Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Liberalizing Cities
From The Ground Up
Apparently, IBM helped implement a congestion pricing solution in Stockholm, Sweden. Could commercials like this help break down aversion to market-based solutions? [hat tip: The Overhead Wire]
As Washington debates how many hundreds-of-billions of the nearly trillion-dollar stimulus will go towards infrastructure or to other spending/tax cut schemes, pundits claim that spending billions on “shovel ready” public works projects can effectively create jobs that will lead to recovery. As readers probably know, I am skeptical that the anticipated spending could be activated so quickly. As Bruce Bartlett put it: Despite claims by the Conference of Mayors and the transportation lobby that there is as much as $96 billion in construction “ready to go,” the fact is that it takes a long time before meaningful numbers of workers can be hired for such projects. As a recent Congressional Budget Office study explains, “Practically speaking … public works involve long start-up lags. … Even those that are ‘on the shelf’ generally cannot be undertaken quickly enough to provide timely stimulus to the economy.” The prospects for unconventional projects such as alternative energy sources are even worse. The CBO calls them “totally impractical for counter-cyclical policy” because they take even longer to come online… Finally, the impact of increased public works spending on state and local governments cannot be ignored. Most federal transportation spending goes for projects initiated by them. When they think there is a chance that the federal government will increase its funding, they tend to cut back on their own spending in hopes that the feds will foot the bill. A study by economist Edward Gramlich found that the $2 billion appropriated by the Local Public Works Act of 1976 postponed $22 billion in total spending as state and local governments competed for federal funds and actually reduced GDP by $30 billion ($225 billion today). Meanwhile, proponents of infrastructure spending claim that Congress should sift through the shelved projects to identify those projects that will be economically […]
Bart Frazier wrote a brief article for the Future of Freedom Foundation on private roads. He begins by discussing how most Americans remain strongly opposed to privately owned roads, while at the same time many have warmed to private education, medicine, and social security. This first part of the article is somewhat similar to many articles advocating private roads. In the second part of the article, Bart goes on to discuss some examples of private roads in America, including a homeowners association, The Dulles Greenway in the suburbs of DC, and the city of North Oaks, Michigan, which doesn’t even own any property. Frazier concludes: Everyone, particularly libertarians, should favor private roads. They have much going for them — they rely on mutual consent for their construction and use, and the market decides what is the appropriate level of their use. People who don’t want to use them are free to spend their dollars on other things that they consider more worthy. And as far-fetched as they seem to some, we have examples of working private roads. I cannot think of a better way for cash-strapped state governments to reduce their budgets than to stop paving the roads.
Recently, I came accross an article by Charles Johnson, who blogs at Rad Geek. The article had linked to a Market Urbanism post about how user fees and gas taxes fall well short of funding road use in the US. Charles’ article further debunks the Urbanism Legend asserted by free-market imposters that a free-market highway system would be similar to the system we see today. I like the post so much that I asked Charles about posting it at Market Urbanism. Charles requested that I, “indicate that the post is freely available for reprinting and derivative use under the terms of the Creative Commons Attribution-ShareAlike 1.0 license.” I am happy to comply, and must admit that I haven’t taken the time to acquaint myself with Creative Commons. So, here it is, in it’s original form, and feel free to read the comments in the link: Yes, Virginia, government roads really are government subsidized, and no, they don’t approximate freed-market outcomes by Charles Johnson, RadGeek.com When left-libertarians argue with more conventionally pro-capitalist libertarians about economics, one of the issues that often comes up is government control over roads, and the ways in which state and federal government’s control over roads has acted as a large subsidy for economic centralization and national-scale production and distribution networks (and thus, to large-scale “big box” retailers, like Wal-Mart or Best Buy, dependent on the crafty arrangement of large-scale cross-country shipping as a basic part of their business model). People who have a problem with this analysis sometimes try to dispute it by arguing that government roads aren’t actually subsidized — that heavy users of government roads are actually getting something that roughly approximates a freed-market outcome, because users of government roads pay for the roads they get, in proportion to how heavily they use them, because government […]
