Are Data Centers Good, Actually? with Robert Tracinski

[00:00:00] Speaker A: Hello, everyone. Welcome to the 320th episode of objectively Speaking. I'm Lawrence Olivo, senior project Manager here at the Atlas Society. Jennifer Grossman has the week off, but I'm excited because Atlas Society senior fellow Robert Tracynski is here with me today back from Nikon last week to do a special webinar that it's very topical right now, talking about data centers, what is actually may be wrong with them, what productive purposes they serve, and whether this campaign against data centers is just old fashioned NIMBYism. And I already see there is a comment here that is critical of data centers, Rob. So we will get to that later, but for right now I'll pass it over to you. Excellent. [00:00:48] Speaker B: Okay, I think I have the chat open so I can probably see those comments. Well, hi everyone. So one of the things I want to talk about here is the reason why I'm talking about this, the reason why this is so topical is that the last six months to a year have been the time in which the American public basically decided they hate data centers. And so if you look at the polls on this, I've seen some poll data on this that about a year ago, if you polled people, you would have gotten a response. It was like 60, 40 or 65, 35. Generally 2 to 1 of people saying, yeah, I guess data centers are okay. It's no big problem. I don't think they were, you know, data centers weren't a big issue. People weren't debating it as much. So I don't think this is a really committed view that people had, but they had a general impression. I don't see anything wrong with data centers. They were not up in arms against them. And what's happened since then up to about the middle of this year is that that flipped. It's now more like 2 to 1 of people saying, I don't like data centers. Now I have a very strong visceral sense of this because the big experiment I've been doing in the last year, so starting last December and going through August, is I was running for office in central Virginia. And Virginia has been kind of a hotspot for data centers for many decades. As central Virginia, the area where I live, sort of the area around Charlottesville and then south of Charlottesville, heavily rural area, it has become something of a hotspot for data centers. It was sort of untouched territory. And for example, they're building one not far from me, building a couple not far from me, right next to the new North Anna nuclear Power Station on Lake Anna. Down here. So, you know, you can see how they're building it right next to the power plant, the nuclear power plant. So the electrons will come straight out of the reactor and into, into the data center to deal with their power issues. So a lot of areas down here, the people have been building data centers or they're in process or they're in permitting or what have you. And so Laura just posted my something I wrote today about this new frontiers in NIMBYism. So this is something that I encountered very directly while running for office. I began my campaign in December, lost my primary in August. And one thing that didn't help me, I don't think it's not the reason I lost my primary. I lost my primary because I'm new to politics. There was somebody in the race who was much better known and much, you know, more widely accepted than I was. He sort of had all, without actually being an incumbent, had a lot of the advantages of incumbency. I couldn't overcome that. But one thing that held me back is that I watched during this campaign from December to August, I watched from data centers being like sort of a minor issue in the background and people maybe grumble a little about them at the beginning to being the front and center issue. And I wasn't the person who was willing to go along and sort of pander to that and, and to say, well, I think data centers are terrible and I'll ban them all. Whereas some of the other people in the race were more than happy to go in and say, I will ban all data centers, or, you know, to sort of make that, that populist, nimbyist appeal. And so, but the point of this is that I saw the public flipping against them. And, and the interesting thing about this is this is very bipartisan. It is not just Democrats hate them because they're big business or whatever, you know, for leftist reasons. There are also a lot of Republicans who don't like them. And, and I know that that's very much the case here in. I'm broadcasting to you from the cellar of an old house in central Virginia and in the county where I'm at, where they have these data centers coming in, there's a certain type here who's, who's very conservative, very Republican and who has this idea, well, we want to preserve the rural character of the community. These supposed to be farming community, there should be farms. And so they, they hate, they hate data centers, they hate transition lines, they hate solar farms, solar panels. You know, anything that's not Not a traditional crop that you would grow here, there against it. So there's very much that, you know, I, I think of it as sort of small C. Conservative, right? It's not ideologically conservative, it's more like a conservative temperament. An idea that, that we don't like things changing. We don't like the economy changing, we don't like new things being built. We want this county or this, this rural area to remain as it always was or as they imagine it always was. So if you went far, far enough back, it would not have been farms. So the, the idea here is that I, so I think part of the, what's happened is in my observation of this and I'm going to get to the merits of data centers in a moment, but I do think part of the context here is that there is that NIMBYIST impulse, NIMBY as the old acronym stands for not in my Backyard. The people who, who, who don't. Who reflexive nimby, the classic NIMBY is the person who reflexively opposes anything being built near them, especially anything big or anything new because it changes the character of the community, it changes their environment. They want things to remain as they were. And any inconvenience, you know, any new project is going to have some inconveniences. And for the real high card coordinate, no amount of inconvenience introduced by having something new would be acceptable. That they want things to remain as they were or to change so slowly and incrementally they don't notice it. All right, so that's a classic NIMBY reaction. And here's the thing. I think that the history on this is, is that in the last five, maybe five to 10 years, but really mostly in the last five years there's been some progress made against that sort of attitude. There's been a movement that's calls themselves yimby. So instead of not in my backyard, they say yes, in my backyard. And this started out especially in some of the big city centers where you had, it really started out with you had a bunch of young people who were wondering how come I can't afford to buy a house? And they looked around and realized the reason that you couldn't afford to buy a house is that nobody could afford to build anything new. In, in the, in the urban neighborhoods you have like vast areas where you had these sort of modest, you know, one story craftsman style ranch houses that were built for carpenters and plumbers and you know, blue collar middle class people a century ago. And those were now all owned by, you know, not mid upper middle class knowledge workers. There were now, you know, all the houses cost a million and a half dollars and up. And it was because they, they had kept this zoned for only single family residential buildings. Not enough new stuff had been built. And it just drove up the prices of the existing housing supply and it priced young people and lower income people completely out of the market. And so there was a push that was made to say look, this is bad, we need to reverse this. And it made some progress. And so one of the things