The Increasing Cost of Car Ownership is Capitalism in Action

The last two years have seen a flurry of posts about why ‘Gen Y’ is not that interested in cars. In a previous post, I had summarized my views on that topic as-

The lack of interest in cars (and automobiles in general) by Gen-Yers is the rational result of a combination of long-term trends and the profit hungry short-sighted mindset which characterizes the later stages of capitalism.

While that post listed and briefly explained the main long-term trends that make autos less desirable, it did not really go into the other part of the problem (short-sighted capitalism) in any worthwhile detail. So let us fix that..

Evangelists of capitalism and its numerous minor flavors such as free-market capitalism, libertarianism, fascism, corporatism etc keep on telling us that capitalism is self-correcting. But what does such “self-correction” lead to? Do social or economic systems really have a stable equilibrium? While we can certainly engage in sophistic arguments about what capitalism is or isn’t; such talk is no different from trying to say that soviet- and mao-style communism wasn’t “real” communism.

I am going to use the response of contemporary society and its institutions to the “new car owner crisis” to demonstrate that capitalism-based systems are not self-correcting. Indeed, they have a very strong tendency to destroy themselves and damage the underlying social fabric.

The responses of car companies to this emerging crisis comes in two forms-

a1. Trying to find new car owners in emerging markets such as China, Brazil, Russia and India. They hope that they can get enough new customers to make up for the stagnation and decline in western countries. While the idea is not without merit, it assumes that whatever is causing the crisis in developed countries won’t occur in these emerging markets. While that assumption might have had some merit a few decades ago, that is no longer the case and trends from female fertility, rates of marital discord and other socio-economic trends spread much faster today than they used to. But let us ignore that for a moment and move on to the next response.

a2. They are hiring “trend consultants” and “designers” to create “hip” and “quirky” cars that will hopefully appeal to ‘Gen Y’. While doing so will make a few consultants wealthy, it does not address why things have gone downhill. Designing “hip” cars is about giving the appearance of action. It is similar to putting a colorful band-aid on a cut artery or giving aspirin to a person suffering from a serious infection. In both cases, it allows people to shield themselves from accusations of inaction.

The auto-makers response seems to be a combination of abandoning ship and casting spells to entice new car buyers. What about the government? Are they any better?

Now you might think that people in the government would be interested in keeping the status quo, if only to ensure the continuity of their scams. While they are aware of the potentially disastrous effects of declining rates of car ownership and use on their bottom line, it is apparent that they cannot get their shit together and act rationally. But why not?

b1. A government is a ever-morphing collection of scamsters and vested interests- just like any corporation. While the older version of this institution (from 1935 to say 1985) had some interest in ensuring their future through keeping the underlying society healthy, the newer version is full of rent-seekers. The governments of developed countries are now largely made up of factions and groups that have absolutely no interest in solving problems or building a better future. Indeed, they try hard to create more problems and opportunities to use legal coercion to collect rent. Consequently they spend most of their time trying to collect more and ever larger traffic tickets, build toll roads in preference to public access roads, and write rules and regulations to makes car ownership more expensive and onerous.

b2. Another factor that affects the government’s ability to respond meaningfully is that they employ an ever-increasing number of people to regulate and micromanage rather than do something useful. While this trend was a response to decreasing opportunities for employment in the private sector due to capitalism, it has created lobbies and cliques that want to justify their jobs, expand their domains and abuse others. While doing that is equivalent to killing the goose that laid the golden eggs, most people are too short-sighted to think (let alone act) otherwise.

OK, so the government is solidly into rent-seeking and kicking the can down the road. But what about society in general? How are people trying to address the problem?

c1. The first and most predictable response is denial as most humans believe that reality requires their explicit consent to manifest itself. The strategies to deny this particular problem range from seeing it as good for the environment, a sign of the end of suburbia to seeing it as a reversion to the mean of ‘impoverished’ existence. While I have hate suburbs, I can see that they were about reestablishing racial and economic segregation. Cars just made the process a whole lot easier. The aggregate sum of the pollution caused by cars pales in comparison to that put out by coal powered electric generation in China. Furthermore, comparing our age with any previous one in human history is as meaningless as comparing a fish to a rat.

c2. Then there are those who hope and pray for a second coming of job based prosperity. But is that possible in a world where automation and machines increasingly do most important jobs? Face it, most jobs today are about scamming, bullshitting, zero-sum competition to do tasks that have a net negative utility to society. We can pretend that jobs in education, law, medicine, management, human resources, sales and other sectors are about creating a better world. But is it true? It is also important to understand that automation, technology and machines are increasingly replacing human labor in even these areas.

c3. We cannot also forget the CONservative, and often older, subhumans who try to convince everyone that they are lucky to alive as slaves. These are often the same asswipes who never try of telling others how they bought and worked on their first beater in the 1960s and 70s. They conveniently miss out the part about relatively stable jobs, low (or no) student debt and living under a less predatory version of capitalism. Some of you see such behavior and beliefs as an example of a simple misunderstanding, but I do not. Many of the morons who exposure such beliefs are just greedy cynics who believe that they are ageless and immortal.

