The Agenda

Counterfactuals

My latest column for The Daily is all about counterfactuals:

A shockingly large number of people, including Obama, seem to believe that had the federal government not stepped up to the plate in the postwar era and invested vast sums in highways and putting a man on the moon, the United States would have wound up an economic backwater. But perhaps not building a huge network of highways would have kept American families in more compact, walkable neighborhoods. Instead of sprawling suburbs and SUVs, we’d have more high-rises and bike lanes. The Interstate Highways helped supersize America’s government, by centralizing authority in D.C., and our waistlines, by encouraging us to drive and to fatten up on fast food. It’s not obvious to me that we’re better off as a nation plagued by high taxes and heart disease.

As for Sputnik, it led to a huge increase in federal funding for scientific research and K-12 education. Had we allowed the Russians to beat us to the moon, American families and firms might have kept more of their own money. Our state universities might have devoted themselves to churning out job-ready graduates instead of chasing federal grants. While the Soviets built enormous cities on the moon and Mars, financed by forced labor, we’d have devoted ourselves to becoming a richer, freer, more creative country. I love Neil Armstrong as much as the next guy, but I’d take that trade in a heartbeat.

If everyone zigs, it’s often a good idea to zag. 

My column was inspired by Robert Fogel, one of my intellectual heroes, and by a paper by economist Nathaniel Baum-Snow:

Between 1950 and 1990, the aggregate population of central cities in the United States declined by 17 percent despite population growth of 72 percent in metropolitan areas as a whole. This paper assesses the extent to which the construction of new limited access highways has contributed to central city population decline. Using planned portions of the interstate highway system as a source of exogenous variation, empirical estimates indicate that one new highway passing through a central city reduces its population by about 18 percent. Estimates imply that aggregate central city population would have grown by about 8 percent had the interstate highway system not been built.

There are, of course, many confounding variables at work, and there is no way to know what might have happened in the absence of limited access highways. Perhaps suburbanization would have occurred via blimp. I tend to think that early implementation of school vouchers would have also stemmed the tide of suburbanization, and the same is true of more effective policing during the crime explosion. Regardless, it is at least interesting that the paradigmatic example of a good federal program turns out to have been such a mixed bag.

 

 

Reihan Salam is president of the Manhattan Institute and a contributing editor of National Review.

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