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Krugman on Cars; an economist knows nought of people

I enjoy reading the New York Times blog of economist Paul Krugman. I imagine the thrill is similar to that enjoyed by a bloodthirsty crowd of Romans, watching gladiators fight in the Colosseum. When reading Krugman, I know there will be violence (of the intellectual variety). I know that blood will be spilled (in the sense of shredded reputations and cutting put-downs). And I know there will be a winner and a loser. Better still, I know the eventual result, and I know I will like it. No matter what he argues, Krugman never fails to be a comical loser, though he thinks himself a heroic winner. Thanks to the X Factorization of public debate, Krugman’s fans also think him a winner, even when he makes the ludicrously pompous argument that he and his supporters are less prone to confirmation bias than the rest of the human race.

As public intellectuals go, Krugman is of the verminous variety. He routinely picks fights, showing his teeth in the hopes of intimidating others. But he quickly runs to the shadows, when an opponent refuses to back down. To complete the gladiatorial spectacle, and see both sides of the fight, we merely need to flick to the words written by the opponents that Krugman picks upon. They invariably rain literary blows on their would-be persecutor, making it clear why the Krugman’s fans prefer to consume just his side of the story.

Krugman’s one-sidedness is confirmed every time he mentions Niall Ferguson (most recently, here). Niall Ferguson’s name features a lot on Krugman’s blog. It recurs so often that Krugman must imagine Ferguson is an avid follower, and so takes every opportunity to irritate his nemesis. Surely no regular reader needs to hear Ferguson’s name mentioned so often. But whilst Krugman maligns Ferguson month after month, supposedly in a bid to promulgate the truth about Ferguson’s falsehoods, Krugman ran from the big prize fight that Ferguson finally offered him. When Ferguson catalogued every major mistake Krugman has made (a long catalogue, but worth reading again), did Krugman defend himself? Did he offer any evidence to the contrary? Did he admit to errors, whilst giving some justification for the positions he adopted? No, no and no. Krugman just ran away, saying he would not speak about Ferguson because he considers the Harvard Professor of History to be nothing more than a ‘troll‘. And how does Krugman continue to respond to this troll? Not by rising above him, and ignoring his presence. Krugman’s prolonged response comes in the form of endless snide comments in his blog. Krugman has the air of a man who was publicly slapped in the face, so ran away in shame. Now desperate for revenge, the pettiest Nobel laureate stalks the man who embarrassed him, taking every sly opportunity to spit on the back of his head, before running off again.

So, after seeing another needless mention of Ferguson’s name, I scrolled down to see what arrogant absurdities Krugman had served up recently. I hoped to find Krugman saying something smug and stupid about a topic so widely understood that Krugman could not possibly adopt his usual defensive posture, which involves hiding behind wonkish economic gibberish and deliberately skewed misrepresentations of the data. My search was not in vain, and was rather short. Lacking the self-awareness of a man who might actually listen to his own words, Krugman pontificated about a topic that many of us understand: cars, and what we think of them. At first it seemed the so-called liberal was going to grasp the thorny subject of how the internet allows people to drive each other’s cars, and give each other lifts, and how this comes into conflict with protecting the economic interests of particular groups like taxi drivers. That would be a reasonable subject for an economist to discuss, and one that might be vexing for a ‘liberal’ of Krugman’s ilk, who somehow equates liberality with protecting vested economic interests. But Krugman did not offer this analysis. Instead, he observed that people do not really need or want cars.

Life Without Cars

I’ve been following some of the discussion about Uber, Lyft, and all that, and I have a few unoriginal thoughts. Well, strictly speaking they are original… [yada yada]…

Anyway: the big benefit from new IT-mediated car services will come if they make it possible for lots of people — and not just people in Manhattan — to live without owning their own cars. And if you think about it, you can see how that might work.