Did you notice something common to every major point in this article? Institutions and people are letting boundless greed, delusional beliefs and absolute self-interest rule their very existence. Some many say that doing so is human nature, but is it just human nature? Isn’t that how capitalism really works?

What do you think? Comments?

  1. September 25, 2012 at 7:53 pm

    Two thoughts

    1. Capitalism is now manifested without morality. Technology has created a permanent ‘surplus’ mentality that encourages all sorts of short sighted choices. If you have a million bucks, why not drop a few hundred k now? If you have a million twitter followers, why build social skills to meet real people? If technology connects you with 500 men ready to have sex, why not fuck a few here and there?

    2. The car is a milquetoast investment. Demand came and went. If Ford would bust out a hover car, bam- instant rejuvination of their market.

  2. jackal
    September 26, 2012 at 6:14 am

    China and India have been rolling cars off production lines in huge numbers, in the process driving up both demand for and the price of oil worldwide. With each copy costing little more than $2,000, you don’t need much of a job to afford a car in China or India. World trade is the driving force that raises the standard of living for populations. So why isn’t China and India making cars available to U.S. and other Western nations? Because they can’t, thanks to special interests that have blocked imports (i.e. corruption of free enterprise) because they are more concerned with protecting their own turf than with making it possible for you to own a car not for $30,000 but a mere $2,000. It doesn’t matter who the next president will be, the unions, banks, Wall Street and other special interests — the ones who call all shots — will make sure you’ll never get to own a car for $2,000. How ironic, the more that China embraces capitalism, the more that car ownership grows; the more the U.S. embraces socialism, the more that car ownership diminishes. Only an idiot would support further corruption of capitalism. It is capitalist America that had planted seeds for middle classes. Capitalism tamed the wilderness, built civilizations, created mind-blowing inventions like cell phones and pocket computers, and revolutionized the globe with trade. Capitalism is in decline only because special-interest liberals and conservatives, alike, have corrupted capitalism, to the extent that when you need a car, you have to bend over to the tune of $30,000 and more. And if you’re one who is prone to taking on debt, you’ll need a loan to buy a car — bending over even more so Wall Street can have a part of you, too.

  3. Jim
    September 26, 2012 at 6:26 am

    If you believe capitalism exist in modern America, you are sadly mistaken. Capitalism is competition and that is the last thing this “free market” is seeing these days.

  4. Ted
    September 26, 2012 at 6:36 am

    Well, for one thing cars last a lot longer now. Most cars are built to go at least 200,000 miles, and if you do regular maintainence, it could last longer. My car is 11 years old and in good shape. Also, the era of the road trip is almost gone, so long as gas stays over $4 per gallon. My sister refuses to buy a car, because she she does not want car payments, insurance, repair costs, and gas. Also, since she now works according to train/bus schedules, it forces her to be more disciplined in how she schedules her time. Secondly, with companies like Amazon that give you low prices and fast delivery on almost anything, you no longer need a car to comparison shop or pick things up.

    Car companies can come up with any possible luxury, but an economical car seems to be of no interest.

  5. Webe
    September 26, 2012 at 6:50 am

    as meaningless as comparing a fish to a rat
    LOL We say comparing “pliers and pigs” or “dicks and drumsticks”.

    I did work on cars myself, after running out of my last $25; found out I knew more than the mechanic and did all the repairs and maintenance myself from then on. Now I can do without owning a car, which I have always considered to be the endpoint for civil society.

    As for capitalism, I prefer to leave aside ideology and take a cue from history: Capitalism refers to capital intensive production, that is, it denotes a mode of production in which economic surplus (profit) is re-invested in the means of production (plant). Ownership of capital goods tends to concentrate in fewer and fewer hands. Such imbalance ironically leads to scarcity amidst plenty (productive capacity grows by orders of magnitude whereas few share in the dividends).

