I already posted this to the pen-l mailing list & tried to post it as a comment to Becker's blog, but for some reason (technical, I am sure), it never appeared.
Gary Becker has a piece on the blog he shares with Richard Posner regarding infrastructure in the wake of the Minneapolis Bridge collapse.
http://www.becker-posner-blog.com/archives/2007/08/the_infrastruct.html
I find it interesting the way conservative economists always find a way to make every problem call for the same solution — markets, markets, markets. In my soon-to-be-released (2 October) Confiscation of American Prosperity, I compared this attitude to the behavior of a doctor who would prescribe the same procedure for every problem, whether it would be a heart attack or broken leg.
First of all, he uses several tactics to rule out the need for more government spending. First of all, he claims that the roads and bridges are in good shape. The second tactic is far more interesting to me. Often when somebody calls for more government spending or regulation to solve a problem, conservatives claim that an unrelated program would be more cost effective.
Childhood vaccinations are a good example. For example, if somebody recommends policies, such as the regulation of tobacco, conservatives, such as John Graham, later Bush’s regulatory czar, argued that allocating money for regulation rather than spending it on childhood vaccinations or some other worthy purposes is tantamount to “statistical murder” (see Graham 1995).
Graham, John D. 1995. ”Comparing Opportunities To Reduce Health Risks: Toxin Control, Medicine and Injury Prevention (Dallas: National Center For Policy Analysis).
http://www.ncpa.org/studies/s192/s192.html
Of course, the people who make such an argument never actively promote the childhood vaccination. Instead, they merely insist on government inaction. In this case, Becker argues that reducing alcohol related deaths would make a greater contribution to safety, without giving any suggestion of how to achieve such a goal.
Finally, Becker makes the case that — surprise surprise — the best approach would be privatization, without explaining how privatization could be accomplished in a way to guarantee better maintenance of the infrastructure.
21 comments:
"I find it interesting the way leftist "economists" always find a way to make every problem call for the same solution — taxes, taxes, taxes."
Fixed that for you.
well, take that recent mine collapse, for example. that wouldn't have happened if that mine had been in private hands.
I think equating opposition to more infrastructure spending as "conservative" is a strawman.
In fact, it's often just the opposite. Where I live, NW Arkansas, it's the lobbyists for Tyson and Wal-Mart (who are headquartered here) who agitate for more, more, more infrastructure subsidies. The main purpose of the Third District congressman is to pimp federal highway pork for the local Growth Machine. The people who call for market-based funding of highways, i.e. cost-based user fees like weight-distance taxes on trucks that cause the majority of the roadbed damage, are called "tree-huggers" or "anti-growth."
Some of us on the left view subsidized infrastructure as corporate welfare.
Big trucks are the main reason the Interstates were created, and the main source of ongoing maintenance costs. They only pay about half the cost. Subsidized transportation infrastructure is a subsidy to those firms that rely most heavily on long-distance distribution. It promotes economic centralization and large firm size by making large, inefficient firms serving large markets against smaller firms serving local markets. If it weren't for subsidies to first railroads, and then civil aviation and highways, we'd probably have a decentralized economy of small manufacturers serving local markets.
As Gabriel Kolko's historical work proves, big government liberals are useful idiots for big business.
kevin carson
i am not sure i understand your point. but wouldn't higher gas taxes take care of the problem?
i saw your arkansas roads a few years ago. they needed something.
i also have to admit i took advantage of subsidies to civil aviation.
what it reminds me of is the opposite of when my wife was in France and went to sit on a park bench only to have the owner of the bench come out of the bushes and demand rent.
in other words, perhaps, i am not so desperately fond of my last tax nickle that i am willing to give up a certain grace in public life.