The more human amongst you will have already noticed the flaw in Krugman’s argument. You probably noticed it when I wrote that ‘people do not really need or want cars’. The flaw is that lots of people like cars, and want cars, even if they do not need cars. That is pretty typical of people: they like and want all sorts of things they do not need. Sometimes they like things so much, they say they need them, even though they do not really need them. Nobody needs television, or laughter, or cake. We just really like them. The fact that people like cars is vital to understanding why car ownership has historically gone up, rather than down. It is also key to understanding why the number of households with multiple cars has risen. Things can become more popular, and more common, even if nobody needs them. Our desire for many television channels, and for many kinds of cake, and for many cars, greatly exceeds our bare necessity.

Right now, if you live in places without exceptionally good public transportation, it’s very difficult to manage without a car. Yet when you think about it, for most people owning a car is quite wasteful.

Having reached the middle of the third paragraph, Krugman still has not grasped the possibility that some people like cars. Ferraris. Cadillacs. Top Gear. Personalized number plates. Giving your car a name. Reading car magazines. You intuitively and instantly understand what I am saying, because you are a person and I am talking about people, instead of waffling about the abstractions of macroeconomics and public policy. Krugman’s blind spot is plain: he is a Nobel prizewinning economist without the slightest affinity for actual human beings.

It’s an expensive item of equipment that sits idle most of the time; it requires parking (and often a parking structure) both at origin and at destination; it requires maintenance and is a big hassle all around.

Krugman thinks cars are a big hassle all around. Most of us have a devil and an angel on our shoulders, ensuring some internal quality control over the things we say and do. In contrast, Krugman is a machine, bereft of an internal dialogue. He is more of a machine than any motor car. Krugman relentlessly follows his ‘logical’ programming, no matter how imbecilic the conclusion. And what does he calculate in this case? Porsche = big hassle. Aston Martin = big hassle. Off-roading = big hassle. Driving a convertible sports car through a forest on a sunny day = big hassle. Driving your pregnant wife to the hospital instead of begging a lift off your neighbours = big hassle. Not wanting to depend on somebody who might be unreliable to get you to the airport on time = big hassle. Not knowing when you will leave work but knowing you will not have to wait for a taxi = big hassle. Given what an enormous hassle cars are, marketeers have done an amazing job, brainwashing people, manipulating them into buying their own car! Per Krugman’s logic, as none of us genuinely want cars, our need for cars must be truly enormous, and growing all the time.

I am forced to wonder what Krugman thinks of Recreational Vehicles – the houses on wheels that some Americans own. These monster vehicles serve as both vacation transport and vacation home, which must rank as the most inefficient investment of capital in history. And yet, some Americans want them, even though none need them. They could just fly somewhere, and then stay in a hotel. Krugman must be deeply unsettled by the irrationality of the 8.5% of American households that own an RV.

So reliable, quick-response chauffeur services could free many people from the need to tie up all those resources in a consumer durable that they only use now and then. And from a social point of view it would avoid the need to tie up so much capital that sits unused most of the time.

According to Krugman, his is the thought process I should follow, whilst contemplating if I want to drive to a relatively out-of-the-way location, in order to go for a long hike in the countryside. His thought process is correct, even if I want to nip to a unique gift shop in the next town over, to make a last-minute purchase. Never mind convenience. Never mind freedom. Like Krugman, I should be thinking about the wasted capital! I should be thinking how much wealthier, and happier, I would be if that capital was reinvested elsewhere.

Also I should imagine how much better off I would be, if I could just rent an unfamiliar vehicle, with or without an unfamiliar driver, which we assume is conveniently available at literally any time I need it, and at a price which I also assume is better value than the cost of simply owning and maintaining a car in the first place! And yet, somehow, I struggle to think like Krugman.

