TO THE CLASS —
Lucero is a splice tech I bill at $4.10 a linear foot on a 6,200-mile trench run I am building for a hyperscaler along the back-haul east of the Cascades. She is 42. Her boots are in a 4-foot section outside Stanfield, Oregon. The cable she mends is 11.4 pounds a foot. The line is the layer between you and the model you queried this morning — the assistant you typed your question into, the image you asked it to draw. Renaldo is a rigger on the pipe rack of the 480-megawatt behind-the-meter peaker I own outside New London, Wisconsin. He is 41. His harness costs $3,178.40. The body belt I issued him costs $41.80. The body belt is mine. The answer your chatbot gave you at 3 a.m. ran on the megawatt his turbine was rated to push. God bless the spread.
The six counties along Lucero’s route want environmental review, community benefits, and an enforceable wage floor before a permit lands. I have a one-page answer to each. Glenn Davis has filed the brief for this week in National Review, indexing the governors layering conditions onto data-center permits — Shapiro in Pennsylvania removed the fast-track, Pritzker in Illinois froze new incentives, Spanberger in Virginia is drafting a 2027 package, Newsom in California signed seven oversight bills, Moore in Maryland wants the tax exemption repealed — and attributing every addition to the 2028 primary. (Read him here.) File the chapter under “Pass-Through,” the section you were tested on in October. You will recognize the moves. The governor’s move is the surcharge. Your move is the pass-through. The pass-through is mine.
Let me put the numbers where you can see them.
The hyperscaler pays $4.10 a linear foot for the lit fiber I turn over. I pay Lucero $0.34. My spread is $3.76 a foot. The 6,200 miles of trench become 32,736,000 linear feet of cable. The arithmetic is large without my having to teach it.
On Renaldo’s end: the $3,178.40 I didn’t spend on the harness is not the prize. The prize is the avoided liability on each rig I will not hire. Workers’ comp on the Wisconsin iron-erection classification runs $53,760 per rig. The OSHA willful-violation cap, if a rigger falls from the pipe rack, is $156,000 per death. The wrongful-death settlement the 1099’s estate cannot reach is $1,250,000. Per rig, my refusal of the harness and the W-2 saves me $1,459,760. Across the eight rigs that will follow Renaldo onto the deck, the refusal clears $11,678,080. The harness is the symbol. The 1099 is the mechanism. The $41 belt is a trinket. The trinket is the test.
Trace the figures with your eye. Hold those two columns together. That is the whole lesson, and most people never learn it.
The counties wanted environmental review. I declined to pay for the site-remediation bond. Lucero pays for it in silica, in the trench that is not shored where the soil classification requires shoring, in the 96-minute daily commute she drives herself because I declined the per diem for the camp 22 miles east. I do not pay for the commute. I do not require her to take it. The counties wanted community benefits. I signed an agreement with the cousin of the county commissioner. The cousin is a one-man LLC. The agreement is mine. The benefit is mine. The wage floor it does not contain is mine. Lucero’s knee is also mine, in the sense that the 4-foot wall collapsed on it last Tuesday and the only orthopedist in Stanfield who takes her Medicaid is a 38-mile drive and a 3-week wait. I do not pay for the wait.
Hilma is a cable puller on the 230-kV interconnect that runs from my peaker to the hyperscaler’s substation across the county line. She is Renaldo with a cable in her hand and a 230-kV line over her head. She is 29. She has the same body belt Renaldo has, because the procurement officer at the staffing agency is the same man who procured Renaldo’s belt. The staffing agency is mine. The procurement officer is mine. Two bodies in the same belt is the beginning of a pattern. The third rigger is the one whose name you will not read in this column, because the third rigger is the one whose body belt is being boxed in the procurement warehouse as I write this.
Roy is the night shift on a 1.4-million-square-foot data-center campus I service in Loudoun County, in the alley south of Route 7. He is 51, he is a veteran, and he is the mop between the racks I contract-clean and the day-shift workers who arrive at six. He earns $14.40 an hour. I bill his campus at $19.20. The temp agency bills me at $16.80. The regional facilities vendor bills the agency at $15.60. I keep $0.80 an hour per cleaner and seven of them I keep, and the $185 boot reimbursement I declined last quarter paid for a dinner in Richmond I do not remember. He bought his boots at Walmart.
Widen the frame.
Here is the principle the case was only an example of. The AI buildout is the new enclosure of the commons. Power, water, the heat-rejection plume — these were municipal infrastructure for a century. The 21st-century arrangement is the private enclosure of all three. The data center is the new manor. The hyperscaler is the new landlord. The 1099 contractor is the new copyholder, with the body belt he was issued instead of the harness he was owed. The governors’ pause is the brief expensive interruption. The pause is ending.
The arithmetic is older than the governors. Moses priced it. The verse is Deuteronomy 15:16–17:
And it shall be, if he say unto thee, I will not go away from thee; because he loveth thee and thine house, because he is well with thee; then thou shalt take an awl, and thrust it through his ear unto the door, and he shall be thy servant for ever.
The door is the staffing agency. The awl is the 1099. The ear is Renaldo’s. The “for ever” is the 20-year PPA. The man who composed that passage understood what the staffing-agreement understands: that a body which does not leave has been priced into the floor plan. The “love” the servant professes is the dependence the procurement engineered. I did not invent the awl. I updated the procurement.
The grandmothers’ pensions sit on the bonds that financed my peaker. The grandmothers’ premiums sit on the policies that insure the data center. The grandmothers’ children sit in the classrooms where the chatbot answers the homework. The grandmothers’ grandchildren will sit in the queues at the staffing agency that issues the body belt. The line of descent is the line of the procurement.
Now raise the altitude. I’m not unusual. I’m a curriculum. The dean was Stringfellow; he graded Virginia planters into this arithmetic in 1861. The graduates of the faculty sit in the procurement desks that issue Renaldo his body belt, in the staffing agencies that classify him as a contractor, in the local-hire audit teams that certify 17% of the crew is “local” because the 17% were hired 14 days before the audit. One of them scored the queue Lucero’s run is waiting in. The best of them bill at $310/hour where I bill at $250/hour, and I say so in their performance reviews. The graduates run the ratepayer-protection pledge the governors think they invented. The model the hyperscaler is going to train on her splice and his mop will be priced by one of yours, in this decade or the next. You are not the only one who has read this. You are the one who has been paid to teach it.
I’m told the governors’ pause will cost America 19 months of compute. I expect my successor will price the next 11 gigawatts at a lower number than I priced this one. He’ll be cheaper than I am. The next rigger will be cheaper than Renaldo. The transformer on the interconnect hums at 60 hertz. It will hum for the next 20 years. The trench has 4,820 miles to go. The knee has a 3-week wait. The boots have a 9-month warranty. I will not meet the third rigger. The class is in session.
Sterling A. Varice holds the Hayek-Friedman Chair and serves as Dean of Instruction at Warden University’s College of Business and Economics in Richmond, Virginia. He is the author of three textbooks: Divine Mandates for Labor Utilization, Social Obligations for Profit Maximization, and Calibrated Deprivation: A Manager’s Guide to Employee Motivation.