April 05, 2004

The "state must fund rail because otherwise the roads would be clogged" fallacy

Patrick Crozier | Fallacies | Subsidy

102_0206_2.jpg
The state should fund this…
 
I have seen this line twice over the last couple of days in two entirely separate contexts. The first was in an article relating to the Beeching cuts from the 1960s:

Outcries from the country have stressed that there are not roads suitable to carry buses in some rural areas threatened with loss of their trains and sounded the alarm for the road congestion that will ensue from B.R. load-shedding at the holiday peak.

The second was in an article about South Korea's new high-speed line:

High-speed rail, for 40 years a Japanese preserve, is spreading in middle-class Asia as a glut of vehicles slows traffic

What they are basically saying is that the state must fund rail because there isn't enough road capacity. I wonder if that would apply to some other things:

The state should fund KitKats because there aren't enough Mars Bars.

The state should fund Ataris because there aren't enough PCs.

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…because there isn't enough of this
Of course not. It's absurd. When did you ever hear of a Mars Bar shortage? Or a run on PCs? It just doesn't happen. The difference is, of course, that KitKats, Mars Bars and PCs exist in something pretty close to a free market. Roads don't. Unlike PCs you can't just build a road*. Unlike KitKats you can't just charge what you like. And because those freedoms do not exist in the road market extra demand does not lead to extra capacity.

* Yes, I know you can't just build a PC or a Mars Bar factory - you need the funds to do it. What I am saying is that even if you had the funds to build a road you wouldn't be able to.

Trackbacks

Rail subsidies
An interesting post on Transport blog about how clogged roads could easily be solved by free markets - if there was such a thing. So why the soft spot
Right On! Blog on April 5, 2004

Comments

Its really amazing the lack of imagination some statists display when it comes to markets and choice. They look at the umpteen varieties of toothpaste, sneakers, cars, furniture, etc. and sneer at how wasteful capitalism can be.
The roads/health care/power grid are too important to be left to the market they say. All the more reason to let these vital services operate in private hands, I say!
I could probably live with one brand of dish detergent provided by a govt monopoly, but when it comes to the big ticket items I like lots of variety, competition and respect for individual choices, frightening as that may be to some.

Posted by Jay on April 6, 2004

Come on now. The barriers to entry in the power market, not to mention the externalities involved with the infrastructure (especially when it doesn't work) makes for a completly different situation than the choice between dishwashing detergents.

And as for the original post: Yes, government should fund rail if there isn't sufficient road capacity, since the lack of roads is their responsibility in the first place and adding train service to existing rights-of-way is probably cheaper and easier than using eminent domain and building new roads.

Posted by RJ3 on April 6, 2004

"And as for the original post: Yes, government should fund rail if there isn't sufficient road capacity, since the lack of roads is their responsibility in the first place and adding train service to existing rights-of-way is probably cheaper and easier than using eminent domain and building new roads."

Yes very true but I cannot see the problem of handing over public money for private companies. For instance isn't all road maintanance done by private companies. Suirly this is profits before safety blah blah blah. Don't companies and individuals get tax breaks for doing certain things which are enviromently friendly.

I think the problem with trains was that fact that the TOC's were failing while govt. pumped in money. It's all bad management by the government no private company would run a railway like this. If like with busses. Private companies will not run a bus service with two people on it. If the demend isn't there then it is withdrawn. As part of paying council tax the council can pay the company to run the bus. Any money they make after that is their's. However no bus firm would run a profitable route and then close it down early. Or only have two routes. As people would think blow this get a car and then not get a bus at all. Therefore cutting the bus service down it then sprials downwards. Bus company cuts more services etc etc...

This happened with the Uckfield Line. They cut the southern end out and wondered why no one used it. They they cut the edenbridge bit out another link out because under demand was sited.

Posted by Amir on April 6, 2004

There are all sorts of ways of increasing capacity without building roads. For example: more buses and jitneys, less roadside parking, staggering journeys. I often wonder whether it would be possible to move the "centre" of the road around so that in the morning there are three lanes (out of four) going in and in the evening only one (say) going in.

Posted by Patrick Crozier on April 6, 2004

Actually, they do that all over the US, in some places with cool machines that move articulated Jersey Barriers from lane to lane. But it still doesn't make it much better because it only encourages more drivers at peak times. I guess that's the problem with roads: It's inefficient to charge on most of them, and if you make them better, more people will stop avoid using them at peak time, negating any improvement you've made.

Posted by RJ3 on April 6, 2004

"...inefficient to charge on most of them..."

I am most surprised. We manage it in London. The French manage it on their autoroutes. Where else do you get jams?

Posted by Patrick Crozier on April 7, 2004

A combination of Metrorail and suburbanization has made traffic in downtown DC managable, if not entirely alleviated, so a London-style congestion charge zone isn't the solution, at least here. The highways could be a target for automatic tolling, should many Americans (like myself) finally give up and decide that it's not so bad that the government knows where I'm going at all times.

However, that won't really solve the problem. Traffic will spill on to already crowded paralell local roads, which are not limited access and thus much harder to toll. It would no doubt work for long-haul trips, but many people would spend an additional 20 minutes on the road to avoid a $5 charge.

Posted by RJ3 on April 7, 2004

Although limited access freeways are the ideal candidates for electronic tolling, there is no particular reason why surface streets can't be tolled at what we like to call 'screenlines' in technical jargon. These could be major natural or manmade barriers such as waterways, rail lines, greenspace or areas where there are a physically limited number of crossing points between population/employment zones.
As for potential 'cut-through' or 'rat-run' traffic, this is a very common problem in urban areas even without widespread use of tolls, due to the overloaded public road system. Depending on the land uses abutting the alternate routes, traffic calming or a reordering of the street network could eliminate much of the short cutting traffic. In any event, I don't see how this makes privately-operated urban tolling a non-starter.

As to my original post, I don't mean to be flippant about the obvious complexities involved in the planning, construction and operation of transport infrastructure. But the manufacture and distribution of all of the commodities I mentioned involve complexities of their own (building the assembly plant, developing and marketing the product, coordinating logistics, etc.), things that were solved without state intervention. What frustrates me to no end is the lack of imagination displayed by those who demand the state dump more money into rail transit simply because the public roads happen to be congested. If for as long as we could remember, the state designed, built and operated supermarkets (Soviet-Union style), I'm sure we would be having the same discussion over whether the state should fund the production of hamburgers or the production of tofu. We would all be dumbfounded as to how a private market would produce and distribute food without the government's direction. How would the poor eat? How to secure land for raising produce? How to ensure an adequate supply of food to urbanized areas? etc., The beauty is no one person could possibly forsee how it would be done or 'plan' it from on high.

(ok, I'm channeling Hayek again here, back to work now!)

Posted by Jay on April 7, 2004

Isn't it funny how "traffic calming" does just the opposite to drivers?

Anyway, I don't disagree that rail isn't always the answer (the Camden-Trenton River line comes to mind), but comparing public goods built by an elected government in a market economy to private goods in a non-market system doesn't do much good when making an analysis.

I don't think charging for everything is the answer, especially when it involves giving the government a log of everywhere you've been, or giving that information to a private company, which could be even worse.

Posted by RJ3 on April 7, 2004

It's hard to apply market analogies here when there is no direct market for roadspace. there will always be limited capacity on the roads so why not apply a market solution and use road pricing to reflect the balance between demand and supply.

Then we can have road and rail compete on a more equal footing - without so much state intervention

Posted by dgately on April 8, 2004

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