The Distorting Effects of Transportation Subsidies
Although critics on the left are very astute in describing the evils of present-day society, they usually fail to understand either the root of those problems (government intervention) or their solution (the operation of a freed market). In Progressive commentary on energy, pollution, and so on—otherwise often quite insightful—calls for government intervention are quite common. George Monbiot, for instance, has written that “[t]he only rational response to both the impending end of the Oil Age and the menace of global warming is to redesign our cities, our farming and our lives. But this cannot happen without massive political pressure.”
But this is precisely backward. Existing problems of excess energy consumption, pollution, big-box stores, the car culture, and suburban sprawl result from the “massive political pressure” that has already been applied, over the past several decades, to “redesign our cities, our farming, and our lives.” The root of all the problems Monbiot finds so objectionable is State intervention in the marketplace.
In particular, subsidies to transportation have probably done more than any other factor (with the possible exception of intellectual property law) to determine the present shape of the American corporate economy. Currently predominating firm sizes and market areas are the result of government subsidies to transportation.
Adam Smith argued over 200 years ago that the fairest way of funding transportation infrastructure was user fees rather than general revenues: “When the carriages which pass over a highway or a bridge, and the lighters which sail upon a navigable canal, pay toll in proportion to their weight or their tonnage, they pay for the maintenance of those public works exactly in proportion to the wear and tear which they occasion of them.”
This is not, however, how things were actually done. Powerful business interests have used their political influence since the beginning of American history to secure government funding for “internal improvements.” The real turning point was the government’s role in creating the railroad system from the mid-nineteenth century on. The national railroad system as we know it was almost entirely a creature of the State.
The federal railroad land grants included not only the rights-of-way for the actual railroads, but extended 15-mile tracts on both sides. As the lines were completed, this adjoining land became prime real estate and skyrocketed in value. As new communities sprang up along the routes, every house and business in town was built on land acquired from the railroads. The tracts also frequently included valuable timberland. The railroads, according to Matthew Josephson (The Robber Barons), were “land companies” whose directors “did a rushing land business in farm lands and town sites at rising prices.” For example, under the terms of the Pacific Railroad bill, the Union Pacific (which built from the Mississippi westward) was granted 12 million acres of land and $27 million worth of 30-year government bonds. The Central Pacific (built from the West Coast eastward) received nine million acres and $24 million worth of bonds. The total land grants to the railroads amounted to about six times the area of France.
Theodore Judah, chief engineer for what became the Central Pacific, assured potential investors “that it could be done—if government aid were obtained. For the cost would be terrible.” Collis Huntington, the leading promoter for the project, engaged in a sordid combination of strategically placed bribes and appeals to communities’ fears of being bypassed in order to extort grants of “rights of way, terminal and harbor sites, and . . . stock or bond subscriptions ranging from $150,000 to $1,000,000” from a long string of local governments that included San Francisco, Stockton, and Sacramento.
Government also revised tort and contract law to ease the carriers’ way—for example, by exempting common carriers from liability for many kinds of physical damage caused by their operation.
Had railroad ventures been forced to bear their own initial capital outlays—securing rights of way, preparing roadbeds, and laying track, without land grants and government purchases of their bonds—the railroads would likely have developed instead along the initial lines on which Lewis Mumford speculated in The City in History: many local rail networks linking communities into local industrial economies. The regional and national interlinkages of local networks, when they did occur, would have been far fewer and far smaller in capacity. The comparative costs of local and national distribution, accordingly, would have been quite different. In a nation of hundreds of local industrial economies, with long-distance rail transport much more costly than at present, the natural pattern of industrialization would have been to integrate small-scale power machinery into flexible manufacturing for local markets.
Alfred Chandler, in The Visible Hand, argued that the creation of the national railroad system made possible, first, national wholesale and retail markets, and then large manufacturing firms serving the national market. The existence of unified national markets served by large-scale manufacturers depended on a reliable, high-volume distribution system operating on a national level. The railroad and telegraph, “so essential to high-volume production and distribution,” were in Chandler’s view what made possible this steady flow of goods through the distribution pipeline: “The revolution in the processes of distribution and production rested in large part on the new transportation and communications infrastructure. Modern mass production and mass distribution depend on the speed, volume, and regularity in the movement of goods and messages made possible by the coming of the railroad, telegraph and steamship.”