that I think has happened is that the YIMBYs or so the NIMBYs have been sort of made to feel a little sheepish. They've been pushed back on these key issues of housing. And also the other issue in which they've been pushed back is green energy. Because there's been this big push. Oh we have to have. Because of global warming, I think that's dubious. But because of global warming we have to have this transition away from fossil fuels. And so people would go out and you know, they try to build things that were, they thought were necessary for environmental reasons and found out we can't build this wind farm or we can't build this solar farm or we can't build this electric transmission line to take the electricity from the wind farm to where people need it. We can't build any of these things because there are so many restrictions on permits and approval. There's so much nimbyism that's stopping us. So there was this pushback against nimbyism. And I think part of what's happened with data centers is that, you know, with the other versions you could say, look, if you're nimby, you're, you're, you're keeping young people or low income people from being able to buy a house or if you're an nimby, you're stopping these environmentally good projects from going, going into place. Whereas with data centers is the idea that, look, if you're, you know, the only person who gets hurt by this is Mark Zuckerberg or, or Jeff Bezos or you know, one of these tech barons in Silicon Valley, that's the only person who gets hurt, so why should we care about them? So it became like a respectable reputable outlet for all this pent up NIMBYism. You know, the old NIMBYISM hadn't gone away. The older version to change hadn't gone away and it burst forward and found this respectable channel which is we hate data centers now. The other aspect I think we need to throw in as context here is, is the fact that people, is that the fact that the big tech companies have also sort of alienated the custom people in a lot of ways. And especially I think, you know, it's partly the, the politics of it that, you know, they, a lot of them were seen as sort of sucking up to Donald Trump. So there was a partisan element that if you're a Democrat, you're a lot less likely to have a positive view of, of, of Jeff Bezos or, or Elon Musk especially. So there was a partisan element of people sort of having this resentment towards the tech guys who are building a lot of these data centers to put it into AI. But the broader thing is people have a hatred, a suspicion, a fear of artificial intelligence. And a lot of this has been a giant new build out of data centers, trillions of dollars being poured into this. And a lot of that is being, is, is being the impetus behind a lot of that new building of data centers is people trying to put in the computing power to power artificial intelligence. So some of this sort of the fear and, and the fear of artificial intelligence and not just the robot apocalypse, but also the idea that your job is going to get automated away. That fear, which, which I think, you know, it is a way Silicon Valley did its, its hype job too well that they actually promoted, oh, AI is going to be able to do everything and they've sort of to, to get the investments in from their investors. They've sort of encouraged this fear that we encourage people to have this fear that this is going to take your job away. And so therefore a lot of that anger and resentment towards the big tech companies and towards AI. It's, you know, there's very few ways that people can find to stop that. The one way you can find to stop it is show up at your local planning commission and speak out against the data center. So I want to set that as the context, as the reasons why people, why there's a sort of a, an animus going into this. Before we even get to the specific issues, there's an animus coming in here from two angles. And one is this general fear of change and development of something new coming in that's going to inconvenience me. And the second one of this, the, the fear and opposition to artifact, this new era of artificial intelligence, fear and opposition to the tech companies and the big guys behind the tech companies that is then finding an outlet. This is a way to get back at them. And stop them from building their AI data centers. Now let's put all off to the side as the context. Now I want to take a few minutes and go to questions shortly, but I would take a few minutes just to go over the main issues with this as I see it. So the first is, first of all, what are data centers actually used for? So a lot of this has come been brought up in the context of AI and it's all being used for AI and we should do this because we, we hate AI or the threat that it poses. But the fact is that, you know, Virginia, where I am, it has been a center, a big center for data center construction for like 40 years. And most of that 40 years, you know, ChatGPT didn't exist. A lot of the anthropic OpenAI, these companies didn't exist. Most of that data center capacity was built for, for doing, for doing other things, the ordinary things. We're doing things like what we're doing now, right? We have, I, I'm giving you a talk here, talking with you about, about data centers. I'm broadcasting this from the seller of my house. It's going out, you're watching it wherever you are. All of that, these, these sounds and pictures are all going through data centers. But the big things that's going to do with it's going data centers are being done is so you can, you can buy stuff online and so you can stream movies, right? So if you have Netflix on your TV or one of the other streaming services, all that's coming through a data center. If you're going to Amazon or if you're going to any other person who has a website and you're buying something online, which we all do in large amounts, you're doing that through a data center that, you know, the data centers were built out to provide us this experience of the modern intranet where we can do all these things online that we could never do before. And that, I think that's, that's, that's progress, that's incredible and productive. I would not want to go back, you know, to the era where we had, you know, three, three channels on three broadcast networks that you got on a rabbit ear tv. So, you know, this is progress and we need data centers for this. And one of the ironies I said, I've been running for office for a part of last year and one of the ironies I found is that there were two big causes I would hear about when I went out to especially some of these rural counties. The first is we need to have broadband Internet and we hate data centers. And if you think about that, it's like, well, you pick one of those two things, but you can't have both because if you have broadband Internet and you're all taking advantage of this access to the Internet, which they correctly think is important for people to have the conveniences to be able to work, to be able to expand the economy, especially in rural, in remote rural areas, it's important for them to have access to the Internet. But if you're on the Internet, where's all the data that's coming down to you on the Internet? Where's all the data that's coming into your phone? Well, it is going through a data center. And so you could pick one, you can be against data centers, you can be against data centers or you could be for broadband, rural broadband. But those two things, you can't do both at once. So that's part of the context I want to set for this as to the benefit, the value of data centers. Now the second one thing I'd say is I've been commenting on AI and the developments in AI for gosh, 10 or so years now, watching this develop and, and I've seen a lot of cycles of hype and overhyping and I think we're in another overhyping cycle. So I think both the, you know, there's sort of two, there's two overhyped schools of AI which is one is that it's going to, it's going to, you