Answering Bill Maher's concerns on traffic and One Billion Americans
Solve the problem, don't shy away from growth
Bill Maher wants the United States of America to stop kowtowing to China and worries that we are losing to China because it’s too hard to get things built in this country.
Under the circumstances, I’d think he would agree with the thesis of “One Billion Americans,” which is that we should embrace the growth of our physical and human capital to ensure that we remain the world’s number one economy and don’t need to knuckle under to the power of the Chinese market.
Instead, he mentioned the book in an unflattering light in last week’s episode, raising some irrelevant points about baby formula, some arguments about resource depletion that I think indicate he didn’t actually read the book, and one issue that I think is worth talking about: concern that more people means more traffic on the 405 and other already-crowded highways in Los Angeles where Maher lives.
One of my big things in politics is that the world is less zero-sum than people think.
There was no per capita economic growth over the majority of human history. And of course for most of Homo sapiens’ existence, we were in a state of prehistory — there was no economic growth then either. So on both a biological and cultural level, humans are ill-suited to think about a world of growth, and there’s no shame that on an instinctual level we respond like hunter-gatherers worried about competition for scarce game and berries. But the path to enlightenment is to recognize that this is not how our current society works. If the U.S. population were dramatically smaller, Bill Maher would be poorer rather than richer. In a big country, Maher can have a large audience even though the Bill Maher niche is actually pretty small relative to the whole country. That’s the same reason I can have a successful career. It would be very challenging to do a Substack as successful as Slow Boring in Italian and totally impossible to do it in Finnish.
So the main theme of “One Billion Americans” is that scarcity concerns are illusory.
The United States is about nine times as dense as Canada, but we are richer than Canada on a per person basis. That’s not despite the fact that Canadians enjoy more natural resources than we do; it’s specifically because the United States has deeper and more complex markets.
But in addition to being an optimist about the nonzero nature of modern economic growth, I try to be an honest person. And it is absolutely true that if we accept my policy recommendations in “One Billion Americans,” traffic congestion will worsen. I do not think that this is a good reason to give up on the dream of global hegemony, but it is factually accurate. So let’s talk about better approaches to traffic management and the dream of solving this problem once and for all with congestion pricing.
What building more does and doesn’t achieve
I think normal people think you should solve traffic jams by building more roads.
But it’s often not feasible to build more roads because there’s already tons of stuff built where the road is. In that case, traffic congestion is unsolvable, so you ought to fear population growth. Conversely, urbanists will tell you that you can’t solve traffic congestion by building more roads due to something they call “induced demand.” This is meant as a call to arms for massive investment in mass transit, but the fact is people mostly don’t want to take mass transit, so “the only solution is to build more” and “actually, building more won’t work” lead to the same place, which is that growth is the enemy.
It’s worth thinking a little about induced demand.
Here’s what it gets right. Suppose that the Highway Fairy comes along and builds a second deck on top of I-95 from Richmond, Virginia all the way up to Portland, Maine. Traffic becomes a lot less congested, and because traffic is now less congested, car trips around the northeast go faster. Because driving is now faster, it poaches modal share away from Amtrak and airplanes on the northeast corridor. And ideas like “let’s drive from Fredericksburg up to Baltimore to see the Aquarium” or “let’s drive from Providence to Portland for the long weekend” or “I can commute to Philadelphia from south of Wilmington” start to seem more appealing. All that extra driving eventually soaks up the additional highway capacity, and the bigger I-95 ends up congested after all.
I think that’s an accurate description of the situation, but it’s fundamentally odd to describe that as if the Highway Fairy didn’t accomplish anything useful here. People got to go more places and do more stuff.
To the extent that there’s a genuine problem with overbuilding roads, it’s that sometimes they don’t induce much demand. That’s a “bridge to nowhere” and a waste of resources.
By the same token, I think it mostly speaks well of these cities that LA, New York, and San Francisco were the three most congested metro areas in America, pre-pandemic. The top 10 is rounded out by San Jose (i.e., Silicon Valley), Seattle, Miami, D.C., Chicago, Honolulu, and Austin. These are places with a lot going on and some mix of high populations and rapid growth. It’s obviously not good per se that there are a lot of traffic jams in Miami. But if Miami residents wanted to live in Syracuse, they could. The congestion reflects the fact that Miami is a place where a lot of people want to live and visit and do things.
Transit also induces demand
New York’s presence in the number two position is a useful reminder that the induced demand problem applies just as much to mass transit as it does to highway construction.
The existence of a very robust metro system and a robust-by-U.S.-standards commuter rail system doesn’t mean that Manhattan streets are devoid of traffic. What it means is that way more people are able to get to and move around Manhattan than would be possible without mass transit. But the roads exist, they are useful, and so they fill up. The very severe traffic congestion tends to deter people from driving. And if you improved transit options to take cars off the road, that would ameliorate the traffic in the short-term but just induce more driving in the longer term.
This is absolutely not a case against New York expanding its transit offerings.
It’s just to say that the point of adding transportation infrastructure, whether that’s trains or highways or anything, is for people to consume more transportation services. If consumption doesn’t rise, you’ve built something that’s pointless.
The problem with roads in America is that we’re perennially caught between building infrastructure that is in high demand and that ends up overtaxed, and wastefully creating things that nobody uses. But that’s because the roads are too cheap — generally free — so the only way to balance supply and demand is to massively oversupply.
What we need is congestion pricing, a price to use the road that varies according to the time of day in order to bring supply and demand into balance while generating revenue. This idea is always very controversial with voters when it’s proposed, but I think it’s telling that the places that have implemented it — like Oslo, Stockholm, and London — don’t get rid of it. The fact is, it works. But I think American advocates tend to make the idea less appealing by often describing it as a means to obtain extra funding for mass transit. Outside of the specific context of New York City, proposing a new transfer from the driving majority to the non-driving minority isn’t going to be a winner. And I think it basically misstates the case for congestion charges, which is that pricing is the appropriate way to manage an asset.
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