Infrastructure and Class

Brett’s insightful work on infrastructure has conditioned me to think carefully about stories that invoke the term in the news. Here’s one on Transportation Secretary Mary Peters’ apparent effort to push down transportation infrastructure costs to individual users:

[Peters’] main objective seems to be blocking any increase of public contributions to the public infrastructure. The main reason you are sitting in traffic, she believes, is not that the purchasing power of Highway Trust Fund revenue has been dwindling for the past decade, not that population and freight traffic have been soaring with no government response — but that you are not being asked to pay enough to use the road you are on.

The rigidity of the administration’s ideology became clear last week with the culmination of a two-year study of the nation’s transportation woes. A bipartisan federal commission came up with a comprehensive, balanced plan for the next 50 years, calling for maintenance and construction, road and rail, public and private funds. [Peters dissented, saying] “When consumer demand determines supply, it will engender funding sufficient to meet the demand.”

Peters’ promotion of toll roads is going to hit the poor much harder than it hits the rich; $6 a day or so means a lot more to the bottom half than, say, the top ten percent of income earners. But we have a real problem of incommensurability here. Individual automobiles generate externalities, and to the extent their carbon footprint gets internalized, we may be helping the environment. As Anne Applebaum might ask, what happens when the “laudable, currently fashionable movement to improve the environment comes directly into conflict with the equally laudable, equally fashionable movement to improve the lives of the poor?”

My tentative thoughts here are that road fees ought to be balanced by the types of public transit projects that are subsidized by progressive taxation. At least then some alternatives are being developed for those who would be hit hardest by road fees. Bloomberg’s congestion pricing plan in New York includes such elements.

What about information infrastructure? As Frischmann might note, there’s no clear downside to excessive use of info-infrastructure (though network congestion and “information overload may strain some). So we might be more suspicious of user fees in the context of intangible infrastructure than in the context of tangible public works.

One thought on “Infrastructure and Class

  1. Frank,

    I don’t know where to start with this one. So I’ll just echo the Post article, which hits the nail on the head: this is a clear reflection of the overly simplistic ideology that has infected public policy discourse. Even though economists recognize that markets predictably undersupply public transportation infrastructure and that there is a well accepted and understood economic case for public subsidies and/or provision (of course, with plenty of rangling over details), ideologues choose to ignore those views while attempting to invoke economic rhetoric to hide their ideology. There are a variety of reasons why relying on consumer demand–essentially, defined in terms of willingness and ability to pay–will not lead to sufficient investment in transportation infrastructure–as Peters suggests it would. I don’t have links available off hand, but one simply has to look at a basic econ textbook. (I’ll be writing much more about this topic in the future as well.)

    Also, keep in mind that it is important to distinguish between user fees that are based on the identity of the user or their intended use and usage fees that are based on congestion. (see my article with Barbara van Schewick). Congestion pricing often makes sense for both road and communications networks.

    The report is available at http://www.transportationfortomorrow.org/final_report/

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