know, have super intelligent AI, it's going to solve all of our problems, it's going to cure cancer, we're going to take a, carry us instantaneously into some sort of future utopia. And, and the other is, you know, the Skynet version or the Skynet, the Matrix, Ultron, whatever. You've probably seen at least one movie with this scenario where the AI becomes intelligent and it immediately tries to kill us. All those things are really not going to happen. I've following this enough. You know, the AI could do some interesting things. It's not that powerful, but there will be, you know, there will be some effects. It has unemployment, I think it's actually not going to do as have as much effect on taking away our jobs as, as they claim because a lot of those overhyped. Now the, the avenue that people use then to go after this because they're afraid of the effects of AI is the avenue they used to go after is well, what about the effects that the data centers have? And the main Things are. They talk about the power use of data centers, they talk about the water use of data centers, because a lot of them use water to cool, you know, the, the as you're putting. What is a data center? A data center is just a big warehouse full of electronics. It's full of computer chips. It's full of processing power, computer processing power. So all these chips, as they're processing all this data, they warm up, they heat up, they need to be cooled. And so a lot of them use water. They run water through pipes as their coolant to. To take the excess heat out and keep the system functioning properly. So there's water use, there's power usage, and there's water usage. And then the other thing is noise. And so people will complain that there's just a humming noise that comes from the operation of all these. All these chips and all this electronic equipment, this humming noise that can be moderately loud. Okay, so one thing I want to talk about this. So let's take those one at a time. And I would start with water. So water is kind of an issue where. Where we are in central Virginia, because the geography of. Is such that we don't have a lot of natural lakes. But on the other hand, my local one is being built literally on the shore of an artificial lake created for the nuclear power plant. So I think water supply is not going to be an issue. This is something that can be taken care of. This is. There are ways of gathering water, the water they need. And the water needs are not that great because, you know, this isn't like somebody compared it to a paper mill. Paper mills use huge amounts of water to. To process, you know, to take the wood pulp and soak it and then process it through to make it into paper. And they produce huge amounts of runoff where you have the residue from the wood pulp and other chemicals that they use in the process that are in the water. And you have water treatment issues. Data centers are just taking a much smaller amount of water. They're running it through pipes, and they're not doing anything. You know, there's no. There's generally not an issue with toxic waste. Anything is coming out of it that's toxic is coming from the pipe. It's not coming from some massive industrial process. As for the power usage, I think that is a significant issue, but it has to do with how electricity generation and distribution is regulated, because. So what happens in Virginia, I know that we have a system where the power industry is heavily regulated, often at the state level and oftentimes Those rules are done in such a way that when the power companies build new power plants to provide new energy, then the cost of those new power plants is automatically distributed across all the ratepayers. So like you in your house, me and my house, using electricity to go online and to give this talk, I'm paying, I would end up paying a higher rate because of a new power plant they built in order to power a data center. Well, but that's a problem with electricity regulation and the rules of electricity regulation not being properly set up. It's not a problem with the data center itself. It's a problem with the regulatory structure. So that's something that can be fixed. And I've seen attempts to fix it. And then last is the least one that I think is least substantial is the noise. Now the noise of a power of a data center can be, you know, like I said, it's a moderately loud hum. And that could be an issue if you are literally right next to it. Most of the data centers I see being built especially out here in more rural areas in central Virginia, they are not that close to residential, just where people live. They're not that close to a residential place. There's, it could be a quarter mile or half mile or a mile away from you. Literally, if you were driving around in the area, you will probably never actually see it. It'll be behind trees. The noise is not a major issue. Now that might be an issue if you're literally living right next to it. We could make them build walls, but what you'll see is that each one of these is a relatively minor inconvenience to the people around it. It's something that could probably be mitigated. And the important point I want to make is that data centers are a relatively low level, inobtrusive light industrial facility compared to all the other things we might build there. So they use like, they use a lot less water, for example, than a golf course. They use less water than a, than a, than a paper mill. They're not as loud as a machine shop or a foundry or a steel mill. There are a lot of industrial or light industrial facilities that are going to be a lot louder and they use a lot, a lot of electricity, but not, as you know, not that much compared to a heavy industrial facility. And this is one of my concerns, is that. One of my concerns about this is that if you can't build a data center, what else can't you build, right? So if you can't build a data center, could you then also build a factory? Could you build a sawmill? Sawmill is tremendously noisy. Could you build a sawmill? Could you build a paper mill? Could you build an office building? Could you build a golf course? You know, all these things have a lot of the same drawbacks and maybe even more so than data centers have. And again, that aversion that people have to change towards anything altering in their world, I think people would more readily approve one of these other things because it's familiar, it's normal. Oh, a sawmill. Well, we already have sawmills. We know what those are like. But a data center is new and it's different and it's high tech. And so therefore we don't need that. All right, so my part of my concern about this NIMBYism, so when I put it on the campaign trail, I said I don't want to ban data centers because I don't want to feed the NIMBYs. Because if you create this precedent that anytime people object to something, anytime there's something convenient, convenience created by something, you can't build it. If you, if you set up rules that won't allow you to build data centers, there's a whole list of other things that you won't be able to build, a whole list of other economic growth and development that will not be able to happen. So aside from whatever value that, that data centers offer in terms of offer empowering the technology that makes our lives, that makes the sort of modern life that we live possible. In addition to that, there's the fact that if you ban data centers, I think you're going to end up with a problem where there's a whole other list of things you're going to ban. You're going to bring the full on old fashioned NIMBYism roaring back and you're not, you're going to cut off all sorts of other growth and development that could also happen. All right, so I want to, if you have something you want to pull out from the comments, Lawrence, go ahead. I'm going to go start scanning through them and seeing what, what, what people are saying here. [00:23:36] Speaker A: Okay. As you mentioned earlier that you