Wednesday, August 19, 2009

Generational Politics

I've always wondered about charging schemes (pardon the pun) for electricity. When we were young, they taught us that the electricity bill was calculated in terms of kilowatt-hours (kWh); that is, the amount of electricity used to do work multiplied by the amount of time. This looked perfectly reasonable; after all, with terms like 'flow' and 'current', it was almost as if electricity was like water, something turned on and off at the tap.

But I was just thinking in recent months... what is the main difference between water and electricity? The main difference is that it is easier to store water; you generate electricity and if it's not used, nothing happens and the electricity is 'wasted'. In fact, it doesn't matter how many people use mains electricity as long as the load limit isn't exceeded; excess capacity is just excess.

There is a case for conservation of water, of course. We should keep as much reserve water as possible and not waste it. But domestic electricity is just a sideshow compared to what's used in industry. We should be allowed to use electricity as much as we can, up to a certain limit, for a flat fee. I'm sure the reason we don't get this privilege is a political one and not a scientific one.

In fact, the main opposition to Edison's electrical lines was Tesla's wireless effect, first patented in 1904. The difference between the two is a simple one. Edison's wires received financing simply because you can put a meter on a wire and charge for usage (like a tollbooth on a highway), while Tesla's approach would have made it impossible to charge for electricity at all.

Yes, it all comes down to this. Econs students, take note. The only way to really make money is through inefficiencies. If the free market had no failures at all, you'd be paying exactly how much something was worth, and in a sense, nobody would be making qualitatively outrageous profits.

In the case of electricity, if practically infinite energy was to be produced, as Tesla hoped when he studied the harvesting of universal energy, then eventually, everything would be free except craftsmanship, style and imagination. Edison won because people could understand how money could be made from his system of electricity distribution. But Nikola Tesla was a far better scientist, a visionary and a genius.

Then again, nobody has ever been able to prove that intelligence is a winner.

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