One of the things I meant to get into in my transportation piece today is this: As a matter of social architecture, how do we go about aggregating interests?
The progressive view assumes that in most cases, one rich guy can effectively trump the interests of a large number of poor people, and that democratic processes are the instrument needed for reversing that. In practice, it seems to work in the opposite way: Putting more power into the hands of politicians increases the ability of small numbers of wealthy and/or powerful people to bend public affairs to their own interests. See: the Export-Import Bank, sugar subsidies and ethanol and basically everything else the USDA gets up to, the bailouts, Solyndra, GE’s tax bill, etc.
There’s a reason that things work out that way: The more decision-making is concentrated in political entities, the fewer people really make decisions, and the more power each of those decision-makers has. In the context of transportation policy, a congressional baron who wants an Amtrak station in his district or an interstate spur built in a way that just happens to benefit one of his cronies can get that done. Who is on the other side of the negotiating table? Likewise, a couple of rotten gazillionaires who want to use the federal government to keep you from buying the other guys’ sugar so that you can enjoy the many benefits that come from paying much more for their own sugar have an easy time getting that done. In public-choice economics, this is known as the problem of concentrated benefits and dispersed costs: Every sweetheart deal has a strong constituency in favor of it, but even a subsidy worth billions to a particular interest group only costs a few pennies per taxpayer, so nobody has a very strong incentive to fight those shenanigans.
The thing that progressives fail to appreciate—because they are in the business of failing to appreciate it—is that markets do an excellent job of aggregating the power of people of modest means, and the power of poor people, too. If you are a New York state politician leaning on the MTA to fix up some stations, it’s pretty easy to ignore the interests of poor people in the South Bronx, but a lot harder to ignore the interests of property owners on the Upper East Side or developers in Westchester County. But, strangely enough, South Bronx residents of modest means have considerable power in faraway Beaverton, Oregon, where Nike is headquartered. The typical person of modest means does not spend a great deal of money individually on sneakers, but collectively, they spend a great deal. Enormously powerful corporations—Nike, Walmart, Honda, Apple—are obliged to take into account the interests of classes of people who, as individuals, do not have a great deal of money or power. That is why Walmart works so much harder in the interests of low-income people than do corporate-welfare queens such as Elizabeth Warren, archpatroness of the Export-Import Bank. In the matter of a great many common consumer goods, global markets are bent toward the interests of people without much money—because that’s where all the money is, weirdly enough.
That sort of happy outcome is never going to be the case with government-dominated transportation systems, government-dominated education systems, or government-dominated health-care systems. The incentive structure isn’t right, and there is no way to make it right. All the happy talk about increasing voter turnout and political participation, community outreach, “bringing all the stakeholders to the table,” and all the rest of it, is rubbish, and very often it is cynical, intellectually dishonest rubbish deployed with malice aforethought by politicians looking after their own interests.
If you want to make institutions serve the interests of ordinary people, then you make their financial well-being dependent on their doing so. That means more markets, not more politics.