For automobiles, the quality and complexity frequently CANNOT be solved in low cost ways.
Often more metal is required.
Life, and property are at risk, for both the user, other drivers, and pedestrians.
Safety glass costs more to make than window glass.
Good brakes on four wheels cost more than lousy brakes on 2 wheels
Performance and speeds have also gone up from 30 mph to 70 mph or more.
One of the problems that occured in the late 1920s was the saturation of the market for basic cars. The prices of new Model Ts fell from about $800 to about $200, along with the prices of used Model Ts. To get some one who had a car to buy a NEW car, the new car must have some improvements over the old car.
This caused cars to add features like self starters(instead of hand cranks), enclosed bodies, heaters (real luxury item) windshield wipers, better seats, enclosed trunks (boots), exterior lighting for attempting to drive at night, etc.
In the late 1930s, automatic transmissions, much better suspensions, and air conditioning were availible.
How did consumers afford this ? One big factor has been selling their present car. Getting even 20-30% of the price of the next car for your used car really helps to buy a better, more complex car.
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For developing nations, getting the first group of cars is a big hump to get over.
Antoher factor is the cost of steel. In the US and Europe, much of the steel in a car comes from recycled scrap from very old cars. China, for example, now has to import scrap steel. In roughly 25 years , they will have most of their own scrap supply from older cars.
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If we look at South Korea, which has developed very rapidly, going from about $500 per capita GDP in the 1960s to about 7000 + today, they have developed a car culture, and are vastly improving their quality.
Korea did have large anounts of scrap metal left over from the Korean War. they alos made a huge sacrifice in civil liberties (esentially all of them) used some almost forced savings (low returns to savers, money directed to key Chaebols) massive US aid, some help from Japan to become a low cost supplier, and brutal hard work to achieve their rapid rise in living standards.
Korea was also extremely export oriented, and ran large trade surpluses. Not sure how feasible the Korea path is for other countries.
I expect that more countries will become developed, if they have an educated work force, some natural resources, are not over populated, and don't have governments of crooks, incompetents, or socialists ideologes.
The last criteria leaves out most of Africa.
Also Phillipines, maybe VietNam (ideologes)
Argentina has had some experience going back and forth on economic progress - it's not irreversable either way.
Also note that at one time Cuba had the highest living standard in South America.
The overpopulation issue has been tough for El Salvador, and presents a problem for Bangladesh
and Indonesia.
In the Americas, Bolivia, Paraguay, Suriname, Guatamaela will have a tough time. Most of the rest of South America will develop about as much as they want.
There is a pricing effect that tends to stablize prices at points where demand changes, especially when supply is expensive to develop. If you are going to sink a billion dollars into an oil refinery in say New Zealand or Barbados, you will want to make sure there are enough people who will be able to pay a profitable price for all your produciton - not just half the people you need who can only buy at a rock bottom price. |