The Tipping Point
The creation of a single national market, unified by a high-volume distribution system, was probably the tipping point between two possible industrial systems. As Mumford argued in Technics and Civilization, the main economic reason for large-scale production in the factory system was the need to economize on power from prime movers. Factories were filled with long rows of machines, all connected by belts to drive shafts from a single steam engine. The invention of the electric motor changed all this: A prime mover, appropriately scaled, could be built into each individual machine. As a result, it was possible to scale machinery to the flow of production and situate it close to the point of consumption.
With the introduction of electrical power, as described by Charles Sabel and Michael Piore in The Second Industrial Divide, there were two alternative possibilities for organizing production around the new electrical machinery: decentralized production for local markets, integrating general-purpose machinery into craft production and governed on a demand-pull basis with short production runs and frequent shifts between product lines; or centralized production using expensive, product-specific machinery in large batches on a supply-push basis. The first alternative was the one most naturally suited to the new possibilities offered by electrical power. But in fact what was chosen was the second alternative. The role of the State in creating a single national market, with artificially low distribution costs, was almost certainly what tipped the balance between them.
The railroads, themselves largely creatures of the State, in turn actively promoted the concentration of industry through their rate policies. Sabel and Piore argue that “the railroads’ policy of favoring their largest customers, through rebates” was a central factor in the rise of the large corporation. Once in place, the railroads—being a high fixed-cost industry—had “a tremendous incentive to use their capacity in a continuous, stable way. This incentive meant, in turn, that they had an interest in stabilizing the output of their principal customers—an interest that extended to protecting their customers from competitors who were served by other railroads. It is therefore not surprising that the railroads promoted merger schemes that had this effect, nor that they favored the resulting corporations or trusts with rebates.”
Reprising the Role
As new forms of transportation emerged, the government reprised its role, subsidizing both the national highway and civil aviation systems.
From its beginning the American automotive industry formed a “complex” with the petroleum industry and government highway projects. The “most powerful pressure group in Washington” (as a PBS documentary called it) began in June 1932, when GM president Alfred P. Sloan created the National Highway Users Conference, inviting oil and rubber firms to help GM bankroll a propaganda and lobbying effort that continues to this day.
Whatever the political motivation behind it, the economic effect of the interstate system should hardly be controversial. Virtually 100 percent of roadbed damage to highways is caused by heavy trucks. After repeated liberalization of maximum weight restrictions, far beyond the heaviest conceivable weight the interstate roadbeds were originally designed to support, fuel taxes fail miserably at capturing from big-rig operators the cost of pavement damage caused by higher axle loads. And truckers have been successful at scrapping weight-distance user charges in all but a few western states, where the push for repeal continues. So only about half the revenue of the highway trust fund comes from fees or fuel taxes on the trucking industry, and the rest is externalized on private automobiles.
This doesn’t even count the 20 percent of highway funding that’s still subsidized by general revenues, or the role of eminent domain in lowering the transaction costs involved in building new highways or expanding existing ones.
As for the civil aviation system, from the beginning it was a creature of the State. Its original physical infrastructure was built entirely with federal grants and tax-free municipal bonds. Professor Stephen Paul Dempsey of the University of Denver in 1992 estimated the replacement value of this infrastructure at $1 trillion. The federal government didn’t even start collecting user fees from airline passengers and freight shippers until 1971. Even with such user fees paid into the Airport and Airways Trust Fund, the system still required taxpayer subsidies of $3 billion to maintain the Federal Aviation Administration’s network of control towers, air traffic control centers, and tens of thousands of air traffic controllers.
Eminent domain also remains central to the building of new airports and expansion of existing airports, as it does with highways.
