More On Light Rail

TK had some good comments in my post on light rail in Columbus and I wanted to respond to them in full form, so I figured it would help to do so in a post rather than in the comments section.

The first question TK asks regards the viability of private mass transit and/or private roads. The answer to this is that there were plenty of good examples of private highways/roads and even private mass transit—before the Progressive movement shut them down. Dan Klein has several articles and papers on turnpikes and toll roads during the 18th and 19th centuries, up until Congress effectively banned them. Congress loosened regulations in 1991, as Klein says in one of the easily-readable articles, and since then, there have been several public-private partnerships involved with building toll highways. The problem with directly answering the question with good examples from today is that the incentives in place are strongly anti-private and states are loathe to allow entirely private roads.

As for mass transit, it was private until, once again, the Progressive era. But in recent years, there are some limited moves to privatization (like in Indianapolis) and they’ve been pretty successful. The problem is the amount of regulation—particularly at the state and federal level—preventing cities from experimenting with private options. But an example that I’ve always found really cool is in the Dominican Republic. The Dominican Republic is a fairly poor country and a lot of people can’t afford cars and the government doesn’t really have the cash to do much in the way of mass transit infrastructure. As I gather (this was a story told by a friend who grew up there), there are designated pick-up points across towns where anybody can slap a sticker on their car (or turn on a light or something; I forget what, exactly, the signal was), drive up, and become a transit entrepreneur. You tell the people sitting there where you’re driving, they pay you a fixed rate (set by the government), you drive the route you said you would drive, and they let you know when they want to get off. You can do that once (on the way to work, perhaps) or all day. This is a way for spontaneous interaction between individuals to occur and solve a logistical problem with government doing little more than setting and enforcing the rules.

The next portion involved the British rail system. As Iain Murray explains, there were major problems with the way privatization occurred. He argues that the Thatcher government went a bit overboard with privatization and instead should have limited it somewhat, especially in the realm of vertical integration. The Thatcher government split British Rail into several companies and did not allow those companies to bleed over vertically, so that the company which owns the rails could not also own or run the trains. This led to an information problem, as the rail owners lost valuable channels of information because they did not regularly communicate with conductors, so they were somewhat in-the-dark regarding rail quality as opposed to a company which also ran some portion of the trains. This led to a couple of disasters which the rail company handled rather poorly and the end result was re-regulation.

Next up: “As for your point that city/municipal governments are not responsible for shielding their residents from fiscal realties (difficulties), I agree in principle, but then, when the cities like Columbus (and many other northern cities) are losing population (and thus tax bases), isn’t it wise to risk the depopulation by dismissing their concern?”

There are a couple of things here to tease out, followed by a somewhat-boring discussion portion on my part. One thing to note is that Columbus actually is not losing population, although much of Ohio is. So if the chain of logic went [People want certain forms of mass transit] ^ [Columbus does not have certain forms of mass transit] —> [People are leaving Columbus], the fact that people are (on net) not leaving Columbus means either that the logical chain is incorrect or that there is some stronger logical link which exists.

The other implication noted in the comment is that because people want certain forms of mass transit, people are moving to the places which have these forms of mass transit. The problem with this argument is that the mass transit setups are only getting built after a significant population move has already occurred. Taking a look at population trends, you can see a distinct move into the Rocky mountains, Pacific northwest, and sun belt. Cities like Phoenix, Atlanta, and Seattle are blossoming, but you can tell that it isn’t directly affected by mass transit. In Phoenix, for example, their light rail system isn’t done yet, so that can’t have been a draw several years before it was even built. The Seattle light rail system is hardly in place, either (and went massively over budget, as I noted in my previous post on this subject). You could make a sounder argument with Atlanta, seeing as how MARTA’s been around for a while, but I would argue that there’s a much simpler answer, and that is economic opportunity. There is a distinct trend for business-friendly states to be states growing in population. For an even tighter trend, check out Forbes’ listing of the most business-friendly states and compare them to the highest-growing states population-wise. At the top of the list, you have Virginia, Texas, North Carolina, Utah, Colorado, Idaho, Nebraska, Delaware, Florida, and Georgia. Of those ten states, 9 had above-average population growth rates between 1990 and 2000 (only Nebraska was below-average). They also make up 7 of the top 10 population growth states from the last census. The three others, Nevada, Arizona and Washington, were numbers 26, 15 and 12, respectively. Ohio ranks 34th in the Forbes index. As far as trends go, that’s a pretty strong one which makes a lot of sense: lots of people go where the jobs and money are. A business-friendly climate alone does not guarantee population growth, but it’s a very strong factor.

If I were a municipal leader who wants his city to grow and prosper, I would not increase the already-heavy tax burden by wasting taxpayer money in perpetuity on things that people would not buy on their own. At the same time, I would relax as many regulations as I could (but you must keep in mind that a lot of the most pernicious regulations are at the state or federal level) to allow people to do as much of what they want as they can and to allow entrepreneurs to satisfy public demand*. Houston would be a decent model for this, and I should note that Houston’s population has skyrocketed over the past 40 years, despite the fact that work on its light rail system didn’t begin until 1999 and isn’t extremely popular with the residents, despite a massive population increase and much higher gas prices. So given that Ohio’s economic outlook is hardly happy, increasing the cost of government to subsidize a small percentage of people who work and live downtown won’t reverse the problems and will likely exacerbate them.

* – As noted in my comment on my last post, I would argue that small-scale enterprise on the order of private bus lines which criss-cross and compete with and/or feed one another would do more to satisfy public demand for mass transit than more expensive options and have the huge benefit that they would not increase the tax burden on citizens.  This structure would not look exactly like a city government-created transit plan, but certain regulations could exist to harmonize bus use to some extent and if taxpayers decide that it’s a good idea to subsidize certain regions with public-fare bus transit, that’s their choice.