Not too long ago I made a post on WeWrite called Unfiltered Thoughts on Data Centers where I consider the implications of data center overproduction on the general US economy and infrastructure
In summary, I was concerned that not enough attention was being paid to electrical "grid decentralization", where the overproduction of data centers creates something like an "income inequality", an uneven distribution of resources, where the "resources" in question are the newer, smaller, more robust, modular, and advanced voltage transformers, power lines, and generators in the electrical grid. I.e. due to excessive investment in data centers, new energy grid technology is being invested into sustaining data centers themselves rather than in residential areas for civilians, agriculturalists, and rather than in other domains that are more critical than data centers for reproducing the economy.
But I never took any time to consider the deeper implications that an imbalance like this has for America in general. To discover longer-term implications and break it down to what it means for the average person, I'll be creating a mental model that allows me to distinguish the general social patterns between two hypothetical countries. "Extremistan" will be the country that at some point in time, t, is currently investing as much manpower as physically possible (without its subjects immediately starving to death or experiencing insurmountable health crises like disease outbreaks) into constructing new data centers in its territory, while "Mediocristan" is a country that isn't investing as much into datacenters as "Extremistan" at the same time, t, and is aiming to diversify itself in other industries to a relatively greater extent (by how much doesn't matter) including factories, mining, lumber, refineries, agriculture, services, etc.
Let's say that at some later time period (months, years, etc. doesn't matter), time t+1, Extremistan and Mediocristan both experience an extreme weather event, such as a hurricane, tsunami, earthquake, or monsoon, and that this weather event occurred in such a way that every node in the electrical grid was equally impacted so as to be subject to the exact same amount and same volatility of high-speed wind, earth tremors, downpour, water acidity, and lightning strikes. I.e. every location across the realm of both Mediocristan and Extremistan experiences the exact same amount of inclement weather.
What would happen is that Extremistan would experience a disproportionate amount of loss compared to Mediocristan in infrastructure that's unrelated to constructing and preserving data centers. Extremistan would suffer disproportionate losses to factories, mining, lumber, refineries, agriculture, services, etc. These industries would more frequently be losing access to power in such a way that it couldn't compete with the *same industries competing with them in the open market in Mediocristan*. This would leave Extremistan with one of two choices:
1) Prevent a Keynesian death spiral by providing these industries with some sort of stipend, to prevent them from going out of business and to prevent Mediocristan from monopolizing the market in these industries
2) Allow the Keynesian death spiral to occur for these industries, cut investment from them, and thereby allow companies based in Extremistan (except for the data center industry) to shut down and cede the market to Mediocristan.
If Extremistan chooses option #1, the government deficit of Extremistan would increase and it would have to finance this deficit by going into more government debt. It's unclear to me atm what implications that government debt, by itself has for the general infrastructure of a country, so this is something I'll need to look into.
If Extremistan chooses option #2, there would be an unemployment crisis in Extremistan that could be resolved in 1 of 3 ways.
2.a) Similar to option #1, increase the maximum amount of welfare payments that the government can give to the unemployed populace, increasing the deficit and therefore the debt.
2.b) Somehow negotiate or make diplomatically possible a mass exodus (offshoring) of now-unemployed workers from Extremistan into Mediocristan, where expats of Extremistan origin are employed in Mediocristan industries that match their background.
2.c) Extremistan could simply allow the now-unemployed workers to suffer in their standard of living, with the most precarious among them becoming homeless, starving to death, or dying of disease
If Extremistan somehow got away with choosing option 2.b or 2.c, the situation at some time period after the hurricane and the recovery, time t+2, would be the following:
- Extremistan has now secured a relative monopoly on data center maintenance and production, since Mediocristan has fewer energy supply backups compared to Extremistan, but...
- Extremistan would now be dependent on Mediocristan for all other industries, including bare essentials like food, oil, vehicles, plumbing, etc.