This morning, as I stepped to the stairway that brings me into Brooklyn’s 86th street subway station on the R line, I was greeted by two MTA employees who handed me MTA’s ‘Rider Report Card’ to fill out and mail in. As I started down the steps, I noticed something different than the usual routine; the stairway was an absolute mess. The turnstile level was just as messy. Litter was strewn about the steps and floor of the station. This wasn’t the normal subway station clutter; it caught me off guard immediately. Several other employees stood by the turnstiles handing out report cards. I bought a new monthly pass and headed through the turnstile. Above the stairs leading down to the platform there were another 10 or so MTA employees holding stacks of report cards, just socializing with each other amongst the litter. When I saw this, I became disgusted. Why were they all standing around while there was a huge cluttered mess throughout the station? Why couldn’t they even pick up the report cards that had been discarded? Then I got more upset as my cynical side kicked in. Could there be some perverse incentive for the MTA employees to want the station cluttered? Would a failing grade for cleanliness cause hiring of more maintenance employees? Strangely, the train platform was its usual shape, with limited clutter. No employees were present on the platform. As the train arrived and I took my seat, I decided to blog this incident. I wished I had taken pictures, but it was too late for that. I will be prepared to photograph tonight and tomorrow if this peculiar incident repeats itself. Is anyone familiar with how the report cards are used? Is the fact the 10-20 employees weren’t cleaning the mess just a […]
Brendan Crain at Where tipped me off to a great post by Ryan Avent at The Bellows. Here’s a little snippet of Shortage: For whatever reason, we’re not built to naturally internalize negative externalities. When riding on a crowded highway, no one (no non-economist, at any rate) curses the government for not making the road more expensive; they demand more capacity — fewer traffic lights, higher speed limits, more lanes, more roads. And when free parking results in no available parking, no one demands market pricing for spots; they ask why the lot’s so small and the garages so scarce, and they get angry about those two new developments that just went in, bringing new residents who unsurprisingly use the valuable, yet free, parking spots when they’re open. We see a shortage of a public good, and we think more, not more expensive. And as a result, the failure to price public goods appropriately leads to an inefficient use of existing resources, and an inefficient allocation of new resources. We don’t use existing roads well, and we spend too much valuable capital building new roads. We don’t use existing parking well, and we spend too much valuable capital building new parking OR we allow shortage concerns to undermine good investments. This type of anti-market bias which seems to be the natural default in humans creates unhealthy positive-feedback loops such as the highway -> development -> congestion -> widen/extend highway, etc. loop. But in that light, we should be glad modern society has been able to overcome so many of its anti-market biases such as making profits, charging interest, and trade between strangers. Hopefully, as society adapts to deal with issues of scacity of land, resources, and time, it will overcome the unhealthy biases it needs to shed to sustain growth. […]
This post is part of an ongoing series featured on Market Urbanism called Urbanism Legends. The Urbanism Legends series is intended to expose many of the myths about development and Urban Economics. (it’s a play on the term: “Urban Legends” in case you didn’t catch that) Last week President-elect Obama announced some details of his economic stimulus package: Second, we will create millions of jobs by making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s. We’ll invest your precious tax dollars in new and smarter ways This further taxpayer subsidization, beyond currently insufficient highway revenue sources, of sprawl and auto-dependency seems to contradict Obama’s promise of “green jobs”. As Tyler Cowen remarks, “for better or worse you can consider the opposite of a carbon tax.” Furthermore, the Obama plan intends to fund the stimulus directly to states, as opposed to metro areas, which have historically received almost two-thirds of the funds directly. Certainly, Obama’s plan is not an urbanism-friendly plan, yet I consistently hear urbanists subscribing to and spreading the myth that jobs can be created by spending on infrastructure, and that these jobs will lead to economic recovery. Even if the job creation myth were true, and could stimulate the economy immediately, you would think urbanists would not sacrifice urbanist ideals for the sake of short-term recovery through their commitment to so-called progressive ideology. In his enduring 1961 classic, Economics in One Lesson, Henry Hazlitt addresses the long-standing myth about “creating jobs” through public works projects: A bridge is built. If it is built to meet an insistent public demand, if it solves a traffic problem or a transportation problem otherwise insoluble, if, in short, it is even more necessary to the taxpayers collectively than the things for which […]
