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Category Economics

Why does the Infrastructurist hate libertarians so much?

by Stephen Smith Among urban planners, libertarianism gets a pretty bad rap. Melissa Lafsky at the Infrastructurist goes so far as to call libertarianism “an enemy of infrastructure,” and dismisses entirely the idea that private industry can build infrastructure with a single hyperlink – to a poorly-written article on New Zealand’s economy written over a decade ago that barely says a word about transportation, land use, or infrastructure. She goes on to criticize the Reason Foundation’s transportation writers (something we too have done), and with it, negates entirely libertarianism’s contributions to urbanism. Here at Market Urbanism we’re used to these sorts of attacks from the left, and we work tirelessly to disassociate ourselves (well, mostly) from Reason’s brand of (sub)urbanist libertarianism. Normally I wouldn’t expend so much effort, but the Infrastructurist is a blog that I read daily and we’ve linked to them approvingly over the years, so I figured it merited a rebuttal. To start, I would recommend that Melissa bone up on her history. At least in North America, every great intracity mass transit system was build by private enterprise, almost without exception. From subways to streetcars, private enterprise showed a willingness and eagerness to build and profit from rail-based transit. Sure, the systems weren’t totally private and unregulated (exclusive franchise monopolies were often granted by municipal governments, among other interventions), but the system was far more “private” than the current mostly-suburban road/automobile transportation system that Reason and many other self-identified libertarians champion. While many progressives today like to blame the demise of rail-based transit on GM, Firestone Tire, and Standard Oil (what I like to call the Who Framed Roger Rabbit theory of urbanist history), the truth is that progressives themselves were the ones who really did mass transit in. Through populist measures like the mandatory five-cent fare […]

Private Buses: Econtalk Takes A Second look at Santiago

Back a couple years ago, I noted an Econtalk podcast with Russell Roberts and Duke University Professor Mike Munger on the private bus system in Santiago, Chile.  This week’s episode starts with Munger’s update on the Santiago transportation system after visiting for three weeks and spending a lot of time traveling the city’s buses and transit.  This discussion comes at a perfect time to follow-up on Stephen Smith’s post on private busing in New York. Munger and Roberts discussed the advantages and problems of the evolution of the system over the years.  In the case of the private system with over 3,000 competing private bus companies, accidents and injuries were common, and pollution was problematic.  However, the regulation and publicization of the buses led to unintended consequences that were probably far worse than the drawbacks of the private system.  Unfortunately, although the administration has apologized for the failures of the system, it would be politically impossible to revert to some of the beneficial aspects of the private system.

Must Read: The Demand Curve for Sprawl Slopes Downward

Sandy Ikeda’s latest article at FEE’s “The Freeman” is a great summary of the libertarian sprawl debate. There has been a lot of Internet chatter lately about what libertarians ought to think about urban sprawl and its causes, including pieces by Kevin Carson, Austin Bramwell, Randal O’Toole, and Matthew Yglesias. The title of Ben Adler’s post basically sums it up: “If You Love the Free Market, You Should Hate Mandated Suburban Sprawl.” Sandy includes a mention of the ongoing minimum parking debate. Sandy concludes that the more the government subsidizes items related to low-density development, the more low-density development we’ll get. But the bottom line is that the law of demand still holds – other things equal, the cheaper you make something the more of it people will want to buy, and that includes low-density development. You’ll get more of that, too, if those direct and indirect subsidies make it cheaper for people to get it. Government intervention has done just that, and it’s hard to understand how you can argue, whether you’re a proponent or (especially) an opponent of Smart Growth, that the free market alone is responsible for the amount of sprawl that we actually have. This doesn’t mean, of course, that Smart Growth regulations are the place to begin. Instead, if you think sprawl is a bad thing, it would seem logical to first remove the vast array of interventions that over the decades have pushed it along. On this, I would have thought all market urbanists could agree. Well said!

