13.4.16

AMAZON'S DRONE FLEET IS ANOTHER INDUCED INNOVATION.

Governments mandate minimum wages, and such mandates, or the prospects of new mandates, induce innovation.  Relative prices influence the capital-labor ratio of the inventions so induced.

Governments fail to take care of the roads they build, and commerce stagnates.
For all their convenience to consumers, the rise of e-commerce and the allure of same- and next-day delivery have hit the goods movement industry like a tidal wave, UPS more than most, multiplying the number of trips each day by several orders of magnitude. Big Brown’s original lucrative model has shifted from truckloads of business-to-business delivery to those same truckloads dropping off a parcel at a time at a hundred different home addresses. Traffic is the enemy in this new reality, and it’s getting worse, not better, over time.
The article focuses on ways government might do a better job with the roads, including replacing the fuel tax with time-of-day pricing and all expressways converted to toll roads; providing inducements for businesses to stagger the starting time of work (something that might be easier with the blurring of boundaries between work and home); repurposing carpool lanes as bus and truck lanes (why not sell such lanes to the bus and truck companies, that might get more trailers onto the railroads?); and distinguish useful from unproductive congestion.

Those are all standard Cold Spring Shops themes, and I might add that UPS has the option of selling expedited transportation in order that the more time-sensitive stuff absolutely, positively gets to the airport in time to be loaded on the plane.

My post title follows immediately by a similar argument.

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