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Why should they? If demand for X goes up, and price goes up, the whole point of the price system is to incentivize all users of X to use less and producers of X
by Straw 2mo ago
Why should they? If demand for X goes up, and price goes up, the whole point of the price system is to incentivize all users of X to use less and producers of X to make more.
Here's an example where the benefit is obvious:
Say I set up a desalination plant for a city with water shortages. I use a lot of electricity; this drives up electricity prices. But I also sell the more scarce water, lowering the price of water. If I make more selling the water, then to first order I'm helping people overall- they value the water more than the electricity. Perhaps I put other, less efficient desalination plants out of use, or simply other uses of electricity that people value less than the water I provide.
- stanfordkid 2mo agoYeah, the issue with your example is that it's not a desalination plant serving local customers, but rather the entire world via a network. So rural customers have to pay for negative externalities that benefit others geographically distant from them. The benefit is not purely localized. Of course data centers bring jobs etc. I don't think we should ban them... but community level politics exist for a reason -- those that live in a geography should control the land surrounding them.
- Straw 2mo agoThere isn't an externality here in the traditional sense. No one has a right to purchase anything at any particular price. Should people be disallowed from bidding in auctions because it increases the price of the item in question? No, people who live in geography absolutely should not control the land surrounding them. That's effectively land hoarding, and incentivizes deeply counterproductive NIMBYism. People should primarily control the land they own.
- rybosworld 2mo ago> Why should they? Because utilities are regulated monopolies that exist to benefit society. The companies building data-centers are well aware that the system isn't setup to handle a customer that suddenly doubles or triples the electric demand of a whole town over night. They are taking advantage of that until someone steps in.
- Straw 2mo agoThe data center demands are known years in advance. Its not like they magically appear out of nowhere. Perhaps we should eliminate the utilities guaranteed monopoly then! Monopolies are usually dysfunctional.
- vrganj 2mo agoBecause VCs are pumping fantasy money into the AI bubble and their data centers are pricing regular people out of daily neccessities? The market isn't some magic tool to get optimal results. It's a way for capital to self-reproduce, not more, not less.
- jnwatson 2mo agoElectricity production isn't a free market in the vast majority of municipalities. Market systems only work when demand and supply are relatively unconstrained. In this case, supply is strongly constrained.
- Straw 2mo agoMarket systems work especially well when supply or demand are constrained- they allocate the scarce resource more effectively!
- nancyminusone 2mo ago>they value the water more than the electricity and yet I have a hard time believing they value the electricity less than the AI. Let them drink tokens!