Subsidies to airport and air traffic control infrastructure are only part of the picture. Equally important was the direct role of the State in creating the heavy aircraft industry, whose jumbo jets revolutionized civil aviation after World War II. In Harry Truman and the War Scare of 1948, Frank Kofsky described the aircraft industry as spiraling into red ink after the end of the war and on the verge of bankruptcy when it was rescued by the Cold War (and more specifically Truman’s heavy bomber program). David Noble, in America by Design, made a convincing case that civilian jumbo jets were only profitable thanks to the government’s heavy bomber contracts; the production runs for the civilian market alone were too small to pay for the complex and expensive machinery. The 747 is essentially a spinoff of military production. The civil aviation system is, many times over, a creature of the State.
The State and the Corporation
It’s hard to avoid the conclusion that the dominant business model in the American economy, and the size of the prevailing corporate business unit, are direct results of such policies. A subsidy to any factor of production amounts to a subsidy of those firms whose business models rely most heavily on that factor, at the expense of those who depend on it the least. Subsidies to transportation, by keeping the cost of distribution artificially low, tend to lengthen supply and distribution chains. They make large corporations operating over wide market areas artificially competitive against smaller firms producing for local markets—not to mention big-box retailers with their warehouses-on-wheels distribution model.
Some consequentialists treat this as a justification for transportation subsidies: Subsidies are good because they make possible mass-production industry and large-scale distribution, which are (it is claimed) inherently more efficient (because of those magically unlimited “economies of scale,” of course).
Tibor Machan argued just the opposite in the February 1999 Freeman:
Some people will say that stringent protection of rights [against eminent domain] would lead to small airports, at best, and many constraints on construction. Of course—but what’s so wrong with that?
Perhaps the worst thing about modern industrial life has been the power of political authorities to grant special privileges to some enterprises to violate the rights of third parties whose permission would be too expensive to obtain. The need to obtain that permission would indeed seriously impede what most environmentalists see as rampant—indeed reckless—industrialization.
The system of private property rights . . . is the greatest moderator of human aspirations. . . . In short, people may reach goals they aren’t able to reach with their own resources only by convincing others, through arguments and fair exchanges, to cooperate.
In any case, the “efficiencies” resulting from subsidized centralization are entirely spurious. If the efficiencies of large-scale production were sufficient to compensate for increased distribution costs, it would not be necessary to shift a major portion of the latter to taxpayers to make the former profitable. If an economic activity is only profitable when a portion of the cost side of the ledger is concealed, and will not be undertaken when all costs are fully internalized by an economic actor, then it’s not really efficient. And when total distribution costs (including those currently shifted to the taxpayer) exceed mass-production industry’s ostensible savings in unit cost of production, the “efficiencies” of large-scale production are illusory.
Comment by Aster on 26 October 2010:
Kevin-
An extensive transportation system isn’t merely an economic issue. It’s also a cultural public good. A society in which trade and travel are made easier and less expensive is a blessing for literature and the arts, for public discourse and public tolerance. Seaports and harbours have for this always been symbols of freedom; commerce made Athens the school of Hellas. I’ve never personally liked car culture, but it is sociologically undeniable that the automobile was a pillar of the XX century’s cultural revolutions, which in the case of youth, independent women, and sexual minorities has saved souls and lives. Fleetness of foot allows one to escape confinement; ease of movement and transportation allows us to do with our bodies what the internet allows us to do with our minds. If the essence of positive freedom is the presence of substantive alternatives, then anything which increases mobility is thus in itself liberatory.
If someone argued persuasively that the internet would have been impossible without DARPA, or that its existence constituted a subsidy to murderous multinationals, then we should of course assimilate this knowledge to our models of economic reality, and change them accordingly. But a discussion of the internet without consciousness of its liberating civilisational effects would be absurd- everyone who has ever felt an excitement of consciousness knows the beautiful things which the internet has done for us, the speed at which it allows us to speak and think. And yet international trade and commerce are the physical reality and material precursor to the internet, and inherently valuably for the same reasons. A world in which people find travel and emigration difficult is thereby less free and less thoughtful. This is one reason why police statism in airports and along the border should be condemned, and why Homeland Security is, among other things, a bane to human awareness.