already talked about water, that was the first thing that I was gonna see that someone had immediately jumped on about the pollution of drinkable water. But I think you've already attacked, sort of tackled that topic. So one of the questions that I've seen pop up a few times is regards to power. In terms of should the data centers be in charge of generating the power themselves or paying for new infrastructure, or should that cost be put onto regular customers. And I feel there's a few people who have talked about that and don't really feel like they should be paying for that to happen. [00:24:19] Speaker B: Right? So that's, I think is the reasonable response to this is the idea that, look, build the data centers, but you should also be paying for the power. Like I said, this is, this is actually really more an artifact of utility regulations and the way that they're structured, that they're often structured in a way that forces the costs onto other people. Now, I wanted to. Actually there's something in the comments here that is a broader thing that I want to talk about. And somebody says here, let me just read this one from King Fisher, 2135. My key complaint right now is the tax incentives. They don't make economic sense and it seems, seems like government's competing too aggressively to attract them. And I think that this real. That connects to the same thing. There's a long history of government providing certain subsidies, like especially local governments, state and local governments providing certain subsidies in order to lure a business in. Like we're going to give you a break on property taxes and also sometimes we're going to build roads, we're going to build sewers, we're going to build infrastructure, we're going to take on some of the costs of developing the land for a new factory or a warehouse or whatever because we want to lure your business here to our county so that the economic growth will happen here. And that's always been an incentive of local politicians to say, look, I brought in, I brought in the factory where all these people are, which bring out, brought in all these jobs. So if you have a good job working this factory, that you owe it to me. Right? That's the, the local politicians incentive. And so as long as that's been going on, there has also been a temptation for companies then, you know, an opportunity for companies then to say, well look, we can play because play Springfield against Shelbyville as to who will give us the best deal. That's a Simpsons reference for those who are above the age of 35. We can play these two counties against each other for who will give us the better deal and we can wring more and more concessions and more and more subsidies out. Out of them. And in order to, to support our business. So there's been this element of subsidies. Now part of the thing with data centers is the subsidies, you know, with, with a factory or something like that, you could make the case for the subsidy because, well, you know, or tax Break. Because, well, when we bring this factory and it's going to employ a lot of people in our county, a lot of people have jobs there. Data centers don't employ very many people. It's just this giant rack of servers. You got a couple of guys maintaining it. There's a lot of work that goes into the construction, but as soon as it's built, the construction workers leave, they go on to another project. And the number of people required to maintain it is relatively small. So it doesn't bring a lot of employment into the community. And so I think it sort of exposes that this sort of deal where you have governments subsidizing businesses to come in aren't always a really good deal. Sometimes they're good for the politicians because they get to claim credit for it, but they're not that good a deal economically or for the citizens who live there. And one thing that's part of the scandal of this that I heard a lot about was that you've also had cases where there will be non disclosure agreements that the local government will sign a non disclosure agreement with the company building the data center where they can't release details about the construction or the data center. And people got really upset about that. And I think there's a case for that that, you know, if you are doing something that deals with the local government, none of the activities of local government should be secret from the citizens, from the voters, from the taxpayers. And we just actually had it here in Virginia. Our governor just signed, I think he's just signed a law which bans these non, these nondisclosure agreements. So if you're building a data center, you have to disclose you're dealing with the local government to get to tax breaks or, or permissions or what have you. You have to reveal all, all the information. So you can't keep secrets. And I think that's reasonable. But like I said, these are reasonable complaints. They're not things that would shut down data centers entirely now. But part of the problem with electric, when it comes to electricity, as a special case, there is, I think we are, it is actually finally forcing us to, to come up against the fact that we have not been building a lot of new electric generating capacity. We have not been building enough power to power our economy. And I think we've sort of been able to put off the day of reckoning on that. And it's because of some of the Nimbus and because of some of the environmental restrictions and we've been able to put off the day of reckoning on that because we've increased power efficiency. So I'm coming to bathe in the, in the light of led, LED lights that I've got set up here for these videos so that the advanced LEDs use a lot, lot, lot, lot less power than old fashioned incandescent light bulbs. So you know, 40 years ago to light me like this would have required a lot more energy and that's happened across the nation. That we switched to more efficient uses of, of lighting. That's actually made a significant difference. There's been other things that we've done that have, have decrease the amount of energy that we're using. So it's sort of staved off those savings in power use have staved off the sort of day of reckoning with the fact that we haven't been building enough new power plants. We stopped building nuclear power plants. We've put more restrictions on other kinds of power plants. And this kind of puts that issue to the forefront that yes, if we actually want to power everything that Silicon Valley wants to do with data centers, we are actually going to have to, we're going to have to use more power plants. So I view that as an opportunity. I view it as like, look, these guys have trillions of dollars to throw into, into building data centers. Let's say, let's use that as our upfront costs to help expand and build our power grid. It'll benefit everybody and it'll benefit everybody else, but we can get them to pay for it. So I think as long as they're paying all their way, their way, I think this is a win, win. We all get an expanded power grid, we get expanded generating capacity, but you don't pass it along to the ratepayers when it's going to benefit the, you, you, you, you have the people who are benefiting most likely from it paying for it. [00:30:28] Speaker A: So there's a comment from Alan Turner which sort of gets to power, but it's more of a strategic thing. He asks, is there a strategic aspect of data centers? We often hear that America needs to remain competitive in artificial intelligence. How important is data center capacity to that competition or to broaden the scope to just foreign policy in general? Does there even need to be competition in that respect? [00:30:51] Speaker B: Yeah. So, you know, this is the idea that look, if we don't build the data centers, China is definitely going to build the data centers. And that's absolutely true. And, and so China then is going to have the data centers, they're going to have the advances, they're going to be in