I am thrilled, absolutely thrilled, to find out from Tyler Cowen this morning that Al Lowi’s and Clyde Wayne Crews’s chapter on electricity is available online (and many thanks to Dan Klein for doing so). I recommend it to you all.
This chapter is from Dan Klein’s and Fred Foldvary’s book, The Half-Life of Policy Rationales, which I recommend to you all as a good set of arguments for how technological change and dynamism makes government intervention irrelevant or even destructive.
Unlike Tyler, I am happy to evaluate the claims in this chapter; I emailed some with Al while he was working on it. The chapter is full of good, thorough information about distributed generation technologies, and I cannot second his claim on p. 181 strongly enough:
Natural monopoly is a myth.
Hear hear! There is a lot of information and new research that corroborates the claims in this chapter, which I’ll post links to later when I have time.
It is also consistent with the argument that Adrian Moore and I made in our recent Reason study called Movin’ Juice: Making Electricity Transmission More Competitive. Distributed generation is a core development that makes transmission contestable, and will ultimately make it competitive.
Now we just have to convince the regulators and legislators that natural monopoly is a myth.