Perhaps unsurprisingly, Tyler Cowen is a hyperloop skeptic. More surprisingly, I’m not sure he’s asking the right questions about it.

First, a rule of thumb – if your criticism of hyperloop also applies to other, less sci-fi-y modes of transportation like high-speed rail, then it is probably not a very good criticism unless you also think high-speed rail is a bad idea in principle. I’m not sure why someone would think that, but I think it is clarifying to note.

Specifically, the problems of air travel are as follows – it can get you very long distances at very fast speeds, but to do so requires several things on the margin – a plane, fuel, pilots, and a runway. All of these things are scarce and expensive, and therefore, anything we do to improve the efficiency of their use is a good thing. Therefore, the primary benefit of building true HSR between, say, Chicago and Minneapolis would not simply be all the various benefits of such a system to the riders and to the environment and to productivity growth in the cities (where hyperloop would directly serve the urban core, not the periphery) and to Milwaukee and Madison, but also to airline passengers, since you could now substitute the vast numbers of flights between those two cities with flights that take further advantage of the comparative advantage of the airline industry – going really far away. The hyperloop would magnify this. If it really does turn out that the hyperloop works as advertised and costs as advertised, you could imagine a world where it supersedes the majority of intra-continental or at least intra-national air travel in the United States or the EU and a larger and larger share of total air travel is long-haul, especially over oceans. The more hyperloop trips taken between LA and SF, the more flights out of LAX and SFO will go to Seoul and Tel Aviv and Brasilia and Naples and Hyderabad.

This would also have positive environmental externalities, as longer flights are less carbon-intensive than shorter flights.

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