“Momma told me there would be light at the end of the tunnel. But she never told me it would be …”
Then the chorus, “if you can see, what I can see, then you will come with me — into electric light.”
When the battle of wills between Tesla and Edison transformed the world, we truly entered the “electric age”. We’re still there. Growth in electric generation is almost perfectly correlated to a nation’s economic growth; and this picture of North Korea’s darkness relate more than just visually. More than 10 years ago, I did some work on trading floor systems for the electric “grid”, and have been fascinated ever since by the intersection of economics, computing power, and electricity. It is no coincidence that top economists are taking jobs at companies that mine human behavior and host massive software “utilities”. People who have been making predictions about the future of “grid” computing have often been scorned and treated as crackpots (Joe Firmage, founder of USWeb and UFO-hunter; and the folks at Enron among others). When Amazon first launched EC2, the reaction was similarly skeptical. But it wasn’t long before people realized something was up.
Last month, I ended up sitting next to Dr. Albert Schweitzer on a few hours flight. Not the nobel prize winner, a living breathing Albert Schweitzer. I saw his passport, and that’s his name. He’s a retired chemist from Exxon/Mobil who now advises former central economies on building chemical production plants. I picked his brain mercilessly for three hours and learned many things, but he had some really interesting data relevant to this discussion. In mass production of a chemical like Ammonia, it is a competetive necessity to build next to a coal source and generate your own electricity. In fact, for a number of chemical processes, the company will generate electricity, and feed that electricity back to the electric company when it’s more profitable than using for chemical processing. In making certain types of polymers for which hydrocarbons are input, the chemical plant takes product from the oil companies and processes — but there is always a risk that new technology would enable to produce those chemicals cheaper and they would transfer a lot of profits from the chemical company to themselves. Projections of electrical generation technology lifespan play a big part in deciding whether or not to build a particular chemical plant. Tiny fractions of pennies per gallon make the difference between life and death for the plant.
I’m fascinated that something which might as well be free can exert such leverage indirectly.
Of course, electricity is a commodity. Computing power (on the server) is about to become a commodity. One beam of light shooting up into space like a beacon, maybe two or three. When that happens, then what? For the past two hundred years, knowledge about human economic behavior in aggregate (economics) has been a public good; available to all. But this is incredibly valuable information, and our wealth of knowledge is exploding dramatically. We have unprecedented ability to test, mine, and model. Who owns these models?