Sounds to me that we're heading back to the same old issue of responsible government. Infrastructure is one of those age old costs of civilization. Infrastructure is a measure of the level of civilization that a culture has achieved. The exact allocation of that infrastructure is a government responsibility if that infrastructure is intended to serve the community at large. Things like school buildings, bridges that serve a useful purpose to a majority of the population, roads kept in good repair, etc. It's all a matter of responsible government decision making. And that includes how the infrastructure is paid for. Choose "free market capitalist" acolytes and you get what you've paid for.
jack
minor quibble:
"...that serve a useful purpose to a majority of the population."
that leaves the minority high and dry. for example developing drugs that will only cure rare diseases is not something that the free market could be relied upon to bother with.
a country which is rich enough takes the attitude that, either, one day it couls be me who has that rare disease, or, it is sweet and becoming to do this for the least among us.
Coberly, I am always leery of any solution based on consumption taxes. Particularly given what Kevin pointed out, neither the benefits of highway construction or the costs of repair and maintenence are allocated in strict proportion to the amount of gas used.
The gas tax ends up being an income transfer from the travelling and rural public to big business and urban populations. (Because that food doesn't magically make it to the deli. Just because you walk to work or take the subway doesn't mean you aren't drawing social benefits from the highway system.)
ah bruce
no, but gas taxes would be allocated in strict proportion to the amount of gas used.
i don't worry about social justice quite as much as you do.
you are trying to protect the status quo.
a huge gas tax would be an incentive for business to find other ways of doing business.
could even happen that people would take to growing their own food locally, or doing without produce imported from chile.
i dunno. but i just feel warm and cozy all over at the thought of making EVERYONE who burns gas, even second hand, pay until it hurts enough for them to do whatever it is that markets are supposed to do.
the initial pain to working class could be offset by a cut in the income tax (made up for by the gas tax), but not on a "deductions" basis. simply cut their overall tax rate and let them figure out how to cut their gas bill.
tax cuts for the wealthy and consumption taxes on gasoline has to do with tax shifting and socialization of costs, has to do with capital's use of the state as mediation between itself and the working class which no doubt expends substantially more on gasoline than a smaller portion of the population and would have more difficulty 'making do' even with a income tax cut.
which is reminiscent of 1920s democratic (P. du Pont, JJ Raskob, et al) ideas of ending prohibition in order to tax 'the workingmans's drink', beer. why? to allow for/offset much lower taxes on capital and its personifications.
"Estimates indicated that such a levy (beer tax) could raise $1.3 billion. This would allow a further 50 percent cut in corporate and individual taxes. In short, Du Pont and friends would give workers beer, and with it they would also give them half the tax burden of the rich. It seemed to them to be a reasonable trade-off." (mcelvaine, 1993)
republicans wanted to do the same but through a national sales tax.
current infrastructural decay in the u.s. has been cumulative and probably not disconnected from a multi-decade adherence to religion of tax cuts, itself an aspect of 'managed depression' and the by now should be evidently false idea that those with the most know best what to do with more.
this whole show has limits that will not be reformed away.
Juan
yes cutting taxes is a boondoggle that could result in catastrophe.
i was not thinking of cutting the taxes of the rich.
but if you don't make gas more expensive, people will keep using it. and that could result in catastrophe.
you may want to swaddle the poor. i think of my neighbor driving his 12 m/h muscle car 30 miles to work each day, and up and down the local strip for entertainment on the weekends. i would bet that if gas cost twice as much he might see some reason to get a more efficient car, or move closer to work, or...if everyone else was doing it... find a more efficient way to meet girls.
that was supposed to be 12 miles per gallon muscle car.
wow! 12 mpg is great, my muscle car ('71 stage 1 buick grand sport w/455 rebuilt to '70 specs) only gets 9 but with a smaller cam and carb rejetting would do better, maybe 12.
of course its only driven a few times/wk.
other hand -
http://eco-motion.com/
a worker driving five miles to work in a car that gets 30 miles per gallon would use 87 gallons per year. A two dollar per gallon gas tax would cost him $174 pe year.
