Less Government, But More Roads Please

Conservatives and libertarians who admonish government spending and transit subsides still support new road and highway construction, and the state power and funding they typically require.

Author and commentator Alex Marshall argues that the current pro-road position of many conservative and libertarian groups doesn't seem to match with their anti-government stance.

"The ancient Romans had a saying: To make a road straight, you need to make someone's neck crooked.

This chilling refrain is a vivid summing up of an obvious fact: Building a road is a manifestation of power, particularly state power. Carving a road across multiple jurisdictions and property lines - not to mention varying terrain - can be done only by an institution that can override the wishes of any one individual.

This was true in the days of the Roman Empire, when mighty roads were built so well that many of them still exist. And it's true today. In the exercise of that authority, local, state and federal governments spent more than $150 billion on roads in 2005, according to the most recent federal Highway Statistics report. That's comparable to what we spend annually on waging war in Iraq.

Given all this, I find it exceedingly strange that a group of conservative and libertarian-oriented think tanks - groups that argue for less government - have embraced highways and roads as a solution to traffic congestion and a general boon to living. In the same breath, they usually attack mass-transit spending, particularly on trains. 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."

Full Story: King of the Road

Comments

Comments

Free Market Stalinists

I suppose some libertarians will retort that government's vast social engineering (sic) with roads is simply giving people what they want. After all, most people want single family homes and automobiles, or so the general wisdom says.

Of course the problem with signing on with this argument is that then the government has a green light to go ahead with other things people "want" such as health insurance for everyone, the best education, etc. For libertarians like Robert Poole and the Reason Foundation, boiled down to their logical conclusions, their road arguments are ultimately futile an contrary to their professed ideology.

As someone concerned about climate change and the negative impacts of a century's worth of automobiles on our cities, I see the final logic of Poole's argument: personal vehicle usage should be charged to cover all the economic and environmental costs that it imposes on virtually every human activity EXCEPT that of driving.

Of course the power of government is the only way to impose such charges, which would be over a trillion dollars per year once government mandates such as "free" parking, medical expenses from vehicle accidents not covered from auto insurance, greenhouse gas emissions and other air pollution, etc. is added. With such charges per capita miles driven would probably drop by at least half, and private sector operation of passenger railroads and lcoal transit would be financially feasible again, as it was before the vast socialist road system was begun by government in earnest about a century ago.

Michael Lewyn's picture
Blogger

easier said than done

Letting every mode of transportation pay for itself is one of these ideas that is great in theory, but very hard to practically implement, for the simple reason that there is no consensus as to what externalities cost how much.

For example:

*To some extent, free parking is a result of government regulation (in particular, municipal minimum parking requirements), and thus a subsidy to drivers. But in the absence of such regulations, some landowners would undoubtedly install off-street parking on their own. How can we know how much parking is due to government regulation?

*How can we know today how extensive the costs of greenhouse gases will be- let alone the extent to which those costs are linked to driving?

I think it is fairly likely that such externalities exist- but I also think that they are not amenable to precise calculations.

Roads

Externalities aside how about roads actually to be paid for by the users. Last year in Wisconsin $1.3 Billion of property taxes (not gas taxes) were used to pay for roads/road repair. That is a subsidy.

http://www.mkedevelopment.com

true conservatives?

http://www.frepubtra.blogspot.com/

Honest true conservatives are about as common as honest free markets.

Most conservatives (and liberals, too) are just shills for the carbon-auto industry. After all, that is where the money is.

Nothing can be planned accurately as long as the carbon-auto subsidy continues

.

My Assessment

He is not alone in his critique of libertarians on transportation and to a small degree, I think he is right. But, he is also wrong on some things that I think he thought about in haste. First, we all have to give some credence to the fact that the gas tax, while not a perfect user fee, is close to one. You can't add up all the amount we have ever spent on roadways as a society and exclude revenue from the gas tax. It won't cover all the direct expenses, but it would cover a fair chunk, especially the operating expenses. As for his comment about not subsidizing roads in the past leading to roads not having been built, my thought was GOOD, that's the whole point. Would that not have been a good thing? It sounds like he is suggesting that since roads were wrongly subsidized, now we must subsidize rail transit or anything else. I don't like this logic or lack of it.

As for Poole, the author's assessment of him is semi-fair, but thoroughly incomplete. Poole's ultimate goal is to have all roads privately owned and operated and self-sustaining financially (no subsidies). He advocates congestion pricing only if the money gets returned to roadways in the form of improvements. His current proposals are pretty good - HOT lanes, BRT, privatization/leasing of highways. They are all incremental solutions and he knows it, but it's what is politically palatable and that's why he's moving slowly to his ultimate goal. I know this because I have spoken with directly at length about it (with an open mind).

His "government involvement" is more of a regulatory approach because even though roads are primarily a private good, transportation is an industry with far too high of barriers to entry to operate perfectly efficiently. But, that shouldn't be an excuse for heavy subsidies, just a call for necessary regulation. It's much like a large real estate development project.

