I don’t know how technically viable hyperloop is, but it seems especially well suited for the United States.
Investing in a hyperloop system doesn’t make as much sense in Europe or Japan for a number of reasons:
European/Japanese cities are closer together, so Hyperloop’s long acceleration times are a larger relative penalty in terms of speed. The existing HSR systems reach their lower top speeds more quickly.
Most European countries and Japan already have decent HSR systems and are set to decline in population. Big new infrastructure projects tend not to make as much sense when populations are declining and the infrastructure cost : population ratio is increasing by default.
Existing HSR systems create a natural political enemy for Hyperloop proposals. For most countries, having HSR and Hyperloop doesn’t make sense.
In contrast, the US seems far better suited:
The US is set for a massive population increase, requiring large new investments in transportation infrastructure in any case.
The US has lots of large but far-flung cities, so long acceleration times are not as much of a relative penalty.
The US has little existing HSR to act as a competitor. The political class has expressed interest in increasing passenger rail infrastructure.
Hyperloop is proposed to carry automobiles. Low walkability of US towns is the big killer of intercity passenger rail in the US. Taking HSR might be faster than driving, but in addition to other benefits, driving saves money on having to rent a car when you reach the destination city.
Another possible early adopter is China (because they still need more transport infrastructure, land acquisition is a trivial problem for the Communist party, and they have a larger area, mitigating the slow acceleration problem.) I see China as less likely than the US because they do have a fairly large HSR system and it is expanding quickly. Also, China is set for population decline within a few decades, although they have some decades of slow growth left.
Russia is another possible candidate. Admittedly they have the declining population problem, but they still need more transport infrastructure and they have several big, far-flung cities. The current Russian transportation system is quite unsafe, so they could be expected to be willing to invest in big new projects. The slow acceleration problem would again be mitigated by Russia’s large size.
Don’t forget Australia. We have a few, large cities separated by long distances. In particular, Melbourne to Sydney is one of the highest traffic air routes in the world, roughly the same distance as the proposed Hyperloop, and there has been on and off talk of high speed rail links. Additionally, Sydney airport has a curfew, and is more or less operating at capacity. Offloading Melbourne-bound passengers to a cheaper, faster option would free up more flights for other destinations.
In theory there is no difference between theory and practice. In practice, there is.
I continue to fail to see how this idea is anything more than a cool idea that would take huge amounts of testing and engineering hurdles to get going if it indeed would prove viable. Nothing is as simple as its untested dream ever is.
Not hating on it, but seriously, hold your horses...
I feel like I covered this in the first sentence with, “I don’t know how technically viable hyperloop is.” My point is just to argue that the US would be especially well-suited for hyperloop if it turns out to be viable. My goal was mainly to try to argue against the apparent popular wisdom that hyperloop would never be built in the US for the same reason HSR (mostly) wasn’t.
I was only vaguely following the Hyperloop thread on Lesswrong, but this analysis convinced me to Google it to learn more. I was immediately bombarded with a page full of search results that were pecimmistic at best (mocking, pretending at fallasy of gray but still patronizing, and politically indignant (the LA Times) were among the results on the first page)[1]. I was actually kinda hopeful about the concept, since America desperately needs better transit infrastructure, and KND’s analysis of it being best suited for America makes plenty of sense so far as I can tell.
[1] I didn’t actually open any of the results, just read the titles and descriptions. The tone might have been exaggerated or even completely mutated by that filter, but that seems unlikely for the titles and excerpts I read.
I suggest that this is very weak evidence against the viability, either political, economic, or technical, of the Hyperloop. Any project that is obviously viable and useful has been done already; consequently, both useful and non-useful projects get the same amount of resistance of the form “Here’s a problem I spent at least ten seconds thinking up, now you must take three days to counter it or I will pout. In public. Thus spoiling all your chances of ever getting your pet project accepted, hah!”
I’ve been told that railways primarily get money from freight, and nobody cares that much about freight getting there immediately. As such, high speed railways are not a good idea.
I know you can’t leave this to free enterprise per se. If someone doesn’t want to sell their house, you can’t exactly steer a railroad around it. However, if eminent domain is used, then if it’s worth building, the market will build it. Let the government offer eminent domain use for railroads, and let them be built if they’re truly needed.