the cutting edge of AI and we're going to be left behind. And I, I do think there is the case that AI has some applications in war that are very important. Now, I'm generally not the guy who's like, let's do industrial policy where we, we, we subsidize or support an American industry because it has strategic importance militarily, because like 90% of the time it has a strategic and distance importance. And militarily actually just means there's, there's a factory in my district and I want to subsidize it. You know, this is used by, it's a, it's something that's been hugely abused by politicians. This, the military justification for putting subsidies or import restrictions. But it also is true that like, yeah, as with airplanes, you know, we, it's good that we have American manufacturers of F16s, you know, fighters and bombers, things like that, so that if we're in a war, we're not dependent on some other country to supply us with, with the, with the planes or the rockets or what have you that we need. So it's really good that we do have. I think the thing is, if it's not just a matter of subsidizing or putting in tariffs to, to protect an industry, but it's literally a matter of not crippling our own industry by, by using government regulation to strangle it. I think we shouldn't use government regulation to strangle it for a number of reasons, but also for the fact that this is going to have military applications. Now, some of the military applications are dubious. Like in Iran, we blew up a girls school because they were using AI for targeting and it was using bad data. And so, you know, that wasn't the AI's fault. It was the people who were using it who screwed up, who used it in a wrong way. But, you know, so there's, there's some dubious applications, but I know, for example, in Ukraine that AI can be used to, so when you're sending drones out and you're trying to control the drone, they will, you know, the, the enemy will try to, to, to block, to block or to, to jam the frequency that you're using. And so one way to do that is frequency hopping where you, the, the, you change freak, you know, both your transmitter backup base and the drone are changing their frequencies. They're transmitting on to be able to keep, to be moved to new frequencies that aren't jammed. And some of them have used AI for that Right. To, to make that, to create that sort of random hopping of frequencies in a way that can't be blocked by the enemy. So there, there are number of different applications of AI militarily, there may be many more in the future. So yes, we want to not kill our own AI industry for that strategic reason, but I think it's mostly for the economic reason. And the economic reason is whatever. You know, I think AI is overhyped, but there will be productive value that comes out of it. I think the main thing that's happened so far is it's put a lot of programmers, actually it hasn't put programmers out of work. There's still a lot of programmers working. But I have heard that it has, it does increase the productivity of people who are writing computer programs because there's all sorts of whole blocks of code to do something that can be done by relatively reliably by the AI. As long as you're testing it, it can be done relatively reliably by the AI for a lot less work, putting in a lot less work than if you were coding every line by hand. And so it has increased the productivity of, of certain, there's certain professions where it's already increasing the productivity of people who are working. And, and so there are going to be productive benefits to AI and we should not be throwing that out. Like I said, I think it's it. Some people compared the AI, you know, AI is almost certainly a bubble. Some people have compared it to the early years of railroads because again, there was this huge infrastructure build out, huge amounts of money put into building new railroad lines and engines and all the things that made the railroads work. And it was done in this, this massive growth that ended up being a bubble. And a bunch of the early railroads went bankrupt because they were building it without really knowing what was going to be productive and what was not. And so, but on the other hand, you know, in the long run having railroads was hugely productive. It added a whole lot of value to the economy. Even though a lot of the early build out was a bubble and a lot of people went bankrupt, I think we're going to see something similar here. So he says maybe nuclear power can finally come back. That's one of my plans too. So I think something we could take advantage of, which is the big problem with nuclear power as an energy source is that you basically have to pour a couple of billion dollars, like 10 or 20 billion dollars into a hole in the ground for about five to 10 years building the thing because it's such A huge amount of infrastructure to build the reactor and build it safely. So you have to spend like 5, 10 years just pouring billions of dollars into the ground to make this thing. So it's huge upfront costs. And then after 10 to 20 years, when you've made back your original cost, you get the cheapest power that you could possibly have. Because nuclear power is incredibly efficient. But it's incredibly efficient, you know, 10 to 20 years from now, but hugely capital intensive when you first started up. And I think that's a great case for where you have something like this where somebody needs a lot of energy, they've got trillions of dollars to put into it. You know, have them say, okay, put, put that money in a fund, we'll use it to put those upfront costs for nuclear power plant. And then you get first call on all this cheap energy that we get once, once it's built. I think that would be a great idea. That would be a good way to, you know, AI and nuclear power. Like, you know, each one has a problem and each one is the solution to the other one's problem. I think that would be tremendously good idea. But again, you have to overcome there's the same sort of technophobia behind, behind that, that blocks both of them to [00:36:53] Speaker A: that point about technophobia. I just, since you brought that up, there was a question earlier from my modern G asking what are the warning signs that a legitimate criticism has crossed into technophobia. So maybe there's a philosophical standpoint of how we can analyze that. [00:37:11] Speaker B: I think that's a good question. My, my rule of thumb here is when, when people would object to, to put up objections to data centers or to any other development. As I say, my test for them is under what conditions would you allow it? So under what conditions? If you have an objection about water use or power use or what have you, or noise, under what conditions would that be mitigated enough that you would say this is okay and we can do it. And generally speaking, when you push people on that the most Iheart people, you find out there's no conditions under which they would find it acceptable. They'll always find another reason why this thing can't be done. And so in those cases, you realize that the objections about the power or about the water or about the noise, these are not about power, water, noise, they're about, I just don't want this thing to be built. And so I guess the challenge to put it in your mind is if you think there's a problem, under what conditions would this be acceptable. So somebody. Now if and, and one good way, you know, your technophobe is if you're saying what one person says here in the comments. He says none of these data centers are doing anything good for the people. We don't need all this technological bs. We need freedom. Well, okay, so you know, meanwhile, you know, a lot think of, you know, we say don't need all this technological bs that is a tech. That is by definition a technophobic response. But at the same time there's sort of an irony there but that we are here talking about this on an online streaming service. We're taking