Dahon.Steve

Here’s a good article that comes up with a shocking dollar amount of how much money would stay in the local economy if people went carfree. Get this, it’s actually provided by AAA!!

According to AAA, $7,095.00 per motorist leave the local economy each year. When multiplied over tens of thousands of people, the figure is staggering! Something that is not discussed on this forum is how much more people would be able to spend in their community if they didn’t own a car.

All the spending in Washington to stimulate the economy along with the Federal Reserve wouldn’t be needed. If the population went carfree, we might see the greatest economic boom since the industrial revolution. We may also see a Great Depression with all those unemployed auto workers along with those associated in that industry losing their jobs. ;-(

Personally, you’ll see me four or five times a week in the local supermarket one block away buying fresh fish and produce. My money is invested back in the local economy.

How to add $1 Billion to local economy: get 140,000 to go car free

https://urbantimes.co/2014/03/the-tr...car-ownership/

350htrr

That's probably true... This world economy "may" work to allow cheaper products on the shelve, but at what cost...? The local economy goes bankrupt, because it's actually "cheaper" to ship products around the world that is produced by what amounts to basically "slave labor"... but the big companies don't care, profits, profits, profits...

Machka 

... and are spent in a local economy next door. Meanwhile someone from another local economy has driven over to spend money in your local economy.


What is "local economy" anyway? Where do we draw the lines? Is "local" within 5 km radius of where you live? Or 10 km? Or 100 km? Is "local" your own state/province or country? But what about when you travel to another country each year? Does that country become "local" or do you have to buy everything you need before you go and bring it with you?

I find this whole "local economy" concept kind of funny. I live in one community, shop in the next community over, work in another community, shop there and in a several of the surrounding communities. Rowan works in a community in an entirely different direction, and sometimes shops over that way. Our work/living circle is about 45 km in diameter. We regularly cycle all over the place within about a 75 km radius ... and will stop at the shops or cafes for a bite to eat along the way. About once a month we venture further afield for cycling weekends in various places throughout Tasmania, and spend money in those communities (accommodation, food, etc.). And we try to get into a different state or country at least once a year, preferably more. Just in the last couple months we've been to Canada, USA, and up to Victoria on mainland Australia. Of course, we spend money in whatever communities we happen to be in when we travel.

So I guess, personally, I prefer to support a much more global economy. Or perhaps the "local economy" I happen to be in at the moment.

Roody

I don't know the "official" definition of local, but I suppose it's your metro area, or the area where residents tend to spend their time. Surely any place that's within a day's travel, there and back, could be considered local. (By whatever means of travel is typical.)

[HR][/HR]

As for me, cars are produced locally. Within 5 miles of my house are two of GM's foremost assembly plants, along with dozens of plants that feed into the GM supply line. If somebody from Timbuktu buys a Cadillac or a GM crossover vehicle, some of that money is going into my local economy.

So in a way I agree with what Machka seems to be saying: world trade makes some local places more prosperous. Two GM plants is pretty good for the local economy. World trade, including cars is a tide that floats a lot of local boats.

But there used to be five GM plants within five miles of my house, and they employed many more local workers in the pre-robotics era of automobile manufacture. Now, like I said, it's down to two plants. So what world trade giveth, it also taketh away. For me it's a big conundrum. The last 15 years have been pretty much a depression in some parts of Michigan, and difficult all over the state.

But I am very future oriented. I think in the future (well, the present also) we need a mixed economy--local and global, large-scale and small-scale, multi-national corporations and small businesses.

Ekdog

The less money I spend on petroleum the better. I'd rather spend my euros in my neighborhood shops on local goods (as much as is possible) than on petroleum products, as any money spent on the latter is going to certain regimes in the Middle East that I'd rather not be supporting. There are some things that are not produced here, of course, so they have to be imported, but I try to buy as few of those as possible.

This is another advantage of living car-free.

Dahon.Steve

There's no question that imports have wrecked manufacturing and hurting jobs overall. But people would still have more money to spend even for imported products if they didn't have to support a vehicle. Also, if those same people had more money, it would eventually go into the local economy.

Dahon.Steve

You missed the point.

Out economy is based on consumption and all those driving are spending less. It doesn't matter if they drive to your town or elsewhere, they are not consuming like the past.

You do not make this up by other drivers coming into your town unless there is a special reason to do so like fine dining. Local economies in general look very similar with the same stores so there is no reason for anyone to drive 20 miles to your town.

jwarner

Personally, I would just as soon spend my money with people I know, and can deal with face to face. If I spend my money in my town, they they can hire more locals to do whatever they do, and those locals spend more money with my business, pay more taxes, whatever. Granted it isn't that simple in todays world, but I do what I can where I can. Of course, big business loses out this way, but I don't really care, as they only thing most of them seem to care about is the almighty dollar, none, or very little of which is staying in my local economy helping benefit me, my neighbors, or my community.

