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Google cars versus public transit: the US’s problem with public goods

I have an excellent job at a great university. I have a home that I love in a community I’ve lived in for two decades where I have deep ties of family and friendship. Unfortunately, that university and that hometown are about 250 kilometers from one another. And so, I’ve become an extreme commuter, traveling three or four hours each way once or twice a week so I can spend time with my students 3-4 days a week and with my wife and young son the rest of the time.

America is a commuter culture. Averaged out over a week, my commute is near the median American experience. Spend forty minutes driving each way to your job and you’ve got a longer commute than I in the weeks I make one trip to Cambridge. But, of course, I don’t get to go home every night. I stay two to three nights a week at a bed and breakfast in Cambridge, where my “ludicrously frequent guest” status gets me a break on a room. I spend less this way than I did my first year at MIT, when I rented an apartment that I never used on weekends or during school vacations.

This is not how I would choose to live if I could bend space and time, and I spend a decent amount of time trying to optimise my travel through audiobooks, podcasts, and phone calls made while driving. I also gripe about the commute probably far too often to my friends, who are considerate if not entirely sympathetic. (It’s hard to be sympathetic to a guy who has the job he wants, lives in a beautiful place, and simply has a long drive a few times a week.)

Hearing my predicament, one friend prescribed a solution: “You need a Google self-driving car!” The friend in question is a top programmer for a world-leading game company, and her enthusiasm for a technical solution parallels advice I’ve gotten from my technically oriented friends, who offer cutting edge technology that is either highly unlikely to materially affect my circumstances, or would improve some aspect of my commute rather than change its core nature. (Lots of friends forwarded me Elon Musk’s hyperloop proposal. And lots more have suggested tools I can use on my iPhone so that a synthetic voice will read my students’ assignments aloud while I drive.)

“I don’t want a Google car,” I tell her. “I want a train.”

In much of the world, a train wouldn’t be an unreasonable thing to ask for. New England has a population density comparable to parts of Europe where commuting by train is commonplace. I live ten kilometers north of downtown Pittsfield, MA, which lies on a rail line that connects Albany, NY with Boston. There is, in fact, one train per day from Pittsfield to Boston. It takes almost six hours to make a journey that can take me as little as 2.5 hours (if there’s no traffic) to drive, and operates at a time that makes it impossible for me to use it for business travel. I want a European train, a Japanese train, not necessarily a bullet train, but something that could get me from the county seat of Berkshire county to the state capitol in under two hours.

Such a train exists on some of the proposed maps for high speed rail service in New England. But given the current government shutdown, and more broadly, a sense that government services are contracting rather than expanding, it’s very hard to imagine such a line ever being built. In fact, it’s much easier for me to imagine my semi-autonomous car speeding down the Mass Pike as part of a computer-controlled platoon than boarding a train in my little city and disembarking in a bigger one.

There’s something very odd about a world in which it’s easier to imagine a futuristic technology that doesn’t exist outside of lab tests than to envision expansion of a technology that’s in wide use around the world. How did we reach a state in America where highly speculative technologies, backed by private companies, are seen as a plausible future while routine, ordinary technologies backed by governments are seen as unrealistic and impossible?

The irony of the Google car for my circumstances is that it would be inferior in every way to a train. A semi-autonomous car might let me read or relax behind the wheel, but it would be little faster than my existing commute and as sensitive to traffic, which is the main factor that makes some trips 2.5 hours and some 4 hours. Even if my Google car is a gas-sipping Prius or a plug-in hybrid, it will be less energy efficient than a train, which achieves giant economies of scale in fuel usage even at higher speeds than individual vehicles. It keeps me sealed in my private compartment, rather than giving me an opportunity to see friends who make the same trip or meet new people.

There’s a logical response to my whiny demands for an easier commute: if there were a market for such a service, surely such a thing would exist. And if train service can’t be profitably provided between Pittsfield and Boston, why should Massachusetts taxpayers foot the bill for making my life marginally easier?

