I’m reading another book about macroeconomics and economic fallacies. It’s called… Economic Facts and Fallacies by Thomas Sowell – a decidedly center-right author. He writes like a ruthless machine of logic and facts, and it works. Sometimes there are details that get … forgotten or too easily discounted, but it’s still a very smart book and a good read, even if the title initially lulls you to sleep.
I’m not too far into it, but something in it was pretty smart and I wanted to share it with you.
Think of roads as a resource that is consumed. When people are driving on a road, they are consuming a resource, usually quite poorly in my experience. If it’s one car on one road, the time spent on the road is very low, and thus the cost to the person on the road is low – in terms of time spent on the road, gasoline consumed, wear and tear on the car, stress, etc.
If fifty cars are on the road – consumers will spend more time on the road due to congestion and competition for the same resource. This means it’s more expensive for a consumer to drive when there’s more traffic – the cost is just hidden/insulated from our plain sight.
If it’s rush-hour traffic on I-25 or I-395/495, it’s ridiculously expensive because tons of people are competing for a very limited number of space on the roads. Lots of time will be spent on the road, lots of gasoline is burned off, there is lots of wear and tear on the cars, and Jiminy H. Christmas is there some stress!
The argument he is trying to make is – if a resource is free to use, everybody will use as much of it as they can, to the detriment of the consumer, and in this case, the resource. But it’s not actually free – we just don’t think about the costs.
He goes to list a few places in Europe like Stockholm, London, and a few cities in Asia that have started to charge a series of scaled tolls based on time of day. During times deemed “rush hour” the tolls are at their highest, and at non-peak times, the roads are free. This has effectively scaled back traffic, as it causes people to seek out other means of transportation, or causes them to adjust their schedules so that they are driving at non peak times.
Do I think it would work in the USA? Possibly – but I think people like their free roads here, and it’d be tough to go from “free” roads to “sometimes free”.
Anyway, I promise this will be the last smart post of the week. Should be a lot of springtime pictures, because it looks like real spring is starting, at least until it snows again.