Much of Amtrak uses tracks owned by freight companies, and that this is responsible for a good chunk of Amtrak’s poor performance. However, high-speed rail on non-freight-owned tracks works pretty well in the rest of the world; it just needs its own right-of-way (in some cases running freight at night when the high-speed trains aren’t running, but still having priority over freight traffic).
Many of the private passenger rail companies were losing money before they were nationalized, but that was under heavy regulation and price controls. The freight rail companies were losing money before they were deregulated as well. These days they are quite profitable.
A lot of the old right-of-way has been lost so they would certainly need government help to overcome the tragedy-of-the-anticommons problem.
A lot of the old right-of-way has been lost so they would certainly need government help to overcome the tragedy-of-the-anticommons problem.
You mean the problem that someone isn’t going to be willing to sell their property? Eminent domain is certainly necessary. I’m just wondering if it’s sufficient.
That’s not at all the same question as “Are high-speed trains a good idea?”
Any decent HSR would generate quite a lot of value not captured by fares. It would be more informative to compare the economic development of regions that have built high-speed rail against that of similar regions which haven’t or which did so later.
France’s TGV is profitable. Do you think that because it might not have been built without government funding it was a bad idea to build?
It would be more informative to compare the economic development of regions that have built high-speed rail against that of similar regions which haven’t or which did so later.
If the HSR charges based on marginal cost, and marginal and average cost are significantly different, then this could be a problem. I intuitively assumed they’d be fairly close. Thinking about it more, I’ve heard that airports charge vastly more for people who are flying for business than for pleasure, which suggests there is a signifcant difference. Of course, it also suggests that they might be able to capture it through price discrimination, since the airports seem to manage.
How much government help is necessary for a train to be built?
It would be more informative to compare the economic development of regions that have built high-speed rail against that of similar regions which haven’t or which did so later.
The economics of a train is not comparable to the economics of a city. If you can actually notice the difference in economic development caused by the train, then the train is so insanely valuable that it would be blindingly obvious from looking at how often they’re built by the private sector.
France’s TGV is profitable. Do you think that because it might not have been built without government funding it was a bad idea to build?
Making a profit is not a sufficient condition for it to be worth while to build. It has to make enough profit to make up for the capital cost. It might well do that, and it is possible to check, but it’s a lot easier to ask if one has been built without government funding.
If it is worth while to build trains in general, and the government doesn’t always fund them, then someone will build one without the government funding them.
If you can actually notice the difference in economic development caused by the train, then the train is so insanely valuable that it would be blindingly obvious from looking at how often they’re built by the private sector.
I don’t understand the reasoning by which you conclude that if an effect is measurable it must be so overwhelmingly huge that you wouldn’t have to measure it.
On a much smaller scale, property values rise substantially in the neighborhood of light rail stations, but this value is not easily captured by whoever builds the rails. Despite the measurability of this created value, we do not find that “[light rail] is so insanely valuable that it would be blindingly obvious from looking at how often they’re built by the private sector.”
If the effect is measurable on an accurate but imprecise scale (such as the effect of a train on the economy), then it will be overwhelming on an inaccurate but precise scale (such as ticket sales).
You are suggesting we measure the utility of a single business by its effect on the entire economy. Unless my guesses of the relative sizes are way off, the cost of a train is tiny compared to the normal variation of the economy. In order for the effect to be noticeable, the train would have to pay for itself many, many times over. Ticket sales, and by extension the free market, might not be entirely accurate in judging the value of a train. But it’s not so inaccurate that an effect of that magnitude will go unnoticed.
Am I missing something? Are trains really valuable enough that they’d be noticed on the scale of cities?
Faster, more convenient transportation is what fares are charging for. Non-captured value is more complicated than that.
If the non-captured value is 20% of the captured value, it’s highly unlikely that trains will frequently be worth building, but rarely capture enough value. That would require that the true value stay within a very narrow area.