advantage of all the huge benefits that we have. I mean the very fact that I'm, I'm out here in, in like I said, I'm broadcasting from central Virginia. I could not have done that. 30. Well I started doing it 30 years ago, but I wasn't doing this 30 years ago because you know, I was on a impossibly slow dial up connection. The fact that we so about was about eight years ago, I think it was that I first started sort of doing podcasts, first set up this little studio here and, and, and started doing podcasts from my seller. One of the first things I set up was I, we are in discussion of international news. So I got somebody I knew in Paris and then she brought in somebody she knew in Mumbai, in India. And we did this three way conference call of you know, central Virginia, Paris and India. And we're just talking like this, you know, on, on that, the split screen on zoom or whatever and being able to have this conversation about what's going on in the world, bringing together three people who are thousands and thousands of miles apart and then reaching, you know, people in the audience who are many more thousands of miles in every direction. That is something that was just not possible before. This modern age is something not possible without all these data centers and all the transmission telecommunications infrastructure that we built over the last 40, 50 years. And it's something that really wasn't possible till about 10 years ago with the technology, the advance in technology. And that's a tremendously, that's a new way of, the new thing we're able to do in the world that I think is tremendously valuable. The sport spread of information is so much more widespread, so much more easily available. I mean it's, it's. There's an irony sometimes I complain that, you know, when I, especially when I meet voters and I find out all the things they, they don't know or that they think are they think are true that aren't true, that I, I sometimes wonder, you know, we all had these supercomputers in our pocket with access to all the information in the world and somehow we managed not to use it. But it's all there. We have this tremendous value, the tremendous amount of entertainment, the, the entertainment and information, the ability to work remotely. So this is something I've been doing for 30 years. I was an early adopter. But the fact that you don't have to work, you know, 30, 40 years ago, I would have had to work in a couple of big cities, New York, basically New York or Washington, if I wanted to have the. Do the work that I do. And I would have had all the inconvenience and all the extra expense of having to live in one of these big cities. Cities. And I'm able to live, you know, a very different and much more rural lifestyle, which I prefer, have a lot more peace and quiet, have a lot more flexibility in my, in my, in my work. And that's something that is only possible with the kind of telecommunic modern telecommunications that we have. So there's a huge amount of value offered by this and saying we don't need, you know, we don't need technology. Well, you know, imagine what you. I think it's because we forget what life was like without technology. And I remember what life was like without all this modern telecommunications. And it was, it was a lot less now. It wasn't horrible, but it was a lot less convenient. But also, you have to ask, where do you draw the line if all this modern telecommunications is terrible? At that time, you would have found somebody who said, you know, the automobile is terrible and the airplane is terrible. And, you know, a whole previous round of technology they were against because it had upset the natural order of things. Or I recommend to you, I don't know if you can find it. Douglas Adams wrote a series of rules about people's attitudes toward now tourist technology. And they basically said anything that happened before you were 10 years old is the natural order of things, just the way things are done. Any technology developed between the age of 5 and like 30 or 10, between when you're like 10 years old and 30 years old is exciting and new and you could possibly make a living off of it. And anything happens after you're like 35 is an abomination and destroys the. Destroys destroying the world. And that tends to be sort of the attitude that people have. You know, people are against whatever technology happened after a certain point in time, but they Want to keep all the technology that happened before that. So I think that's sort of a contradiction in the way people think about technology. [00:43:06] Speaker A: Okay, I'm going to pull that up here and post it in the chat. But there is a comment here, just came in from Alan Turner asking about the thoughts of government being preferential to data centers because they want to utilize AI for more control. And he's bringing up the example of Flock, which while privately owned people have been showing a lot of sort of the abuse that police officers and other people have been using with it. [00:43:30] Speaker B: Yeah, so Flock is a good example because, you know, the promise of Flock is if you report your car, you know, 10, 15 years ago, you report your car stolen to the police and they say, okay, well, maybe we'll find it and maybe there's a good chance that they wouldn't. And so when you report your car stolen to the police, it's mostly so you could submit that to insurance and, and you know, maybe they'll find it abandoned like a couple hours later because somebody, you know, did a joyride. But a lot of times it's just gone. We can't bring it back. But now, you know, the, the sort of, the positive thing, the selling point to get for Flock is that, well, now we, we could, we feed in your license plate and you know, we have these license plate readers and within minutes, within an hour, we could find somebody driving your car along and we know exactly where they are and we can stop them. We get your car back and that's fine. But here's the problem with Flock is it also becomes this sort of universal surveillance state with not a lot of controls on it. And so the, the scandal on that is you found a bunch of guys who are, you know, guys who are in the system who are on the police force, who are using it to stalk their ex girlfriends or, or you had a case in Texas where you had a zealous local prosecutor, an anti abortion zealot who was trying to track someone who he thought had left the state in order to procure an abortion. So trying to track her not just within Texas, but I think going across state lines by accessing this Flock camera system. And there, I think there were some similar things with not just the Flock cameras, but the ring doorbells where you have this, this, this camera on your doorbell. And you know, the thing about that is you can see who's coming to your house. You can see, you can see who stole the, your Amazon package off your front porch, but you can also track everybody going through the neighborhood, and they have some very creepy technology there. So I think definitely that's a case where I think there's a role for government not to use and abuse this, which government tends to do, but to, to regulate it and say, look, this is data you can't. And to, and to basically say, here's data you can't gather, data you can't store, data you can't access in certain ways because of those privacy issues. And I think that, you know, unfortunately, we, we have been building the downside of that. This is like, this is not the robot apocalypse. The real downsides are things like somebody can use this to track you or snoop on you, or, you know, your ex boyfriend can use it to stalk you or whatever. So I think there's some legitimate complaints there. But again, the question is, are there things that could be done to mitigate this or are you just deciding, are you or, or is there nothing that can be done and you just don't like the technology existing in the first place? [00:46:13] Speaker A: Question just came in here