Variable Costs and the Visible Hand

Under an Act of 1926, a ‘public interest’ corporation, the CEB, was empowered to build a national transmission grid and rationalize UK electricity generation. A constrained cost model estimates the gains from this re‐regulation of the electricity generating industry. The new regime reduced costs by one‐third, radically improving the utilization of capital and boosting the average scale of operations. It did so by persuading private and municipal enterprises to accept central direction of the extent and timing of their electricity generation. This voluntarism saved on enforcement costs, but perhaps one‐half of the industry cost reduction the CEB actually achieved by 1937 was apparently forgone

Business · Capital cost · Economics · Electricity · Electricity market · Electricity retailing · Enforcement · Fixed cost · Industrial organization · Macroeconomics · Microeconomics · Variable cost · Voluntarism (philosophy) · Engineering · Finance · Historical Economic and Social Studies · Italy: Economic History and Contemporary Issues · Political and Economic history of UK and US

• Introduction

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• Equilibrium Investment in an Industry with Moderate Investment Economies of Scale

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• Domestic Capital Formation in the United Kingdom, 1920-1938

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• The Comparative Efficiency of Public and Private Enterprise in Britain

  James Foreman-Peck, James Foreman–peck et al.•The Economic Journal•1985

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• The Organisation of Electricity Supply in Great Britain

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• Public and Private Ownership of British Industry

  John Kay, James Foreman-Peck et al.•The Economic History Review•1995

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