So people are fiddling their government mandated targets, are they?
Not that we agree this is what is being done but this is the allegation:
Plug-in hybrid electric cars (PHEVs) use much more fuel on the road than officially stated by their manufacturers, a large-scale analysis of about a million vehicles of this type has shown.
Our read of this is a little different:
Porsche hybrids consumed more fuel – around seven litres per 100km – than other PHEVs when the electric motor kicks in, and significantly more than non-PHEVs in combustion engine mode. The lowest fuel consumption levels were found in the cheaper end of the PHEV market, in Kia, Toyota, Ford and Renault vehicles, which often used under one litre per 100km, or as much as 85% less fuel than the Porsche.
People who drive a Porsche as they think a Porsche should be driven use more fuel than people who drive a Kia as they think a Kia should be driven. This neither surprises nor shocks us.
But let us all stick with that original allegation - manufacturers are fiddling. This does not surprise us either. For this is what happens to targets. Always and inevitably we would suggest.
We have, of course, the example before us of emissions targets for cars, quite famously those were gamed. There’s also that apocryphal story of the one tonne nails under Stalinist planning - we do tend to think that one’s apocryphal on the basis that the Stalinist regime was perfectly capable of executing someone for taking the micturation. But we’ve got Goodhart’s Law, that any monetary target stops being a useful one as soon as it is defined. There’s the Lucas Critique, which is that macroeconomic planning does not work well. For as soon as there is a macroeconomic plan everyone changes their behaviour given the strictures of the macroeconomic plan. Everyone who has ever employed anyone on a bonus structure knows that the mere definition of the structure is the starting gun for the plots to game that structure.
In fact, we’d suggest that the setting of targets is, in a general and universal sense, merely the incentive to start gaming those targets. Which is a significant problem for any detailed management of the economy - for that process depends upon the centre defining the targets that the planning is aimed at reaching. This of course is over and on top of the basic Hayekian point, that no matter how many bureaucrats gurn over their slide rules the centre never does have enough information to be able to plan. It is to go beyond that and to insist that the very existence of the plan, the target, changes people’s behaviour in response to the mere existence of the plan, those targets. At which point, of course, planning devolves down into a series of infinite recursions.
In fact, how about a new little party game? Can anyone point to a target that isn’t, or hasn’t been, fiddled?
We’ll wait.
Tim Worstall