A politics which proposes a just and sustainable alternative version of a cosmopolitan world would be a blessing. But a politics which forces one to choose between sustainable justice and cosmopolitanism cuts human beings in half, places certain crucial elements of human flourishing in opposition to others, and- inevitably- places some human beings in opposition to others. A revolution, however just, which does not make provisions to sustain the liberal cultural element will see the libraries and universities burn with the palaces, and a society which discards the virtues cultivated by these institutions will pay an enormous price, including an enormous price in sustainability and justice.
If the future is to be a Social War between centre and periphery, and if, in that war, only the centre pledges to preserve the cultural and material conditions which permit the continuance of liberal civilisation, then I’ll stand with the centre, as a matter of both my deepest convictions and my physical survival. My suspicion is that a majority of those classes which presume a university education will do the same- partially, yes, through privilege, blindness, and inertia- but also because many of us know that outside our urban islands of liberalism there are no allies and no hope.
Comment by DML on 27 October 2010:
How has an “extensive transportation system” been a blessing for “public discourse” and “public tolerance?”
If anything, the consequence of modern subsidized transportation systems has been a wash when it comes to those issues. It is indeed arguable that it liberated people in some manner at certain times and continues to do so. However, it is just as arguable that it has resulted in forced assimilation and left communities in flux, as they face cultures and mores that they are not ready to deal with, resulting in the oppression of various peoples and groups.
Comment by Aster on 27 October 2010:
So much for libertarianism as an individualist philosophy. But what else is new?
I’d love to hear what Kevin thinks. I don’t debate with creatures who use concepts like “forced assimilation”. If your cutures, mores, and communities ever come anywhere near me I will immediately contact New Zealand’s Human Rights Commission. I’ve already had to pull lawyers once to stop housing discrimination, and I’m sure as Hell glad to have that option, given what its absence meant for me in the United States. In any system of justice I’m interested in the individual is protected from collective prejudice, and I support state action to ensure that society doesn’t run by tribal principles. It’s your responsibility to deal with peaceful people moving next door and a society has no right to practice arbitrary exclusion. Thank Elyseum that the rules in New Zealand agree with me and the Civil Rights movement and not with libertarianism.
Comment by DML on 27 October 2010:
So what about freedom of association? What about the black people who view “integration” as white people forcing themselves on their communities ; who, in short, view integration as a form as forced assimilation? Do they not have a voice or a valid opinion?
People of different cultures and backgrounds moving freely to a community is not forced assimilation. On the other hand, the government passing laws that compel people to deal with one another when they do not want to associate is indeed forced assimilation.
I find it hilarious that you call me a “creature” and threaten me with legal action if I ever come anywhere near you. I know your background from comments you’ve left around the web; I have nothing against you, and wish you no harm. Yet you threaten me with legal action because I use a phrase you don’t like. So much for your “cosmopolitan” liberal tolerance and enlightenment!
Comment by Matt69 on 28 October 2010:
So, what´s the point of this article? Do you seriously claim that without state subsidies of railways, highways and air traffic we would have TODAY “many local [transportation] networks linking communities into local industrial economies” but almost no / FAR smaller national economy?
Comment by Rothbardian on 28 October 2010:
I very much agree with Carson on this, and the history he presents herein. In fact, the only true entreprenuerial spirit (James J. Hill) in the Railroad Industry was in fact the Great Northern Railway funded entirely privately and without any State assistance.
As a Misesian foremost, I disagree with Carson’s Mutualism, but I do however agree in his last paragraph. Most railroads were not creatures of the Market, but of the State inherently bankrupt (Without subsidy), would never have seen the light of day in the first place. These enterprises should rightfully be condemned as what they are; a theft from the people to the receivers of stolen money and land (Land not homesteaded — but, outright arbitrarily given). Almost entirely the railroad industry was the pre-cursor to the modern Fascistic American economy. A long storied history from the Hamiltonian Mercantilism which was ultimately successful in supplanting its hold here after the War. We merely displaced one monstrosity with another.
