Regulated public utility monopolies are not 'natural'

Market Intervention (#9 #10)
The reason this system of regulation is akin to a tax, is that unlike most other forms of regulation, it regularly produces readily identifiable impacts in the form of the regulated prices that have to be paid directly or indirectly by every business and household in the country. These pseudo-taxes are almost always on the rise like real taxes (as per the diagram below), and also like the latter include all of the predictable inefficiencies associated with government central planning (the government regulators) and government protected cronyism (the utilities themselves).

There have been few comprehensive empirical studies, but these show a poor performance for utility oversight regulation in terms of high prices (as well as low quantity and quality, poor customer service and innovation, etc). This is not surprising, given the lack of economic and political incentives to do so.

Source: Beecher, Institute of Public Utilities, MSU [2016]

Like the Fed which does not control but creates inflation, this regulatory system does not control but creates monopoly pricesthrough such mechanisms as entry barriers, competition restrictions and substitution impediments as well as through regulatory capture and other Public Choice Theory effects. Even more fundamentally, these prices aren't even real prices as such, due to the impossibility of socialist economic calculation. Thus, as Hayek once lectured other economists: "… the effects on policy of the more ambitious constructions have not been very fortunate … [due] to a pretense of exact knowledge that is likely to be false."

Conclusion
In light of all this, it seems that it's about time that some significant reform paths to genuine free markets (or at least more free ones) were more seriously considered in my two homes of the USA and Australia (and in the UK, NZ and elsewhere). Pro choice and competition reforms not only need to take genuine steps in the right direction towards free markets (without offsetting steps backwards, at the same or over time), but should also focus on the main game of removing government's own barriers to market entry, along with it's other barriers to buyers, capital, complements, cooperation, rivalry, substitutes and suppliers.

Hopefully the gaping theoretical, statistical and historical shortcomings of public utilities regulation can be put more and more on the radar of the long suffering businesses and households of Australia and the Western world. This is especially the case, given what one of the 20^thcentury's greatest libertarians and renaissance men pointed out:

The very term "public utility", furthermore, is an absurd one. Every good is useful "to the public", and almost every good, if we take a large enough chunk of supply as the unit, may be considered "necessary". Any designation of a few industries as "public utilities" is completely arbitrary and unjustified. – Murray Rothbard