from Flying Custard, who is asking, how should a free society balance property rights against genuine externalities such as noise pollution or strain on shared infrastructure? We've kind of talked about this in different ways, but more philosophical branch. [00:46:31] Speaker B: Yeah, I think philosophically. So the philosophical thing I would say is to recognize that this is an issue. Right? And this is always going to be an issue. It always has been an issue that. So, you know, one of the things I mentioned that, you know, people tend to focus on the new things, the new technology, because it's, it's, it's new and not on the old familiar stuff. So like, one of the major issues that we have in this country is runoff, agricultural runoff. So if you're fertilizing your field and you put a bunch of fertilizers on there and then it rains. And some of that rain, you know, some of that rain gets soaked into the soil and keeps your plants growing. Some of it runs off into the local stream and that, you know, for a bunch of different farms, makes it into a local river and then eventually makes it to the ocean. And you end up, and that can end up creating some problems where you have like, algae blooms that are happening in the rivers or, or at the mouth of the ocean because you have so many nutrients coming down from fertilized fields that, that, that, that are, that are feeding the algae. So they have these, these algae blooms are not natural phenomenon. They're caused by the agricultural runoff, and that can cause problems it could cause problems for water treatment and things like that. Or similarly, if, you know, if you have a city, a city creates a lot of runoff, it creates a lot of human waste. It creates a lot of. A factory can create a lot of waste. It has to be retreated. It has to be treated. So I definitely think that, you know, the property rights regime, if you have a society that has property rights, it recognizes the right to property, but it also recognizes your responsibility for what happens on your property and your responsibility for what happens when something leaves your property and affects somebody else's property. So it generally involves things like, you know, if you have there. There are certain regulations that have to do with, you know, have been put in place on this. So having to have containment ponds so that when water comes. Runs off of your property, it's contained in a pond. It doesn't just go out into the rest of the system or having to have, you know, you. [00:48:37] Speaker A: You. [00:48:37] Speaker B: If you have wastewater that has dangerous chemicals in it, you are responsible for treating that wastewater to make it safe before you release it into the local river. So my dad tells the story of. He grew up in Cleveland, Ohio. And there is at one point where the Cuyahoga river, which is the river that flows through Cleveland, the Cuyahoga river caught on fire. Now, how does the river catch on fire? Well, there was a factory that had flammable materials that were leaking out into the. Leaking out into the. And floating on the surface of the water. And then, you know, something set it off and it caught on fire. So there's a case where, you know, the property owners are responsible for making sure that what happens in their property does not adversely, in fact, impact the property and the lives of other people around them. So there's a way to do this. You know, this is not just something you can. You can combine with a regime of property rights. It is actually a central part of a regime, a system of property rights is that you create a system where there's. There's rules for what you're liable for. You know, you. You. This often works its way through the courts over many decades that they create sort of rules about that, about what's a reasonable thing that you should be considered liable for, that you are responsible for taking care of versus a reasonable versus something that's an unreasonable requirement that's on you. And so those things can. All. Those things can all be developed. They can work through the course, they can be codified in law. And, you know, noise, for example, you know, if you are having a raging party that goes to three in the morning every night, your neighbors can call on, call the police on you to make a noise complaint. So that's another case where, you know, if you are creating a problem that's preventing somebody else from sleeping, they, you know, government can come in to settle those, those disputes where people's rights, one person's right to have a party because you got to fight for your right to party. That's very important. But sometimes that right to have a party interferes with somebody else's right to have a peaceful night's sleep. And so there are rules that we come up with for how you adjudicate those disputes. And that is, I think that is, you know, that's the, that's the, the really legitimate purpose of government is government is here to protect our property rights. It's here to protect all of our other rights. So its job is to come up with, and the reason why we want to have that under a government, under a bureaucracy, under some sort of objective control is so that you can have people sit down over a period of time and come up with reasonable rules for how you settle these disputes. Where people are claiming that their rights are in conflict, where you can say, okay, here's how far the one person's rights go and here's where they end and here's where the other person's rights begin. And that is the central task, as I see it, of, of a civilized society, of having a government, is to, to make sure that you are coming up with reasonable, rational answers to those problems and allowing people to, to have their rights protected and have their rights work in harmony with each other because you've made reasonable dividing lines to settle those disputes. So this is the case where, you know, the philosophical context here for data centers is going to be. We don't, here is what we, what we don't want is we don't want society as a whole deciding that. We don't think, think data centers are a good use of, of your property. We don't think you should be, we think data centers are, are something you shouldn't be allowed to do on your own property with your own money, and therefore we're just going to ban it versus some saying you can do this so long as you make sure that you are, you know, providing, paying for your power, keeping your runoff from, from the runoff of water from your prop. From your data center, keeping that from polluting somebody else's property, where you have these restrictions that are based on the rights of other people, but recognize your Rights and keep them intact. [00:52:34] Speaker A: Okay. [00:52:35] Speaker B: And somebody talked about technophobia, about people who pine for the good old days which weren't so good. I think that's, you know, because we live in this tremendously advanced. Since I think people were in some ways I find that, that you know, if you go back, there's a certain history here where in the early years of the Industrial revolution, oftentimes a lot of pollution was tolerated. Like in some of the early factory towns where you had, you know, they were burning coal and you know, smokestacks are viewed as like this, this symbol of the horrors of industrial environmental horrors of capitals are of, of the industrial revolution. But actually smokestacks were the solution to a problem that if you didn't have a tall enough chimney for the coal you were burning, the coal dust would come out and the smoke and the dust from the coal would spread out over the town and people would literally, you know, have to have to deal with inhaling the dust from the coal as they were walking around town. That the first really tall smokestacks were the solution to say okay, we'll put it higher up in the atmosphere so that it, it just dispersed over such a wide area that it's not a problem. So again, I