“Street Smart” — Fresh Thinking about Transportation

As Virginians, we approach the debate over transportation, land use and taxes with tunnel vision. We are captive to the way we’ve always done things, mentally shackled by our institutions of governance and business groups with a vested interest in maintaining the status quo. I’ve always found remarkable the lack of interest — even in a supposedly cosmopolitan, world-class technology center like Northern Virginia — in how mobility and access are provided in other countries.

The antidote for parochialism is at hand in the form of a book, “Street Smart: Competition, Entrepreneurship, and the Future of Roads,” edited by Gabriel Roth, a scholar with the Independent Institute. This timely book deals with transportation issues both at the level of abstract economic theory and practical, real-world application.

Roth, a Maryland resident, sets the tone for the book in his introductory essay:

Road systems exhibit the usual “command economy” characteristics of congestion, queuing, deteriorating, and waste. …

A major cause of the inefficiency is the political control of road systems, which enables road users to shift the costs they impose to other road users, and even to other taxpayers. Farmers in Kansas, for example, pay to rebuild the Wilson Bridge over the Potomac to relieve congestion in Washington, D.C. Those who underpay are thus encouraged to increase their road usage at the expense of others, illustrating Bastiat’s insight that government is seen as a device to enable everyone to live at everyone else’s expense.”

Bastiat’s dictum certainly applies to Virginia, where the politically powerful influence the construction of transportation projects, from Richmond’s 288 bypass to the Rail-to-Dulles project through Tysons Corner, subsidizing sprawl and enriching speculators who own property along the improvements. The alternative, as Roth and other authors elaborate, is “de-socializing the roads” — shifting to a system in which road networks are commercialized, i.e., made self-financing, relying for revenue from road users and/or affected property owners, and in which pricing plays a much larger role than it does today.

“Street Smart” has chapters on Singapore’s experience with congestion tolls, HOT lanes in California, the rise and fall of non-government roads in Great Britain, America’s toll road heritage, Swedish private road associations and the commercialization of roads in New Zealand. Other chapters discuss strategems for moving towards the private provision of roads.

For transportation junkies, the book offers stimulating reading. My main disappointment is the neglect of land use issues. Transportation networks are embedded, and inseparable from, human settlement patterns. To a large degree, human settlement patterns define the demand for transportation capacity. The lack of discussion on this critical relationship represents a serious void. Still, there is more than enough good material here to justify the $29.95 price tag.

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7 responses to ““Street Smart” — Fresh Thinking about Transportation”

  1. Gabriel Roth Avatar
    Gabriel Roth

    Jim –

    Thanks for your kind comments. The point about land use not being covered is well taken, but the experts we approached were not available to write it.

    Gabriel Roth (Editor)

  2. E M Risse Avatar

    Honesty is the best policy.

  3. Ray Hyde Avatar

    “the rise and fall of non-government roads in Great Britain, America’s toll road heritage,…”

    What else do you need to know?

    The book I have frequemtly cited here, by Winston and Shirley suggests that we price all transportation modes according to the true social benefits they provide. but even they don’t suggest that they all be privatized.

    It is true that people in Oregon are paying for Metro, and clearly that is unfair. They are also paying for the Springfield interchange, and that is also unfair, but only to the extent that Virginia residents are not also paying for Oregon improvements.

    It is the same locally. Larry Gross makes the point that gas taxes don’t pay enough to support roads, yet he is opposed to higher gas taxes. I don’t see how you can reconcile those positions.

    But, given that gas taxes don;t support the roads, this is a system that we have suppported through electing those who put the system in place. However the roads in Virginia are paid for, they are paid for by others who also use the roads.

    You cannot say the same for Metro, or VRE.

    The Wilson Bridge project is not just to relieve congestion in DC. The original plan was for 95 to go through DC. When that was defeated by the anti-road lobby, the default position was to route 95 around the city and over the bridge. 95 is a major North Sout thouroughfare and carries a high percentage of non-local and out of state traffic. Accordingly , it is just that the funding come from other than locals.

