In the matter of price controls, Fox proposed to set the price of natural gas at $7.65 per BTU, and incrementally increase electric rates for low and medium domestic consumption, and to increase the price of LP gas not more than 4 percent. The proposed subsidies would maintain a 28 percent price support for natural gas for domestic consumption, as well as a program of energy price supports for micro, small and medium-sized businesses that are most impacted by high energy prices.

Price controls and subsidies have always been populist measures that, in the best of cases, alleviate the effects of the problem without eliminating the cause, which is nothing more than a lack of production capacity. And this incapacity to produce is not because of a lack of natural resources, nor a lack of capital, but because of the absurd legal prohibition of the participation of private capital in the energy industry.

In an attempt to go beyond simply alleviating the effects of the lack of production capacity and to produce more and better energy, Fox offered two reform proposals. The first is a constitutional reform for the purpose of complementing public investment with private investment in exploration, exploitation and activities related to natural gas that are not associated with petroleum.

The second reform proposal refers to the Regulatory Law of Article 27 of the constitution, which has the objective of complementing private investment in infrastructure for oil storage and petroleum pipelines and petroleum by-products, measures that aim in the right direction - the participation of private capital in the energy industry. But the legislators of the PRI and PRD are opposed, anticipating that these are the first steps toward privatization of the energy industry which is today a government monopoly. To these legislators, the most important thing is that the energy industry (petroleum and electricity) remains in the hands of the government, regardless of the results, and without consideration that those monopolies violate the concept of free enterprise and consumer choice, as well as private ownership of the means of production.

Besides the previously mentioned measures, President Fox proposed to diversify the sources of supply of natural gas, as well as to promote sales in other parts of the world, as well as increasing and strengthening sources of renewable energy. Fox also proposed the creation of a group of experts that will analyze the solutions that have proved effective in solving similar problems in other countries.

Of the ten proposals, only four truly aim at relief of the actual cause of the problem. The proposals that would allow greater participation of private capital in the energy industry, and which would provide more diversification of energy supplies, and which would increase and strengthen renewable sources of energy all aim at the elimination of the causes of the problem. The other six, at best, aim only at relief of the effects of the problem, based on price controls, subsidies, and a panel of experts - or more of the same failed populism.

It is worth reiterating that the cause of the energy problem in Mexico is neither the lack of natural resources nor the lack of capital, but the legal prohibition of private investment in the energy industry. This prohibition not only limits productivity and competitiveness in the energy sector as well as the economy in general, but it also violates the idea of entrepreneurial freedom, consumer choice, and the private ownership of the means of production - the latter being the most serious.

Unless and until the Mexican government frees itself from the counterproductive habit of proposing populist measures to appease constituencies and actually allows the market to function, these problems will continue unabated and we will be lamenting the same problems well into the next administration.

* Arturo Damm Arnal is a Mexican Economist and Philosopher devoted to journalism and college teaching.