Well, that escalated quickly. The above AI exercise started with a simple question about anti-trust law and went all the way to a ‘Declaration of Infrastructure Sovereignty’. Most of the path there was heavy-duty political science (or so it seems to me– in any case, outside my main expertise), so I don’t know if I was asking the right questions or whether ChatGPT’s answers will stand much scrutiny. But interesting — flip through the PDF and you’ll get the idea (my questions highlighted in yellow).
The simple question to ChatGPT stemmed from some further thought on an off-hand observation I made a few days ago in another AI exercise:
Btw, as the model ‘contemplates’ and slowly scrolls out an answer, you get a visceral sense of physical effort: millions of chips firing away, heat rising from the frames, electricity pouring in and heated cooling water pouring out. All for one question on a free model. Now…how about that essential physical infrastructure again?
In old time means of production, that physical effort came from human beings, either with their muscles or (increasingly, as technology progressed) with their physical ‘wetware’ brains that controlled the draft animals, steam engines, machine tools, input switches, logistics, and so on. But now, increasingly again, the wetware is replaced by AI software which controls robots doing the physical stuff. People will become marginalized as a primary factor in economic production. Everybody knows that this is a looming social problem of explosive magnitude — nobody has an answer.
But, as I imagined it the other day, there still is physical effort going on (even to produce a purely digital product) and so physical infrastructure (to deliver electricity, communication links, cooling water, transport, etc.) is as essential as it ever was. Oh, you say, how hard is that? Some wires, pipes, asphalt planted on cheap land. And you’d probably be right.
And perhaps so said a Mr. Gradgrind as he planned a factory in mid-19th century England and considered the physical effort then required. ‘We’re going to need a lot of people to operate these new machines. Oh, how hard is that? Some subsistence wages and cheap worker housing planted on non-productive land close to the factory.’ And he was right — until the people organized into trade unions and demanded a bigger cut of the pie. Or organized politically, under a new and radical ideology, and demanded a lot more.
Public Infrastructure Regional Cartels
Now back to our own hard times. The elected officials of a locality might ask the developer of an essentially jobless new data center to cover the cost, in some way, of the additional infrastructure improvements that will be necessary. ‘No problem,’ say the developers, ‘but that’s all you’ll get, or we’ll take our data center to another town.’ Well, that’s how it is.
But something changes. The elected officials of many localities in the region get together — and organize. They know that their local labor is relatively unimportant to data centers and robotic factories, but that their local infrastructure is critical. Their wires, their pipes, their asphalt, their land — low-tech, dull as dirt, but theirs [1]. And what else do they have? A few of their people can move away, but most are stuck. If their communities are going to survive, they have to work with what they’ve got to get what they can out of the new economy — it’s existential. It won’t be easy, but they well know that if they compete with each other, it’ll be much worse.
So, they form…a coalition, a conference, a co-operative, an association, something like that, but regardless of label, in essence and in operation a cartel. The cartel agrees to establish a minimum price for infrastructure access. All costs covered, of course — but more. A chunk of the data center’s profits through special local taxes, obligations to fund local restoration or land improvement, support for local education, maybe environmental remediation — it can be a lot of things, but it will be more. And it will be made clear to the developers that there’s little point in going elsewhere in the region, a region that is so otherwise perfect for the planned development, because all the cartel members have sworn to ask for the same.
Of course, this is classic monopolistic behavior — the cartel is, in effect, a ‘trust’, as the term was used for late 19th century US industrial monopolization. The legality is, at best, ambiguous — hence, the questions for ChatGPT. But the economic effect is straightforward — I won’t sugarcoat this — the owners of the infrastructure, or access to it, are extracting rent from the users.
‘Unconstitutional! Un-American!’ say Classical Liberals. ‘Economic travesty! Incredibly inefficient!’ say the Neoliberals. ‘Heresy! Uncontrolled and rapacious provincialism!’ say the Progressives. Yes, a lot of that is off-the-chart hypocrisy. But each is right in one way — rent extraction by cartel is not pretty.
But what choice did the cartel members have? They wanted their communities to survive and for their people have a decent life, not as pitiful recipients of progressive largesse, or maintained as a sullen reserve army of labor for low-wage services, but because in some way they earned it, and when necessary, by taking it. This kind of story has a moral quality that resonates with many people — a cartel’s rent extraction soon becomes seen as a regional coalition’s righteous actions to preserve and restore local communities, the sacredness of place, continuity of identity and culture, and so on. The regional coalition will inevitably face neoliberal resistance and serious legal challenges, but those battles will be classic morality plays and, successful or not, will only amplify the underlying theme: Physical infrastructure cannot be considered as simply an economic factor, but as subject to the natural rights of people — not just their individual right to electricity, water, etc., but their right to act on a collective basis to gain economic relevance and preserve their local communities by taking control of the value of their physical space.
The Ideological Power of Public Infrastructure Issues
Okay, the above story about public infrastructure cartels is perhaps a bit fantastical. I was spinning it, however, to illustrate an idea that does strike me as realistic: physical infrastructure issues can have an ideological component and, as such, may attract political Ideological Power, as that concept is described in the prior essay, From an Unstable Mix of Forces, a Possible Path. There I sketch out that the path to federal infrastructure finance reform in the current political context requires Ideological Power, which can only be achieved indirectly, by public infrastructure issues themselves becoming ideological. The cartel story and the somewhat extreme ChatGPT ‘discussion’ are explorations of how that might happen.
I’m not sure what the ideological component will exactly look like, but I do think that it’s realistically possible.
- Historically, it seems that ideologies always arise wherever there is a need to change control over critical economic assets. Simply asserting ‘right of conquest’ (e.g., cartels extract rent because they can) usually doesn’t work well or for too long. The increasing marginalization of labor creates the need for change (likely acute in many localities) and local physical infrastructure, which will remain critical, is one of few available means to effect it. So, whatever form the change is forced to take, it’ll probably need ideological cover.
- Even the Administration’s recent crazy-looking tariff actions weren’t pitched completely as a purely economic initiative. Concepts of national renewal, nationalism, self-reliance, and other goals were stated or surfaced in ideological opposition to globalism.
- Maybe most importantly, post-liberalism is an emerging ideological viewpoint (at least to the extent that it explicitly opposes current ideologies) which emphasizes the importance of local community, physical space, and an equitable ‘common good’ standard for economic policy. Local public infrastructure would seem to fit into all of that — and its renewal (especially with reformed federal finance) is a practical, near-term way to demonstrate the principles. More on this topic in future essays.
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Notes
[1] Being rhetorical here. Of course, reality is far more complicated. Much local infrastructure, especially energy and communications, is owned by IOUs. Other stuff crisscrossing the locality is federal, state or regional. The local authorities might have some indirect control (e.g., regulation, special taxes, tolls). But the core point about ‘theirs’ is valid, I think, especially in the context of rent extraction. There was some early economic theory about land in a natural state being developed for agriculture over centuries, and the rent extracted by the current owner somehow reflected the past efforts of development. A legacy of ancestors, and so on, implying a natural right to use the physical space and the improvements on it (regardless of origin) to survive and prosper, even if by extracting a part of the production. A legal or moral right to control the local infrastructure is the sense. But actual ownership would be better.