Friday, May 12, 2006

'Fresh' Ideas - How To Punish Rich Consumers

After very long and very serious debates Georgian Government decided how to deal with electricity consumers. Hew idea is not simply socialist but a most socialist way of electricity distribution and pricing.
Yesterday, so called 'Regulator of the Energy Supply' (RES) issued its decree about new prices on electricity. By it consumers who use less than 100 kWt (per month) energy will pay 13.48 tetris, from 101 to 300 kWt - 16 tetris, and up than 300 kWt 17.69 tetris (1 US cent = 1.8 tetris).
So that means if you are rich and consume more you pay more. This blog is not a good place to explain why this is very bad for suppliers and especially for the producers of the electric energy. But it is very easy to see that the decision of the government (and of course not of the RES) is very stupid socialist idea.
Main problem is not really management or business difficulties. It is the wrong idea to regulate the price from the central bureau. Thus the new revolutionary government failed to go through this examination with such a sinful idea to govern economic activities from the center.
So the main principle of governance is still central planning Bolshevistic. They are sure that if central planning is permanently failing it is a fault of planners but not of the idea of central planning itself.
If somebody still believes in this kind of business - selling more for higher prices - they can look at the very famous world brand firms' manners of trade. One of the most known Coca Cola company (the same with Pepsi Cola or all the other successful businesses in the world). Price for 0.25 liter bottle of cola is somewhere GEL0.35; 1.5 liter - GEL1.5 and for the 2 liter - GEL1.8. So if you buy 8 bottles of 0.25 l cola you pay GEL2.8 but if you buy 2l - 1 lari less.Trust me readers, this law of economics works in every situation, revolutionary or non-revolutionary, socialist or capitalist environment. To understand this easier ask any seller on the street - they know!

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