Are free ideas and Peak Oil compatible?

Lisa Margonelli asks a good question, referring to Chris Anderson’s book on the Freeconomy:

“Underlying this copious pile of free is a steady stream of electrons that keeps our eyes and ears hooked into the ideas beaming out of our computers, TV’s, stereos, and twitter-enabled smart phones. Between 2000 and 2005 according to this pdf report by Jonathan Koomey, the amount of electricity used by servers alone doubled to account for 14 power plants world wide and $7.2 billion dollars. Is there some tension between free ideas and limited energy and natural resources? Are free ideas and Peak Oil compatible? Or do they have some strange synergy? I think so, but the unified theory of it all remains to be thought, so I’m throwing it out to you, readers. Respond freely.

The low cost of energy has underwritten much of what we accept as reality. Free shipping for buying an extra book on Amazon is a case in point. But so is the bargain price of goods made in China with subsidized fuel and cheap container transport. And so are suburban McMansions, enabled by mortgages that didn’t take the cost of power into account. Long commutes in big cars were enabled by cheap gas, which seemed inconsequential until it topped $2 a gallon (and then $3 and then $4.) In the US, energy is a “right” as much as an expense, which changes its psychological price, at least.

Anderson (as quoted by Gladwell) says “From the consumer’s perspective, there is a huge difference between cheap and free. Give a product away, and it can go viral. Charge a single cent for it and you’re in an entirely different business…. The truth is that zero is one market and any other price is another.”

So what happens as the economy of free, with its viral geometric expansions, hits the economy of not-quite-free-and-increasingly-scarce energy? It seems to me that the price of energy will increase and somewhere along the way it will loop back and start either choking the flow of these free ideas, or putting a new price on them. But in the case of oil, the price of the resource itself is determined in the sphere of necessarily free ideas and information. Because much of the information about the world oil market is open and freely available, multiple participants in the market can price the product and transfer “free” news of its price frictionlessly around the world. As the resource rises in price, and the value of news falls, there will be two tiers of information about it–free and pricey. Will the market still work if the free information becomes worthless?”

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