Paying for Itself

Tom Laskawy, over at Weaver's Way, takes on what he sees as Amtrak-hating Republicans. In the process, he appears to misunderstand what it means to call something a public good:

This drives me nuts. In an article by the AP on the House's omnibus budget bill comes a reference to: "the money-losing Amtrak passenger rail system"

Come on! How about the money-losing Interstate Highway System? Or the money-losing national parks? Or our money-losing VA Hospitals? Or the Mother of All Money-losers: the US Military?

At the Prospect, Ezra Klein falls for the same trap, complaining that

there's been a concerted effort over the past 30 or 40 years to paint Amtrak as uniquely wasteful because, like highways and parks and fighter jets, it loses money.

At first glance Tom and Ezra seem to have a point; we don't expect the military or our parks to literally pay for themselves. But I think that, on another level, the complaint totally misses the point of public goods.

The fact is that roads and the military actually increase our wealth. (Within reason; arguably a military that gets really damn big just becomes a sinkhole, but that's another issue.) Having a highway allows workers to get to my factory quickly and cheaply and it allows me to ship my goods cheaply and it allows you to get to the store and buy my goods more easily. Those things combine to make all of us wealthier. And, assuming that we've built our road in an area where all of these things happen on a regular basis, there's a pretty good chance that we have increased the total amount of wealth by more than the cost of the road.

Given that fact (and given the public goods problems involved in building the road in the first place), there's at least a decent libertarian case to be made for taxing people to construct the road. It's a collective investment that makes all of us better off. So in that very real sense, we do expect roads to make roads pay for themselves. The same can be said for the military; having a taxpayer-funded military keeping me safe from invasion gives me the freedom to invest more of my resources in producing widgets more cheaply and less in buying tanks to protect my inefficient but cheaper factory.

So, no, we don't think that roads and fighter jets have to literally pay for themselves. But we do think that they ought to provide more value than they cost.

Whether Amtrak does this is an open question. I mean, as someone who lives in the NE corridor, I like Amtrak. But passenger trains are mostly substitution for other available means of transit. Given that we already have roads that will get people up and down the NE corridor, the public goods argument for passenger rail is fairly weak. So it's not unreasonable to expect that various substitution-goods should have to be self-sufficient -- that trains, like the airlines with which they compete, should have to pay for themselves.

Now there is a possible public goods argument for trains, depending on how seriously one takes environmental concerns. But it's not the case, contra Ezra and Tom, that passenger rail is an obvious candidate for public good status. They would be better served by actually making that argument, rather than simply dismissing those who don't buy it as "train-hating b@stards."

UPDATE: Edited to strike out extraneous words. Next time I'll remember to proofread.

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Not impressed

That's the second idiotic thing I've seen quoted from Ezra Klein in the space of three days. The first time around, I gave him the benefit of the doubt by arguing that what he said was so idiotic on its face that it could not possibly mean what it actually said. I'm retracting that position now. I know little about "Ezra Klein" except that I see his stuff quoted a lot, which is why I defaulted to the assumption that he was worth reading.

Maslow's Hierarchy

probably applies to public good as well as human need. Right now there are more important matters than providing subsidized vacations.

I would add, also, that the

I would add, also, that the reason highways and the military lose money is that we don't charge for them, ostensibly because it's more trouble than it's worth. Actually, we do charge for highways (sort of) in the form of a gas tax, and I've heard that the gas tax raises enough to pay for highways plus subsidization of alternative transit, though I'm not 100% sure of that.

There are three possible reasons for Amtrak losing money:
1. We don't charge the right amount. If we charged the right amount for tickets, it would make money.
2. The externalities of driving are not fully internalized by the fuel tax, and the difference is more than Amtrak loses. This may well be true, but I doubt very much that Klein has done the math. And it's irrelevant anyway; if a higher fuel tax is needed to make Amtrak profitable, and we don't in fact have a higher fuel tax, Amtrack is still a waste of money.
3. Amtrak is, in fact, a net waste of resources, and would be even if we had a fuel tax high enough to internalize the externalities.

For what it's worth, I went from Seattle to Portland back in January, and considered Amtrak, but ended up driving because:

1. A four-person carpool was about half as much per capita as Amtrak.
2. The times were inconvenient. The last train leaves around 5:00-6:00 PM, depending on the day.

And that's just the stuff that was quoted here!

Decent libertarian case?

"Given that fact (and given the public goods problems involved in building the road in the first place), there's at least a decent libertarian case to be made for taxing people to construct the road."

What exactly is libertarian about a case for taxing people to construct a road?