This line of reasoning became popular in the US during the Reagan/Thatcher revolution and has remained influential ever since. What government services can be privatized should be, and government dollars should go only towards services, like defense, that we can’t pay for in private markets. As the US postal service has reminded us recently, they remain open during the government shutdown because they are mandated by Congress to be revenue neutral. Ditto for Amtrak, which subsidizes money-losing long distance routes with profitable New England services and covers 88% of expenses through revenue, not through government support. Our obsession with privatization is so thorough in the US that we had no meaningful debate in the US about single payer healthcare, a system that would likely be far cheaper and more efficient than the commercial health insurance mandated under the Affordable Care Act – even when governments provide services more efficiently than private markets, the current orthodoxy dictates that private market solutions are the way to go.

The problem with private market solutions is that they often achieve a lower level of efficiency than public solutions. Medicare has tremendous power to negotiate with drug manufacturers, which brings down healthcare costs. Private insurers have less leverage, and we all pay higher prices for drugs as a result, especially those whose healthcare isn’t paid for my a government or private organization and who have no negotiating power. The current system works very well for drug companies, but poorly for anyone who needs and uses healthcare (which is to say, for virtually everyone.)

It’s possible that the same argument applies to transportation, though the argument is less direct. It’s not that a federal or state government can provide train service to western MA at a cost that’s substantially lower than a private company (though they might – Medicare’s aggressive audit process helps keep costs down by minimizing waste.) It’s more that transportation has ancillary financial benefits that are hard for anyone other than a state to claim.

Real estate in Boston is insanely expensive, either to buy or to rent. That’s because lots of people want to live and work in Boston and the supply of real estate is relatively scarce compared to demand. In much of the rest of Massachusetts (let’s say, anywhere west of I-495), jobs are relatively scare and real estate is plentiful. Cities like Worcester, Holyoke, Springfield, Greenfield and Pittsfield experienced peak population decades ago and have been on the decline ever since. These cities and their surrounding communities are nice places to live, though they suffer from a shrinking population and tax base.

If there were a high-speed rail corridor from Boston to Albany, through Worcester, Springfield and Pittsfield, we would expect real estate in those cities to become more valuable as people fed up with Boston rents moved to smaller cities and the countryside, using high speed rail to commute to schools and jobs. This would have the salubrious effect of increasing the tax base for the most vulnerable communities in MA, though it might decrease the tax base in the most densely settled parts of Massachusetts. Then again, lowered density might be a good thing – few people stuck on I-90 or I-93 on their way into Boston on a Monday morning think the city and its suburbs works especially well at current density.

This model of rail turning undesirable land into desirable land is basically the model that enabled westward expansion during the 19th century – the US government and rail companies struck a deal that shared ownership of land along the new rail lines. Railroad companies sold land to new immigrants and to those willing to trade urban density for rural opportunity to finance their construction, and the government used revenues from land sales to fill public coffers.

But western MA is not unclaimed land. High speed rail will make some landowners wealthy while leaving others relatively untouched. The only entity that can capture the value generated by an infrastructural improvement like high speed rail is a government – local, state or federal – which can claim a share of those increased property values through taxation. If high speed rail makes it possible to live in Springfield and work in Boston, it might – over time – generate enough traffic to make running the service profitable. In the short term, however, we’d see Springfield better able to pay for schools and public services, a not insignificant development for a community that’s facing severe economic problems.

Who loses? Residents of Boston and surrounding suburbs. We’d expect rents and property values to decrease somewhat as demand lessens. And we’d be generating public debt through a bond issue, much as when citizens throughout Massachusetts subsidized the Big Dig, despite the fact that the massive infrastructure project did little to benefit residents of Pittsfield, on the other side of the state. We would be engaged in a transfer or wealth from the wealthiest part of our state to some of the poorest, hoping that, in the long run, our poorer communities would become more self-sufficient and sustainable, and would do a better job of supporting the state as a whole.