Daniel Nairn at Discovering Urbanism brings up a great point about cul-de-sacs. Are they public goods, or truly unnecessary “socialism in its most extreme form”? Take the standard cul-de-sac that serves a handful of households. The purpose of this design is to exclude the general public from passing through while serving the automotive needs of a small number of individuals. Does it pass our intuitive sense of fairness to declare that the entire public, say the local municipal citizenry, ought to foot the bill for what could essentially be considered a shared driveway? Perhaps a more important question: How does the government’s decision of where to draw the line between public and private encourage or discourage the connectivity of the road system? Dan discusses that Virginia’s DOT is looking at shifting funding away from roads that don’t play a significant role in the transportation network, by using a very well defined metric: The link-node ratio is calculated by dividing the number of links (street segments and stub streets) by the number of nodes (intersections or cul-de-sacs). A perfect grid of streets will have a link-node ratio around 2.5 and a network of complete cul-de-sac or dead end streets with only one way in and one way out will have a link-node ratio of 1.0. It is suggested that a ratio of 1.4 will provide adequate connectivity in many situations. The link-to-node ratio seems like a very rational approach to determining public roadway funding, if one chooses to concede that roads are a public good. Unfortunately, owners of homes on cul-de-sacs have grown acustomed using their publicly-funded, communal driveways, and would suffer from decreased funding for roads they are entirely dependent upon. A viable solution would be for the municipality to grant the cul-de-sac roadway and land to the owners of […]
[flickr: darren bryden] Congestion pricing schemes, touted as environmentally-responsible at the time of $4 gas, were defeated in New York City last Spring. However, as the market turmoil threatens to wreak havoc on tax revenues, fiscal necessity has lured New York State and New York City politicians to re-examine the political viability of charging tolls to drivers entering Manhattan. The NY Times City Room blog discusses the history of tolling on New York City’s East River bridges, but much of that history features plans to reinstate tolling and the popular resistance to those plans. How East River Bridges Stayed Toll-Free: On numerous occasions, politicians have tried to reinstitute tolls on the four bridges — the Brooklyn (completed in 1883), Williamsburg (completed in 1903) and Manhattan and Queensboro (both completed in 1909). After all, the Brooklyn Bridge charged horse-drawn carriages a toll from the time it opened. But by the Depression, the tolls were a thing of the past. The history shows that officials have failed again and again to revive tolls on the four bridges. (Other major crossings, including the bridges run by the Metropolitan Transportation Authority and the Port Authority of New York and New Jersey, already charge tolls.) Tolling being “the third rail of of New York City politics”, it will be hard enough to institute in the face of voter sympathy for road socialism. So, we shouldn’t hold our breath for the ideal solution, full privatization of the bridges and transit, but tolling may be a step in the market direction. Or is it?? Is tolling just away for politicians to let themselves off the hook for their irresponsibility, and will just result in another new tax? Or can we hope it will soften the resistance to market-based solutions. [thanks to loyal Market Urbanism reader, Benjamin Hemric […]
Matt Yglesias is one of the best mainstream bloggers on land use/transportation that I know of. As one blogger (who I don’t recall right now) once said, his urban planning and transportation posts could be blogs in their own right. However, it’s puzzling that in an article for Cato Unbound, he comes up with such a pathetic rejoinder to the O’Toole/Cox/Poole “vulgar libertarian” transportation cabal, who don’t seem to have ever met a road they didn’t like: Or consider the fact that Randall [sic] O’Toole is indignant about the prospect of public expenditures on mass transit systems, but appears to have little to say about public funding of highways. This, too, looks more like a case of narrow business interests than sterling free market principles. While Yglesias’ instincts are right – current transportation markets in America are highly distorted – the reason they’re distorted has little to do with the ways highways are financed. Based on some basic figures, Randal O’Toole concludes that the vast majority of road funding – over 80% – comes out of user fees. Now, of course there are still some subsidies there, but it’s really nothing compared to the subsidies that mass transit systems receive, which in America never even come close to covering operating costs, never mind capital expenditures. Now, there are some problems with the 80% number, such as the government’s favorable access to bond markets and the legacy of infrastructure that wasn’t paid for with user fees, but all in all, it’s hard to argue that roads have a subsidy advantage over mass transit. However, that’s not to say that Yglesias doesn’t have a point when he says that libertarians and conservatives have blind spots when it comes to how they see transportation. But the real government benefit that the road/car system […]