Video: Sandy Ikeda on The Unintended Consequences of “Smart Growth”

I came across this video interview of economist Sandy Ikeda by the Mackinac Center. Sandy currently blogs at thinkmarkets and has contributed guest posts to Market Urbanism. I thought Sandy did a great job discussing many of the topics we cover in this site. Sandy is particularly insightful when it comes to the “dynamics of intervention” as it relates to how the planning philosophy in the early days of the automobile created living patterns now disdained by modern planners. Today, Smart Growth planners want to use top-down coercive methods to correct the wrongs of past planners top-down follies, but will they get it right this time? Check it out: The Unintended Consequences of “Smart Growth” from Mackinac Center on Vimeo. Update: Here’s what Sandy has to say at thinkmarkets…

HSR Urbanists: “We Are All O’Tooles Now”

I probably won’t make any friends today, but now I’ve read one too many urbanist (many who’s ideas I usually respect) use unsound logic to support high speed rail. This argument often includes something like this: “…and furthermore, highways and airports don’t come close to paying for themselves, therefore high speed rail need not meet that hurdle either.” Here’s some examples of the typical contradiction many usually-reasonable urbanists are making when arguing for high speed rail- Ryan Avent in an article plagued with this pseudo-logic: Government is going to build more capacity. Given that, what is likely to be the best investment, all things considered? Available alternatives, as it turns out, are not all that attractive. Roads do not appear to pay for themselves any more than railways do. Receipts from the federal gas tax come close to covering federal highway expenditures, but gas is used on highways and non-highways alike, indicating that at the federal level, highways are subsidized. and: I respect Mr Cowen very much, but I think it’s long past time we stopped listening to libertarians on the issue of whether or not to build high-speed rail. Who will ask whether road construction remotely passes any of the tests they’re so prepared to push on rail? And if we begin charging an appropriate fee on drivers to maintain existing roads and reduce congestion, what do they all think will happen to land use patterns and transportation mode share? Some have emailed to ask me why I dislike Randal O’Toole so much.  The main reason is because people like Avent will always be able to point to the government highway-lover from CATO and rashly proclaim all libertarians have forever lost credibility when it comes to transportation and land use.  Of course, Avent’s narrow-mindedness on this topic deserves contempt […]

Rothbard the Urbanist Part 4: Policing

I apologize for the extended delay between posts.  Personal (newborn) and professional priorities have prevented me from having the free time I once had. Unfortunately posts will probably continue to be sporadic until things settle down a little. We are now at Part 4 in the multi-part series delving into the urbanist-friendly ideas in Murray Rothbard’s classic For a New Liberty.   (available free from Mises.org as pdf, web page, and audio book)  In case you missed them, here are the first three parts: Rothbard the Urbanist Part 1: Public Education’s Role in Sprawl and Exclusion Rothbard the Urbanist Part 2: Safe Streets Rothbard the Urbanist Part 3: Prevention of Blockades As we continue through Chapter 11 of For A New Liberty, Rothbard continues to make valid points regarding safety and policing in a fully private-landowner system.  This passage is notably interesting in its discussion of the successes of private railroads.  Whether competition in the private street market would create a vibrant marketplace similar to the early days of the railroad is an interesting topic for discussion.  I’d tend to agree with Rothbard, but of course some imagination is required to envision such a radically different society: There is of course nothing new or startling in the principle of this envisioned libertarian society. We are already familiar with the energizing effects of inter-location and inter-transportation competition. For example, when the private railroads were being built throughout the nation in the nineteenth century, the railroads and their competition provided a remarkable energizing force for developing their respective areas. Each railroad tried its best to induce immigration and economic development in its area in order to increase its profits, land values, and value of its capital; and each hastened to do so, lest people and markets leave their area and move to the […]

Rothbard the Urbanist Part 3: Prevention of Blockades

In the last post, we discussed the first paragraphs of chapter 11 of Murray Rothbard’s For A New Liberty. (available free from Mises.org as pdf, web page, and audio book) Those paragraphs discussed the private ownership of all land, including streets and roads. Rothbard clearly and concisely argues that private ownership of streets would result in safer public spaces. Discussions I have had with people often lead to the topic of forestalling, in which a sinister land owner decides to completely surround a neighbor’s property, preventing him from using it. This valid concern can be eased through a principled analysis of such a situation: At this point in the discussion, someone is bound to raise the question: If streets are owned by street companies, and granting that they generally would aim to please their customers with maximum efficiency, what if some kooky or tyrannical street owner should suddenly decide to block access to his street to an adjoining homeowner? How could the latter get in or out? Could he be blocked permanently, or be charged an enormous amount to be allowed entrance or exit? The answer to this question is the same as to a similar problem about land-ownership: Suppose that everyone owning homes surrounding someone’s property would suddenly not allow him to go in or out? The answer is that [p. 204] everyone, in purchasing homes or street service in a libertarian society, would make sure that the purchase or lease contract provides full access for whatever term of years is specified. With this sort of “easement” provided in advance by contract, no such sudden blockade would be allowed, since it would be an invasion of the property right of the landowner. A likely solution to this issue of forestalling, would be the emergence of “access insurance”. This would […]