Is such an investment worthwhile? I don’t know – it’s the sort of issue one would expect to debate, trying to determine whether future spending is likely to generate significant enough economic gains that a long term investment is worthwhile. But we seem to be losing the ability to have these long-term debates. Experts warn of crumbling infrastructure throughout the US, as exemplified by broken bridges and collapsing freeways. A quick trip to any city in the Middle East or Asia is a stark reminder of how antiquated most of our public transit systems are, in those places where they exist.

The US has a problem with public goods. After thirty years of hearing that government can do nothing right and that the private sector is inevitably more efficient, my generation and those younger tend not to look towards the government to solve problems. Instead, we look to the private sector, sometimes towards social ventures that promise to turn a profit while doing good, more often towards fast-growth private companies, where we hope their services will make the world a better place. Google can feel like a public good – like a library, it’s free for everyone to use, and it may have social benefits by increasing access to information. But it’s not a public good – we don’t have influence over what services Google does and doesn’t provide, and our investment is an investment of attention as recipients of ads, not taxation.

It’s unthinkable for most Americans to posit a government-built Google, as the French government proposed some years ago. But it’s likely that long established parts of our civic landscape, like libraries and universities, would be similarly unthinkable as public ventures if we were to start them today. (You want to lend intellectual property at zero cost to consumers who might copy and redistribute it, and you’d like local government to pay for it? What sort of socialist are you?!)

This unwillingness to consider the creation of new public goods restricts the solution space we consider. We look for solutions to the crisis in journalism but aren’t willing to consider national license models like the one that supports the BBC, or strong, funded national broadcasters like NHK or Deutsche Welle. We build markets to match consumers with health insurance but won’t consider expanding Medicare into a single-payer health system. We look towards MOOCs and underpaid lecturers rather than considering fundamental reforms to the structure of state universities. We consider a narrow range of options and complain when we find only lousy solutions.

My student Rodrigo Davies has been writing about civic crowdfunding, looking at cases where people join together online and raise money for projects we’d expect a government to otherwise provide. On the one hand, this is an exciting development, allowing neighbors to raise money and turn a vacant lot into a community garden quickly and efficiently. But we’re also starting to see cases where civic crowdfunding challenges services we expect governments to provide, like security. Three comparatively wealthy neighborhoods in Oakland have used crowdfunding to raise money for private security patrols to respond to concerns about crime in their communities. Oakland undoubtably has problems with crime, in part due to significant budget cuts in the past decade that have shrunk the police force.

It’s reasonable that communities that feel threatened would take steps to increase their safety. But if those steps focus only on communities wealthy enough to pay for their own security and don’t consider broader issues of security in the community, they are likely to have corrosive effects in the long term. Oakland as a whole may become more dangerous as select communities become safer. And people paying for private security are likely to feel less obligation to paying for high-quality policing for the city as a whole if they feel that private security is keeping them safe – look at the resentment people without kids and people whose kids are homeschooled or in private school express towards funding public schools.

On the one hand, I appreciate the innovation of crowdfunding, and think it’s done remarkable things for some artists and designers. On the other hand, looking towards crowdfunding to solve civic problems seems like a woefully unimaginative solution to an interesting set of problems. It’s the sort of solution we’d expect at a moment where we’ve given up on the ability to influence our government and demand creative, large-scale solutions to pressing problems, where we look to new technologies for solutions or pool our funds to hire someone to do the work we once expected our governments to do.

27 thoughts on “Google cars versus public transit: the US’s problem with public goods”

  1. “But it’s not a public good – we don’t have influence over what services Google does and doesn’t provide, and our investment is an investment of attention as recipients of ads, not taxation.”
    That’s a non-standard usage of “public good”. A non-excludable, non-rivalrous good is “public”, regardless of who provides it. There are a number of different ways in which public goods may be provided, and many of the good provided by government are not public. Even rail service is not a public good!