  6. ScottG
    September 26, 2012 at 9:43 am

    I do not have a car now because I cannot bankroll it. Unlike many I never had a vehicle in hs/college. I got great grades in hs/college (not a preppy stuck-up, but a top 25 sports university and I met some now pro athletes), went to many interviews (I was good looking, in shape, dressed sharp, was not stupid) but did not get a job and it seemed odd (all those years of school and wasting my youth studying for good grades all for nothing). Then, after college bought a very cheap car that the used-car dealership knew was a Lemon, but I did not know it was a Lemon, and it had one repair after another that wiped out any coins I had until a huge problem that to repair would have cost a lot, so I got rid of that Lemon. Now I have to bum rides, bus, and walk places. Trying to pay back college debt has been/is a nightmare that I wonder if it will ever end. I did not even want to go to college. Going to college was the biggest mistake I ever made. A few times I have tried to say to others to maybe don’t go to college, but they got upset and said they were going to college. I currently really want to buy a cheap car, but I cannot pay for it. I now do not have a job making enough money to buy a car. Even if I ever have enough coins to buy another cheap car, after getting sold a Lemon before, I will never buy an expensive house or an expensive vehicle. I may have to move to a “third-world country” just to be able to buy a cheaper car there. No money, No CAR.

    We have reached a point where even smart and well educated guys cannot make enough to buy and maintain reliable cars.

    • Ted
      September 26, 2012 at 12:37 pm

      While I am not walking in Scott’s shoes, I’ve also come to regret the time I spent studying my butt off in both college and B-school. I do a job that requires nothing I learned in higher ed, and I am still paying off my b-school loans, 11 years later. Sometime I think I would like to get a new car to replace my 11 year old Honda, but I like its reliability, and taking on another monthly payment holds no appeal. The corporatist, rent-seeking American economy can no longer continue in its current form. Something’s gotta give.

      That is what I have been saying for a long time- on this blog and my replies on other blogs. The status quo cannot hold because the underlying conditions have changed beyond the point of no return.

      While the changes has been slow, they have also been very large and fundamental.

      • P Ray
        September 26, 2012 at 7:26 pm

        No society deserves to prosper when it treats those who honestly work hard for their qualifications, as inferior towards unqualified mouthbreather conmen with the ability to lie towards customers.
        Those “successes without qualifications” also have the advantage of having no reputation to protect or awarding authorities to complain to for their unethical business practices.
        Then again, the corruption through cronyism happens with decisions made from manager to manager, where the employees have their KPI rated better when they see through a deal without asking for competitve bids.

    • anon666
      September 27, 2012 at 9:39 am

      You need a bike.

    • P Ray
      September 29, 2012 at 12:03 am

      The “smart and well educated guys” will actually be placed in the menial job roles, because their only purpose in an already established company is to clean up the messes of their bosses and place their credentials on display when the company is bidding for contracts.
      It upsets the status quo to hire a young, qualified guy at the price tag that the politically-savvy old fogeys draw, without having those same old fogeys produce the measurable results of a scientific education.
      In other words, it looks like the company is being conned by the managers who don’t produce, vs. the qualified personnel who do.
      Since management are fully aware of how incompetent they’ll look next to qualified people, they delegate menial work to the educated, with the statement “you will gain valuable experience” (even if companies normally do not give their trade secrets to staff).
      Then they can moan about how “youngsters today expect too much” eventhough they’re technically more competent than the old fogeys who can only talk about “strategy” and management-speak in the abstract, without concrete examples.
      I’m willing to bet Larry Page and Sergey Brin … didn’t code Google by themselves, since I also know someone pursuing their Ph.D … who considers MATLAB a programming language (funny, I’ve never seen a commercial application written in that).

  7. jhbowden
    September 26, 2012 at 5:18 pm

    As Milton Friedman once remarked, behind every innocent do-gooder stands a special interest ready to make a profit. They’re almost like front groups, except for the unpleasant fact that leftwing activists really believe their own bullshit.

    All of the Ralph Naders of the world have gotten their way on auto-safety. Who has this benefited? Largely, the automobile companies.

    Automobile companies lobby Congress for increased rules and regulations that increase the base price of their product. Their markup per unit might remain the same, but if the base price increases, the profit increases. Airbags, anti-lock brakes, mpg mandates etc. etc. don’t come cheap.

    The increasing cost of automobiles is *socialism* in action. Crony capitalism isn’t laissez faire.