On a related matter, concerning big boxes like Walmart, or any of the other conglomerates not paying their people a living wage. Who do you think takes up the slack in social programs, healthcare costs, etc... for these businesses? We the people. So not only are we shutting down local businesses, and inundating our world with cheap plastic crap made in China, we are also increasing the misery by paying people nothing, and increasing everyone's taxes to subsidize these corporations who would rather pay their CEOs and stockholders larger dividends, than pay a fair wage and spread the wealth.

What I find really hilarious (in a not so funny way) is that the same people who seem to support this supposed "trickle down" system, are the same ones who complain and moan about government subsidies to the poor, and want to cut big business even larger tax breaks. It hasn't worked yet, not sure why they think it is magically going to start working in the near future. Or maybe they are just lying greedy buggers with with weak morals and no sense of a greater good.

Machka 

We don't have Walmart in Australia.

Mark Stone

Moderator's note: Great thread so far. Please keep the posts OT (by discussing the effects of being Car Free on the economy). If it dissolves into a political debate apart from that subject, and especially if it becomes emotional, we will need to move it to PnR . . .

Thanks

jwarner

My bad... I should have added places I can bike too somewhere up in that mess I wrote.

Dahon.Steve

Your comment reminded me of a book I read years ago called "The Race to the Bottom, Why a Worldwide Worker Surplus and Free Trade are Sinking American Living Standards. This book should be required reading for every high school student.

The sinking of American living standards is the reason the next generation are riding bicycles and taking public transit.

Machka 

So how do you explain tourism? Or how does tourism fit into this? The areas where I've lived over the past 5 years have depended quite heavily on tourism ... on people travelling (driving, flying, arriving by cruise ship, etc.) to those areas, and spending money.


We lived about 100 km north of Melbourne in Victoria. From about now to about the middle of March (but especially mid-Dec to early Feb), we had a steady stream of traffic into our area, mainly from Melbourne. And that's when the businesses in the area made their money. There aren't really enough people living in the local area there to support the businesses, and if it weren't for the tourists during those 4 months, they'd all close.

During those 4 months, we put the bicycles into the van and drove to non-touristy areas about 50 to 70-ish km away just about every weekend so we could cycle in peace, because the amount of motorist traffic in our area made cycling unpleasant. But there was no way I would do anything to discourage the motorist traffic in our area ... I knew the area needed the money they spent in order to survive.

lasauge 

Those projections of 'money-saved' seem extremely optimistic to me, at least as they apply to entire cities or communities: If more people go car-free, what happens to all the economic activity around selling, repairing, maintaining, and building/maintaining infrastructure for automobiles? Would businesses suddenly be spared of the cost of maintaining their parking lots? Would the socially-borne costs of poor health related to decades of car dependency suddenly vanish? What happens to the price and availability of consumer goods when cities/nations eventually reduce their road networks? Most importantly, if large numbers of people decided to reduce/stop using automobiles, would there be enough housing near/inexpensive enough to allow the current level of economic activity and growth to be maintained?

For an individual living in a car-dependent culture, simply reducing/forgoing the use of an automobile is clearly an effective way to reduce living expenses (relative to the rest of the population), but I strongly doubt we would see an overall economic improvement* if a significant portion of our society stopped driving cars. History says that there were plenty of problems associated with transportation in the era just before automobiles became wiely popular - rail (and canal) transport was not cheap, and the rates for carrying cargo were a constant source of political/social debate, and highways were either privately funded or almost non-existent outside of areas with high population density.

* - strictly measured in money, of course there are other benefits associated with cycling (health, environmental) that don't immediately translate into financial value

Roody

Good post, with many interesting questions. Personally, I think economic changes related to society becoming carfree will be gradual and incremental.

I think it's related to the urbanization of the world. Cars can make a lot of sense in a rural area and in suburban areas in the days when most suburbanites lived far from their work places. The trend now is for people all over the world to move into cities, where non-car alternatives are practical and convenient.

Ekdog

Tourism is an important part of my city's economy. Most visitors don't arrive by car. Why? Because we have excellent train service, and once they're here there's no point in hiring a car because they can walk around, take a bus or use our bike-share scheme and protected bike lanes, which have become an attraction in themselves.

Dahon.Steve

1. If more people go car-free, what happens to all the economic activity around selling, repairing, maintaining, and building/maintaining infrastructure for automobiles?

This is my concern since much of this economic activity would end. However, something would come around and replace it like it always does. With millions of Americans 7K richer, I’m sure they would find other places to spend their money creating more jobs than you think since all that wealth would stay in the country instead of leaving in the form of exports.

2. Would businesses suddenly be spared of the cost of maintaining their parking lots?

Businesses would have a windfall from not having to maintain parking lots. Those lots would be sold and made into luxury condos, shopping centers or commercial buildings. The parking lot is a business expense if they re not charging by the hour and can now be converted to revenue.