The others who call for more roads with subsidies are just hypocrites. They are not libertarians. Any massive public works project will require a capital subsidy, but I would question whether it's good policy unless what is being capitally subsidized can be operated without subsidy. The operating subsidies are a greater killer because it's basically demonstrating that the project does not meet economic demand. It's a job creator, pork project, economic development tool, get elected tool, redesign land use patterns tool. I don't think those are good reasons for a transportation subsidy.

Although I would like the world spelled out by setty and lewyn in their posts, lewyn is right in questioning how we would price the negative externalities. My only reply is: enough to change behavior with out bankrupting the masses. I always thought we could slowly phase in pollution taxes through vehicle registration based on weight and mileage. It would give consumers time to adjust while still altering their decisions today. I don't know exactly how much and nobody really does, but that shouldn't be an excuse for abandoning the idea.

Market signals.

My only reply is: enough to change behavior with out bankrupting the masses. I always thought we could slowly phase in pollution taxes through vehicle registration based on weight and mileage. It would give consumers time to adjust while still altering their decisions today.

Indeed. My car registration in Germany was also based on horsepower and CC (IIRC), which is a market signal. My tires were bought for my max speed (those funny numbers on the side of your tire) & that was a market signal. My insurance rates IIRC were by horsepower and engine size, another signal. There are many ways to send signals to agents to help them make choices.

And wrt externality pricing: see how much FUD gets spread about health effects. This is a long row to hoe (I'd like it to be hoed for many reasons, but I'm sanguine about it getting done).

Best,

D

Full-Cost Pricing For Transporation

Interesting ideas. My own take is that the cost of externalities is important theoretically, since it shows we overuse the automobile (which has far more externalities than other forms of transportation). In practice, I think we could internalize some but not all externalities in the form of user fees: eg, it is very hard to quantify esthetic issues (the ugliness of freeways and parking lots).

CP, my question for you is why, as your ideal model, you say that transporation should pay for operating but not capital costs? Private projects all have to pay for both: if I build rental housing, I have to charge rent high enough to cover the cost of construction as well as maintenance of the housing, and if I run a factory, I have to generate enough sales to cover the cost of construction as well as operation of the factory.

It seems very clear that, in an ideal market model, transportation should pay its full costs, both capital and operating, so there is a level playing field as transporation competes with the rest of the economy for investment.

I say this because I think we consume far too much transportation. The average American drives twice as much as in the 1960s, and we are not better off because we spend all this extra money on transportation. Subsidies to transporation (capital expenses, operating expenses, or externalized costs) make people travel more, and I think we would be better off if we travelled less during our everyday activities: removing the subsidies would mean higher densities and shorter travel distances within metropolitan areas, and would mean much more use of the two essentially free forms of transportation, walking and bicycling.

That is the ideal market model. Of course, we are not going to get there purely by pricing, but it is important theoretically because it shows the direction we should be moving in.

Charles Siegel

Agreed on Ideal Model

Oh I agree with you on the ideal model. I see transportation as a real estate project and there is available capital that would buy/build some projects. But, you are correct in saying we would just consume a lot less transportation if none of it was subsidized.

But, building on what lots of other posters are pointing out, is this possible? It would seem almost impossible to build and operate a light or heavy rail system at break even with farebox revenue. I understand ridership would be better given the higher cost of alternatives, but still???

I think the answer to which mode is financially feasible entirely depends on your assumptions about land use patterns and the cost of the alternative. Given the current dominant land use pattern, roads and highways would probably pencil, fixed route transit would suffer. But, significant changes in land use patterns might change that.

Did any of you see that CA is going to vote on a gas tax increase for carbon reduction earmarked for public transportation? I guess that would be a start for pricing externalities. They should have opted for congestion pricing (it might be more politically popular). Or, as an expense offset, why not cut funds to municipalities that subsidize development (infrastructure, etc.) and get the double bagger? That way, all those funds allocated for rail projects won't be in vain.

Theory And Practice

It would seem almost impossible to build and operate a light or heavy rail system at break even with farebox revenue.

It clearly is impossible now. The ideal would be to make drivers pay all the costs of driving, including external costs; then the price of driving would be so high some people would be willing to pay the full cost of transit, and people generally would travel much less.

But I think of this as essentially a theoretical point that shows how we should change the way our cities are built - not as a practical way of making the transition.

At any rate, it is good to hear from someone who applies market theory consistently and knows that a genuinely free market would mean less transporation and therefore less sprawl - a welcome contrast to the O'Tooles and Coxes of the world, who abuse market theory to promote auto use and sprawl.

Charles Siegel

transport

lets not forget transportation 100 years ago used to be almost entirely private... railroads, trolley companies, steamship companies, interurbans and not only covered their own costs but paid taxes. roads were little more than dirt pathways or trails.

also what about the private ferry companies that are put out of business by a new publicly funded and operated toll bridge or free bridge for that matter?

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