Saturday, May 29, 2010

Global Capital 5: Cars, Mobility and Capitalism

(Note: These are my last notes a few hours before I leave Houston last May 23, then fly to Atlanta, for my Atlanta-Narita-Manila trip. It's also posted in

HOUSTON, TEXAS – Cars and faster mobility of people are among the clear examples of the success of capitalism in improving the lives of the people. Various car manufacturers from around the world compete for customer satisfaction, pushing all of them to produce better quality (based on the specific needs of each motorist) cars at more competitive prices.

The huge price differential of the same car model by the same manufacturer across countries can be explained mainly by the (a) cost of manufacturing and/or transportation of said cars in various countries, and (b) the level of taxes, fees and bribery, if any, imposed by governments in each country. Thus, while cars are generally cheap relative to the annual income of an average worker in the US and other industrialized countries, cars can be expensive and unaffordable to average workers in the Philippines and other developing economies.

I have been to the US several times the past three years to attend various conferences in various cities, then make short side trips to visit Filipino friends. What is noticeable here is the absence of public land transportation in the suburbs, except for a few trips by Greyhound buses and Amtrak (buses-trains). The city buses, trams and trains are found only in big cities. In the suburbs and small cities, they are nowhere to be found. Workers, visitors, students and household members drive their cars to their various destinations. A few ride big motorbikes but no one seems to be walking.

For some rich guys, they are buying huge cars like vans, SUVs and trucks. And much richer guys are buying those long and luxurious limousine cars.

The US government – federal and local – construct so many roads to almost anywhere. The wide roads, expressways and road interchanges seem to be full of cars everyday. Coming from the Philippines where there are millions of jeepneys, tricycles, taxis and buses, the sight of so many cars on the highways everyday – except on winter and during heavy snow, of course – do not fail to amaze me until now.

And not only in highways, the coastal cities in the west, east and southern coasts also have plenty of boats and yachts. Like the wharves in Kemah, Houston, full of so many boats. And not to mention the tens of thousands of commercial and private planes in so many airports around the US.

These sights could have prodded Mr. Al Gore, officials of the UN IPCC, environmentalist groups and NGOs, and some big banks and corporations, to push for more environmental regulations and taxation. There are just too much money to be collected when millions upon millions of motorists in the US alone are forced to pay higher gasoline and electricity prices and taxes. Thus, climate science has to be politicized whenever possible, similar to politicizing the setting of wages, fares, rentals and prices of other goods and services. The goal is to paint modernization and huge car use and ownership in many places around the world as “causing global warming and destroying the planet” and hence, as an evil thing. Thus, governments (the UN, various foreign aid bodies, national and local governments) and environmentalist groups should step in to restrict heavy cars and electricity use. And the mechanism to do that is through a carbon cap and tax measure.

Many people have glorified the “death or near-death of capitalism” in the US and many parts of the world as a result of the global financial turmoil of 2008-09. We may add that capitalism has “died” many times before – during WW1, during the Great Depression, during WW2, during the global oil crisis of the 70s, the global stockmarket collapse of 1987 and 2008-09. The problem, however, is that capitalism is “reborn” as soon as it is assumed to have already died and collapsed.

What the world needs now, the developing countries especially, is to have more economic growth, more modernization, more competitive capitalism, and to have faster mobility of people, goods and services across cities, countries and continents. This way, more jobs will be created, which reduces poverty and unemployment around the world.

People should not fall into the trap of believing that more government regulations and taxation, of having ever bigger and expanding governments, of reviving socialism, is the answer to the continuing scourge of high unemployment and poverty.

See also:

Global Capital 1: Why Market Turbulence are Necessary, November 19, 2007
Global Capital 2: ICT, Capitalism and Government, December 18, 2008
Global Capital 3: Service Charges and Capitalism, October 25, 2009
Global Capital 4: Facebook, Capitalism and Liberty, February 09, 2010

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