If it’s not a monopoly good, and marginal costs are close to average costs, then captured value will only go down as people build more trains, so that value not being captured doesn’t prevent trains from being built. If it is a monopoly good (I think it is, but I would appreciate it if some who actually knows tells me), and marginal costs are much lower than average costs, then a significant portion of the value will not be captured. Much more than 20%. It’s not entirely unreasonable that the true value is such that trains are rarely built when they should often be built.
That’s part of why I asked:
How much government help is necessary for a train to be built?
If the government is subsidizing it by, say, 20%, then the trains are likely worth while. If the government practically has to pay for the infrastructure to get people to operate trains, not so much.
Also, that comment isn’t really applicable to what you just posted it as a response to. It would fit better as a response to my last comment. The comment you responded to was just saying that unless the value of trains is orders of magnitude more than the cost, you’d never notice by looking at the economy.
If the HSR charges based on marginal cost, and marginal and average cost are significantly different, then this could be a problem. I intuitively assumed they’d be fairly close. Thinking about it more, I’ve heard that airports charge vastly more for people who are flying for business than for pleasure, which suggests there is a significant difference.
Marginal and average cost are obviously different, but your example of business fliers is not relevant. Business fliers aren’t paying for their flights, but do often get to choose which airline they take. If there is one population that pays for their own flights and another population that does not even consider cost, it would be silly not to discriminate whatever the relation between marginal and average cost.
The businesses are perfectly capable of choosing not to pay for their employees flights. The fact that they do, and that they don’t consider the costs, shows that their willingness to pay is much higher than the marginal cost. If it wasn’t for price discrimination, consumer surplus would be high, and a large amount of value produced by the airlines would go towards the consumers.
Are high-speed trains natural monopolies? That is, are the capital costs (e.g. rail lines) much higher than the marginal costs (e.g. train cars)? I think they are, and if they are considering the consumer surplus is important, but if they’re not, then it doesn’t matter.
The fact that they do, and that they don’t consider the costs, shows that their willingness to pay is much higher than the marginal cost.
What marginal cost are you referring to here? If it’s the cost to the airline of one butt-in-seat, we know it’s less than one fare because the airline is willing to sell that ticket. And this has nothing to do with average cost. I think you’ve lost the thread a bit.
What I mean is that, if everyone payed what people who travel for pleasure pay, then people travelling for business would pay much less than they’re willing to, so the amount of value airports produce would be a lot less than what they’d get. If they charged everyone the same, either it would get so expensive that people would only travel for business, even though it’s worth while for people to travel for pleasure, or it would be cheap enough that people travelling for business would fly for a fraction of what they’re willing to pay. Either way, airports that are worth building would go unbuilt since the airport wouldn’t actually be able to make enough money to build it.
Some roads do collect tolls. Again, I don’t know how to look it up, but I don’t think they have government help. They’re in the minority, but they show that having roads is socially optimal. Similarly, if there are high-speed trains that operate without government help, we know that it’s good to have high-speed trains, and while it may be that government encouragement is resulting in too many of them being built, we should still build some.
I’m not sure what your point is here. Passenger rail and freight rail are usually decoupled. Amtrak operates on freight rail in most places because the government orders the rail companies to give preference to passenger rail (at substantial cost to the private freight railways).
Hyperloop would help out a lot, since it takes the burden off of freight rail. I suppose hyperloop could be privately operated (that would be my preference, so long as there was commonsense regulation against monopolistic pricing).
so long as there was commonsense regulation against monopolistic pricing
If competitors can simply build more hyperloops, monopolistic pricing won’t be a problem. If you only need one hyperloop, then monopolistic pricing is insufficient. They will still make less money than they produce. Getting rid of monopolistic pricing runs the risk of keeping anyone from building the hyperloops.
I’d like to hear more about possibilities in China, if you’ve got more. Everything I’ve read lately suggests that they’ve extensively overbuilt their infrastructure, much of it with bad debt, in the rush to create urban jobs. And it seems like they’re teetering on the edge of a land-development bubble, and that urbanization has already started slowing. But they do get rights-of-way trivially, as you say, and they’re geographically a lot more like the US than Europe.
Mr. Sumner has some pretty clear systemic assumptions toward government spending on infrastructure. This article seems to agree with both aspects, without conflicting with either, however.