I disagree though with Carson’s specualtive assessment that without such subsidies that all such endeavors would prove unprofitable. Here the Great Northern Railway shines as a beacon to become the falsifier for his premise. Of course, enterprises such as Coca-Cola, et. al. would not be around today (Numerous subsidy including transportation), but other such enterprises would (In market-share, scope, size, etc.). I however sympathize with Carson in arguing that more local control of production would be much more competitive with distant factors of production. It is an entirely Misesian argument to make, especially when you see how we argue on the market setting of interest rates (Locally).
As for Aster he has no idea what liberty is, nor what libertarianism is. To say you have a right to anothers property and body, is entirely absurd (As such is American liberalism). No one owes you, nor are you entitled to anyone elses property or use thereof. Libertarianism is a political philosophy, not a personal philosophy — like Austrian Economics it is a value-free philosophy. This more than anything is problematic because people view their personal philosophies interchangably with their political, and hence the constant division and conflict that arises. You will never see your liberalism in full effect because there are conservatives who fight for the same power. A one-size fits all solution is no solution at all. You can certainly form your own liberal community which upholds all your specific values, but only people who share your values will be members — hereby reducing coercion and force from the equation.
That is the model the libertarian represents. A self-organizing, spontaneous order. Any other attempt to try and correct perceived ‘problems’ through means contrary to liberty and the individual will inherently be flawed producing ends that are contrary to your goals.
I am curious, what rights of yours have been violated by the Landlord who refused you tenancy? Are you entitled to a right of tenancy now? Are you entitled to half his labor? What else of his are you entitled to steal in your mind?
Comment by DML on 29 October 2010:
Actually, the Great Northern does very little to help either side of the debate. In brief: J.J Hill was the beneficiary of government intervention throughout his career, in various forms and guises.
1.) He was connected to men who were bankers and financiers from various parts of the globe, from which he received cheap credit and capital –I should not have to tell someone who calls themself “Rothbardian” that this alone implies he benefited from government intervention! Later in his career, he was involved with such crooks as J.P. Morgan.
2.) He had a steamship company that was a monopoly because of government regulations and from this he got much of his early capital.
3.)Throughout his career, he had access to railroad capital that he commonly bought for pennies on the dollar; this cheap capital would not have existed without the governments subsidization of the railroad system.
4.) Early in his career he received a land grant of 2 million acres, from which, if I have done the math correctly, his company made a profit of around 13 million dollars.
5.) Throughout the rest of his career he was granted free right-of- ways, or at leas right-of-ways for pennies on the dollar, from the federal government.
Of course, the other side of the debate could enumerate how the government stood in his way, and what a brilliant business man he was. Although I find this side less convincing, I will grant there is an element of truth in that view, and that is why I ultimately say the case of J.J. Hill does not really help either side.
Comment by Aster on 29 October 2010:
Rothbardian-
First of all, I’m a girl. And fuck the idea of property rights justifying denial of housing and employment on grounds of irrational prejudice. The entire atomistic notion of rights behind libertarianism has no relation to reality and onyl empowers the privilege. And having been a libertarian I know precisely the kind of prejudices half of you conceal behind your rationalist rhetoric. Goddess bless anti-discrimination laws and most of the welfare state.
Comment by Matt69 on 30 October 2010:
Aster:
Perhaps you should read i.e. Richard A. Epstein´s “Forbidden Grounds: The Case Against Employment Discrimination Laws”, http://www.amazon.com/Forbidden-Grounds-Against-Employment-Discrimination/dp/0674308093
Comment by Rothbardian on 30 October 2010:
DML, thanks for the information. I was aware he received two very small grants throughout construction, but was so minor as to not ‘make’ or ‘break’ the endeavor. You gave me some good starting points to look further. I must admit I have not really delved too much into JJ Hills whole historical context. I will do so, when I have the time
(However, I still think my point stands in relation to Carson saying that such a railway could never exist without subsidy (According to you, much of Hill’s previous capitalizations did not come about through the GNR))
As for Aster, you are no libertarian. You are a died in heart run of the mill liberal (Vis a vis your view of positive rights, welfare, and property rights). You are closer to a Democratic-Socialist than anything else. In any event, if one does not ground ones right in self-ownership and its extension homesteading of property, you have no sound basis of any rights whatsoever.
