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August 20, 2004

Problems on the Railroad

The Washington Post is calling for dedicated public funding for the D.C. metro system, telling its readers that "a first-class system requires public support: a dedicated source of funding." Might I suggest another fix?

If there is really a call for a 'first-class system' in Washington, then the managers of the system ought to be able to raise the cost of a ride on the system to cover the costs necessary to develop a better system. Yet the Post informs us that public transportation can never be self-sufficient. If this is true, then it would appear that when people are required to vote with their wallets rather than with their words, they don't really want a public transportation system. Which raises the question, why should taxpayers be required to subsidize a system people don't really want?

This is the problem with too much of government. People say that they want the sun, the moon, etc., but when they're asked to pay for it, suddenly they realize there are more important things they'd rather do with their money. But because government allows people to have it both ways, we end up with boondoggles like light rail systems and monorails that subsidize a small portion of the population (and well-connected contractors) rather than what people would honestly be willing to pay for. Rather than calling for additional tax dollars to subsidize feel-good projects, the Post ought to be calling for the Metro to either covers its own costs or go out of business, like all real businesses have to do.

Posted at August 20, 2004 07:42 AM

Andrew Olmsted

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Comments

Andrew:

The generic problem is one identified by Hume as "proximal" versus "long term" incentives. In many cases no matter how much resolve you have for a long term gain, a short term gain that scuttles your long term objective may be impossible to turn down. That's especially true when the short term gain is individual and the long term consequences are collective. Essentially it's Hardin's "tragedy of the commons" dilemma. There are, however, ways of organizing markets so that they better reflect these long term objectives.

Most public transit advocates presume that the public really wants the benefits of public transit but simply can't abide the short term costs. That's not entirely unreasonable, since it's rare that the public even perceives long term costs very accurately. (Take a look at the "edge cities" that surround Washington, DC and tell me if those places are really where you'd like to live.)

I actually wrote a paper on this in a previous lifetime, with Jonathan Gifford. I don't really know what the public wants, but it's quite possible that the long term goals conflict with the short term desires, and it's precisely situations like this that are the justification for "constitutional clauses" that restrict the behavior of individuals. But the solution is constitutional rather than some jacking of the price regime, because people are allowed to constrain themselves just as Ullyses directed his crew to tie him to the mast so that he could enjoy the Siren's song without paying the ultimate cost of his life. Constitutions can meddle in markets without violating the principles of Public Choice.

Posted by: Demosophist at August 20, 2004 07:09 PM

They don't charge for elevators, either. Mass transit is usually a mechanism for businesses to bring workers and customers into their buildings without the businesses having to invest in provisions for private cars. Manhattan businesses should pay for their horizontal elevators, Washington buildings should incorporate the cost of their horizontal elevators into their cost structure. I would not work for a company that charged me for parking nor shop where I was charged for parking and entering the store. It is becoming less and less necessary to mass up to do business. The mall and the internet are where it is at.

Posted by: Walter E. Wallis at August 21, 2004 09:46 AM

to me, this is another case where the democracy fails. In this case, the majority in cities can outvote the suburban people and cause everyones taxes to go up for a system that only the urban taxpayers get to use. Reminds me of D'Toqueville's quote that Democracies survive only until the majority realizes it can vote itself major benefits at little or no cost to themselves.

Posted by: dad at August 23, 2004 03:27 PM

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