Rothbard the Urbanist Part 2: Safe Streets

It turns out the entire Chapter 11 called “The Public Sector, II: Streets and Roads” is actually a chapter on Market Urbanism. Bryan Caplan considers this chapter "the least convincing chapter in the book", but as a Market Urbanist, I strongly disagree. I do admit that his discussion of safety and policing of private local streets involves a great deal of speculation and reliance on faith in the action of individual agents, but the insights into road subsidization and land-use patterns was decades ahead of its time. These insights may not seem so radical now, but imagine the resistance to these ideas in the days before urbanism gained much credibility.

Are You a Wright or Friedman Urbanist?

In a post blogger Eric Orozco called, ‘forerunner candidate for “most incisive blog post” of the year,’ Daniel Nairn of Discovering Urbanism discussed the seemingly conflicted camps of libertarianism when it comes to Urbanism.  His observations are based upon the comments in the Volokh article on planning and walkability linked in the previous post. Daniel (a non-libertarian) presents the opposing libertarian factions as The Wright Group, after Frank Lloyd Wright and his romanticism about individualistic prairie living and The Friedman Group, which “believes that the spatial distribution of development ought to be determined by a free market.” The Wright group seems to favor optimizing individual autonomy through spatial living arrangements even if doing so requires centralizing economic and political authority to some extent. The Friedman group seems to favor optimizing individual autonomy through market decisions even if doing so results in more people living in situations where full control over private property is compromised in some way. Daniel’s insightful choice of figureheads fascinates me from a philosophical point of view.  Frank Lloyd Wright was hardly a libertarian, but had strong individualist tendencies, and is said to be the model for Howard Roark’s character in Ayn Rand’s The Fountainhead.  Milton Friedman, a Nobel Laurette Economist, is probably one of the most famous figures of modern libertarian thought.  Despite Friedman’s steadfast defense of liberty, he had favored government roads on occasion. I think most would agree that The Friedman Group, as Daniel describes it, is more closely aligned with the thesis of Market Urbanism and the ideas of emergent order of the land marketplace.  Hayek or even Rothbard may also be considered appropriate, although less famous substitutes as figurehead. (note: I’m not sure what Daniel means by,  “even if doing so results in more people living in situations where full control over […]

Block vs Poole: The Public-Private Partnership Debate

The Orange County Register’s Freedom Politics website (check out my rent control article FreePo published in March) features articles discussing two differing takes on road privatization from notable scholars Walter Block and Robert Poole. In Robert Poole’s article, he discusses the merits of the increasingly popular use of Public-Private Partnerships (PPP) to fund and operate roadways: Four potential benefits are particularly important: Fewer Boondoggles: Elected officials often champion projects that yield political benefits but have costs greater than their benefits. But with PPP toll projects, nobody will invest unless the benefits exceed the costs to the extent that they can project a positive return on their investment. That’s a powerful safeguard against boondoggles. Avoiding “Big Dig” Disasters: Large-scale “mega-projects” like Boston’s notorious Big Dig are prone to large cost over-runs and schedule delays. In a well-structured PPP project, those risks can be transferred to the private sector, shielding taxpayers from those costs. Cost Minimization: Traditional highway projects are built by the lowest-bidder, which often means they are built cheaply and need lots of expensive maintenance over their lifetimes. But a PPP toll highway must be maintained for decades at the private company’s expense. Hence, it has every incentive to build it right to begin with, to minimize total life-cycle cost. Sustainable Congestion Relief: If you add ordinary freeway lanes, they tend to fill up and become congested. But today’s urban toll lanes use variable pricing (as on the 91 Express Lanes) to keep traffic flowing smoothly on a long-term basis. In contrast, Walter Block takes a more principled stand for complete privatization: Public – private partnerships (PPP) are thus part and parcel of both fascism and socialism; they constitute a partial state ownership of the means of production. As well, they are emblematic of fascism, and government is the senior […]

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