The Chinese government /is/ opening up new opportunities for non-Chinese companies to provide infrastructure, in order to further cover land development. But they’re doing so at least in part because urbanization is slowing and these investments are perceived locally as higher-risk to already risk-heavy banks, and foreign investors are likely to be more adventurous or to lack information.
I don’t know how technically viable hyperloop is, but it seems especially well suited for the United States.
Investing in a hyperloop system doesn’t make as much sense in Europe or Japan for a number of reasons:
European/Japanese cities are closer together, so Hyperloop’s long acceleration times are a larger relative penalty in terms of speed. The existing HSR systems reach their lower top speeds more quickly.
Most European countries and Japan already have decent HSR systems and are set to decline in population. Big new infrastructure projects tend not to make as much sense when populations are declining and the infrastructure cost : population ratio is increasing by default.
Existing HSR systems create a natural political enemy for Hyperloop proposals. For most countries, having HSR and Hyperloop doesn’t make sense.
In contrast, the US seems far better suited:
The US is set for a massive population increase, requiring large new investments in transportation infrastructure in any case.
The US has lots of large but far-flung cities, so long acceleration times are not as much of a relative penalty.
The US has little existing HSR to act as a competitor. The political class has expressed interest in increasing passenger rail infrastructure.
Hyperloop is proposed to carry automobiles. Low walkability of US towns is the big killer of intercity passenger rail in the US. Taking HSR might be faster than driving, but in addition to other benefits, driving saves money on having to rent a car when you reach the destination city.
Another possible early adopter is China (because they still need more transport infrastructure, land acquisition is a trivial problem for the Communist party, and they have a larger area, mitigating the slow acceleration problem.) I see China as less likely than the US because they do have a fairly large HSR system and it is expanding quickly. Also, China is set for population decline within a few decades, although they have some decades of slow growth left.
Russia is another possible candidate. Admittedly they have the declining population problem, but they still need more transport infrastructure and they have several big, far-flung cities. The current Russian transportation system is quite unsafe, so they could be expected to be willing to invest in big new projects. The slow acceleration problem would again be mitigated by Russia’s large size.
Don’t forget Australia. We have a few, large cities separated by long distances. In particular, Melbourne to Sydney is one of the highest traffic air routes in the world, roughly the same distance as the proposed Hyperloop, and there has been on and off talk of high speed rail links. Additionally, Sydney airport has a curfew, and is more or less operating at capacity. Offloading Melbourne-bound passengers to a cheaper, faster option would free up more flights for other destinations.
In theory there is no difference between theory and practice. In practice, there is.
I continue to fail to see how this idea is anything more than a cool idea that would take huge amounts of testing and engineering hurdles to get going if it indeed would prove viable. Nothing is as simple as its untested dream ever is.
Not hating on it, but seriously, hold your horses...
I feel like I covered this in the first sentence with, “I don’t know how technically viable hyperloop is.” My point is just to argue that the US would be especially well-suited for hyperloop if it turns out to be viable. My goal was mainly to try to argue against the apparent popular wisdom that hyperloop would never be built in the US for the same reason HSR (mostly) wasn’t.
I was only vaguely following the Hyperloop thread on Lesswrong, but this analysis convinced me to Google it to learn more. I was immediately bombarded with a page full of search results that were pecimmistic at best (mocking, pretending at fallasy of gray but still patronizing, and politically indignant (the LA Times) were among the results on the first page)[1]. I was actually kinda hopeful about the concept, since America desperately needs better transit infrastructure, and KND’s analysis of it being best suited for America makes plenty of sense so far as I can tell.
[1] I didn’t actually open any of the results, just read the titles and descriptions. The tone might have been exaggerated or even completely mutated by that filter, but that seems unlikely for the titles and excerpts I read.
I suggest that this is very weak evidence against the viability, either political, economic, or technical, of the Hyperloop. Any project that is obviously viable and useful has been done already; consequently, both useful and non-useful projects get the same amount of resistance of the form “Here’s a problem I spent at least ten seconds thinking up, now you must take three days to counter it or I will pout. In public. Thus spoiling all your chances of ever getting your pet project accepted, hah!”
