Crowding in Production

In the sphere of production, the phenomenon of crowding can occur just as it can in relation to consumption (for example, in housing). This is evident particularly in relation to the various modes of transportation that take people to and from work.

For example, consider the old and badly maintained vehicles that are heavily used in poor countries. These are frequently involved in serious accidents when they become overcrowded. Indian trains are a notorious example:

They are the arteries that keep Mumbai's economy ticking, rattling 6 million people a day to offices, shops and factories. But arriving safe and sound for work after a trip on Mumbai's clogged railways is no mean feat. On average 4,000 people die a year on Mumbai's railways, crushed under trains, electrocuted by overhead power lines or killed as they lean from jam-packed carriages to gasp for air. It is perhaps the world's deadliest commute… At peak hours more than 550 people cram into a carriage built for 200. Passengers fall to their deaths from moving trains or tumble under the wheels from crowded platforms.1

Another example is ferries in countries like Indonesia and Bangladesh. These capsize all too often due to overloading, resulting in the drowning deaths of dozens and sometimes hundreds of people.

When people are injured or die in such accidents, ENL counts this as an increase in labor cost. The trips are assumed to be an unavoidable part of the labor process, and any negative health effects must therefore be counted against the effectual value of the outputs produced. See the following figure.

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Crowding occurs if labor requires mass transportation, and if the accident rate increases when the bus, ferry, etc. is loaded beyond a safe number of passengers. The injuries and deaths suffered as a result are counted as part of labor cost.

This graph is similar to the one that depicts consumption crowding. It has total health on the vertical axis and users per output on the horizontal axis.

The curve isolates the health effects of transportation — that is, it does not depict labor cost as a whole. This means that the health effect shown must be added to the other components of labor cost for this production process.

Until a bus or ferry is loaded to its safe capacity, the danger to its passengers is relatively low. This is indicated by the horizontal portion of the curve. Averaged over time, the labor cost from injuries and deaths in this baseline situation is H0.

When the number of users rises beyond the conveyance’s safe capacity at U*, the risk of accidents increases sharply, as do the negative health effects.

The optimum number of users in this situation is U*. At this point the conveyance is fully used, but without increasing the baseline danger level.

Crowding begins after U*, when the accident rate starts its rapid rise. If the number of users increases to U1, a health loss of H1 is incurred. As stated, this is an incremental factor, which must be added to the other components of labor cost for each worker on the bus or ferry.

In a rational economy, whatever is being produced by these workers must create sufficient effectual value to cover the health cost of not only the labor process and the natural effects of production, but also the perils of traveling on an overloaded bus, train, or ferry.

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