It is interesting to see with what speed or endless slack countries wake up to limit the windfall profits from Russia starting a war and thereby shortening supply of oil, gas and through war difficulties also fertilizer and basic food. There has been a long runing discussion in economics to what extent short-term profit maximization is detrimental to the economy or society at large (see below). The super profits accumulated by some countries and companies due to warmongering by Russia are beyond comprehension for almost everybody. Although it is simple actual and perceived shortage of supply sends prices soaring. However, countries can change the rules of the game in multiple ways. The limitation of prices to upper limits is one such element. Taxing profits on living basics above ethical levels of a percentage level of returns on capital, for example, can be instrumental. No incentive to invest to increase supply (of polluters) is wanted, therefore the profits not due to intellectual capital or human capital invested could be taxed at different levels. Even in the Financial times from December 2020 had already a debate on this, before Russia waged its war. Windfall profits on markets for energy, as huge exporting country, and land gains appeared promising for Putin. Let’s just stop this historical nonsense with limiting prices and investment in bottom-up, decentralized energy production. A European fundamental issue with repercussions around the globe.