Why do you presuppose a right over another mans mind and choices? How is that liberty whatsoever? I will await the usual liberal response.
Comment by Aster on 30 October 2010:
I’m familiar with Epstein’s work, and have no desire to revisit it.
Pingback by Media Coordinator Update, 10/30/10 on 30 October 2010:
[...] proper, or through me as coordinator, I’m going to brag on Kevin Carson some more anyway: His “The Distorting Effects of Transportation Subsidies” appears in the November issue of the Foundation for Economic Education’s The Freeman: Ideas [...]
Comment by Gerard Bendiks on 30 October 2010:
“I’ve never personally liked car culture, but it is sociologically undeniable that the automobile was a pillar of the XX century’s cultural revolutions, which in the case of youth, independent women, and sexual minorities has saved souls and lives.”
I could point to the act of me stealing my neighbor’s watch as a benefit too. My child now knows what time it is. (Yep, ye olde Broken Window Fallacy enters stage left). What is “unseen” is that my neighbor was going to give it to some other “more deserving child” (maybe his, maybe a Peruvian child) or sell it to put food on the table.
The above quote shines a light on “what is seen” and it also assumes that “what is seen” exists only because of, 1) the a priori “breaking of the window” (transportation subsidies), 2)exists in the optimal amount, 3) and of optimal quality, 4)wouldn’t exist if not for the subsidies.
What is also “unseen” is the fact that these transportation subsidies (plus the indirect and direct barriers to ye olde spontaneous/emergent orders) coupled with urban planning/zoning (apartheid+a smiley face) increased the cost of moving from Point A to Point B to those near the bottom end of the economic totem pole. In many contemporary USA towns it’s difficult to change one’s mind without engaging the cost/overhead of a personal car.
Comment by Gerard Bendiks on 30 October 2010:
“what´s the point of this article?”
People bitch ‘n’ moan about Big Boxes, evil Mondo Corporations, cookie-cutter housing communities, ugly (if not silly) malls and strip malls, blah-blah-blah…as if these are all blatant and oh-so-obvious examples of ye olde Decadence of Free Market Capitlaism/Laissez-Fair-ism. The point is that, 1) they’re not; they’re examples of a modern version of good ol’ Mercantilism, public-private “partnerships” and that, 2) it’s not a good thing.
“Do you seriously claim that without state subsidies of railways, highways and air traffic we would have TODAY “many local [transportation] networks linking communities into local industrial economies” but…”
Yes. And just like USA’s music environment/community is exactly that and precisely due to the fact that the USA music environment/market is much more spontaneous/emergent order-like than Europe’s for example.
“…almost no / FAR smaller national economy?”
No, the economy would be stronger/better, just like the music scene. Splintered? Yes. Dynamic? Yes. Protean? Yes. Piles and piles of it? Yes. Healthy? Yes. Unbound? Yes. Creative, adaptive, even “incestuous”/open-source-like? Yes. Available to damn near anyone? Yes.
Comment by Gerard Bendiks on 30 October 2010:
“fuck the idea of property rights justifying denial of housing and employment on grounds of irrational prejudice.”
Actually you do believe in fucking the idea of property rights: that of someone else. It’s called rape and it’s not as nice as good ol’ fucking as a “mutually agreeable act ‘tween consenting adults”.
“Irrational prejudice” was the foundation upon which the Trail of Tears was enacted. Likewise, Torquemada did his evil thang as a bulwark against the “irrational prejudices” of the unbelievers.
The “housing problem of the lower economic classes” is another prime example of the results of political shenanigans in the housing market. It certainly isn’t an example of the inherent evilness of some laissez-faire market in housing.
Comment by Aster on 1 November 2010:
Dear goddess, you libertarian idiots. I don ‘t care about justifying transportation subsidies, and most likely oppose them. What I care about is respect for rational and individualistic cultural values, and the cavalier attitude which most libertarians evidence toward the core values of a liberal society. My comment to Kevin wasn’t about economic policy at all, but about about the dangers of a politics which endorses economic justice without regard for the essential values of the Enlightenment.
