Wednesday, July 04, 2007

Electronic Money and Money [Updated]

Today's Times has an article on toll roads. In the old days, you had to stop every 5-10 miles to deposit quarters when driving the New Jersey Turnpike (which I did once or twice, going from Fort Belvoir home). Today, the EZ Pass system (for anyone not used to the Boston-DC megaplex, it's an electronic system of scanners tied to one's credit card--you can roll through at 35 mph legally, 65 for all the speed freaks). The idea of the article is that people hardly notice the fees; the result of which is, according to an economist, toll road authorities have jacked their tolls. This raises concerns--the taxes are unseen and perhaps hit poorer families harder than rich.

Now in the real old days, we didn't spend money on roads. Country folk had to work x number of days on the roads (we're talking early and middle nineteenth century here), using their own equipment and animals to improve them. In effect, it was a non-monetary economy, one that was almost gone by the time I was born 100 years later.

It also occurs to me that now our toll pays for two things: the roads we travel on and the time and aggravation we save by not having to pay money tolls. The richer we get, the more we value our time. Time is one thing that, by and large, the poor have as much of as the rich.

[Update] Piece in the Post this morning about credit cards--they make it so easy to spend money and go into debt. So liberals will complain about credit cards and conservatives will complain about EZ-Pass. Both innovations reduce the friction in the system, with good and bad consequences.

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