But then, when you really think about it, you discover that lots of things are a waste of capital. Do you have a guest bedroom in your house, which is rarely used? That is a waste of capital! Perhaps that means Krugman would be a fan of the British government’s so-called ‘bedroom tax’ – a change to welfare payments where people receive less money if they waste the capital of an unused bedroom in their government-provided housing. But I doubt Krugman would describe that particular waste of capital in those unsympathetic terms.

Those influenced by Paul Krugman should take a look at the house he lives in. It is very much larger than where I live. It is larger than where most people live. There are roads, but no evidence of a sidewalk, so presumably everybody drives in that part of the world. Why should ordinary people give up the luxury of their cars, and the capital invested in it, when Krugman invests so much more capital in his excessively large home which is designed to be visited by car? If you think cars are bad for the environment, consider the energy and resources that were used to build Krugman’s house, and the heightened energy bill needed to make full use of such a property. Or maybe he does not make full use of the house, so from a social point of view, Krugman is happy to selfishly tie up capital so long as it suits him personally.

Any house larger than the minimum necessary to sustain life must count as a very good example of wasted capital, but we are literally surrounded by other examples. Every minute you do not watch your television, you waste the capital that was spent on that purchase. If you have a television in the bedroom as well as the living room, you have doubled the waste. Every minute you are not hoovering your carpet with your vacuum cleaner, you waste the capital absorbed by that useful household gadget. Are you even using all your carpet? I bet there are some segments you rarely stand upon. Wasted capital, all of it! Imagine how glorious life would be, without all this wasted capital!

And that is before I mention public parks, during the night time. Or the books in libraries, after closing hours. Or churches, when there is no service (or even when there is a service, according to atheists). Wasted capital, wasted capital, wasted capital. Why should anyone pay to build parks, libraries and churches, and then pay again to maintain them? Instead, we should all live in dense high-rise cities (to avoid the need for cars) but spare ourselves the waste of parks by visiting the countryside, on the better-than-ever train service. We should not invest in books because they waste capital (and paper!) and instead we should read from free websites on our Kindles. We should do away with organized religion, and its obsession with temples, icons and art, and we should all behave like Quakers, preying in each other’s houses. We should coerce people to give up all these unnecessarily wasteful pursuits, in order to preserve the greatest god of all: capital. Life would be so much better, if we could find peace, knowledge and enlightenment without so much wasted capital!

Of course, we would still have roads. They would be needed for ambulances, and fire trucks, and delivery vans, and possibly even for buses. But if there were far fewer cars to drive upon them, they might seem like wasted capital too.

There is, however, an obvious problem: rush hour.

On the contrary, there are a whole slew of problems with the way Krugman thinks. He is blissfully unaware of them, and is likely to remain so. The adoring comments he receives on his blog are mostly written by people with a similarly blinkered view, so they will not broaden his outlook. Even if the yawning gaps in his thinking were pointed out, Krugman would still not be able to comprehend that his thinking is flawed. There is no need to vote Republican, in order to see what is wrong with Krugman’s thinking, but the fault line of Krugman’s worldview is that criticism only comes from partisans.

Peak car use comes twice a day, and that would seem to dictate that we have nearly as many cars as we do now even if they’re supplied by the likes of Uber.

But here’s where surge pricing comes in. If traveling during peak hours is more expensive than off-peak, people will have an incentive to shave off those peaks. People who aren’t commuting to work will avoid travel at peak hours; some people will find other ways to travel; some people (and businesses) will rearrange their schedules to take advantage of cheaper off-peak travel. So you can imagine a society that still relies mainly on cars to get around, but manages to do this with significantly fewer cars than we need at present.

How does Krugman’s brain work? Does it work? Anybody who ever drove in rush hour knows there are already plenty of incentives to ‘shave off those peaks’. Just because the incentive is not measured in dollar bills, does not mean there is no incentive. Or does Krugman really believe the average driver is a money-obsessed retard, indifferent to sitting in traffic jams for hours, but willing to dramatically change behaviour in order to save a few cents?

Cars aren’t the only consumer durable where something like this might work, of course.