think. But the interesting thing I frustration I've made is that I think people put up with a lot of this stuff in the early years of the desert revolution. And the reason they did it is because they were so incredibly poor. I mean people were amazingly soul crushingly poor compared to what we enjoy today. And so they were willing to put up with a lot of environmental problems because the Industrial revolution was actually making them better off. It was making them, they could, you know, if you had a [00:54:13] Speaker A: mill that [00:54:14] Speaker B: was making cloth, was making cloth, you know, 100 times cheaper than you had it before, then suddenly there's all sorts of clothing you could afford, all sorts of new things we could afford because of that. You know, if you had a steel mill, you know, it was making products that you could not have had before. People were becoming much, much wealthier and they were starting just from just incredible, you know, in, in and in the most advanced western countries, people were incredibly poor and, and live much shorter lives and, and lived in, in squalor compared to what we have. The average person lived in squalor compared to what we have today. You know, there's this whole saying that everybody thinks about oh, how great would be live in the Middle Ages. And you think, well that's because you imagine you're going to be, be you know, the knight or the Lord. And you're actually probably going to be the surf, right? You're going to be the guy in the low. You know, statistically, like 99 of people were, were on the bottom. They were on the low end of the totem pole. And 99 of people were abysmally poor by today's standards. So the same sort of thing, I think we, we've, we've gotten so used to this tremendous prosperity we have that we forget how bad the poverty can be. And so we, we tend to say, oh, wow. We then, we tend to focus so much more on the inconveniences of modern life because they, you know, we take for granted all the good things that are coming from it. [00:55:35] Speaker A: Okay, we've got about four minutes left. That's really, I would say it's a good way to end it off. But we still got the four minutes. And we did get a super chat that came in from Chris Banker for $2. So thank you for that, Chris. We kind of touched on this earlier, so I don't know if you have any more details that you want to go into this, but he was basically talking about how much corporate welfare do data centers get. So aside from what we talked about with terms of tax breaks, are there other issues that you see currently arising in regards to how these data centers are ultimately getting set up? [00:56:04] Speaker B: Yeah, yeah. So, and that's a good question because one of the things I've, I've, I've been focusing on a little bit recently because, you know, I think there are people have some legitimate complaints against some of these big tech companies. And one of them is that this suddenly goes back a long time. One of the earliest sort of pro capitalist groups in American politics, sort of explicitly pro capitalist, pro free market groups in American politics, was a, a group of guys called the Locofocos. And there's a whole, they have this very colorful name. There's a whole story behind it. But it was this group of Democrats. They were Jacksonian Democrats and laissez faire Jacksonian Democrats in New York City in the night in the 1830s. Excuse me. And one of their key campaigns. So they were campaigning for free markets. What was their enemy? Their enemy was not socialism, because the term socialism literally at the time had just been invented in like, way off in France. Socialism didn't, wasn't really a thing in America. It wasn't something that had come across and become a cause here. In defending free markets, their big thing was they were defending free markets against big Business. They were defending free markets against the guys who had become wealthy, who had become entrenched, who tried to use government to set up subsidies and monopolies and corrupt, corrupt deals. So, you know, one of them was. The one was that New York, a steamboat monopoly. They gave Robert Fulton a monopoly on operating steamboats in, in New York. And then Commodore Vanderbilt came along and, and started operating a steamboat, a bootleg, a sort of illegal steamboat going from New Jersey to Manhattan. And there was this whole, you know, swashbuckling thing where he would like, did, did this in, you know, in defiance of the law and the police would be chasing him kind of thing for a long time. And then there was a big court case and they settled it. And the court said, no, you can't create this monopoly that prevents people from New Jersey from doing it. So I think there's something of that going on today too, which is that, you know, for all the complaints Bill have about, oh, the socialists on the left, and it's terrible. One things you have is you have some of these Silicon Valley guys who like, you know, present themselves as, I'm, you know, I'm a product of the, the harsh capitalism of the free market. And then you look closely at their business model and it's like, well, actually, you're a government contractor. I would, I would pull out Palantir on this because if you're talking about, you know, the surveillance state and people going through your data, a lot of what Palantir does is, you know, is data mining your life on behalf of a government, and that's not such a good thing. So I think we have to deal with the fact that, yes, I think there is directed indirect corporate welfare. There are a lot of these people who are, you know, we're doing this, but we're actually government contractors and we're getting government contracts to do this. I think the government has a role in needing to buy AI services. But it should be the same as they do with most other things, where the free market produces it, the private economy produces it, the government comes in as one customer among others. But, you know, that's something I think that the broader thing I would make is, you know, Ayn Rand once said, we have to save capitalism from the capitalists. And I think she said in a somewhat different context to what I'm using. But I do think that applies here, that. That being a favorite capitalism is being in favor of the free market, not being in favor of whatever company happens to be big right now. Because sometimes those companies try to capture the government and they try to get the government to do things on their behalf and, or to use the government for subsidies or special favors. And yeah, like I said, one of the things that goes on is they go to the local government, the county government and say, hey, sweeten the deal, provide tax breaks and subsidies and build out some of the infrastructure and then we'll put our, our business there. And so a lot of this is, you know, sort of throughout the system. And so we need to guard against that, that, that, that, you know, we shouldn't, government shouldn't be interfering and preventing this from happening, but it also should not be playing favorites and subsidizing and, and, and, and sort of paying the bills for the companies because somebody has a friend in Washington or somebody made a friend in local government. [01:00:21] Speaker A: Well said. Thank you for that, Rob, and for this full hour. So hopefully all of you who are watching across the country and maybe even the world enjoyed this and hopefully this is assuage some of your concerns and maybe giving you a different perspective on data centers. So if you did enjoy this webinar and you want to support future webinars like it, please don't hesitate to support the Atlas Society and all of our work@Atlas Society.org donate and be sure to join us next week when Jennifer Grossman will return. Well, she'll be joined with Romina Bakia to talk about her co authored book Reimagining Social Security Global Lessons for Retirement Policy Changes. We'll see you next time. Take care everyone.