will only be supplied to those who can pay the price. Right now the government subsidises it so it’s available to all.
S:     You can’t have entrepreneurship with government interference. It won’t work
A:     So we are substituting the problem of loadshedding for all and the potential of no electricity in the future, with that of electricity for some who have money.
S:     Quite an economic dilemma isn’t it?

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