Would You Give Up One of Your Cars for Someone Else?

The citizens of India are embracing automobiles like never before: http://ow.ly/2y1rT.

Am I the only one who notices a huge disconnect with reality here? Where is all the fuel going to come from to power all the snazzy new cars? Worldwide oil production has been stuck at zero growth for many years now. And don’t tell me it’s because of the worldwide recession, which confuses the symptom with the disease.

Could it be that automakers around the world are aware of the stakes, and are simply rushing to position themselves as last man standing? After all, there is still lots of oil left. For now.

This situation illustrates the abject failure of markets in one specific area: resource conservation. Unfettered markets may be quite efficient at allocating scarce resources -- but only to the highest bidder and right down to the last drop. This model does not, and will never, foster conservation or rational stewardship. Instead, it favors short-term gluttony (for the lucky few) at the expense of long-term economic stability (which benefits everyone).

Most western drivers probably don’t think much -- if at all -- about auto production in emerging markets. But they should. How are you going to tell an aspiring Indian new car owner that he or she doesn’t deserve it? We “need” cars. They don’t. Go ahead, try to come up with a convincing argument for that one.