Hi everyone. Well, after an incredibly productive day yesterday spent working the yard, my immune system decided to take the rest of the weekend off. I woke up this morning around five with aches, a mild fever, and that special kind of nasty taste in my mouth that only a cold can bring (hint: think an ass-flavored fruit roll-up … with no fruit). On strict orders from Nurse Wife, I spent the day in bed. Normally, getting sick really bugs the crap out of me, as I like to stay busy and be busy, even if that means just cleaning up my MP3s or sorting paperclips by color and size. (Don’t put it past me.) But it was actually really nice to have a day of forced rest. We’ve both been ridiculously busy lately, Ms. Wife (and she is known in her new role as a middle-school math teacher in Frayser) especially, so I very much appreciated the downtime, even if Ms. Wife had to spend most of the day working on lesson plans for the next week. Plus, I managed to plow through a stack of half-read New Yorkers while I rested. Not even a cold can stop me.
But enough about my unproductive productivity. I have some articles I’ve been saving for just the right time, which is now.
First, are cyclists the new limousine liberals? Well, assuming that taking a limousine to work involves profuse sweating, dealing with surly drivers, and the ever-present danger of being run off the road, sure. But that’s not the point. Some libertarians in Washington D.C. are apparently taking issue with public subsidies for the city’s very popular and successful bike-sharing program. Their beef is that most of the riders are college-educated and white, characteristics that don’t reflect the city’s population. (The article does a good job of addressing that objection.)
The larger question for me revolves around subsidies. From an economics perspective, goods and services should be subsidized when the value to society exceeds the value to the individual. In the case of bike infrastructure, there is just such a difference in value. It has to do with the congestion externality created by vehicular traffic. Essentially, the individual’s decision to drive a car is motivated largely by individual costs: fuel, repair, and so on. But the individual’s decision to drive also creates other costs which are not directly paid by the individual. Among those costs are the reduced driving times experienced by other drivers when one more car enters a roadway. These congestion costs are a negative externality, a cost generated by each individual but not paid by those individuals. Generally speaking, negative externalities result in too much of some thing being done. In this case, too many miles driven.
Cycling however carries very little congestion externality, especially in cities with robust infrastructure for cyclists. So, a subsidy for these programs is entirely justified, as it uses a public payment to reduce a public cost. It is worth noting that other solutions to the congestion externality, like congestion taxes, are far less popular (and politically feasible), so targeting these public funds at programs that are popular makes sense. Plus, there are positive externalities associated with cycling, like enhanced productivity (which might be fully captured in higher wages) and decreased reliance on healthcare (which would be more difficult to capture). Indeed, there are estimates of the net gain from cycling, and the net costs from driving.
Whatever the case, I think the subsidies are fully justified. It would be good to see the city take steps to improve access to the program for low-income residents. But given that libertarians are not known for arguing in favor of government programs to alleviate poverty (beyond an often misguided belief that smaller government = more freedom), it appears that their concerns are motivated more by ideology than sound economics.
Speaking of economics – and who doesn’t tremble with joy on hearing those words? – this brief article on the Marginal Revolution blog asks about the socially optimal level of bike danger. OK, it’s really just a repost from an email to the authors of the blog, but it raises an interesting question. Again, we see the presence of an externality, again a negative one. The externality is the one cyclist’s decision to obey the rules of the road leads to expectations about the overall lawfulness (or lawlessness) of cyclists. So, if a majority of cyclists in Memphis are law-abiding citizens, stopping at traffic signals and so on, then drivers should expect that any given cyclist will be law-abiding. The danger, according to the letter, is if a large number of cyclists are scofflaws. This could change the expectations of drivers about cyclist behavior and potentially lead to more conflicts, accidents, and so on. (Note: I’ve written about this before.) And, at least one person thinks that being a lawbreaker is ethical. Works for me!
Let’s talk for a minute about the phrase “socially optimal.” Basically, a good or service is produced at a socially optimal level when the value to society of the last unit produced equals the cost to society. So, thinking about cyclist behavior, the socially optimal level of bike danger (or safety) is found where the benefit of one more instance of dangerous behavior exactly equals the cost. In other words, the socially optimal level of bike danger is found where there is neither too much nor too little danger.
But again, there could be an externality here, as my decisions about how dangerous to ride could effect drivers’ expectations about how dangerous are all cyclists. So, I should behave less dangerously, lest my reckless behavior reflect poorly on my two-wheeled brethren.
(And if you needed more libertarian content, the authors of the Marginal Revolution blog, Tyler Cowen and Alex Tabarrok, are economists with a decidedly libertarian bent. They are both employed at the Mercatus Center at George Mason University, which is funded in part by the Koch Brothers. Whatever the case, and however distasteful you might find the Kochs, I’ve met both Tyler and Alex, and they are both very nice guys. Also, their microeconomics text is among the best I’ve ever read. But enough about that.)
A few comments on another post about biking on Marginal Revolution:
- No, biking is not inherently dangerous, especially if drivers are polite.
- Discouraging biking might be the cheapest way to reduce accidents, but it is not the best way. See above.
- Drivers might have a higher time-value than cyclists, but over short distances, there is little difference between driving and cycling, to say nothing of the health benefits of the latter.