In a political environment that increasingly claims that government-imposed solutions are the best answer to everyday problems, it sometimes seems rare that we can celebrate the dynamism of the market when it comes to problem solving.

Three Mile Island – especially the new 20-year deal between Constellation and Microsoft to fire up the decades-old reactor and provide the power grid with urgently needed baseload power – is such a moment. This agreement represents a truly market-driven solution to a broader economic challenge: satisfying our unquenchable thirst for electricity.

Too many lawmakers are proposing government intervention to meet this need. Proposals traditionally use the carrot or stick approach: politicians dangle tax breaks and subsidies (the carrot) to attract businesses they like and penalize those they don’t by raising taxes and regulations (the stick).

This is how our state ends up promoting authoritarian and arbitrary policy projects like the Regional Greenhouse Gas Initiative (RGGI), the Pennsylvania Climate Emissions Reduction Act (PACER), and the Pennsylvania Reliable Energy Sustainability Standard (PRESS) – all of which weigh on the industry and encourage it. less productive sectors.

Such misguided measures are, at best, a band-aid. These proposals offer superficial solutions to complex problems.

In the worst case, government intervention causes economic havoc. When the federal government injected billions in public funds to stimulate the pandemic-ravaged economy, record inflation was the unfortunate but predictable result.

Government subsidies distort the market. Subsidies lead to an abnormal increase in investment in low-return economic activities, such as intermittent energy sources like solar and wind.

And these subsidy-dependent sources pale in comparison to nuclear power. Nuclear provides baseload power – the easily distributed 24-hour electricity that powers the grid when weather-dependent wind and solar cannot.

Even with massive subsidies and regulatory benefits, solar and wind power remain economically unfeasible on a larger scale. The solar industry has recently experienced a wave of bankruptcies. Unless taxpayers foot the bill, government-subsidized energy companies — from Solyndra to Titan Solar — don’t have the comparative advantage needed to compete. Government underwriting supports inherently flawed businesses that can disappear as quickly as they appear – all at the expense of hard-working taxpayers.

Markets thrive on competition, not coercion. If the government suppresses or artificially restricts competition, the market will not produce the most efficient outcome. When it tampers and intervenes, the government picks winners and losers, and the rewards become stratified. A few disproportionately benefit and harm the rest.

Most government intervention programs lack a price system – the naturally defined organic method of production, distribution and consumption of goods and services. The demand for electricity has continued to increase while the available supply has decreased, leading to higher prices. These higher prices send an urgent signal to the world that more electricity is needed, quickly.

This price signal does not require a government mandate. Instead, this organic incentive encourages the pursuit of profit within the market. Although it seems selfish and self-serving, the pursuit of profit invites companies to capitalize and invest.

Three Mile Island is an illustrative case study.

Five years ago, Exelon, the company that managed Three Mile Island, faced a significant economic downturn and lobbied for a $500 million bailout. Fortunately, Pennsylvania lawmakers did the right thing and balked at this massive subsidy, leading to the inevitable closure of the plant.

Today, the factory is on the cusp of something much more impactful. Rather than extracting millions in public funds through annual grants, the Constellation-Microsoft project at Three Mile Island will generate about $3 billion in state and federal tax revenue. When Exelon closed, the community lost about 600 good-paying jobs. Today, projections suggest that Three Mile Island’s revival will require 3,400 direct and indirect jobs to rebuild, operate and maintain the plant.

What once might have been a drain on public funds will now contribute more than it extracts while still producing much-needed, reliable electricity.

What is happening at Three Mile Island is not an isolated example. Instead, this cutting-edge, costly event represents the countless small economic interactions that occur every day in the free market: businesses and individuals assume financial risks, voluntarily enter into mutually beneficial contracts, and create businesses that create well-paid jobs. and provide essential goods and services.

A healthy economy guides good public policy. This happens when we minimize unnecessary government intervention and allow free markets to do what they do best.

Stephen Bloom, a former state representative, is vice president of the Commonwealth Foundation, Pennsylvania’s free-market think tank.