I consider Kevin a profoundly serious thinker. Libertarians, however, are a group of naive idealists decieved by a group of privileged, heartless, and disconnected ideologues, who are in turn selectively promoted by a group of utterly vicious elites who do not care if most people in this world are free or happy. Your movement is half a cult and half a confidence game and is not open to reason or evidence, as is clearly demonstrated by the scientific reality of climate change which you guys spent decades denying at an unspeakable cost of future human lives. Libertarianiam is a parochially arch-American ideology is an age where America has failed. Locke was wrong and is a hopeless guide to coping with the problems we face in a radically interconnected world. And again, I’ve seen up close and person how many of you have copies of the Bell Curve in your living rooms, and how many of you treat gays and women.
Pingback by Militant Libertarian » Is Freedom a Radical Idea? on 1 November 2010:
[...] identified by Benjamin Tucker), protection, and subsidies (most egregiously and consequentially in transportation) — and with more opportunity, later on, to make a living independent of any corporate hierarchy. [...]
Comment by taxpayer on 13 November 2010:
In the absence of land grants, a transcontinental railroad still would have been built, tho slightly later than actually occurred. Land in the inaccessible west would have been so cheap that someone could have bought it, built a railroad, and sold the newly-valuable land at great profit. Similarly, we can and should fund transportation infrastructure from a tax on the land value that it helps create.
Also, factual correction, Union Pacific built west from the Missouri, not the Mississippi.
Comment by Ben on 16 November 2010:
Aster,
You seem to be implying a belief that libertarians are below average in their level of enlightenment with regards to gender relations or different sexualities. I’d argue that from personal experience, this is rather far off. I am a liberal. I am a feminist. I believe that there is nothing inherently better about set of sexual choices, although certainly I might argue that indiscriminate unprotected sex can carry personal dangers with it. I don’t wish to say that because I am these things, they are spread widely throughout libertarians. But surely it is the case that they are. Libertarians are overwhelmingly tolerant, liberal people. Sure, I have met conservative libertarians, but in their tolerance they fair outweighed the tolerance of ‘cosmopolitan’ ‘urbane’ ‘progressives’ tolerance for those elements in society they dislike.
There are plenty of grounds on which to attack libertarianism, at least if you disagree with the paramountcy of rights, but an attack based on a supposed lack of tolerance, a supposed lack of altruism — these are far wide of the mark.
Comment by Brian on 17 November 2010:
Aster,
Take no prisoners, I guess? I’m having fun, no disrespect at all. But, back to where you started – you lost me. “An extensive transportation system isn’t merely an economic issue. It’s also a cultural public good.” Indulge me – as a hick from the sticks with libertarian inclinations, I’m not sure what a “cultural public good” might or might not include. However, I am pretty sure that empowering any individual or batch of politicians to decide let alone fund “cultural public goods” is an invitation to disaster. But I’m open to being corrected.
Thanks if you read this far,
Brian
Pingback by Kevin Carson Victorious! on 12 January 2011:
[...] Congratulations to Kevin Carson, who has just won the Foundation for Economic Education’s Hoffman Prize for his Freeman article on transportation subsidies. [...]
Comment by Kevin Carson on 13 January 2011:
Aster: This is the first time I checked out the comments under this article (negligent, I know). Re the civilizing effects of increased travel, I can’t think of any easy answers, but can at least make a few tentative swipes toward one.
Even without transportation subsidies, and an increased cost of shipping per pound, there would likely be more travel per capita than at any time in history up until the creation of the railroads. And the cost of transporting people for periodic recreational travel is a lot cheaper than either transporting large amounts of bulk freight on a daily basis as the ordinary economic model, or transporting millions of people every single day for business travel that could be easily replaced by teleconferencing in most cases.
With the change in economic incentives from increased transportation cost, I’d (just guessing, of course) expect to see a shift from long distance air travel and road trips toward passenger rail. Rail travel for visiting or sightseeing every few months would probably be cheaper than the current cost of doing it by car or plane, and would certainly be cheaper than the current cost of frequent business travel.