    If Amtrak was privatized (or just no longer required to subsidize unprofitable routes), would you regard that as an improvement?

    “the crisis in journalism”
    It seems like the internet has greatly expanded access to journalism, even if it might be harder to make a living as a journalist.

  2. This seems to miss the fact that car travel is only as fast and economical as it is because of massive investment in roads and highways (and continuing investment in their maintenance) as a public good. Gas taxes don’t come close to even covering the maintenance costs of major highways, so congress keeps having to divert general revenue to the highway trust fund, and local roads are paid for entirely out of local property taxes.

    While high speed rail does have some impact on property values near stations that is hard for the rail operator to capture, this impact is much lower than with local transit; most of the benefits of high speed rail accrue directly to riders, who can be charged fares that reflect this. As a result, the vast majority of high speed rail lines in the world are profitable. In Japan, JR Central is even planning to spend over $90 billion dollars of its own private money to build an even faster (maglev-based) line from Tokyo to Osaka. For that matter, most railways in the world were originally built by private investors who expected to make back their investment from fare revenues – railways definitely don’t need to be a public good.

    The obstacles to a private investor building high speed rail in the US are primarily:
    1) The competition in the form of highways is massively subsidised. Admittedly in your example I-90 is tolled but the tolls should be higher and the feeder roads at either end that make it useful are not. Cars are also subsidised indirectly with zoning-mandated parking minimums and similar (and of course get away without paying for their pollution and congestion externalities).
    2) The Federal Railroad Administration, which regulates mainline rail in the United States, suffers from a combination of not-invented-here syndrome (refusing to embrace practises that work well elsewhere in the world) and regulatory capture by the freight railroads (who want to keep their maintenance costs and liabilities as low as possible, so passenger trains are required to be ridiculously heavy to survive collisions with freight, the banking of curves can’t be designed for high speeds, etc).
    3) It has never been possible to get enough land in a straight line for any kind of transportation infrastructure without eminent domain/compulsory purchase powers. Backlash against the overuse of such powers to build freeways etc in the mid-20th century has made local and federal governments less willing to use or delegate them, and has led to “environmental” legislation that makes it very easy for property owners to stall projects on minimal grounds.

    The US does have an unfortunate tendency in many fields to reject good solutions purely because they are “socialist”, with the health care system being the most obvious and unfortunate example. But transport really isn’t an example; trillions of dollars worth of free government-owned roads on which people of almost all classes wait in traffic jams (i.e. bread lines) are as “socialist” as it gets.

  3. Good read. I think America’s woes with public transportation primarily lies with it’s culture of ‘rugged individualism,’ and doing things on their own terms, when they want to do it. Although I agree with you, and I think America could benefit from better public transit, I don’t see it happening anytime soon.

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  7. Tanks for your great story.
    I live in a country with a railway system that might appeal to you and am involved in it’s planning.
    First I can confirm that it really works the way you describe. I know quite a few people living that far away from their work benefiting from a daily or weekly commute by train. And it’s not only for the good of the individual, it’s also cities and companies who benefit from a larger pool of potential employees.
    Second, I’m afraid to say, the policy of getting and maintaining a railway system here isn’t easy either. State companies really tend to get big and inefficient over time and find it difficult to provide good customer service. We have had partial privatization and a lot of experimentation with mixed forms of public/private organization. The current equilibrium is a government who owns and finances the railway infrastructure and issues a tendering process where private companies can win a concession for the operation. I don’t think there is a best solution but searching for a mix that combines public and private elements might be a good thing.

  8. I don’t see that Boston and suburb residents necessarily lose. HSR would converge on Boston; our Big City would be come a bigger city, with even more jobs, even more culture, etc. The tax code, which is busted, would not necessarily reward outlying suburbs for becoming more desirable, and it would reward near-Boston towns that attacted more commercial development (because people with kids to educate cost tax money, businesses yield tax money).

