Demand for truck transport is about as inelastic as possible. If you bankrupt independent truckers, someone else will have to fill those routes. There won't be less truck traffic. Unless...
An alternative scheme for moving goods around is built. This requires new forms of infrastructure. This does not happen overnight. And there is certainly NO historical reason to believe the marketeers will build it.
And now I return you to your wonderful debate on how markets respond. Have fun, gentlemen. "Remember the I35W bridge--who needs terrorists when there are Republicans"
So there might well be a 25% oversupply of drivers right now. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
No it isn't for three reasons. First of all the truck haulage costs represent part of the final consumer cost, and they vary by good - certain ones will go up more, others less because of things like distance, compactness and weight. Consumers will respond to differential price changes by favoring those goods which cost less in the same general category. So will producers by shifting production location - just as they do with labour costs. Secondly, unless the rails are running at full capacity you can always shift to rail transport for everything except the final stage. The truckers themselves will respond with different patterns (idling less, being more careful about routes, decreasing the amount of non-full loads).
Secondly, unless the rails are running at full capacity
Bingo. I don't know what the situation is in Spain, but rail freight in the UK has very little spare capacity.
Rather than believing in a market utopia, which is the best of all possible worlds and everything balances out in the end, it's more likely that stuff will stop appearing in shops, and when it does appear it will be less affordable.
This will be called 'markets providing lower prices and increased consumer choice', and therefore everyone will be happy.
Those goods which require more oil to produce and get to the consumer will see an increase in their price relative to those that require less. In the short term that will shift consumption patterns, in the medium term it will shift production patterns, and in the long term it will shift infrastructure investment patterns. All good things.
That's not believing in a market utopia, but that we do live in a world where costs affect consumption and production decisions. If you don't believe they do, I suggest you wander over to all those thriving British textile factories.
we do live in a world where costs affect consumption and production decisions.
No, we live in a world where politics decides costs and patterns of consuumption and production on the basis of short term returns.
If those textiles are now going to become too expensive to import from China and India again, would it have been smarter to keep prices higher, but industry and distribution sustainable and local, or to throw away the old industries so that a tiny minority could benefit by making an easy buck?
I realise it's not easy to think outside of the ideology, but the first step is realising that is just an ideology, and all of the supposed explanations it offers aren't inevitable, definitive, complete, or even particularly useful.
