National View: Expect more data center moratoriums — and slower growth
New York has enacted a one-year moratorium on new data centers, a move an economist argues is an example of "friction" that hinders economic growth. The article suggests that while such restrictions are driven by environmental and electricity price concerns, they represent an illusion of governmental control over technological progress.
Bloomberg Opinion columnist Allison Schrager discusses the increasing trend of data center moratoriums in the U.S., citing New York's one-year pause on new developments as a prime example. Schrager, an economist, characterizes these restrictions as economic "friction" stemming from public fears regarding data centers' environmental impact and their potential to raise electricity prices. She argues that attempts by governments to control technology through such measures are largely an illusion, as development will likely shift to other states.
Schrager contends that while some friction can be beneficial, such as regulations enforcing professionalism, it generally reduces economic growth. She highlights AI's potential to eliminate traditional frictions, forcing society to re-evaluate which ones are truly valuable. However, she notes that a significant majority of Americans, by one survey, desire more friction to slow AI, with some even willing to forgo medical advances.
The author expresses doubt about society's ability to judiciously distinguish between beneficial and harmful frictions, pointing to challenges in local zoning as an indicator. Schrager concludes that the public's negative reaction to data centers suggests a preference for increased friction over higher economic growth, possibly due to the perceived comfort of retaining some control over technological advancement.