Saturday, October 13, 2007

How you gonna get the money?

I've always thought of 'work' as something you actually do, people give you money for making something useful in return. But, I'm not in finance.

Milled about at Energy Night yesterday evening, which was a great MIT-style affair at the institute museum -- more or less a huge science fair with drinks on the house. Science posters and comped Sam Adams -- I came to the right place.

There was a guy there named Peter, whose company is baffling if you're used to thinking of economics in terms of simply exchanging products for money. I won't go into the weirdness of electricity market economics, but suffice to say that there's no real storage on the grid, so in order to keep everything at equilibrium the grid operators have to do a number of number tricks and capitalist wizardry. One of them is his company -- on a high energy day, the grid pays them money, and they turn around to their clients, large operations like MIT and hospitals, and pay them to turn down their energy usage .

That's right. They make money by paying people not to do something. Long live the market.

1 comment:

Chris Jones said...

I've heard the term "self-correction" bandied about for such things. Honestly, in practical terms I have more faith in the market than I do in anything religious (unless the above is a false dichotomy).