Agreed. See above for my comment on houses. And yet, people do seem to like having spare rooms for all sorts of reasons, despite the truly enormous amount of capital that they tie up. To put capital into perspective, consider the numbers for the UK, the kind of small densely-packed country that might actually have a chance of ‘life without cars’. The total value of all British vehicles, including cars, but also including planes and ships, is under GBP200bn (USD340bn). The total value of all British housing is over GBP4,000bn (USD6,800bn). So why is Krugman worried about the relatively tiny proportion of capital tied up in cars, when the quickest and easiest way to save capital (and to save the environment) is that we all volunteer to live in homes the size of shoeboxes?

People in New York don’t need refrigerators (and in particular freezers) that are as big as those in the suburbs, because it’s so easy to pop around the corner for groceries…

People have small refrigerators in New York because real estate is expensive, and hence living spaces are small. The cost of space is the factor that drives down the size of refrigerators, not the ease of accessing of alternatives. Krugman understands economics like a man who can draw a perfectly accurate picture of a stationary horse and a cart, but earnestly believes that the cart leads the horse when in motion.

… online ordering and delivery could produce a similar effect outside the city.

Here is a question that should arise in the mind of any decent economist: well why the fuck don’t they, then?

The restriction on space in New York is in opposition to the natural human desire to have a great big house with a great big fridge… even if they have bugger all inside them. In Manhattan, people do not choose late-night delis and pizza delivery in preference to having a big refrigerator. The former services become economically viable because of density of population and because the scarceness of land leads to a high cost for even a rudimentary kitchen. In contrast, people who live outside the city can travel easily, using the car they already want and own, they can afford larger and well-equipped kitchens, meaning they have less reason to rely on ‘convenience’ stores and online delivery services. In these circumstances, the latter business models will only succeed through winning a genuine competition.

But cars are surely the big prize.

And here Krugman shows his hand, and reveals what really motivates his thinking. He does not care if you like cars. He does not like cars. And therefore the goal is to stop you doing things, having things, using things, that he does not like. What you want is irrelevant to his analysis.

Again, I’m sure this has been worked out by someone somewhere. But I’m having fun thinking about it.

I am sure his last sentence is very sincere. Krugman gets a lot of fun imagining how you should live your life according to his principles, whether you like it or not. Being a genuine liberal, I despise Krugman’s twisted claim to be a liberal. I feel no sense of fun imagining a world run according to Krugman’s dictatorial whims. He is a rat in sheep’s clothing, a small man with delusions of demagoguery, a would-be tyrant pretending to be a democrat. Lovers of liberty should abhor him. Fans of his half-cocked thinking should reconsider. Or if not, they should follow Krugman’s logic to its inevitable, irregular conjugation: I buy what I want; you waste capital; Krugman knows best.

One Response

  1. It’s a fine analysis of Mr. Krugman’s inconsistencies and tendencies to preach his mastermind theories about cars and how we should spend our capital.

    Was that a two-car garage driveway I saw in the Google Bird’s Eye View of his home in New Jersey? Hard to tell. But seeing his “living large” home suggests we should take his lectures about conserving resources with a microscopic grain of salt.

    Krugman’s bid to promote: “Life Without Cars” is also ill-timed.

    Six months after Krugman published his rant, there’s a big story in Forbes this week about how SUV sales are taking off in the U.S. thanks to a huge drop in the cost for gasoline. Last weekend while shopping in New Jersey with my wife, I paid an astonishingly low $2.15 for a gallon of fuel. This is a big change from the peak of gasoline prices which reached about $3.75 in my region only a few years ago.

    America’s love for large vehicles is not only back in fashion: sales of sedans are hurting. For details, read the Forbes story: Hyundai, VW Missing Out On Auto Industry’s Truck-Fueled Sales Boom. The print edition of the story is appropriately subtitled, “Revenge of the SUV”.

    So your column was right on the money.

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