Road Warriors
March 5th, 2008 by Peter SudermanMatt Yglesias writes:
The “world in numbers” for our current print issue is a nifty map of the overtaxed highway infrastructure in our major urban areas. Under the circumstances, the case for more transportation infrastructure is compelling, but it’s worth underscoring the fact that you’re never going to have anything more than a very temporary solution to congestion problems until you start implementing congestion pricing.
Building a highway, after all, costs money. But it creates something of value — the chance to drive on an uncrowded roadway. But if you just give this valuable opportunity away for free, then people wind up consuming too much of it and soon enough there’s no uncrowded roadway left. It’s just like overfishing or any other “tragedy of the commons” issue. When you see construction of a new, unpriced and it’s not likely that it’ll soon become overcrowded, you’re looking at a porkalicious “bridge to nowhere” sort of phenomenon where people are constructing something that has a cost out of proportion to its value. Anything that’s genuinely valuable and also given away for free is going to wind up overconsumed.
Seems to me like this is less an argument for congestion pricing than an argument for privately-funded toll roads. Using public funds on a public resource creates a commons problem, which you then have to add additional charges to solve. Why not simply have private entities fund the roads in the first place and then set prices that allow them to make a profit? Understandably, this isn’t exactly politically palatable* right now, and the persistence of current public infrastructure might make even a partial transition difficult. But using actual markets rather than some vaguely market-based system underwritten by public money seem like it’d provide a more efficient, less risky solution to the problem.
*Understatement, I know.
March 5th, 2008 at 7:39 pm
They already have “congestion pricing” over in the UK, and it appears to be wroking in reducing traffic congestion during the day. In order for this to happen here in the States, we’d have to swallow the idea of being monitored by wireless or video technology & give up the right to drive whereever you want to whenever you want to. There are places, VT for one, that have rejected the idea that more roads (specificially the completeion of a circumferencial highway, I-289) is the answer. The real answer is more public transportation to get all those commuters off the roads and more rail and airplane infrastructure to get goods off the roads. This will take a large influx of money though, but it will create good jobs for working Americans too.
Toll roads…there are states like NH that survive, in part, due to fees and tolls on their population. The tolls up and down the Concord, NH to MA mainlines just went up about 33%. These toll roads will *never* become free because the state of NH is always desperate for revenue to run state govt.. I agree that it would be nice though to come up with a way for private interests to invest in infrastructure that this country desperately needs. I don’t think perpetual tolls are the answer though…they are de-facto regressive taxes IMO.
March 5th, 2008 at 9:26 pm
Congestion pricing is a smart way to allocate the common (and scarce) resource of public roadways. The key is to not allow governments to use the pricing income as a general revenue source…
March 6th, 2008 at 1:46 pm
I don’t understand. Why not?
March 6th, 2008 at 5:39 pm
I think the point of congestion pricing is like the point behind taxing smoking or plastic bags. The point is to tax that something out of existance, and if you come to rely heavily on that shrinking money resource…you’re in trouble.
March 6th, 2008 at 6:56 pm
Ah, I see. Thanks, MG.
March 6th, 2008 at 7:48 pm
I think the whole taxing out of existence metaphore does not really apply to roads. Or are you suggesting that cars will stop circulating on those highways ? I see no harm in government keeping the extra change.
To me, the big problem with private infraestructure and in particular private highways is that they are very hard to model as a free market product. Where is the competition ? Once a highway is laid out no one can expect a second or third one being constructed to compete against the first one (is that even possible given the constrainst of physical placement?)
So basically, at some point, goverment will reward a lucky winner that will get to build and manage its own little gold mine with no competition or market pressures. That does not sound like real capitalism to me. Does it ?
March 7th, 2008 at 9:05 pm
Sure, I don’t think anyone here or in the UK thinks that we can tax cars on roads out of existence. We haven’t done that with cigarettes, but it has been done with plastic bags (Ireland I think recently did this). I’m also no expert on the sucessful plan that they have in place in the UK right now. Maybe they have permits that can be purchased so you don’t get slammed with a tax whenever you show up in an exclusion area during the “wrong” time of day?
I agree that just handing over control of the roads to private interests would be insane, but I think there has to be a way to get private interests to contribute more to infrastructure. For instance, the I-289 highway that I mentioned above (and am oppossed to as unnecessary BTW) is mostly being pushed by Republicans and the nearby IBM plant that it will mostly benefit (they want their own exit off the road). In that case, if they ever build it, why not get IBM to kick in some money to help foot the bill for constructing and maintaining the road? There might be other good idea out there too…