[FoRK] Transportation as a location factor, Was: "The World Is Not Flat"

David Kammeyer kammeyer at rocketmail.com
Tue Jan 19 16:16:45 PST 2010



> From: "Ken Ganshirt @ Yahoo" <ken_ganshirt at yahoo.ca>
> > All of this has happened largely due to cheaper
> > transportation. ...
> >
> 
> Well, no. Not really. It's generally coming out of tax dollars or artificially 
> reduced wages and other individual and/or collective benefits. 
> 
> It has little, if anything to do with transportation costs; only its 
> availability, e.g. in your example, transportation has to be available or 
> there's no deal to be made. But it doesn't much matter what it costs. It's cost 
> can and will be offset, if necessary, by the other giveaways^h^h^h^h^h^h^h^h^h 

Your assumption is that such giveaways can be unlimited.  Transportation costs represent a large piece of the cost of manufacturing heavy goods like cars.  Also, the government's time horizon is only oriented towards the startup of a new business.  Once the business is established and has invested capital in a place, the incentive to keep subsidizing is reduced.  Therefore, companies will only want to move plants if they percieve that there will be a sustained cost reduction which doesn't directly cost the government anything, such as different labor laws, or lower labor costs for other reasons.  Furthermore, that cost reduction has to offset the increased transportation costs of moving.

To answer my own question about what could be the next big revolution in transportation that would cause these sorts of uphevals again, maybe it will be practical superconducting cable.  If the cost of transporting electricity were to dramatically fall, there might be economies of scale in power generation.  For example, we might create a giganic carbon sequestration facility in the powder river basin, create huge coal power plants, and ship the electricity off to the west coast.

-Dave


      


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