Congestion and Classical Economics

One of the major goals of transportation planners is to relieve congestion on highways and surface streets.  They often do this by constructing new roads or widening existing ones.  Some more progressive planners attempt to take cars off the road by improving transit options and other alternative modes.  While I sympathize with the more progressive planners, they are just as wrong as the road-builders.  Experts have speculated since the 1950s and have known unequivocally since the 1960s that the only cost-effective way to alleviate congestion is to permanently reduce the amount of cars traveling on a road; and the only way that that can possibly be done (outside of $6/gallon gasoline) is to actually take away roads.  Here’s the most recent study to confirm these findings.

I completely understand when people hear this conclusion and think, “Huh?  How can this be?”  It seems counterintuitive: Why would I take away road space when the problem is that there isn’t enough of it?  Well, if that were the actual problem, that would be a logical question.  But the problem isn’t about a shortage of supply.  There are plenty of roads.  In fact, we have so many roads that we can no longer afford to self-finance new construction or the maintenance of existing roads.  We have a $4 trillion infrastructure deficit in this country, and we still think that building our way out of congestion is desirable.  By the way, one would think, with a deficit like that, that the Tea Party would be all over this on the local level.  Turns out that it benefits them and their local commute, so they don’t care.  But go ahead and take those benefits away from the unemployed, okay!)

The problem isn’t undersupply.  We know this.  All of the data points to it, and examples of tearing down freeways inPortlandand other cities have proved it.  So, what is the problem?  It’s complicated.  First, motorists look for the fastest routes to get to their destinations.  When news reaches their ears that the normally-clogged freeway was just widened by a lane or two, guess where they are headed.  Suddenly, even the committed transit-riders start seeing the personal time benefits of driving again.  In less then a year or two, the 12-lane freeway becomes a parking lot.  Of course, the taxpayers could have financed a 20-lane freeway and probably never would have reached capacity, but they also would have spent half of $1 trillion getting it.  It’s just not feasible.  But they were hoping adding an extra lane or two would buy them some breathing room for long enough that they could, ten years down the road, convince the taxpayers to put up the funds to widen it again.  That is when induced demand begins its conniving (and predictable) plot to undermine free-flowing traffic.

Ahh, yes.  Induced demand.  This is a phenomenon that occurs when an oversupply finds a way to actually create demand.  The demand didn’t exist before that.  In fact, the demand was fully satisfied with the current supply.  No one else thought it beneficial to use that congested road.  In fact, that congested road created demand for other forms of transportation.  When you think about it, this is kind of disturbing.  In our consumer culture, we tend to think that products and services exist because we demanded them.  But induced demand begs to differ.  What if we are told what to demand by what producers decide to over-produce?  Now we’re getting at the reason for why corn products are in 80% of all foods (don’t believe me?  Go read some labels at your local supermarket), careers that require less than a college degree are almost non-existent (we didn’t demand that), and brand new roads become crawl zones in a matter of months.  Adam Smith would be rolling over in his grave.

But when it comes to traffic (and, I would argue, everything else in life), Smith just isn’t relevant anymore.  The reason congestion occurs in the first place is because people are rationally acting in their own self-interest.  I want to get to work in the most convenient way for me as possible.  It’s too bad that everyone else has the same goal as well.  The result is that everyone and their uncles are traveling on the same road at the same time.  Nobel Prize winner John Nash had an alternative solution.  I will drive on the second most convenient road for me, and everyone else should as well.  For most of us, this might mean taking Redwood instead of I-15; for others, it might mean Highway 89; for others still, I-15 might now become a possibility.  With such a strong, complex, and varied network of roads in most American cities, Nash’s solution would at least relieve the worst of congestion (as well as the increasing income gap, massive consumer credit card debt, and other important economic and social problems).

I think Nash’s solution would show all of us even more clearly that reducing our road supply would actually make transportation more efficient.  Taxpayers would realize that the multi-billion dollar investment in that road that is not used to its capacity was a waste of money.  Maybe then they would learn to oppose such road additions in the future.  But let’s be realistic.  Nash revolutionized the way we engage and negotiate with foreign countries, but it will have a very difficult time holding sway in our me-first culture.  We all want it our way, right away, and that creates congestion.  So, why do we think that building more environments of the same nature will decrease the problem?  Mumford said it best: “People, it seems, find it hard to believe that the cure for congestion is not more facilities for congestion.”