Let a Billion Blooms Bloom

Bloom Energy builds energy servers. An energy server runs on clean fuels cells. An energy server provides “100kW of power, enough to meet the baseload needs of 100 average homes or a small office building… day and night, in roughly the footprint of a standard parking space.”

Science fiction? Not at all. For 8 years, Bloom Energy has been in development mode; they have just started to deploy their servers to companies such as  Google, Walmart, Staples, and FedEx.  Each server currently costs $750,000; the goal is to slash the cost to $3000 within a decade.

A price of $3000 for a locally distributed, clean energy source would obviously revolutionize power generation. Will Bloom Energy be successful? We do not know. They have been successful in generating publicity, and the early results for their product are promising. Yet, for every Bloom Energy we hear about, a 1000 more Blooms are still in stealth (development) mode. Most will never be successful, but the few who are will transform world. And no one can predict which Blooms will succeed.

In the months to come, politicians, the economically illiterate, and those who support a larger role for government will chant louder and louder:  We need a new energy policy. The government owes it to the people to do something about the coming energy crisis. Someone needs to do something to secure our energy future.

The federal government was designed by the framers of the Constitution to be slow-moving. Legislation was to be hard—not easy—to pass. The Senate was designed to be the place where bills without broad support would die.

Why would the Founders design our system of government in this way? They understood that a free society innovates and creates wealth —politicians and planners are unable to do that. Elected officials were to be stewards of the founding principles of the country and not central planners meddling in every aspect of our lives. The Constitution was designed to bind the government to very limited and enumerated powers.  Thomas Jefferson wrote clearly, “In questions of power, then, let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.”

There is seemingly no end to the mischief that politicians propose. And, about the effects of what they propose, they are seemingly ignorant. In his book The Fatal Conceit, Nobel laureate in economics Friedrich Hayek observed, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” Having written The Road to Serfdom, his seminal cautionary book, Hayek would not be shocked by how vivid the imaginations of American politicians have become as they “design” our future.

Entrepreneurs are essential to secure our future freedom. They help lower the costs and improve the quality for essential products. They help to decentralize power by overthrowing incumbents and channeling decision-making away from government. Congress does the exact opposite—they centralize decision-making and raise costs by subsidizing that which cannot exist in a free market.

The Blooms of the world need capital. Unfortunately, we are in a destructive spiral in many areas of the economy—more government involvement and more subsidization which leads to more problems and triggers more demands that government “solve” the problems.

George Gilder gives us the antidote: “The first great rule of enterprise is do not solve problems, pursue opportunities. Problems are infinite and they multiply continuously; when you solve them, you are back where you began. Governments specialize in creating problems that they then generously solve for the people, creating yet more serious and more systemic problems in the process.”

Every day, tens of thousands of people are working tirelessly to secure our energy future. Like Bloom Energy, they’re doing it in stealth mode—we won’t hear about them until they begin to be successful. Politicians will tell us it’s too risky to bet on Blooms. Should we trust the “wisdom” of the politicians or of the Blooms?


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: