Allison Schrager: Expect more data center moratoriums – and slower growth
This opinion piece discusses New York's one-year moratorium on new data centers as an example of economic "friction" that slows growth. The author, an economist, argues that more such restrictions are likely in other states due to public fears about environmental harm and increased electricity prices. Despite the potential for slowing economic growth, the article suggests that Americans may prefer this "friction" due to a desire for control over technological progress.
Allison Schrager, a Bloomberg Opinion columnist and senior fellow at the Manhattan Institute, argues that New York's one-year moratorium on new data centers exemplifies economic "friction" that hinders growth. Schrager, an economist, suggests that such restrictions are likely to become more common in other states due to public concerns about data centers' environmental impact and their effect on electricity prices. She frames these regulations as an illusion of government control over technology, positing that if one state restricts data center development, another will simply accommodate it.
While acknowledging that some friction, such as those that prevent identity theft or enforce professionalism, can be useful, Schrager generally opposes it, particularly when it comes to economic activities like building housing or adopting new technologies. She contends that America's economy and culture are predisposed to friction, citing a survey indicating that 80% of Americans desire to slow down AI's progress.
Schrager concludes that the backlash against data centers suggests a societal preference for greater friction over higher economic growth. She highlights the challenge of managing rapidly advancing technology when even local zoning issues prove difficult to resolve, suggesting that the appeal of perceived control may outweigh the pursuit of smoother economic development.