Data Centers and the Open Access Order
The US discussion over datacenters is depressing. Datacenters do not use a lot of water, they produce very useful outputs, they are not a blight on the landscape. All of this is obvious. But I don’t want to restate the obvious. What bothers me most about the discussion is that people seem to think this […] The post Data Centers and the Open Access Order appeared first on Marginal REVOLUTION .
The debate surrounding data centers is a contentious one. These facilities are efficient in their water usage and generate significant benefits, but their construction process often involves complex negotiations and community agreements. This process varies greatly from the general rules that govern most economic activities. North, Wallis, and Weingast argue that societies generally operate under limited access orders, where political power determines entry and resource allocation.
In contrast, open access orders allow for open entry and competition, regardless of who seeks to build or whether officials approve. In the case of data centers, the construction process involves rezoning, permits, comprehensive plan amendments, and community benefit agreements, rather than following established, impersonal rules.
This shift from the natural state, which prevailed for millennia, to the open access order that emerged more recently, may have contributed to our current prosperity and political strength. However, the reliance on special agreements and negotiations to access economic opportunities could pose a risk to this system's stability and continued success.
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