Market Urbanism

Liberalizing cities | From the bottom up

“Market Urbanism” refers to the synthesis of classical liberal economics and ethics (market), with an appreciation of the urban way of life and its benefits to society (urbanism). We advocate for the emergence of bottom up solutions to urban issues, as opposed to ones imposed from the top down.

Free Market Impostors

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I subscribe to the CATO Institute’s Daily Dispatch email. I enjoy ready the daily briefings of current events from a free-market perspective. But, once in a while, my capitalist stomach turns when they mention transit, usually accompanied by a quote from Randal O’Toole. Usually he bashes some transit plan, and gives some statistics about the inferiority of transit. Here’s a quote form the most recent Dispatch:

Cato senior fellow Randal O’Toole writes: “A mile of rail transit line typically costs more to build than a four- to eight-lane freeway and typically carries fewer than half as many people as a single freeway lane mile. Federal funding for rail transit comes out of gasoline taxes and other highway user fees, and in most cases those funds would be more cost effective if spent on other transportation facilities.”

Does this sound particularly “free market” to you? He’s just saying one socialist system is better than the other. On top of that he consistently presents only half the facts. You don’t even have to dig into his sources of data to know he is pulling a trick on the reader. Can you detect the deceptions?

Yep, he discusses construction costs and completely neglects land costs, then focuses on cost/mile (as opposed to the more relevant cost/trip), while falsely inferring that the costs of automobile use is fully paid by fees and gas tax.

Out in the country, land may be cheap and costs can be neglected. But, in urban areas where transit becomes more competitive, land is significantly more expensive. If one neglects land costs, one could justify tearing down several 60 story, $1000/sf office buildings Midtown Manhattan to build a 10 lane highway instead of an underground subway. I have a hard time respecting anyone who willingly neglects real costs (not just opportunity costs) in order to advance their agenda.

Why is this free market think tank so eager to endorse highway socialism? And, if it’s not an endorsement, why not argue against roads too?

Comments

  1. 1. If you’re a capitalist who seeks to to use the government to obtain your preferred outcome, then you’re no capitalist.

    2. I long ago stopped reading anything written by one-trick-pony Randall O’Toole. It looks like he hasn’t changed. (I wonder if his mass-transit phobia extends to airplanes and elevators. Or at least elevators in government buildings…)

    3. To support socialized highways over socialized transit is like preferring socialized hi-rise public housing over socialized sprawling public housing. I’m sure that arguments could be made for/against each, but it is has nothing to do with reducing the detrimental effects of government. Instead, that discussion is best left for the expertise of insulated planners and other “experts”.

  2. 1. If you’re a capitalist who seeks to to use the government to obtain your preferred outcome, then you’re no capitalist.

    2. I long ago stopped reading anything written by one-trick-pony Randall O’Toole. It looks like he hasn’t changed. (I wonder if his mass-transit phobia extends to airplanes and elevators. Or at least elevators in government buildings…)

    3. To support socialized highways over socialized transit is like preferring socialized hi-rise public housing over socialized sprawling public housing. I’m sure that arguments could be made for/against each, but it is has nothing to do with reducing the detrimental effects of government. Instead, that discussion is best left for the expertise of insulated planners and other “experts”.

  3. The weird thing is he claims to be a train enthusiast, so I guess it’s not a phobia. Maybe that’s his way of making himself sound credible.
    “I love trains, but when I researched them I realized… …they suck.”

  4. The weird thing is he claims to be a train enthusiast, so I guess it’s not a phobia. Maybe that’s his way of making himself sound credible.
    “I love trains, but when I researched them I realized… …they suck.”

  7. When you consider the fact that NO ONE EVER USES TRANSIT, then the cost/trip differential is probably even higher than the cost/mile. Sure, if you use cost/max-capacity or cost/projected-ridership, maybe transit comes out cheaper, but in that case you are using pie-in-the-sky numbers. It is more expensive to move five people in a train than it is to move one person in a car.

  8. When you consider the fact that NO ONE EVER USES TRANSIT, then the cost/trip differential is probably even higher than the cost/mile. Sure, if you use cost/max-capacity or cost/projected-ridership, maybe transit comes out cheaper, but in that case you are using pie-in-the-sky numbers. It is more expensive to move five people in a train than it is to move one person in a car.

  9. Thanks for the comment Sameer,

    Since you are visiting the site from New York City and probably have an idea of how many people use transit, I’ll assume you are being sarcastic in saying, “the fact that no one ever uses transit”.

    But, to clarify for the readers, the cost per trip differential is almost never higher than cost per mile since transit users tend to commute from closer distances than driving commuters. Since the cost per mile has a higher denominator, junk economists like to distort the facts using that metric as opposed to the more informative cost per trip metric.

    While it may be more expensive to move five people in a train than it is to move one person in a car (I’ll assume that is a fact), one must consider all costs (such as land, capital, and other opportunity costs) before making a conclusion. There’s much more to it than just moving people.

    Being that you are in New York, would you consider aquiring all the buildings along Broadway plus the additional land needed to build ramps,etc on top of the construction costs of a major highway a feasible economic alternative to the underground subway lines that run under it? This may be an extreme example, but not as extreme as O’Toole’s example that completely neglects land costs and is only relevent in undeveloped areas.

    By no means am I arguing that transit is superior or that roads are inherently bad. My main point is that both systems are highly socialist and completely distort land use patterns. Huge subsidies to both systems divert resources from other productive activities.

  10. Thanks for the comment Sameer,

    Since you are visiting the site from New York City and probably have an idea of how many people use transit, I’ll assume you are being sarcastic in saying, “the fact that no one ever uses transit”.

    But, to clarify for the readers, the cost per trip differential is almost never higher than cost per mile since transit users tend to commute from closer distances than driving commuters. Since the cost per mile has a higher denominator, junk economists like to distort the facts using that metric as opposed to the more informative cost per trip metric.

    While it may be more expensive to move five people in a train than it is to move one person in a car (I’ll assume that is a fact), one must consider all costs (such as land, capital, and other opportunity costs) before making a conclusion. There’s much more to it than just moving people.

    Being that you are in New York, would you consider aquiring all the buildings along Broadway plus the additional land needed to build ramps,etc on top of the construction costs of a major highway a feasible economic alternative to the underground subway lines that run under it? This may be an extreme example, but not as extreme as O’Toole’s example that completely neglects land costs and is only relevent in undeveloped areas.

    By no means am I arguing that transit is superior or that roads are inherently bad. My main point is that both systems are highly socialist and completely distort land use patterns. Huge subsidies to both systems divert resources from other productive activities.

  11. Thank you for this post. I personally admire the libertarian viewpoint , but on transit issues, I always find it weird that they would subscribe to untenable car-centric polices in the name of being “free market”. glad to see someone else sees it this way.

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