    We often hear the argument that anyone who uses the roads imoses an externality on others, and are therefore not paying their true cost. (“…a device to enable everyone to live at everyone else’s expense.”) But everyone else onthe highway also poses an exteranlity to the principal. Therefore, there is not necessarily anything unfair about everyone living at everyone else’s expense.

    And, those that start early go to the front of the queue, which is how we presently tax access. This might not be the best system, but it is the one we have, and it at least gives everyone the same cues. And, those that choose to live closer, are automatically farther ahead in the queue.

    Unfortunately, this particular market based system is not sufficiently efficient to relieve all congestion, and we are faces with wasted time, excess pollution, and other disbenefits as a result.

    The problem we face is, how much are those disbenefits costing us, and how much are we willing to pay over the long term to reduce the costs. Plus, we have to determine which of the many ways to spend the money will have the most and longest lasting benefit, to the greatest number of people.

    Some people think the way we do that is by pouring money into Metro, because it has a high peak capacity. Trickle down theory says it will also benefit non-riders, so they should not object to supporting Metro.

    The problem is that our congestion situation over the last thirty years makes that theory hard to prove. We could find out by studying what happens when Metro is closed, except we would probably have experimental data that lasts only a short time. ]

    When Metro is closed due to weather, roads are also terrible, and many just stay home. I submit you can take that as evidence of what will happen with congestion pricing. But people can only stay home for so long. Then they will either pay up, if it is worthwhile, or make other plans.

    If you make the roads network self financing, then the real answer is to make the transportation system self financing, whether you do that privately or not is mostly a matter of efficiency.

    In its present state, Metro can never be self financing, but taht does not mean that the system cannot be self financing. But what that means is that autos will have to not only pay their own way, but part of Metro as well.

    In other words, everyone lives at everyone else’s expense.

    Suppose you had a SYSTEM like that. What would it take to get auto owners and drivers to go along with it? They would have to think that the system was optimized. They would have to think that the amount they contribute to Metro was evenly matched with the putative traffic reduction that results from Metro.

    Good Luck.

    But if you fail in this, the it will be patently obvious that road users are paying not only for the roads, but for the Metro deficits as well. If that happens, then the argument that road users are not paying their way is passe’ and we go back to square one: everyone is living at everyone else’s expense. And this will be a result of political control of the metro system, which is certainly no better that political control of the road system.

    Roth’s argument must be a logical failure, and the reason is that he has started off with the premise that roads are a failure, instead of looking at things as a system.

    And when you look at things as a system, guess what, land use and land values have to be considered. (They are tied to gether, remember?) Since they are a system too, there is no point in waving the finger at who benefits. We know someone is going to benefit. And if we are building Metro to Tyson’s, it is probably NOT someone in Kansas or Oregon, although it could be. But if we are building the Wilson bridge, the probability is much higher.

    Obviously, anything you build is going to benefit those who live or own property closest to it, right? Exactly. And that is why we don’t use gas taxesas the sole source of revnue for roads. We built the system this way for a reason, Larry.

    It isn’t perfectly fair, but why should it be? Life isn’t fair. That doesn;t mean we can’t work to make it better, but we will need the metrics to make that happen.

    So here is a question for you. The government takes 20% of my property to build an interstate and a state highwy across my land. I am prohibited by my local jurisdidtion from profiting on the remainder from this condition. But, farther to the west, the next county is relatively wide open to the benefits provided.

    I get the constant noise from their travel, as well as people from Oregon and Kansas, and I contribute federal, state, and gas taxes to help them along. I also use the road myself, occasionally. How much are my externalities worth, and who pays for them, since I am prohibited from most of the benefits?

    The problem with everyone living at everyone else’s expense, is that we each feel that everyone else is living at our expense. We just can’t prove it.

  4. Larry Gross Avatar
    Larry Gross

    re: “It is the same locally. Larry Gross makes the point that gas taxes don’t pay enough to support roads, yet he is opposed to higher gas taxes.”


    I simply do not believe that it makes any sense to advocate something – that is not going to happen.