A 200 dollar deduction from his income tax would keep him whole. I don't see any reason to apply that deduction on incomes over 30,000 per year.
a worker driving 30 miles to work in a car that gets 10 miles per gallon would use 1560 gallons per year.
a two dollar tax would cost him 3120. I would give him the same 200 dollar tax rebate and leave it up to him if he wants to move or get a better car.
ok, you want to use a consumption tax, falling primarily on wage workers, for purposes of social engineering,,,
technocratic bureaucratism unleashed
more steps to state capitalism
where oh where is our
grave-digger
already inside the beltway or
in waiting
well
it looked to me like the tax would fall primarily on high end earners, since i gave the low end a tax cut.
i like to think of it as a tax on high gas users.
but then i'm worried about the effects of global warming on poor people.
Anonymous,
I did not see michael saying anything about tax increases. Anyway, George W. Bush has established that one can cut taxes while increasing spending. Those nice Chinese will be willing to lend us the necessary funds, right?
As for privatization, well, obviously all one needs to do is charge tolls on the new bridge. And, of course, all those people having to wait in rush hour in the middle of Minneapolis to pay those tolls will not be experiencing external social costs in order to achieve that wonderful private social optimum!
I was kind of puzzled by that discussion over at Becker-Posner, because it was so up-front about treating bridge maintenance as an issue marginal utility vs. marginal cost. These may be useful metrics for many commodities, but crossing a bridge isn't really a commodity: if it falls while I'm driving over it, my marginal utility is not just less than my marginal cost, it's something like negative infinity (or zero...not an economist, here, but my point is that extreme distributions of costs make marginal costs a poor tool). I may be also taking over some of their language from the previous discussion of airline safety, but again, what's odd is not that we should use economic tools to think about public services, but that we should think that a marginal utility function is always the ultimate metric.
Of course, if you believe that, then markets WILL alway produce the optimal allocation. And I suppose I'm not the first person to suggest that certain styles of argument in economics strike us, the uninitiated, as profoundly circular!
pquincy
i don't often follow the economists line of thought myself, but to give them their due:
you could put a thousand inxpectors on a bridge full time each of them testing their section of the bridge with full xray machinery, and inspectors of the inspectors and so on.
at some point you would begin to feel that you were spending too much money assuring the safety of this bridge.
so where do you draw the line?
well, my take is somewhere north of where the Minn DOT was drawing it, given the inspection reports i heard about
i would, in general, expect the public sector to do this more reliably than the private sector, but MinnDOT raises some doubts. of course given the extent to which the public sector today is a wholly owned subsidiary of the private sector, maybe not the doubts a commited privatizer would have.
coberly,
using your example, it looked to me that the tax would fall most heavily on those who have to drive more miles and have less fuel efficient vehicles.
what income segment of employees would be most impacted; which is least able to afford those more efficient vehicle, less able to afford to move closer to work?
same example, it looks like there's around 3000 in tax revenue in excess of the 400 tax cut - where does that 3000 go and for what?
lets expand this
tens of millions of workers obviously use more gas than a few million upper income people. the former would obviously pay the large majority of that 2/gallon tax, or, in aggregate, those with less would necessarily pay more.
what social and political reactions as worker are squeezed still more?
let me 'turn it over'
who gained the most from decades of supply-side and even a blip of 'stock market keynesianism' - they can afford to pay, but won't.
Juan
as far as i can tell your position appears to be to let the planet burn as long as no "poor" person has to give up his gas burner.
i am not sure what "the aggregate" has to do with justice: you seem to be saying that because a hundred million poor people at two dollars each would pay more than a million rich people at two dollars each... in aggregate... that the tax is unfair.
i hope that is not what you are saying.
Coberly,
No, my position has been simple. Tax the rich. Do not try to place greater burden on the already burdened and do not pretend that a consumption tax does not do this.
'save the planet' rhetoric becomes another ideological stick wielded by that class which has overseen the destruction and hope to perpetuate
by 'repairing' -- this class is not competent.
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