The Road to Serfdom Isn't Paved

Richard Green sends readers to this article about how China has been expanding its network of paved roads, despite a dearth of cars and car owners at present. They are devoid of traffic now, but ready for the day when growth in China's economy produces millions of car owners.

The US experienced a similar expansion in our national roads system during the post-war years of the Eisenhower administration. As most of my readers know, Ike had a stellar military career followed by a pretty decent political career. This was back in the days when both sides of the congressional aisle still did occasional collaborative work for a common purpose: advancing the good of the people of the United States of America. (Disclaimer: despite this blog showing up on left and progressive websites with some regularity, the author is in many ways conservative and can, if pressed, even find a few good things to say about Richard Nixon).

As a military leader, Ike was keenly aware of the advantages of good highways for troop and supplies movement. If you doubt this, pick up any book about the US civil war and search on the eponymous "plank road," a type of road which was apparently ubiquitous in the 1860's. Then note the frequency with which a combination of "plank road" and "bad weather" determined the movements of troops and supplies and, consequently, the outcomes of battles.

But Ike wasn't just a military leader, he was a leader of a nation; a capitalist nation built on commercial enterprise. He recognized the commercial value of a road system in transporting goods long distances. What he may not quite have anticipated was the extent to which it would foster commercial exchange at the bottom and middle of the economic pyramid. With an expanded road system, small farmers are no longer hindered by distance to market. Manufacturers in remote locations, far from rail terminals, can expand output and reach distant markets with greater ease. It's true that the trucking industry enabled by the new US highways provided new competition to an already heavily regulated and faltering rail system, but the benefits that must be tallied against this harm are improved access for small farmers and businessmen and women to national markets and the easier and expanded commutes of office and factory workers both to grandma's house and to work that resulted from an expanding economy. Carbon footprints were of no concern back then.

Now the Wall Street Journal tells us that the economic downturn is causing some small towns in more rural sections of the US to tear up asphalt roads and return them to gravel.

In Michigan, at least 38 of the 83 counties have converted some asphalt roads to gravel in recent years. Last year, South Dakota turned at least 100 miles of asphalt road surfaces to gravel. Counties in Alabama and Pennsylvania have begun downgrading asphalt roads to cheaper chip-and-seal road, also known as "poor man's pavement." Some counties in Ohio are simply letting roads erode to gravel.

The moves have angered some residents because of the choking dust and windshield-cracking stones that gravel roads can kick up, not to mention the jarring "washboard" effect of driving on rutted gravel.

But higher taxes for road maintenance are equally unpopular. In June, Stutsman County residents rejected a measure that would have generated more money for roads by increasing property and sales taxes.

"I'd rather my kids drive on a gravel road than stick them with a big tax bill," said Bob Baumann, as he sipped a bottle of Coors Light at the Sportsman's Bar Café and Gas in Spiritwood.

Well, there you have it. "I'd rather my kids drive on a gravel road than stick them with a big tax bill." What if the paved road will enable them to make more money? Would that alter Mr. Baumann's benefit-tax analysis? What if an ambulance got someone to hospital in time to save their life? Would that alter a world view in which all taxes are bad?

I read an article in Smithsonian magazine last year about an old Roman highway, the Via Aurelia.

In 12 B.C., Augustus, at the height of his power, commanded his legions to build a highway that would traverse the province of Gallia Narbonensis, or southern Gaul, the last of whose unruly tribes had only recently been subdued. Over the next ten years, surveyors, engineers and construction crews carried off one of antiquity's greatest feats: grading and paving a road from the mountains above the Mediterranean near modern Nice to the Rhone River, 180 miles distant. For nearly four centuries, the Via Aurelia served as the region's principal artery, over which armored legions, charioteers, couriers, traders, government officials and countless others passed. It was the Interstate 95 of its time, complete with rest stops and chariot service stations every 12 to 20 miles—a crucial part of a 62,000-mile road network that extended from the Iberian Peninsula to Asia Minor. Along this paved and finely graded route, Rome maintained its control over far-flung provinces, developed commerce, and disseminated its culture and architecture. But as the empire began its long decline—Rome would fall in the fifth century A.D.—the Via Aurelia began to disintegrate.

I remember thinking at the time: "are our roads the canary in the coal mine?" As they crumble, so do we? How does it happen?

But beginning around A.D. 235, the Via Aurelia fell on hard times. After centuries of political stability, a series of military coups roiled the empire. Roman divisions began turning on one another, the value of currency plummeted, urban renewal ceased and towns and entire districts were abandoned.

Are the number and condition of our roads leading indicators of a lost sense of common cause, lost shared purpose, crumbling political stability? Do we stop investing in and maintaining public goods because we feel no common cause with the other people likely to benefit from them? How do empire's crumble? Surely from within, at least at first. The internal weakening of shared purpose and sympathy, bolstered by mindlessly shrinking tax revenues that  otherwise would have maintained the infrastructure of a complex, advanced capitalist and commercial society, must make it easier for the barbarians to storm the maintenance-deferred, crumbling gate.

At moments like this, I have trouble speaking (or in this case, writing). I'm no historian. I don't know the answers to the above questions. As an economist, I know that some roads probably aren't by any metric worth being maintained or improved or built. Either they lead nowhere or there will be no increased productivity that results or in purely utilitarian terms, the opportunity costs for the rest of us more than offset the small, but possibly significant, individual benefits to the few who use them. In an ideal world, a market would help us make these decisions. By definition, there are no markets for public goods.

The astute among you will point out that even if untraveled rural roads are melting back into the prairie, we still have a substantial network of interstate highways. True. Unfortunately, a GAO report in 2002 anticipated that even in the absence of the recent and then unforeseen economic contraction, highway maintenance would fall behind over the next 10 years, while congestion would continue to impose costs on commuters, long-haulers, and the nation generally. And carbon footprint now matters.

