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Block on Road Socialism

For quite some time, Economist Walter Block has been one of the more radical thinkers when it comes to advocating free market solutions. Many of his writings on roads and rent control are featured in the Links to Articles, Academic Papers and Books page. Today’s Lew Rockwell Podcast features an interview with Professor Block discussing Road Socialism. The interview begins with a discussion of the fact that certain socialist institutions exist in our supposedly free-market society, and Block mentioned that when he debated Milton Friedman, he accused Friedman of being a “Road Socialist”. Friedman eventually admitted, “Yes, I am a road socialist.” The discussion turns to deaths on highways, competition, congestion pricing, some history of private turnpikes and transit, eminent domain, and homesteading. Many of Block’s thoughts and ideas are highly controversial, but make for fantastic conversation. I can’t say I always agree with his point of view or ideas, but I like the unique perspective he brings that is always thought provoking and sparks interesting debate. I encourage readers to listen to the podcast and discuss their thoughts on the podcast. Also, check out his recent lecture at FEE on Privatizing Roads and Oceans, and articles on rent control and highways.

CATO Podcast: Transportation

Today, I was listening to CATO’s Daily Podcast about transportation with Samuel Staley of the Reason Foundation. I started listening to him talk about the best ways to plan highway systems and said to myself, “Oh boy, here we go again another so-called “free-market” person talking about how the government can ‘pave our way out of congestion’.” “We’ve got the space, and we’ve got the land, and we’ve got the wealth” to pave away congestion. That’s a very collective “we” for a supposed free-market person to use. But, after about 5 minutes of that, he goes into how we now have the technology to privatize highway use and are 15 years away from the technology to privatize even local roads. Now we’re talking. We need to actually begin to tie those traditional market mechanism to the products that are being developed and implemented at the local level, and that’s something we’ve never been able to achieve before. It’s an exciting time for transportation policy. If, transaction costs are no longer the obstacle to privatization, society needs to start shattering these bureaucracies and selling the roads to the private sector. I think the biggest hurdles to privatization are peoples’ perception/biases and politics. People never paid for roads before, so it’ll take effort to convince them it is not as free as the air we breath… download mp3

Free Market Impostors

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 […]

Roads: US vs Europe

Pick Your Road: The U.S. vs. Europe, by Bryan Caplan In the U.S., we have low gas taxes, low car taxes, few tolls, strict zoning that leads developers to provide lots of free parking, low speed limits, lots of traffic enforcement, and lots of congestion. In Europe (France and Germany specifically), they have high gas taxes, high car taxes, lots of tolls, almost no free parking, high speed limits (often none at all), little traffic enforcement, and very little congestion. I’ve never driven in Europe, but I can’t imagine enduring city driving in the European cities I’ve been to. Those drivers are nuts! But, I’d venture to say that costs of driving in Europe are closer to reflecting the true costs, as opposed to the US’ tax, build with Pork, then neglect highway systems to spend on other pet projects system. The US socializes and subsidizes auto-transportation, while Europe socializes and penalizes. I imagine the European systems is closer to resembling a free-market transportation system than the US. But, we’ll probably never know for sure…

Mixed Incentives and the True Costs of Driving

From the Freakonomic Blog – Mixed Messages on Auto Use: We wrote not long ago about the various negative externalities produced by driving — congestion, pollution, accident risk, etc. — and how pay-as-you-drive insurance might help impose the true cost of driving on each driver. … And here’s another case of mixed messages on auto use, or at least mixed incentives: The U.S. Department of Transportation has issued a press release saying that Americans have started to drive considerably fewer miles than before. And here’s another case of mixed messages on auto use, or at least mixed incentives: The U.S. Department of Transportation has issued a press release saying that Americans have started to drive considerably fewer miles than before. This post and the comments made me think about how little people actually think about the full costs of driving. People don’t typically think about the wear and tear on their car or the depreciation as they put on miles. The IRS’ mileage rates are intended to reflect these costs on top of the costs of gas, but many people think they are getting reimbursed extra for their mileage. Sure, if you are driving an older, fuel-efficient car, you’ll make money on your business travel… What if drivers were to pay the full costs of the roads they use? Would they start to look at the full cost of driving choices?

$12.8b Bid for PA Turnpike

From Toll Road News: With a bid of $12.8 billion an Abertis/Citi team has been selected as the concessionaire in a 75 year lease of the Pennsylvania Turnpike. The bids were received in a second round of best-&-final offer bids last Friday (May 16). #2 bidder was Transurban/Goldman Sachs at $12.1b. With this kind of cash, it’s going to be very tempting for more states to privatize to keep budgets afloat. I worry about how much wasteful spending today’s politicians plan to do after they get this windfall. It’s also a shame it’s a 75 year lease not a sale. This gives the state some authority to maintain some patronage, cap toll increases, and keep unions happy.