    It goes along the lines that if one is truly interested in answers – that one concentrates on paths that lead somewhere rather than moan and whine about how things are not right .. and never will be right.

    Lead, follow or get out of the way.

    I subscribe to the basic premise of this book no matter how it is implemented and the plain truth is that money will not be collected from gas taxes and more likely it will be collected from tolls.

    So – get on with it!

    The reasons why the gas tax won’t work are many but the most important is the one that advocates never talk about and that is the fact that money is taken from drivers – then NOT reallocated back to the roads that those drivers use.

    An unelected and unaccountable government official decides who is going to receive how much – no matter who contributed.

    This is why farmers in Kansas pay for highways in No Va.

    And it’s not an equal proposition as Ray claims where we also pay for his roads.

    If that were true then why not return every penny back to the jurisdicition where it originated to start with?

    Once every driver/taxpayers KNOWs that every penny of what they contributed comes back – then they’ll also know that if its not enough that it will be THEIR responsibility to pay more.

    When you put this proposition to drivers, they overwhelmingly support tolls over taxes because it’s inherently the most fair way to allocate costs.

    What’s the problem? Give drivers a way to pay for more transportation that they will accept – and do it.

    Why continue to argue for means and methods that people are opposed to – and won’t happen.

    We have an answer – right now – on the table… and some want to kick it off and reargue from square one.

    Lead, follow, or get out of the way.

  5. Larry Gross Avatar
    Larry Gross

    I note the following article in the WaPo today:

    “Beltway Toll Plan May Need Va. Funds
    Rising Costs Strain Private Partners”

    Near the end of the article a couple of interesting statements:

    “Virginia officials said possibilities include using surplus money from the general fund or from a continuing state subsidy, although no plans have been formulated.”

    Not the word subsidy. Also note that funds from the General Fund are funds NOT derived from direct user fees.

    The other quote from Ron Kirby – the guy in charge of the Wash Metro MPO – “the inclusion of state money would be a major change in the Beltway project “…. “This is a big change”

    I was not shocked (suprised -yes) that the financial analysis of the 460 project indicated, in essence, that not enough drivers would be willing to pay a high enough toll to use a new toll road.

    Simply stated: the “demand” was not there … yet..

    But now I am truly shocked that if the basis for the current statement about the need for public money is true as to whether that determination was made, in fact, from a financial analysis that demonstrated that there was not enough “demand” for a toll road.

    This outcome may make Ray happy, initially, but, if true, what this means is that not enough drivers are willing to pay a high enough toll to pay for a less congested highway.

    In other words, people are congesting the Beltway because they perceive it to be “free” but when a charge is actually levied – the analysis shows – a substantial number will not pay to drive – and, in fact, will not use the road if it is tolled.

    I find this fascinating – as private companies in other states have not only asked for public money but have actually committed to share some of the proceeds with the states.

    So, methinks something fishy is going on in Virginia – and it starts with the statement that “public money may be needed” with no provided analysis that shows why – and guess what – the reason it cannot be provided is that – that information is said to be PROPRIETARY and not to be shared with potential competitors.

    PPTA in Virgnia is starting to garner an ODOR of non-competitiveness at best and harmful to the public interest at worst.

    I’m not too suprised that VDOT is involved… in this…

    I hope the smarter members in the Va GA get a whiff of this…

  6. Ray Hyde Avatar

    I stand corrected on your position of gas taxes. Sorry.

  7. adron_bh Avatar

    “If you make the roads network self financing, then the real answer is to make the transportation system self financing, whether you do that privately or not is mostly a matter of efficiency.”

    Kind of like it was. But then some socialist minded people (circo 30’s) decided it would be better if everyone just paid into the pot and the budget was thus allocated. Then in the 50’s it was brought to a new order of magnitude. Spend money on things that we don’t intend to allocate maintenance for… 50’s.

    In the process every private industry self sustained transit system and mode was obliterated for the vast majority of peoples in the United States.

    Good job Guv’ment types! Now the Guv’ment has more power and ignores/has less input from actual market demand (and need).

    What a wonderful quagmire. 🙂

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