The story of King Ed

Once upon a time long long ago in a faraway land there lived a king called Ed.  King Ed cared deeply about the people of his country, but he was upset.  He knew that the people loved to eat apples, but they were so expensive.  They commonly sold in supermarkets for between 30p and 50p each, and in independent greengrocers for between 40p and 60p each.

So King Ed took action.  He issued a decree that no one could sell an apple for more than 20p.  He argued that this would allow all of his people, including the very poorest, to eat apples every day.

This is not what happened though.  Independent greengrocers immediately stopped selling apples because they could not afford to lose money by selling them at only 20p. Meanwhile the supermarkets started selling only the very cheapest apples they could find, and even so they could make no profit selling them at only 20p.  Also, a lot of people did not like the cheapest apples, and so did not buy apples at all.

Then people started growing apples in secret, and a black market soon came into being.  The people who sold these apples had to charge more than 20p for each apple in order to cover their costs, but they knew they were breaking the law by doing so.  As a result, they tended to charge a lot more than 20p for each apple, but many people were willing to pay a lot more for apples because they loved eating apples so much.  In fact apples sold on the black market often sold for as much as a pound each, but of course only the better off people could afford to pay a pound each for apples, and so poor people had to go without.

Eventually King Ed realised that he was wrong to cap the price of apples, and he allowed people to charge whatever they wanted for apples.  All of a sudden, the shops were full of apples once again, and the people were overjoyed.  Not one of them ever had to pay as much as a pound for an apple ever again.

Meanwhile in the real world, maybe Ed Miliband might like to rethink his plans to freeze energy prices, and look into the reasons why energy prices are as high as they are.  Maybe instead he would like to pledge to stop throwing public money at wind turbines.  They are very expensive, and produce very little electricity.