No, really, don't cap electricity tariffs

It's obviously election season as people are promising actions of the most blithering stupidity. The latest idea being that electricity tariffs should be capped. No, if you cap prices then that thing the price of is capped disappears from the marketplace:

Theresa May will attempt to capture the political centre ground by slashing £100 from the energy bills of 17m families and granting new rights for workers.

The prime minister will use the Conservative manifesto, to be published on May 8, to cap the gas and electricity bills for the seven out of 10 households that pay standard variable tariffs — dubbed a rip-off by watchdogs.

The policy is a centrepiece of a manifesto that will set out a bold social vision for Britain that parks Tory tanks on terrain usually occupied by Labour.

There's not a huge amount of point in beating Labour if one does so by repeating their idiocies. And this is a foolishness at best. If prices are capped below the cost of production of something then that something disappears from the market. Nicolas Maduro and his stunning success with the Venezuelan food supply is all we need to see to prove that.

Now, we might just possibly think that it is profit margins which are excessive here but that's not actually the case:

GB Energy Supply, which only months ago boasted the cheapest fixed-rate deal on the market, has ceased trading.

The low-cost energy supplier, which is believed to have had around 160,000 customers, moved to reassure customers that they will not be cut-off following the announcement.

A low price, an under the market price, strategy doesn't work in the current industry. We would thus very much assume that the market price is indeed that market price, not one inflated by excessive profit margins.

Capping prices just isn't a sensible thing to do. So, don't do it.