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By your argument, there were no corporate profits to be made in replacing mainframes with intel-based servers and personal computers. IBM would possibly agree with you, but Intel and Dell certainly would not.

You won’t get funding from existing energy companies. But venture capitalists hoping to invest in the Dell of new energy might be another story. Somebody is going to make money building and selling these reactors.

A drawback to VC funding would be that they would probably require patent protection. But patents aren’t necessary for profit - Dell doesn’t have any patents on desktop computers and they do rather well nonetheless. How you make that case to investors, though, I don’t know.

There are plenty of opportunities for patents even if the basic science is published.  Eg. something as simple as a disposable razor blade.  The two major manufacturers probably get a patent a month of some aspect of their designs. 

Basic energy is even a larger market, regardless of how “cheap” it ends up being.  Even if you could make household fusion units (20 GG mag fields, and billion degree temps?  I don’t think anything like that could ever be built as a consumer device), you’d still have a large company building the units, selling, maintaining them, etc. 

Frankly, this whole notion of this energy being so cheap you couldn’t make money from it displays a basic lack of understanding of how the world works.  Maybe it comes from a utopian view of the world, and maybe that’s what motivates Lerner et al.  Great.  But in the real world, if this ever pans out, there will be LOTS of opportunity for for-profit companies to make bucket loads of profit delivering low cost power to consumers.  And it’ll probably use the same electrical distribution grid we currently have (maybe more decentralized as time goes on). 

The reason why corporate funding (and VC funding even) isn’t a viable option right now is that this is still in the realm of speculative basic science.  At this stage, funding would normally come from federal research grants through universities and research centers.

ptruby is minimizing the effects and issues here.  This is truly a “disruptive technology”.  Energy input is a basic cost in all products and consumables, even food.  It can be argued that valuation is simply a measure of how much effort (energy) it took to provide the product at a given time and place.  E.g.; it takes much more effort to located and extract a ton of gold than a ton of iron, so it is correspondingly more expensive.  Asparagus takes more effort to cultivate and harvest than wheat, so it costs more per ton.  And so on. 

But if you reduce the energy cost for many, but not all, products you instantly revalue/devalue them, both in “absolute” terms and relative to those products whose energy cost is less affected or unaffected.  The cost of producing microchips would be far more heavily slashed than hamburger, e.g. 

Consider the shocks that moved through the labor valuation market as electric-powered assembly lines came into play.  Many products that had been very pricey because of the handwork involved suddenly got a lot cheaper, and many workers were employed at lower pay to produce a flood of product that was previously scarce, driving pricing down and consumption and living standards up. 

Similar effects in a plethora of fields would be expected if focus fusion became commonplace.  I sincerely doubt that the world’s most powerful computerized economic models could trace even the bare outlines accurately.

Sorry, Brian, you’re not factoring in the marketers and copywriters increasing perceived value to “justify” bloated prices, keeping gross margins gross. People such as Elmer Wheeler, Cluade Hopkins, and Robert Collier were perfecting that science in the 1920s.

While Henry Ford is most famous for the production line, he also doubled his workers’ wages while driving down the cost of his cars by horizontally and vertically integrating his company.

Early manufacturers of FF plants will have HUGE profit margins due to lack of corporate mass production.

Nothing succeeds like success!

It looks like we will have to rewrite this section!  It’s inaccurate, and dated.  Thanks for your comments.

The very earliest fastest manufacturers of the plants might make “scarcity” profits, but this is picayune vis-a-vis the entire economy.  And it is the entire economy I was speaking of.  Reread.  EVERY product and good and service has energy input, whether it be part of overhead or direct variable cost-of-goods-sold.  Pricing would dive for those who could get access to cheap power first, and force competitors to sell at a loss, probably, until they could get similar access.  And so on. 

As I read Eric’s business plan/intentions, all licenses to manufacture generators will be non-exclusive, so any mfr. taking large margins up front would be undercut very quickly (unless you want to hypothesize a cartel of mfrs. who collude to hold prices high.  I doubt they would continue that very long, for reasons of personal safety! Lynch mobs are unruly things…)

Profit derives from several sources. There is “normal profit”, the profit made by a firm in perfect competition. This represents the value of entrepeneurial input as a factor of production. There is “supernormal profit” which derives from barriers to entry (cartel-like conditions) and there is “quasi-profit” which is the temporary advantage from being the first or undercutting someone else.

It seems likely that normal profits in a focus fusion industry would be substantial, because of the amount of knowledge and intelligence needed in order to be a credible entrepeneur. This is a good thing that promotes entry into the market.

There could also be supernormal profits, in principle, because of economies of scale. Something as complicated as a focus fusion device will have one hell of an overhead to set up production. The marginal costs are tiny by comparison. (There are also research and insurance economies of scale.) Whether this means that domination by an oligopoly is inevitable, is not clear. As long as it remains a contestable market, the price could not rise much higher than the costs at which a new FF competitor could supply energy.

Brian H, I agree that many goods and services would become cheaper to supply. But I don’t know that there will be the kind of contrasting situations you are suggesting for manufacturers - the supply price of FF energy will only be way lower than other energy if it is because it is already in great supply. During a period of transition, FF generators will earn quasi-profit (retained earnings that increase growth). Their industrial customers will scale back their costs but not as dramatically as you are thinking - FF will cost less than the rest, but only enough to ensure all FF energy available gets bought.

Don’t imagine that FF power suppliers will be able to charge previous going rates or anything close for long; the paying public would be aware in general terms of the costs of production, and there would be serious pressure to price accordingly.  IMO, the “quasi-profit” period would be brief, and the “supra-normal” period even briefer. 

There would be a lag time between early introduction and ramped-up generator production, but the incentives to get it going would be immense.  The cost differential for power for one year for one generator’s production would pay for at least two new generators. That cost difference is real money, not just a bookkeeping entry—it represents cash not spent. 

But these are provider profits.  Manufacturers would make multiples of those revenues. Consider aluminum refiners; they eat power by the gigawatt.  I think it’s their main outlay, greater even than ore.  And aluminum price drops would have knock-on effects for a huge number of other manufacturing areas, not least the auto industry.  There would be quasi-profits galore for them! 

So, Eric.  That’s who you can approach from the corporate side.  Try Alcoa, or Alcan, or Kaiser!  They’d consume FF generators like M&Ms;!

Doing some aluminum research:
About 7kwh per lb. of primary aluminum, or ~30¢/lb. (aluminum producers get special bulk rates, which are industry trade secrets).  About 2¢ with FF generators on-site, over 90% reduction. 

Aluminum ore has been on a roller-coaster the last few years, but represents about 1/3 of the selling price of around 80-90¢/lb.  Power costs are so high that it is estimated most producers are losing money, and cutting back on capacity. 

FF would be a godsend to them.

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