I’ve been told that railways primarily get money from freight, and nobody cares that much about freight getting there immediately. As such, high speed railways are not a good idea.
I know you can’t leave this to free enterprise per se. If someone doesn’t want to sell their house, you can’t exactly steer a railroad around it. However, if eminent domain is used, then if it’s worth building, the market will build it. Let the government offer eminent domain use for railroads, and let them be built if they’re truly needed.
Much of Amtrak uses tracks owned by freight companies, and that this is responsible for a good chunk of Amtrak’s poor performance. However, high-speed rail on non-freight-owned tracks works pretty well in the rest of the world; it just needs its own right-of-way (in some cases running freight at night when the high-speed trains aren’t running, but still having priority over freight traffic).
Are high speed trains profitable enough for people to build them without government money? I’m not sure how to look that up.
Many of the private passenger rail companies were losing money before they were nationalized, but that was under heavy regulation and price controls. The freight rail companies were losing money before they were deregulated as well. These days they are quite profitable.
A lot of the old right-of-way has been lost so they would certainly need government help to overcome the tragedy-of-the-anticommons problem.
You mean the problem that someone isn’t going to be willing to sell their property? Eminent domain is certainly necessary. I’m just wondering if it’s sufficient.
That’s not at all the same question as “Are high-speed trains a good idea?”
Any decent HSR would generate quite a lot of value not captured by fares. It would be more informative to compare the economic development of regions that have built high-speed rail against that of similar regions which haven’t or which did so later.
France’s TGV is profitable. Do you think that because it might not have been built without government funding it was a bad idea to build?
If the HSR charges based on marginal cost, and marginal and average cost are significantly different, then this could be a problem. I intuitively assumed they’d be fairly close. Thinking about it more, I’ve heard that airports charge vastly more for people who are flying for business than for pleasure, which suggests there is a signifcant difference. Of course, it also suggests that they might be able to capture it through price discrimination, since the airports seem to manage.
How much government help is necessary for a train to be built?
The economics of a train is not comparable to the economics of a city. If you can actually notice the difference in economic development caused by the train, then the train is so insanely valuable that it would be blindingly obvious from looking at how often they’re built by the private sector.
Making a profit is not a sufficient condition for it to be worth while to build. It has to make enough profit to make up for the capital cost. It might well do that, and it is possible to check, but it’s a lot easier to ask if one has been built without government funding.
If it is worth while to build trains in general, and the government doesn’t always fund them, then someone will build one without the government funding them.
I don’t understand the reasoning by which you conclude that if an effect is measurable it must be so overwhelmingly huge that you wouldn’t have to measure it.
On a much smaller scale, property values rise substantially in the neighborhood of light rail stations, but this value is not easily captured by whoever builds the rails. Despite the measurability of this created value, we do not find that “[light rail] is so insanely valuable that it would be blindingly obvious from looking at how often they’re built by the private sector.”
If the effect is measurable on an accurate but imprecise scale (such as the effect of a train on the economy), then it will be overwhelming on an inaccurate but precise scale (such as ticket sales).
You are suggesting we measure the utility of a single business by its effect on the entire economy. Unless my guesses of the relative sizes are way off, the cost of a train is tiny compared to the normal variation of the economy. In order for the effect to be noticeable, the train would have to pay for itself many, many times over. Ticket sales, and by extension the free market, might not be entirely accurate in judging the value of a train. But it’s not so inaccurate that an effect of that magnitude will go unnoticed.
Am I missing something? Are trains really valuable enough that they’d be noticed on the scale of cities?
Are you claiming that a scenario in which
Fares cover 90% of (construction + operating costs)
Faster, more convenient transportation creates non-captured value worth 20% of (construction + operating costs)
is impossible? You seem to be looking at this from a very all-or-nothing point of view.
Faster, more convenient transportation is what fares are charging for. Non-captured value is more complicated than that.
If the non-captured value is 20% of the captured value, it’s highly unlikely that trains will frequently be worth building, but rarely capture enough value. That would require that the true value stay within a very narrow area.
