Friday, March 30, 2007
Singur: Cars are the problem, not land. M.I.T. statement
The Ford Foundation International Professor of Economics, at M.I.T says, inter alia :
A remarkable fact about the recent debate about Singur is that it is so much about land, and so little about cars.
Cars are what economists call a 'public bad'. When I buy a car, it makes me happy (or at least that is the presumption) but it makes everyone else worse off. The suspended particles that get released into the air when I drive my car, will eventually contribute to killing someone and the carbon dioxide that results from burning hydrocarbons, even George Bush seems to have realised, might end up killing us all. Cars also contribute to worsening the traffic, lengthening the working day, and encouraging the murderous manoeuvres of drivers late for work.
Every time someone buys a car, the pressure on politicians to deliver better public transportation goes down. The people who get hurt by this realignment of political priorities are the poor, those who cannot imagine buying a scooter, let alone a car.... This is why a one lakh rupee car, targeted exactly towards the lower end of the middle classes, is likely to be particularly perverse in its effects.
The mystery is why a leftist government decided to make a showpiece out of a project for building small cars, when it would have much more sense for it to agitate for higher taxes on all cars. Since cars make everyone else pay for the driver's pleasure, the driver needs to pay society back, and a special tax on every new car purchase is the best way to get there. This tax could turn out to be in the lakhs.
All the above is probably true and then Professor Banerjee (not Didi, same name) suggests instead developing a cheap and far more energy efficient version of the Tata Sumo presumably for mutual or joint use.
A remarkable fact about the recent debate about Singur is that it is so much about land, and so little about cars.
Cars are what economists call a 'public bad'. When I buy a car, it makes me happy (or at least that is the presumption) but it makes everyone else worse off. The suspended particles that get released into the air when I drive my car, will eventually contribute to killing someone and the carbon dioxide that results from burning hydrocarbons, even George Bush seems to have realised, might end up killing us all. Cars also contribute to worsening the traffic, lengthening the working day, and encouraging the murderous manoeuvres of drivers late for work.
Every time someone buys a car, the pressure on politicians to deliver better public transportation goes down. The people who get hurt by this realignment of political priorities are the poor, those who cannot imagine buying a scooter, let alone a car.... This is why a one lakh rupee car, targeted exactly towards the lower end of the middle classes, is likely to be particularly perverse in its effects.
The mystery is why a leftist government decided to make a showpiece out of a project for building small cars, when it would have much more sense for it to agitate for higher taxes on all cars. Since cars make everyone else pay for the driver's pleasure, the driver needs to pay society back, and a special tax on every new car purchase is the best way to get there. This tax could turn out to be in the lakhs.
All the above is probably true and then Professor Banerjee (not Didi, same name) suggests instead developing a cheap and far more energy efficient version of the Tata Sumo presumably for mutual or joint use.
# posted by uv : 9:11 PM
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