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Yes, Virginia, government roads really are government subsidized, and no, they don’t approximate freed-market outcomes

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 […]

Conservatives and Urbanism

Matthew Yglesias – Straight Talk on Gasoline on drilling and how conservative deviation from free-market principles has hurt the environment: Meanwhile, take something like the accessory dwellings issue. Here you have a bunch of regulations that make it illegal for people to live more densely. Illegal, in other words, to build the kind of communities where the gas price issue wouldn’t hurt so much. But there’s a movement afoot to change things. Similarly with minimum parking rules — regulations that interfere with the operation of the free market in such a way as to make it more difficult for people to live energy efficient lives. And again, there are people trying to change this. These things are regulatory barriers to solving our energy problems every bit as much as the ban on offshore drilling is. And conservatives are against regulation, right? Except the anti-drilling regulation is good for the environment and for coastal economies whereas anti-urbanist regulation is economically inefficient and environmentally destructive. Naturally, conservatives have chosen to aim all of their fire at anti-drilling regulations. And that’s the sort of thing that makes the conservative movement hard to take seriously — it’s an organized defense of existing power and privilege that now and again adopts principled rhetorical modes of various kinds but basically can’t be moved to act unless some lobbyists pay them too. Similar arguments could describe progressives too, but that (and drilling for oil) is a topic for other blogs… I agree about the inconsistent anti-market sentiments of conservatives when it comes to urbanism. Conservatives tend to embrace socialism when they can abuse government to create barriers that exclude others from their communities, but not when others benefit from socialism. (Public schools, free parking, government roads, exclusionary zoning, community centers, etc…) They are just fighting over different […]

$5 Gas and Commuting Costs

Environmental and Urban Economics – Commuting Cost Arithmetic When people work in the suburbs, will they save many gallons of gasoline if they move to the center city? Yes, they will be closer to their center city friends and stores but they will still need to reverse commute by car to their jobs (unless they can ride the Google Bus from Center City San Fran to Mountainview). So this raises the question of whether high gas prices will push employers to move back to the center city? Employers who need land (think of Google) will be unlikely to want to rent out 35 stories of a skyscrapper. Total One Way commute cost = price of a gallon of gas + hourly wage Case #1: you make minimum wage = 5 + 7 = 12 and the share of expenditure on gas = 5/12 Case #2: Ivy League graduate = 5 + 100 = 105 and the share of expenditure on gas = 5/105 So this simple example highlights how the wage can swamp the price of gas for the high skilled but for the less educated, gas is a huge part of the commute cost. Interesting point. CBDs tend to attract highly talented workers, who tend to earn higher salaries. So, will those people have the incentive to move closer? Probably not much. However, there are plenty of middle wage workers who commute to CBDs, and may be tempted to locate closer. But, a firm that desires to attract the most talented workers will most likely locate in the CBD anyway. Thus, I wouldn’t expect as much difference in firm location preference, compared with the shifts in housing location preference. Those who work in suburban locations may end up moving closer to their jobs, making living patterns more compact near […]

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