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At first glace, it looks like it generated 300 million dollars in revenue for the construction, tunneling, and telecommunications industries. Which was a real v
by TehCorwiz 6y ago
At first glace, it looks like it generated 300 million dollars in revenue for the construction, tunneling, and telecommunications industries. Which was a real value for the companies doing the work. Was the end result useful for anyone else? Probably not, but the companies and employees who made it possible took home a tangible value.
- paulryanrogers 6y agoThis seems really close to the broken window fallacy. The kid breaking the window made some work for the glass maker and installer but the shop owner poorer. So on the whole the village is one window poorer.
- oceanplexian 6y agoIf kids breaking windows is a societal problem, an economic system that has to frequently produce windows would result in stronger windows, making them less attractive for kids to break. A top down solution imposed by police, laws, and imprisonment also makes society poorer, arguably more so.
- xg15 6y ago> an economic system that has to frequently produce windows would result in stronger windows, making them less attractive for kids to break. If I just opened a new window factory, I'd absolutely be interested in as many windows breaking as possible, so I can sell more products. It would make a lot more economic sense for me to produce cheap, thin windows: I need less raw material to produce them and they will break more easily, giving me more opportunity to sell replacements.
- TehCorwiz 6y agoI see where you're coming from. However that fallacy assumes that someone or something was injured and that there's a perverse incentive at play to incentivize destructive behavior. In this situation I'm not sure it applies. Who or what was injured by installing this tunnel? Were the tunneling companies now selling high-speed tunnels to other companies?
- paulryanrogers 6y agoFair enough. Though I imagine the ecological impact and carbon footprint is probably significant. We all live in a reasonably closed system, so the impact of every significant development touches us all.
- iancmceachern 6y agoExactly my point. It generated some work for a few companies, in the short term, but not ongoing value, work, equity for those companies or the economy as a whole. But what about overall, total value to society, the economy, over the long term, not just to the few companies who won a bid.
- TehCorwiz 6y agoOK, that's a fair point. The majority of the value was probably locked up in a small number of hands. I think some probably was spent on materials and services local to the project. Maybe some of the revenue went into expansion for some of the companies working on the contract? But besides being a one-off boondoggle, was there a net negative negative to the tunnel? Had the tunnel not been built then would that money would have stayed locked up in a single place? The money being spent on services and construction generated more economic activity than it sitting in a bank.
- iancmceachern 6y agoI dont think it's a two choice thing. The options aren't to keep the money in the bank vs build this specific tunnel. Its a bigger question, why not this vs. Other income producing infrastructure that has a longstanding, consistent return. Like a interstate highway improvement project.