Posted by Carlo Stagnaro · 13 September 2005 ·
Energy
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European Union
I have an article in today's TechCentralStation about a proposed "electricity strike" in Italy. 4 major consumers associations are asking Italians to stop using electricity tomorrow at 11,30 am, for 5 minutes, as a way to protest against high oil prices that translate into high prices of electricity, gas, etc. Protesters call for political measures aimed at counterbalance the effect of rising oil prices, including a shift in our "energy mix" (the sources through which energy is generated) and possibly price controls. What they doesn't seem to realize is that free market provide a built-in mechanism to react to high prices: demand will eventually fall and prices will have to decrease. If government gets into the process it may simply make the problem harder to solve, as a cap on prices might lead to further scarcity - i.e., waiting lines at gas stations or blackouts. Consumers should understand that that is not their best interests.