One again Erik Best is right. This is his final word for today.
As crisis-response measures go, the scrap subsidy is a fairly minor matter. Even in Germany, where €5bn is going toward it, there are issues that are much more consequential, such as whether the EU should inflate the money supply through quantitative easing. The scrap bonus gets outsized attention because it's an easily understood, direct benefit to a single sector of the economy. It clearly saves jobs and promotes spending in the short term. The existential aspect of it is overlooked, though, and it's in this sense that the subsidy is indeed significant. It speaks volumes about the willingness of Western society to deal with the causes of the current crisis. The subsidy is based on decommissioning and crushing cars that are old but fully operational. This is merely a turbocharged version of the planned obsolescence that is already the lifeblood of economic growth. Almost everyone agrees that we've been living beyond our means, but for some reason we still suffer from the illusion that wealth can be created by destroying wealth.
4/09/2009
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2 comments:
While it is indeed "in" to slam the consumer society, I'm not sure I fully agree this time.
One thing is the technical merit of this (relatively) minor measure; it pretty much just shifts future demand to current time, which might help a lot or might eventually make things worse - depending on how long will the economic problems last...
But he attacks the "scrapping of things that still work", while omitting all other aspect of this particular case.
If you put it that way (planned obsolescence, old but fully operational...) it indeed sounds pretty bad.
But as anyone who has had an old car can attest, while it is operational (e.g. it can drive you from one place to another), there many disadvantages attached.
The operating costs are high, because old parts break.
Fuel consumption is generally higher.
Emissions are much higher. This is the one point that shouldn't be left out, considering all other pro-environmental measures that make much less sense...
Old cars are much more dangerous - both to other people on the road (they drive less safely and can suffer technical malfunctions) and to its occupants (much lower structural strength and safety measures).
So you don't just "destroy things that work", but also achieve many other effects... While I'm still not sure if the scrap subsidy is a good idea as such, this particular point doesn't seem like a good reason to attack it.
Oh, I should probably note that the microwave oven I'm using is a Toshiba from 1988 (still works great!), and that while I have had 4 mobile phones since 2001, each time it was because the previous one broke or because I've achieved a tremendous increase of functionality :)
While this, i.e. "we owe it to the others who already did it", IS a very bad argument in support...
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