    • jhbowden
      September 26, 2012 at 5:20 pm

      (above I’m obviously talking about markup as a percentage)

  8. jackal
    September 26, 2012 at 6:59 pm

    Some free enterprise still remains in the West, such as in technology. In the early 80s a personal computer cost $5,000 and up. Today, you can buy a $200 tablet that has exponentially more power and memory, thanks to unbridled competition. Get rid of all special interests, and you get $2000 cars, $10 college credits, $10,000 homes, and $5 office visits to the doctor — IOW, 1960s prices. That was little more than one generation ago. And as a bonus today, you also get rid of executives earning a million dollars weekly, because without the corrupt advantage of monopoly, no company will have enough fat margin to pay these pigs. Consumers already have the power of boycott to exterminate special interest but there’s too much of a critical mass of stupidity for that to happen anytime soon. They’re also all too busy buying into the liberal-conservative blame game, too dumb to see the larger picture obfuscated by the One Percenters. Consumers would all rather belly up to tables until all the food is gone, then starve to death while the entire system implodes. Meantime, every time you pay your Verizon bill, you’re voting to continue paying its CEO 50 million annually. How stupid is that?

    • Ted
      September 27, 2012 at 6:08 am

      Keep in mind that among the reasons tech prices keep falling is a mass pool of Asian labor. This labor enjoys limited protections and benefits, much to the benefit of tech companies and their American consumers.

      • jackal
        September 27, 2012 at 7:01 am

        Don’t forget that Asians enjoy one benefit you don’t — $2,000 cars. In fact, virtually everything they consume costs a fraction of what you’re bending over for, because the greedy raptors that circle here aren’t circling there — yet. There are no million-dollar per week executives in China. In fact, there are no million-dollar per year executives. If you want to defend the high prices you’re paying, you might as well try to defend bank robbery.

      • P Ray
        September 28, 2012 at 12:56 am

        Which Asians are you talking about when you say $2,000 cars?
        They’re not a singular mass, you know, and Asian car companies sell a better product to the West than they do for their local market (and at cheaper prices too).
        They essentially have a captive market – and they screw it with glee (in some places, cars from overseas get taxed 400%).
        Stop living in a dream world – if things were so good in Asia, why do Asians want to live in the West … and why do Westerners working in Asia, make more with lower qualifications?

        There are no million-dollar per week executives in China. In fact, there are no million-dollar per year executives.
        http://www.dailymail.co.uk/news/article-2161987/Rise-Tiger-tycoons-Asias-millionaires-outnumber-North-Americas-time.html
        You’re not living in reality.
        There are a huge bunch of dynasties and business conglomerates in Asia with – guess what – executives earning millions of dollars!

      • jackal
        September 29, 2012 at 5:01 am

        Of course there is a lot of wealth in China, most of which wealth, unlike the US, is not pissed away in government spending, regulation, and on executive compensation but is, instead, directed to where it counts most — in factories and investments — domestic and foreign (e.g. US debt). My point is that everything in Asia can be had for a fraction of what it costs in the US. One reason is because executives earn a tiny fraction of what they can earn here, explaining why so many foreigners want to move to the US. Most millionaires in China are investors — not executives. Big difference.

      • P Ray
        September 29, 2012 at 8:02 am

        The population of Asia is about 4+ billion.
        China is not all of Asia.
        How did the investors get the money in the first place?

        Of course there is a lot of wealth in China, most of which wealth, unlike the US, is not pissed away in government spending, regulation, and on executive compensation but is, instead, directed to where it counts most — in factories and investments — domestic and foreign (e.g. US debt).
        Yes, there is zero corruption in China … yeah right.

        Most millionaires in China are investors — not executives. Big difference.
        And most got their money a long time ago. Not yesterday.
        Big money requires years of accumulating small money.

        The jobs that pay badly in China … allow the US to buy electronics cheaper than anywhere else in the world. And the Chinese jack up the prices for the rest of Asia, with the statement “what we make, we sell to America – that means it’s worth a premium … everywhere else”.
        If you’re trying to complain about the monetary system, I can assure you that the peasants in China have some bone to pick with the Americans.

  9. anon666
    September 27, 2012 at 9:22 am

    I only learned to drive this last year, as I’ve always used a bicycle as my primary form of transportation. Even while equipped with this new skill, I don’t find the need to use it frequently. I mainly use it for regional trips outside the city, which I do rarely, or for hauling anything too big to carry on a bike, which I also do rarely. Careshare programs and rentals are cheap, so there is no need to own. I bike for commuting, I walk to the grocery store and local bars/restaurants, and I make most of my other purchases online. I find that there is less of a need to transport oneself for daily necessities than every before, as there are countless errands which once required a car trip that can now be done online. There’s not much need to go anywhere anymore, except to experience an adventure. That’s how it should be, I think.

  10. P Ray
    September 28, 2012 at 1:02 am

    One thing that is left out is that employers want to hire desperate people, so that they cannot easily leave a crappy work situation.
    Which is why they want someone (ostensibly) living far away, who owns a car. Then they have them by the dual yokes of rent and car costs.
    Probably a good reason not to put your address on a resume – besides, the Income Tax/Inland Revenue department already has that … so why does your employer need your address? Planning to break in your house to give you a surprise birthday party?

