The Single-Person Motor Vehicle: Who really gains?
by Fred E. Foldvary, Senior Editor
"Segue" means to continue immediately to another place without a transition break. Now we have the new invention, the Segway Human Transporter, a one-person stand-up motorized scooter that can take us to another place seamlessly. It has a maximum speed of 12.5 miles or 20 kilometers per hour.
The Segway has been legalized for sidewalk use in 24 U.S. States, even though it is not yet for sale to the public. Weighing 69 pounds or 31 kilograms, some fear that pedestrians could be injured by enthusiastic Segway riders. But in many places, it is legal to ride a bicycle or skate on the sidewalk, which poses a similar danger. Banning the Segway because of hypothetical injuries is not a morally proper policy. A free society should only prohibit actual harm. The potential for harm is not great enough for a Segway to be a clear and present danger as such.
The inventor, Dean Kamen, claims his scooter will transform transport. Many will ride a Segway rather than drive to work, especially if one can take it into a bus or train. It will also substitute for short bus rides. Letter carriers would be able to do their routes much more quickly. The police could patrol more intimately with the neighborhood. Widely used, the Segway will reduce congestion and pollution. It is a technological answer to the need for more urban mobility.
Hundreds of people scooting about in Segways will greatly reduce noise, since it is battery powered. The power of the machine is in its programming. The Segway computer and gyroscope will help the rider navigate, enabling him to stop quickly if necessary.
The cost of a Segway is estimated at $3000 for the regular consumer. It is much cheaper than a new car, but much more expensive than a bicycle. Just as many middle-class people have a computer and take costly vacations, they would buy a Segway. It will probably become just as standard in homes as televisions and computers. Many folks living in large cities would not need a car if they had a Segway, so for many, it could save on transit costs.
The laws in most places will not require licensing for a Segway. Insurance costs will be much lower than for cars. The Segway is a rational answer to the need for individual motorized mobility, since it is wasteful to have to carry around tons of materials just to move one person.
It seems that the economy will become more productive with the introduction of Segways. The economic question is, who will get the gains? Will workers get higher wages? Unfortunately, wages will not increase much, if at all. Labor is mobile, and workers will move to those industries and locations have the greatest increase in productivity, pushing the wage back down to the general wage level of the economy. The marginal worker sets the wage for everyone else. Workers could gain at first in the non-wage costs of work, in having quicker commuting. But that will attract more people to the labor force, again pushing wages back down.
Will the gains go to the capitalists, those producing and providing capital goods such as machines and buildings? No, because aside from firms profiting from patents, if profits rise in an industry, that attracts other firms to enter, pushing down prices and eliminating the extra profit.
Will consumers gain, since prices will fall? Not if the decline in the price of some goods is offset by the rise in price of other goods. But what kinds of resources would rise in price with greater productivity? Does productivity not reduce all prices?
No. Greater productivity implies a greater demand for the locations that now produce more, and this added demand will increase the rent of those sites. Land rents and land values will soak up most of the increase in productivity. Landowners will benefit the most, if they get to keep most of the rent, as they do now.
But landowners as such do not invent new products. They don't manufacture them. They don't employ labor. They don't market and distribute goods. They simply have title to locations that are in fixed supply. So they get much of the wealth generated by innovations such as the Segway.
Why don't people then demand from their governments that the land rent be collected and used for public revenue or citizens' dividends? People know rent rises when the economy prospers, but they don't think about who should get the gains. "But the owners bought the land," they say. "It's private property!" "Taxing land is communist!"
Well, who should own your labor? Do you want others to own you? Is your labor not your private property? Is it not communist to forcibly share your wage with everybody else, or worse yet, with powerful moneyed special interests? Think about it!
The Segway is an example of a wonderful invention that folks will benefit from, but few think it all the way through to see who ultimately benefits the most, and whether this is just.
-- Fred Foldvary
Copyright 2002 by Fred E. Foldvary. All rights reserved. No part of this material may be reproduced or transmitted in any form or by any means, electronic or mechanical, which includes but is not limited to facsimile transmission, photocopying, recording, rekeying, or using any information storage or retrieval system, without giving full credit to Fred Foldvary and The Progress Report.
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