The Price of Being Driven by Mobility
OK, time for another quiz. Which of the following is larger?
a) the gross national product of Argentina
b) the assets of BankAmerica
c) the value of all motor vehicles in California
If you guessed anything but c), you must have just gotten here.
It’s no news that Californians love their cars, but it might be of interest to know just how much and to ask ourselves for a minute what the answer implies.
Using registration fees charged by the state Department of Motor Vehicles, whose levies are based on some rough estimate of a vehicle’s value, all the vehicles in California are worth $110 billion, implying an average value of just $4,400 each for the 25 million vehicles in state.
“That’s probably about $2,000 or $2,500 too low,” says John Rettie, editorial director of California Report, an auto industry newsletter published by J. D. Power & Associates in Agoura Hills. Adding $2,000 each would mean a total worth of $160 billion. Says Rettie: “The value is unbelievable.”
But even this might be low. After all, state tax records indicate that in 1990 alone Californians probably spent more than $30 billion buying new and used cars. By contrast, spending from all sources on K-12 public education in California will come to barely $27 billion this year.
Indeed, Californians spend quite a bit more for new cars than other Americans, and the gap is growing. According to J. D. Power, the median new-car transaction price in California this year was $15,800, which is $1,800 more than the national median. In 1990, the gap was $900. In 1989, it was just $600.
When you get into the total cost of owning and operating all this rolling metal, the figures are truly daunting.
The Environmental Defense Fund took a stab at this and came up with $9 billion in state spending, $123.5 billion in private costs (including depreciation) and billions of dollars in additional costs for pollution, accidental loss of life, wasted time, a pro rata share of the Persian Gulf War, etc. This is all in just one year.
It’s enough to make you squeamish, especially since a Mercedes won’t move you from Point A to Point B any more effectively than a Toyota Corolla.
Thorstein Veblen, the churlish Plains social critic who taught for a while at Stanford and died in California, would have been appalled, if not surprised.
To Veblen, California’s car fetish would be proof that consumption “becomes honorific; and conversely, the failure to consume in due quantity and quality becomes a mark of inferiority and demerit.”
Veblen sort of predicted this. He wrote, for example, that “pecuniary strength” is the basis for good repute in advanced societies and that consumption works best for this purpose “where the human contact of the individual is widest and the mobility of the population is greatest.” California, all right.
Veblen, who said conspicuous leisure has roughly the same purpose as conspicuous consumption, also predicted that consumption would triumph--that wasting goods would beat wasting time.
And he understood keeping up with the Joneses.
“The only practicable means of impressing one’s pecuniary ability on these unsympathetic observers of one’s everyday life is an unremitting demonstration of ability to pay,” he writes, adding that “this requirement of decent appearance must be lived up to on pain of losing caste.”
But Veblen, who wore crummy clothes and died in a shack, tended to underestimate how comfortable the bourgeois comforts can be. And there’s a Puritan strain in his critique that this state will never embrace.
Nor should it. We’d probably be better off if we didn’t devote so many resources to automobiles, and it would probably help if motorists were prevented from socializing a large part of the cost, in the form of pollution, congestion and so forth. California also needs to devote more resources to improving its infrastructure.
But picking on cars is too easy. Think about how much we pour into housing instead of productive plant and equipment, and how we’re encouraged in this by the deductibility of mortgage interest. Or consider what we spend on entertainment. And who needs such a wide array of restaurants, and even foods, at so many different prices?
Michael Cameron, an economic analyst at the Environmental Defense Fund’s California office, figures that Americans generally spend about 20% of GNP on transportation and that Californians aren’t too far out of line with that.
“It’s not an ungodly amount,” he says.
If not ungodly, then indecent?
“A car is part of the living structure of being California,” protests Rettie, who emigrated from Great Britain and for a while drove a classic Jaguar. “It’s a necessity. You wouldn’t say buying a refrigerator is indecent.”
Pricey Vehicles Median prices paid for new cars and light trucks.
‘89 ’90 ’91 California $14,100 15,600 15,800 U.S. 13,500 14,700 14,000
Source: J. D. Power & Associates
