Reply To: Space Fountain

[Lerner]

This is a really good and needed discussion! A few comments:
First as Aaron says, the markets don’t exactly need us to create a downward economic spiral—they are doing it all by themselves, thank you! And what exactly will happen with this process in the next three of four years depends on a lot of political and economic events. FF won’t be able to influence that until we have a working prototype generator—not before 2014. I am sure that any announcement of “just” scientific feasibility will be shrugged off by the markets.
Second, there can’t possibly be a monopoly in focus fusion no matter how many patents we have and we do not promise any such goal to LPP’s investors. We do expect to have a substantial share of the market because we will have the technical lead and that will be enough. Of course LPP would have a big impact on prices since, if we do have a major market share, no one will be able to price way above us. From our standpoint as a company, pricing way below the current market makes sense. You can’t penetrate an enormously established and huge market like energy without a really large price advantage in any case.
But no matter how we draw up licenses, how much of the saving in cost will be passed to final consumers is ultimately going to be a political battle. If people insist that the saving be passed along and organize to make that happen, it will, but not otherwise.
So the second question is: is that good if it happens? Certainly, yes. The key thing in the world economy today is WHO gets the money—the many or the few? Right now, you can view a lot of the economy as a set of giant funnels sucking money from the many to the few—the ultra-high cost of oil, way above the cost of production is one of those funnels, a big one, about 7-10% of GDP. Others are the debt—all debts;, the bailouts of the banking system, coupled with slashing social services, etc. The money that goes to the few does not come back—it disappears into the black hole of bits and bytes—invested in derivatives, credit default swaps and so on. As Keith says, it goes to the paper economy—except there isn’t even much paper involved any more. (Sure, some money gets reinvested back in real things—people selling their Exxon stock to invest in LPP!–but it is a relative trickle.)
So if we block up one of those funnels by slashing the price of energy, then people in the real, physical economy—the many—have 10% more money to spend on everything else. That creates tons of jobs, far more than are lost in reducing fossil fuel production. It is not the many who are hoarding money—they spend whatever they have because they must to keep afloat. It is the few and their financial institutions that are hoarding. Slashing energy prices will cut off some of their supply. (Obviously there will be a lot of other consequences, but this post is long enough.)