    • P Ray
      September 28, 2012 at 3:18 am

      Whoops, didn’t completely think it through
      – companies want your address so that if you are bonded to them like an indentured servant, they have a place to send their letters of demand if you refuse to put up with 16 hour days without overtime pay. Every slave they go without, is the chairman being unable to afford a new BMW.
      Remember “work hard and you will succeed!” “We are planning a bright future for you here in our company!”
      “No, the guard towers and locks on the outside are to stop people from coming in to work, since we are such a good employer!”

  11. Matt Strictland
    October 1, 2012 at 9:32 am

    Grit :
    Two thoughts
    1. Capitalism is now manifested without morality. Technology has created a permanent ‘surplus’ mentality that encourages all sorts of short sighted choices. If you have a million bucks, why not drop a few hundred k now? If you have a million twitter followers, why build social skills to meet real people? If technology connects you with 500 men ready to have sex, why not fuck a few here and there?
    2. The car is a milquetoast investment. Demand came and went. If Ford would bust out a hover car, bam- instant rejuvination of their market.

    The 1st is pretty true, and while twitter and the other techs do encourage people not to socialize IRL, there are other reasons in play as well. Many people have no common interests with their neighbors and many of them, are also time draining parasites. With the Internet you control the social dynamic. Also some people do use it for networking FtF . I do upon occasion.

    the 2nd requires a wage condition where a worker can afford a car, cash for a few months salary. This will NEVER happen without massive intervention by the state. This is an issue of labor surplus and as such, surplus labor reduces wages, wages reduce consumption and the entire economy shrinks Given that the short sighted greedy sociopaths have hijacked the State readjustment will never happen. Also a lot of people don’t really need them. If you aren’t going out with friends because you are at home on the Internet (or if very lucky can walk to your stores and hangouts) why bother? Cars today, even a putative hover-car is an expensive hassle that does little to improve status for very long.

    • P Ray
      October 1, 2012 at 10:11 am

      This is an issue of labor surplus and as such, surplus labor reduces wages, wages reduce consumption and the entire economy shrinks
      If some people are being overworked … it’s no wonder other people can’t get jobs … as the job is being done by the person overworked!
      Inability to address worker grievances, concentrates a lot of hatred into the workforce.

  12. Matt Strictland
    October 3, 2012 at 10:10 am

    P Ray :
    This is an issue of labor surplus and as such, surplus labor reduces wages, wages reduce consumption and the entire economy shrinks
    If some people are being overworked … it’s no wonder other people can’t get jobs … as the job is being done by the person overworked!
    Inability to address worker grievances, concentrates a lot of hatred into the workforce.

    Absolutely. Most people aren’t sufficiently important in terms of skill sets that they can be swapped out for another person. Exceptions exist of course among a few highly skilled elite (maybe 2% of the work force) another 8% with unusual skills and among the self employed.

    However a correction would require government force. The last time we had correction (the 1930’s) there was mass labor unrest but this age is different for a lot of reasons.

    Basic rule of thumb, humans are evolved from tribal banding primates and will usually do right by members of the tribe (when mentally well) other bands are at best treated neutrally if they want something from them.

    If there is a lot of interchange, members of one band can see members of the other band as people slotting them into the limited cognitive space we have for treating others as human not as stuff (so called Dunbar’s Number)

    Making more complex arrangements work requires force, law and custom but thats often difficult to sustain over time.

    Thus it a;ways gets screwed up.

  13. P Ray
    September 22, 2015 at 5:04 am

    One angle that is left out, is SEX.
    Men own cars to get sex, and women want men who own cars … to do favours for them.
    Of course, since sex work is now open to most women (and only paid shills are stupid enough to say “women can’t make money selling their bodies”/”women are all oppressed”),
    prices have gone down – hence removing the need for owning a car.

    With feminism, sex availability for those that can pay … has certainly gone up.

    Of course, that is one “choice” many feminists want to “take away from women”.

    • March 24, 2016 at 11:22 am

      Yep. Damned right. But if feminism is supposed to be about women owning control over their bodies (abortion, contraception, tubes tied), why generalize and say all women who engage in it are “victims” or “trafficked”, then tell the ugliest bitch she can “do better”? Well, like black MRA Thugtician said, “Because they want to raise the price of pussy. They want as many women – particularly the mediocre ones – to have high self-esteem. Because [… it creates] more hoops for men to jump thru to get pussy.”

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