A recent episode of Russ Roberts’ EconTalk podcast featured a wonderful intersection of interests: economics, public policy and public transit.

One of Russ’ academia friends, economist Michael Munger, speaks at length on the program about the public transportation system quality in Santiago, Chile before and after nationalization of their bus network.

Prior to 2007 Santiago’s surface transit was made up of a patchwork of thousands of independent, private bus operators. Operators specialized in niches ranging from neighborhood local busses which stopped at every block in a town to luxury express busses providing direct to city center service.

Since nationalization circa February 2007 the masses have expressed widespread complaints about the poor quality of the system. Wikipedia’s article on Transantiago sums up these complaints well:

The major complaints are the lack of buses and their inconsistent frequencies, missing or poor infrastructure (such as segregated corridors, prepaid areas and bus stops), the network’s coverage, and the number of transfers needed for longer trips.

I agreed in spirit that market based solutions can offer better outcomes than public, centralized planning in some situations. But, we shouldn’t get rid of public transit and city planning.

• I do agree that in controlled situations, a market solution is better. San Francisco’s publicly owned and operated transit system is largely a failure, spurring reactions identical to those of Santiago’s newly nationalized bus system. Here, Munger and Roberts are spot on in their complaints of the stupidity of nationalizing a once private resource. (Remember, SF had a patchwork of completely privately owned transit lines until around the 1910’s. Everything I’ve read says these competing systems provided excellent service, especially given available technologies.)
• But, I do not share Munger and Roberts’ idyllic view that free markets are the holy grail of public transport policy. Two reasons:
  • Just look at our suburban car-based communities. These communities are real life experiments in market based, unplanned transport and city zoning policies. These communities are a dismal failure.
  • While bus systems can arguably run with no government intervention, most other high-capacity transit systems need exclusive, government granted corridor rights-of-way, whether that be below ground subways, above ground rail corridors, or even fantastical elevated monorails. Like utilities, physical constraints necessitate government involvement to some degree.

Like many EconTalk podcasts, even if you don’t agree with everything, the discussion points a great alternative spotlight on conventional public policy views.

My favorite viewpoint: the entire concept of central transportation planning is communist at its core — an odd anomaly in a nation proud of its free-market ideology. Why should transportation “planners” dictate the best transportation routes? Our publicly owned and operated Muni is blind to the most powerful natural “planner” in the world: market feedback.

This viewpoint strikes me especially hard in the context of the impending Transit Effectiveness and the Geary BRT projects in the planning faces. With the TEP, the City is spending millions of dollars and years of research to accomplish what free market forces could do everyday, instantly, for free.

Link to podcast page (direct mp3 link)