We have to make a collective choice. In effect, we must answer the question: how shall our grandchildren live? It is not helpful either to us or to our grandchildren to view this as Mr. Baumann apparently does as a pure tax minimization problem. It would be analogous to deciding we wanted to minimize health care costs without a quality or outcome constraint. As I have told students repeatedly in the context of health reform: if your only objective is minimizing cost, let everyone die untreated. Costs, like taxes, are only one piece of the decision-making equation.

I have written about this before. There are many things for which I would gladly accept indebtedness passed forward from my ancestors: better health, better education, better roads, better infrastructure, community lighting and safety, sanitation, disease control, higher productivity, better access to information and knowledge, and all the technology that makes cleaning my house easier.

Robert Shiller quotes John Maynard Keynes saying much the same thing:

“Thus we are so sensible, have schooled ourselves to so close a semblance of prudent financiers, taking careful thought before we add to the ‘financial’ burdens of posterity by building them houses to live in, that we have no such easy escape from the sufferings of unemployment.”

What passes for discussion about social choice and taxation in this country has become the sound of one hand clapping. The divisions in discourse have been strategically engineered by interests whose objectives I do not understand, but that I am sure are not the commonweal. The divisions are fueled by oblique appeals to base sentiments about race, class, and sexual preference that all of us harbor to a greater or lesser extent. They drive wedges on issues on which most would otherwise agree and from which most would benefit near equally from the same solution. While sentiments are used to divide us, a nation founded on the idea of a government of, by and for the people lists dangerously toward income inequality and its bedfellow, concentrated economic and political power, while we bequeath to our grandchildren a world in which they travel a network of gravel roads with barely a high school education, they live in cities and towns with failing sewers and water systems, and risk their and our great grandchildren's lives crossing crumbling bridges and overpasses.

But their taxes will be low. I wonder if they'll thank us?

Comments

[Richard Green]

I enjoyed the post (and not just because you link to me. And here is Adam Smith:

From Chapter 11 of the Wealth of Nations:

Good roads, canals, and navigable rivers, by diminishing the expense of carriage, put the remote parts of the country more nearly upon a level with those in the neighbourhood of the town. They are upon that account the greatest of all improvements. They encourage the cultivation of the remote, which must always be the most extensive circle of the country. They are advantageous to the town, by breaking down the monopoly of the country in its neighbourhood. They are advantageous even to that part of the country. Though they introduce some rival commodities into the old market, they open many new markets to its produce. Monopoly, besides, is a great enemy to good management, which can never be universally established but in consequence of that free and universal competition which forces everybody to have recourse to it for the sake of self-defence. It is not more than fifty years ago that some of the counties in the neighbourhood of London petitioned the Parliament against the extension of the turnpike roads into the remoter counties. Those remoter counties, they pretended, from the cheapness of labour, would be able to sell their grass and corn cheaper in the London market than themselves, and would thereby reduce their rents, and ruin their cultivation. Their rents, however, have risen, and their cultivation has been improved since that time.

[rjs]

hey, it could be worse...the road im living on, which was once gravel, has deteriorated to dusty dirt, which is mostly mud in the spring...and one of the original dirt road accesses to the wetlands area that im in has already overgrown with bushes & small trees...

[save_the_rustbelt]

I'm sitting in mid Michigan today, a few miles from dirt roads and a few miles from a sophisticated highway system.

I'm just wondering if I can become an economist or a journalist and write about something I know nothing about.

Paving roads that connect deer camps and fishing spots is hardly going to revitalize the economy of Michigan, or anywhere else for that matter.

Michigan has a complex and convoluted tax system (although better than a few years ago) which punishs just about everyone and rewards only "chosen" companies and "chosen" workers (unions).

[Michael Cuccaro]

I enjoyed the wisdom of this article. But there is a comment that I can't resist making.
You said at the end:

"Their taxes will be low...."

Since taxes are a portion of income, if income is low, then taxes can become higher and higher as the income drops, as you know. So as the conditions are allowed that reverse the trend to greater potential for people to earn, their taxes never get lower. They are only taxed more and more by life.

Thanks for the article.

[tjfxh]

Economic surplus (in excess of the contribution of the factors of production) that is not taxed is parasitically extracted as economic rent (land rent, monopoly rent, and interest) by financial capitalism. This is the current parasitical role of FIRE in the US economy. It is eating the vital organs and the seed as well. See Michael Hudson for elaboration.

[rjs]

ill bet a lot of old cities have this problem:
"Key intersection at Public Square caves in"

http://blog.cleveland.com/plaindealer/2008/03/key_intersection_at_public_squ.html

[Twirth5]

@save_the_rustbelt: Please go on a long vacation at a deer camp or Fishing spot on a dirt road. While you're there, please ponder what you'd prefer:

1) improved infrastructure for all
2) rewards for corporations, or
3) "rewards" for unions, who by the way are the only organizations standing between the working class and the plutocracy.

Know any union workers that are living large? Or, are you jealous because they still have benefits that were yanked out from underneath you 30 years ago?

Please go on collecting your Social Security and Medicare. But in the meantime, STFU.

[Geoff Davies]

Well said. I've been wondering lately when it might dawn on Americans (US variety) that they're destroying their economy, and their power, influence, greatness, etc. The great experiment initiated by Reagan, to vilify all government and shrink it until it can be drowned in the bath, isn't working.

I lived in the US for 15 years before returning to my native Australia. I watch with concern. Not least because our governments mutely follow all the latest political/economic fashions.

[Lee]

Have you ever driven on a chip-and-seal road? I live in the country and I would far rather ride on a chip and seal road than to smell them lay asphalt!