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Re-tool America's Manufacturing

|Includes:CSX Corporation (CSX), KSU, NSC, UNP

The Council on Competitiveness ( hosted a manufacturing summit at Duke University Sept 20-21.  This linked YouTube presentation outlines how returning power and transportation to free markets would repeat the success of returning communications to free markets in 1984 and drive a re-tooling of America's manufacturing.

Basic points:

  • It takes a 10x leap in benefits to drive a paradigm shift. Railroads cut transportation costs between New York and San Francisco in 1869 from $1,000 to $67 (15x). The Internet and cell nets were 10x shifts in the 1990's.
  • Communications, power and transport infrastructures were monopolized/socialized in the mobilization to fight Word War I.
  • The great innovations of Ford, Edison, Bell and the Wright Brothers were institutionalized.
  • Institutions' only capacity is for consistency. Competitors are selected based on their ability to improve "know-how." We had a century of rotary telephones, increased dependence on central power generation and have the same gas mileage of the Model-T. The highway became the answer to all transportation needs. Thousands of miles of railroads were lost as efficiency was removed as a market force by government subsidized oil and highways.
  • Innovations are disruptive changes in "know-what." They are studied, even invented under central planners, but never commercialized.
  • After 1984, communications competitors in a free market had to differentiate their offerings to attract customers. Some competed on better service, lower prices and some tinker with innovations. Interaction between innovators and customers polishes, kills and commercializes innovations.
  • Life requires energy. Less affordable energy, less life, metric of Disposable Energy.
Millions of jobs, vast innovations and better service at lower costs resulted after communications was returned to a free market in 1984.

There is a 10x payback in powering urban transportation within a solar budget. It costs 56 cents a vehicle-mile to operate a car. It costs 4 cents a vehicle-mile to operate a JPods vehicle (14x). JPods are the combination of computer networks with ultra-light, personal railroads. JPods networks automate repetitive commuter range transport of people, cargo and trash in payloads less than 1200 pounds.

Solar collectors mounted over the rails gather 5,000 to 30,000 vehicle-miles of power per mile of rail per day. This large commercial demand for solar collectors will allow that industry to scale. Using solar collectors as a primary power source makes the transportation network durable against blackouts.

In an energy constrained economy, railraods will be the logistical arteries and JPods will be the logistical capillaries.

JPods and other PodCar or Personal Rapid Transit (PRT) companies are privately held. As the networks deploy they will significantly affect the stock values of railroads, solar panel manufacturers and real estate companies can connect their properties.  Oddly, they will also increase the value of oil companies; reduced dependence on oil for fuel will allow the price per barrel to increase toward the true value of about $400 a barrel without stiffling the economy.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: Author is founder and major shareholder in JPods, Inc.
Stocks: CSX, KSU, NSC, UNP