3. Would the socially-borne costs of poor health related to decades of car dependency suddenly vanish?

Probably not. With more income, everyone will be able to eat out more often. LOL! Keep in mind, transportation will still be needed even if the car were removed from the equation. Good health starts with a good diet.

4. What happens to the price and availability of consumer goods when cities/nations eventually reduce their road networks?

Consumer goods will have to move by other means as it did before 1908 when the Model T was invented I don’t’ see the roads falling apart the next day and they’ll last much longer now that millions of vehicles aren’t ripping them to pieces.

5. Most importantly, if large numbers of people decided to reduce/stop using automobiles, would there be enough housing near/inexpensive enough to allow the current level of economic activity and growth to be maintained?

I’m sure housing will be an issue at first but construction does not end. You’ll always see cranes in large cities creating more housing especially if there are good paying jobs not far away. All those parking lots will be converted to luxury housing for those who have the funds. It’s very difficult to find inexpensive housing where employers are paying very good salaries. Quite frankly, I don’t want to live in an area that’s inexpensive to live surrounded by low paying jobs.

5. Rail (and canal) transport was not cheap.[/QUOTE]

Really? I’m reading a book called “Time of the Trolley” where you’ll see trams loaded with passengers some hanging from the roof! It appears they had no trouble paying the 5 cent fare box. Long distance travel was expensive due to the fact the middle class did not exist in the 1800’s and most of the population was poor. This more than anything else made rail travel expensive.

I looked at the cost of airfare today if I wanted to travel to Chicago tomorrow by JetBlue. Total cost to arrive at Chicago was $509.00 dollars. A trip on the 20th Century Limited in the 1920’s would have cost me $32.70 or about $389.29 using an inflation calculator. A bargain!

jon c. 

They aren't spending less. Automobiles and their fuel and maintenance are certainly a form of consumption. Consuming like when in the past?

If you mean spending less "locally", if automobile expenses were eliminated then indeed some of that money might be spent locally. But a lot of our consumption is non-local. In this electronic age, our cell phone providers, ISPs, satellite services etc. aren't really local. I appreciate the desire to keep local small businesses operating and shop locally as much as I can, but the majority of my income is always going to heading somewhere outside my area.

If we go back to a time before all that existed (and few would really care to), then a great deal more of everyone's income was spent locally. But they weren't spending more because by and large they had very little. As you note, the middle class didn't substantially exist until post war industrial boom, which included the great expansion of the auto industry.

tandempower

Two things: 1) Automotive expenses, including insurance and financing among other things, are part of how the non-local economy exploits local economies in order to concentrate profits among certain 'investment clubs.' Welfare state nations are a good example of such 'investment clubs' where investors utilize corporate strategizing to stimulate maximum GDP growth in markets like those of the US, so that big ticket sales like cars can be tapped to fund more 'civilized' cities that are protected from such exploitation and are thus, often, richer in bikable, walkable, areas.

2) what the OP is talking about is the fact that in automotive-dependent local economies, a significant proportion of income goes toward funding automotive expenses. Local GDP might decrease some if automotive expenses were not longer being paid, but non-automotive GDP would go up. In other words, the non-automotive economy would grow by shrinking the automotive economy. Car-lovers often hate and fear this idea because automobilism has a strong pride component and the idea of the automotive economy shrinking and cutting into the rest of the economy bruises that pride. People who drive like being told that their driving is a boost to the economy and they are more productive citizens as a result. Pride/ego.

This false argument about automotive expansion being part and parcel of everything good that came out of industrialism and modernization is getting tiresome. It is accurate to say that driving facilitated a lot of purchases and infrastructure projects that stimulated economic growth for a long time. The problem with that, however, was that the growth left an expanding network of sprawling roads and parking lots that eventually grew too big to navigate efficiently. What's more life grew very unpleasant being stuck in traffic all the time to get to the job to pay the bills for the car and house and credit cards that funded the unpleasant lifestyle.

People didn't question whether this consumer lifestyle was exploiting them, for the most part, because the media keeps touting the idea that it is the people themselves who want more jobs, more money, new cars, new stuff, etc. People want to fit in and not be complainers so they go along with what they perceive as popular economic behavior and beliefs. Exploitation never leads to prosperity, though, so there are always recessions, wars, crime, and other misery that seem to be isolated societal phenomena instead of being connected to the exploitation economy.

Now you can see that exploitation trumps economic and environmental sustainability in the media because there is more fear that people won't be able to live well if GDP is less, even if they have healthier lifestyles and lower costs of living. So there is resistance to reforms that reduce automotive and other big-ticket expenditures in favor of more affordable transportation, housing, etc. that would leave more money over for the things people really want to spend money but that aren't viewed as necessities, the way cars and expensive mortgages and insurance are.