If You Charge Them, Fewer Will Come

The "world in numbers" for our current print issue is a nifty map of the overtaxed highway infrastructure in our major urban areas. Under the circumstances, the case for more transportation infrastructure is compelling, but it's worth underscoring the fact that you're never going to have anything more than a very temporary solution to congestion problems until you start implementing congestion pricing.

Building a highway, after all, costs money. But it creates something of value -- the chance to drive on an uncrowded roadway. But if you just give this valuable opportunity away for free, then people wind up consuming too much of it and soon enough there's no uncrowded roadway left. It's just like overfishing or any other "tragedy of the commons" issue. When you see construction of a new, unpriced and it's not likely that it'll soon become overcrowded, you're looking at a porkalicious "bridge to nowhere" sort of phenomenon where people are constructing something that has a cost out of proportion to its value. Anything that's genuinely valuable and also given away for free is going to wind up overconsumed.

Which isn't to say that we shouldn't build roads. Reasonably uncrowded highways really are valuable and we should want to have them near our major economic centers. But to get that we need to charge for access to them during peak travel periods. That will, when done appropriately, ease the overcrowding and create revenues that can subsidize activities with small-to-zero marginal costs like non-peak driving and rail travel.