    One of the potential routes — the one that connects to the Fitchburg line — runs within 600 feet of our home, and a potential stop is only half a mile away, though I am not sure it is important enough to warrant a HSR stop.

  9. There are some good precedents in how to capture the value around mass transit. Hong Kong uses a ‘Rail + Property’ model in which the rail operator, MTRC (majority government-owned), purchases land from the government at a ‘before rail’ price and sells the rights to a contractor at an ‘after rail’ price. MTRC uses the difference in price (usually large) to cover the cost of railway investment, and takes a share of property development profits and/or co-ownership of the company. The government is the majority shareholder of MTRC and is given exclusive development rights to the land, but doesn’t receive any other public subsidy. The model was partly inspired by the nineteenth and early twentieth century US railroad development corporations, although the extent to which government was involved in those corporations varied significantly, state by state – e.g. during the nineteenth century, Philadelphia’s was largely privately financed, whereas Virginia’s received the majority of its financing from government.

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  11. Another issue is that items like a Google car aren’t really meant to be a solution. They’re a type of postponement or distraction that keeps people talking while not interfering with the status quo – precisely what the power interests want.

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  13. Good perspective. To strengthen the point, I now live in Italy: I chose a location that had a good rail link into Milan and have little use for a car. The rail line was a single set of rails, with stations doubled up to allow cross flow. Only one station had a single set and was an obvious bottleneck. Instead of doubling up that one, they went and spent 20 million Euro to double up 20km of track. This was not for efficiency purposes, but a gift to real estate developers: with an efficient set-up they stand the most to gain. So even public means have private ends.

    One of the better public transit systems is in Venice. I’ve worked there; I could rely blindly on their schedules (one of the advantages of going slower!). Most people who work there live outside and need to take both a train and vaporetto.

    Mind you, Italians are just as hooked to their cars as Americans. In the south (and I travel incessantly northwest-southeast via trains – bullet and regional), notwithstanding reliable though insufficient public transit, folks will still take their cars for the most futile of motives.

    It adds up to a better context than the American approach you correctly qualify: so-called-pragmatic-but-highly-ideological and not-invented-here.

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  16. The point about the failures of imagination and their very real consequences on what we can build is a good one.

    On a side point there’s some good work looking at the move in Europe from rail to short hop flights that really de-romanticized trains for me. Rail lines turn out to be fairly inflexible with high maintenance cost, and frequent (though comparatively low risk) breakdowns.

    True high speed rail (and hyperloop style speeds) change the value proposition again in both directions, but standard train seems like something that ought to be replaced by quality busing (maybe even self driving buses, though it isn’t clear to me there is a win there as salaries for bus drivers aren’t that high)

  17. “There is, in fact, one train per day from Pittsfield to Boston. It takes almost six hours …”

    Well, the scheduled time is 3:40 west and 5:00 east, but that’s because there’s 1:30 of schedule padding from Framingham to Boston, because the inbound train is so often running late.

    That being said, in 1952, Pittsfield to Boston trains ran in a more-respectable 3:08. It would certainly benefit people across the Commonwealth if there was reliable three-hour service from one side of the state to the other.

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  19. I don’t know why you need to contrast higher speed rail with Google cars. These are two very different technologies. HSR is still a train, and Google Cars are still cars. And they are different in different metrics.

    The Google Car is a robot taxi. It’s effect is the same as if there were a government subsidized, pervasive network of taxis with a fares structure, say of the average mileage reimbursement on a private car, something like .25 a mile.

    The effect of 300 mph trains, as you illustrate, is to turn a rural area into a suburb. Suddenly an entire state can be a “metro area”. And given constant population levels (which given our birth rate and the end of large immigration seems possible) we would expect there to be more and cheaper land, and lower density living, with a possible average decrease in property taxes because of less need for heavy duty “infrastructure” around our towns and villages.

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  21. “This unwillingness to consider the creation of new public goods restricts the solution space we consider.” Seems that the US lost the cold war. The Russians may have lost the power game, but the Americans lost their sense.

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