Then, too, throwing the Internet into the picture makes eminently feasible the model Keynes once talked about: an economy in which most production of goods is fairly local, but the cost of moving ideas around is close to zero. The ability of marginal groups of people to form networks transcending geography is a huge gain for freedom.
Finally, in the long run, I think the potential for economic liberty presented by the revolution in decentralized production capabilities and imploding capital requirements will have profound cultural effects. It ties in with some of the material in my last C4SS paper on the economy of waste. Hierarchies derive a great deal of their power from scarcity and the authority to allocate scarce goods. Arguably the first dominator societies, nomadic pastoralists with patriarchal religions and authoritarian cultural values, arose as scarcity mindsets under the pressure of marginal environments like deforestation and desertification. And it was pressure from these mean and hungry folks (a lot like Joe Bageant’s “borderers” who garrisoned Ulster and eventually settled so much of the Red States, come to think of it) who created a domino effect and drove cooperator societies toward authoritarian values under the imperatives of a garrison environment. The more economically feasible it becomes for individuals to provision themselves outside of authoritarian hierarchies, the more the role of the local Lord as “loaf ward” (the Anglo-Saxon origin of the English word) is undermined. And the more comfortable and secure people feel, the less at the mercy either of circumstances or other people, the less free-floating anxiety there is to be directed against targets of opportunity like assorted dissident and outgroup scapegoats. Historically, it’s people who don’t know whether they’ll be employed or housed or fed a month from now who are most prone to irrational hatred of scapegoated minorities.
Pingback by Kevin Carson Wins Freeman Prize for Economic Writing on 13 January 2011:
[...] article, “The Distorting Effects of Transportation Subsidies,” appeared in the November 2010 issue of The Freeman. It was selected from a list of five nominees by [...]
Pingback by The War on the Environment. on 13 February 2011:
[...] As Kevin Carson has noted, choices of fuel are not the only industry distorted by subsidy . With transport subsidies, there is a socialization of the cost onto everyone violating the cost principle of user pays while incentivizing needless travel where alternatives could be sought. [...]
Comment by Jon Adams on 14 February 2011:
The one distorting thing about the fuel tax is that it is an assumed “vote” for more highways.
Pingback by Subsidizing apocalypse | The Alan Furth blog on 20 February 2011:
[...] But the anarchist perspective on this issue turns the argument on its head. Kevin Carson points out that by making distribution costs artificially low, transport subsidies allow incumbent firms to [...]
Pingback by “It’s Complicated”, or the relationship of market anarchism with taxes | The Alan Furth blog on 26 February 2011:
[...] more than one market anarchist, Kevin Carson prominently among them, that despite being acutely aware of the evils of transportation subsidies, would have opposed with equal vehemency the [...]
Pingback by Subsidiando el Apocalipsis | El Blog de Alan Furth on 7 March 2011:
[...] perspectiva anarquista sobre éste tema le da una vuelta de 360 grados al argumento. Kevin Carson señala que al reducir artificialmente los costos de distribución, los subsidios al transporte permiten [...]
Pingback by “Es complicado”, o la relación del anarquismo de mercado con los impuestos | El Blog de Alan Furth on 7 March 2011:
[...] nos encontraremos con que más de un anarquista de mercado, a pesar de estar perfectamente conscientes de los graves problemas ocasionados por los subsidios a cualquier forma de transporte, se [...]
Pingback by State vs. social redistribution on 13 April 2011:
[...] zoning laws and building codes, the use of eminent domain to benefit developers and their clients, transportation subsidies, and tariffs, just for starters. Ending these privileges would shift resources away from those who [...]
Pingback by Redistribution and the State — The League of Ordinary Gentlemen on 1 May 2011:
[...] zoning laws and building codes, the use of eminent domain to benefit developers and their clients, transportation subsidies, and tariffs, just for [...]
Pingback by Anonymous on 10 June 2011:
[...] [...]
Pingback by Elizabeth Warren’s Non Sequitur | The Freeman | Ideas On Liberty on 23 September 2011:
[...] of history.” She mentions only tax-financed roads, schools, and police. (Roads do entail a subsidy to long-distance shippers, but she seems oblivious to that.) There’s an easy remedy for [...]
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