If it’s not a monopoly good, and marginal costs are close to average costs, then captured value will only go down as people build more trains, so that value not being captured doesn’t prevent trains from being built. If it is a monopoly good (I think it is, but I would appreciate it if some who actually knows tells me), and marginal costs are much lower than average costs, then a significant portion of the value will not be captured. Much more than 20%. It’s not entirely unreasonable that the true value is such that trains are rarely built when they should often be built.
That’s part of why I asked:
If the government is subsidizing it by, say, 20%, then the trains are likely worth while. If the government practically has to pay for the infrastructure to get people to operate trains, not so much.
Also, that comment isn’t really applicable to what you just posted it as a response to. It would fit better as a response to my last comment. The comment you responded to was just saying that unless the value of trains is orders of magnitude more than the cost, you’d never notice by looking at the economy.
Marginal and average cost are obviously different, but your example of business fliers is not relevant. Business fliers aren’t paying for their flights, but do often get to choose which airline they take. If there is one population that pays for their own flights and another population that does not even consider cost, it would be silly not to discriminate whatever the relation between marginal and average cost.
The businesses are perfectly capable of choosing not to pay for their employees flights. The fact that they do, and that they don’t consider the costs, shows that their willingness to pay is much higher than the marginal cost. If it wasn’t for price discrimination, consumer surplus would be high, and a large amount of value produced by the airlines would go towards the consumers.
Are high-speed trains natural monopolies? That is, are the capital costs (e.g. rail lines) much higher than the marginal costs (e.g. train cars)? I think they are, and if they are considering the consumer surplus is important, but if they’re not, then it doesn’t matter.
What marginal cost are you referring to here? If it’s the cost to the airline of one butt-in-seat, we know it’s less than one fare because the airline is willing to sell that ticket. And this has nothing to do with average cost. I think you’ve lost the thread a bit.
What I mean is that, if everyone payed what people who travel for pleasure pay, then people travelling for business would pay much less than they’re willing to, so the amount of value airports produce would be a lot less than what they’d get. If they charged everyone the same, either it would get so expensive that people would only travel for business, even though it’s worth while for people to travel for pleasure, or it would be cheap enough that people travelling for business would fly for a fraction of what they’re willing to pay. Either way, airports that are worth building would go unbuilt since the airport wouldn’t actually be able to make enough money to build it.
Are highways?
Some roads do collect tolls. Again, I don’t know how to look it up, but I don’t think they have government help. They’re in the minority, but they show that having roads is socially optimal. Similarly, if there are high-speed trains that operate without government help, we know that it’s good to have high-speed trains, and while it may be that government encouragement is resulting in too many of them being built, we should still build some.
I’m not sure what your point is here. Passenger rail and freight rail are usually decoupled. Amtrak operates on freight rail in most places because the government orders the rail companies to give preference to passenger rail (at substantial cost to the private freight railways).
Hyperloop would help out a lot, since it takes the burden off of freight rail. I suppose hyperloop could be privately operated (that would be my preference, so long as there was commonsense regulation against monopolistic pricing).
If competitors can simply build more hyperloops, monopolistic pricing won’t be a problem. If you only need one hyperloop, then monopolistic pricing is insufficient. They will still make less money than they produce. Getting rid of monopolistic pricing runs the risk of keeping anyone from building the hyperloops.
I’d like to hear more about possibilities in China, if you’ve got more. Everything I’ve read lately suggests that they’ve extensively overbuilt their infrastructure, much of it with bad debt, in the rush to create urban jobs. And it seems like they’re teetering on the edge of a land-development bubble, and that urbanization has already started slowing. But they do get rights-of-way trivially, as you say, and they’re geographically a lot more like the US than Europe.
(The Money Illusion would like to dispute this view of China. Not sure how much to trust Sumner on this but he strikes me as generally smart.)
Mr. Sumner has some pretty clear systemic assumptions toward government spending on infrastructure. This article seems to agree with both aspects, without conflicting with either, however.
The Chinese government /is/ opening up new opportunities for non-Chinese companies to provide infrastructure, in order to further cover land development. But they’re doing so at least in part because urbanization is slowing and these investments are perceived locally as higher-risk to already risk-heavy banks, and foreign investors are likely to be more adventurous or to lack information.