The Great Depression and America’s Addiction to Government Roads and Oil

One of my favorite new blogs, Rationalitate brought up a topic that I have spent much time thinking about, The Great Depression and Public Roads: In a time before the widespread adoption of income and sales taxes, property taxes made up the lion’s share of local government revenues: two-thirds of all revenue according to Dick Netzer, and over 90% of all taxes levied in cities of more than 30,000 according to David Beito. …property owners and renters were subsidizing roads for the benefit of the wealthy. Real estate developers who ran private forms of mass transit (mostly streetcars) and who were in direct competition with government-financed roads were some of the biggest payers of taxes, which makes the transfer especially ironic. It is a tragic coincidence that big government policies became popular during the same era as the automobile. History books champion Roosevelt and his New Deal, but few are willing to attribute our dependence on oil to the progressive policies that exploded during the Depression and continued through Eisenhower’s Interstate Highway System and on to this day. The big government solutions to “create jobs” drew resources from productive sources to fund projects that burdened future generations with the costs of maintenance, debt repayment, and auto dependency, as well as the abandonment of urban areas and rail infrastructure for an extended time. This is a topic that deserves more attention. One could write a book on it.

How McCain or Obama Can Permanently Eliminate the Gas Tax, Cut Pork and Help the Environment

John McCain and Hillary Clinton have both supported the idea of a “Gas Tax Holiday“. The whole idea of a Holy Day to celebrate the worship of socialized transportation catered by Santa Clinton/McCain seems pretty absurd to me. Nonetheless, they expect pandering to gas-addicted voters to pay off in their election hopes. Unfortunately, such a gas holiday would burden the deficit, incentivize the burning of fossil fuels, and further socialize our transportation system. Highway advocates currently cling to arguments that roads are more “free-market” than transit because the costs of maintaining the highways are paid by the user through gas taxes and user fees. That is a myth to be debunked in future posts, but the argument would be void during McCain’s new “holiday”. And, with future tax money footing the bill instead of gas users, we would have a full blown transfer of wealth from the responsible taxpayers who don’t depend on petroleum to the gas guzzlers and petroleum industry. I propose a more free-market solution at the federal level – get out of the transportation business altogether! The federal government would end the gas tax permanently, but at the same time deed the entire federal highway system over to the individual states where the highways are located, and abolish the Department of Transportation over a span of a few years. The individual states would be free to handle their transportation as they see fit, as long as the they do not diminish the military’s ability to mobilize forces for defense. States could pay for maintenance of the assets in ways that best suit them, whether it be a gas tax, tolls, property taxes or states could actually raise money through complete privatization of the new assets. Besides easing the burden on the deficit, getting the federal government out […]

Should the Government Build the Cars or the Roads?

I tend to agree that there is some hypocrisy in the conservative/libertarian world when it comes to transportation, which is part of the reason I started this blog. A more free-market transporation system would certainly lead to a more urban land use pattern; something between pre-auto, transit-reliant density and current auto-reliant sprawling suburbs. Regardless, market-based solutions will lead to a denser land use pattern in the long-run. This article discusses governement’s role in infrastructure and some libertarian free-market advocates’ strange love affair with government planned highways: Maybe the Government Should Build the Cars Is transportation like education, a communal service that works best through heavy general funding that pays off down the road in a community’s overall prosperity, or is it best delivered by targeting users, especially road users through congestion pricing to reduce demand and increase revenues? Also: King of the Road They seem to see a highway as an expression of the free market and of American individualism, and a rail line as an example of government meddling and creeping socialism. However, the above article portrays the government as the hero for overspending on highways, but what do you expect from a magazine named Governing? Rationalitate: Libertarians for Statism on the Governing article: “[o]ur national road system would never have been built if every street were required to pay for itself.” Yeah, that’s exactly the point! Our “national road system” is the problem, and the author’s implication is that not only would there be no “national road system,” but that roads are indeed synonymous with transportation. But just because we wouldn’t have trillion-dollar pavement stretching across the continent doesn’t mean we wouldn’t be able to get across the continent – or, more importantly, wherever it is that we want to go. Latest: How McCain or Obama Can Permanently […]

McCain: Suspend the Gas Tax and Inflate the Deficit

I favor Bob Poole’s solution: “The longer-term solution is to scrap the 20th-century tax-and-grant system in favor of universal tolling, managed by each state’s Department of Transportation and private toll companies.” Furthermore, get the federal government out of the business of subsidizing highways altogether and allow the states to privatize them. It would shift the cost closer to home and drastically reduce pork. More: Greg Mankiw’s Blog: Bad News for the Pigou Club

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