Expect more data center moratoriums and slower growth
Bloomberg Opinion columnist Allison Schrager argues that data center moratoriums, such as the one-year ban in New York, exemplify 'friction' that reduces economic growth. While some regulations may be prudent, she suggests that America's culture may prioritize friction over growth, potentially hindering technological progress like AI. These restrictions are driven by fears about environmental harm and increased electricity prices.
Allison Schrager, a Bloomberg Opinion columnist and senior fellow at the Manhattan Institute, argues that the increasing trend of data center moratoriums, such as New York's one-year ban, represents economic 'friction' that will inevitably slow growth. She posits that while technology aims to reduce friction, humans often create it, driven by fears that data centers harm the environment or raise electricity prices.
Schrager, identifying as a 'pro-growth economist,' believes that while some friction can be useful, much of it reduces economic expansion. She highlights that governmental control over technology, particularly in a capitalist economy, is largely an illusion, as development will simply shift to other locations if one state imposes restrictions.
She contends that the US economy and culture, which she argues 'love friction,' may embrace these regulations to slow down AI and other technological advancements. This preference for perceived control over rapid growth, even when it comes to fundamental issues like 'local zoning,' suggests a future with more moratoriums and regulations that impede technological progress.
Ultimately, Schrager concludes that this 'backlash against data centers' indicates a societal preference for greater friction over higher economic growth, potentially stemming from a desire for the 'illusion of control.'