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Congestion charging goes north

The Swedish city of Stockholm – in which I spent an enjoyable short stay last year – has introduced congestion charges, much like those which now operate in central London. The supposed aim (supposed being the key word) is to reduce car use and get people to use public transport. Public transport is said to be very good in Sweden and I found it to be so, though it comes with a heavy tax bill.

The congestion charge issue is an interesting one because on one level, free marketeers can see a lot of merit in the idea of treating use of a road just like any other commodity. However, in today’s world, road tolls tend to be more of a revenue-raising device than part of a free market approach to transport. Roads are not built with the consent of other property owners, but mostly built at the behest of public authorities using compulsory purchase powers (what is called eminent domain in the United States). So the idea of road pricing, nice though it may sound in some sort of capitalist utopia, is in reality bound to operate in a monopolistic environment.

And as the British police have found, the C-Charge has brought certain unintended consequences. Not a great surprise.

11 comments to Congestion charging goes north

  • Roads inside cities are ultimately always going to be monopolies. The same is not true of rural roads, access roads and motorways which can be privately run.

    I think that any pricing solution should recognise that different types of roads are essentially different types of commodity. An arterial road should be priced based on cost-per-mile, with varying costs at different times. An access road should be paid for by residents on a fixed basis because there is no marginal cost to heavier useage. In a city there is a marginal cost to useage but a cost-per-mile scheme would not be sensible, thus congestion charging is the best solution.

    Of course I am generalising, there are more than three types of road and other systems could be used. I’m particularly keen to hear of any way of achieving competition on city roads.

    My only issue with congestion charging is that drivers already pay road tax tax and fuel duty. Congestion charging on top is like paying for an “all you can eat” buffet and then finding a till at the end of the buffet table and then being presented with a bill at the end.

  • License plate theft is a problem here in Milwaukee, but for simpler reasons. The amoral snip the little colored renewal tag, and the metal which carries it, to put onto their plate so as to avoid renewal payment. I see damaged plates all the time. I’ve been attaching mine with security screws and a heavy duty frame ever since it happened to me.

  • John East

    Short of ridiculous draconian legislation such as enforced car sharing or allowing odd and even registration numbers access to the roads on alternate days, there are only two practical ways to match road usage to road availability. Raise motoring costs until the two balance, or build more roads.

    The socialists are getting there on the cost side, having pondered all sorts of “fair” means in the past I think their hatred of cars and motorists has finally overcome their hatred of market mechanisms of control. As for building more roads, well the money would most certainly be available since the hikes that will be needed to unclog our roads will be enormous. The only problems remaining are to overcome the anti-car ideology of government (impossible?) and find some way to stop government appropriating the massive revenues that road pricing will generate for other uses (Totally impossible?).

  • Jacob

    People already pay “congestion charges” when they get stuck in jams and lose their time. Isn’t that payment enough ? Isn’t that a strong enough disincentive to drive into congested areas ?
    Seems the congestion fees are what govmint likes best – revenue generating schemes.

  • GCooper

    Jacob writes:

    “Seems the congestion fees are what govmint likes best – revenue generating schemes.”

    Governments are addicted to money. In the case of London, the local authority artificially induced congestion with idiotic traffic schemes and then used the resulting jams as an excuse to impose the charge.

    The Stalinist Mayor, Livingstone, promptly used this revenue to finance his obsession with forcing people onto his filthy, dangerous, uncomfortable, unhygienic busses.

    The whole process was a scam.

  • So the idea of road pricing, nice though it may sound in some sort of capitalist utopia, is in reality bound to operate in a monopolistic environment.

    You mean like the capitalist utopia that existed in this country for the bulk of the eighteenth century, when private turnpike companies created the private inter-city road structure which was one of the major foundations of the industrial revolution? Or the capitalist utopia which existed in the US in the early nineteenth century which did the same thing for the north-eastern United States? When Thomas More wrote Utopia, he was speaking of some far distant place which never existed. When you describe private road capitalist utopias, you’re talking about something which happened and which worked. Until of course the state took over both of these private road turnpike systems, to the great benefit of the private railroad systems in both countries. Thankfully, the state also managed to eventually take over the private rail networks of both countries, once again to the great benefit of the private airline companies. No doubt when the state gets round to fully nationalising air travel in both countries, it will be seen as a capitalist utopia that unsubsidised non-government controlled airlines could ever exist in the future.

    I wonder which private transport system the full nationalisation of airlines will encourage? Just guessing, but I imagine it will spur on full 3D imaging systems so that 10 people can hold a meeting in one room as if everyone was actually there, but with everyone being far distant from each other. Though who knows what the market might provide. Whatever it is, no doubt the state will also try to take that over, as it is the duty of the state to control all forms of transport.

    Roads inside cities are ultimately always going to be monopolies.

    It’s funny. When I drive around a holiday village complex, or a large shopping complex, or a gated community, I somehow seem able to manage it without the state needing to control these private road systems. They even manage to have road markings and traffic lights!

    Who would’ve believed it to be possible in this day and age? Though obviously, it would be impossible for this to be extended to full city areas, even in the possible cities of the future which could have entire city segments fully privatized, like giant holiday villages, shopping complexes, or gated estates, with people never buying any property unless it comes with legal clauses guaranteeing road access. Even in this privatized utopia it will still be absolutely necessary for the state to own all the interconnecting roads. Just like it needs to own all the rail lines, and all the shipping lanes, and all the air traffic control lanes.

    Personally, what I’ll do in this future capitalist utopia is buy a great big road and then never allow anyone to use it. That would make great economic sense, wouldn’t it?

    It’s actually remarkable how complex these capitalist utopia road pricing systems got, for the eighteenth century. If you were walking the road you paid one price, with a horse you paid another, with a cart you paid another depending on cart capacity, and also strangely enough on wheel thickness; the thicker your wheels, the less you paid, because you were stressing the road surface less than with narrow buggy wheels. Obviously it could never happen today, what with all these computers and satellites and things. Such technology can only be controlled by the state; that is why the state is so necessary.

    The state is also necessary to ensure road safety. Because it is only with a state where nobody dies on the roads. What? You mean thousands upon thousands of people die each year on state-owned roads, year after endless year? That’s amazing. I’m sure there would be far worse carnage in a capitalist utopia, because safety would be of no concern to private transport companies, just like Karl Marx said.

    Though if it’s possible to criticize state control of roads, there’s one thing that puzzles me about it even when they try to go for road pricing with market-like easy-pass systems. Even then in some US states they get the market signalling completely wrong, by allowing regular commuters to buy bulk passes, to get cheaper journeys, and charging occasional non-peak road users the full charge. So it’s cheaper to go in the peak periods, and more expensive to go off-peak? You bet. Only a government could screw up a pseudo-market that much.

    But don’t let my wild eyed rambling distract you. Instead check out the work of Walter Block, a private road guru from Loyola University in the US.

    His main research page is here, with lots of links to various studies on private roads. As a resident of New Orleans, he knows all about the magnificent transport capability of the modern social democratic state. A good one-article summation of his work exists in the following PDF file:

    Free Market Transportation: Denationalizing the Roads

    I’m afraid it’s all a bit utopian, but you can’t keep a good man down.

  • Johnathan Pearce

    Jack Maturin, of course there have been plenty of examples of privately-built transport systems in the past, such as during the 18th Century in Britain and subsequently (I.K. Brunel being a hero of mine). I was talking about the reality of the here and now.

    Of course, I hope that libertarian economists continue to agitate for a shift to a free market in transport, including roads. On a theoretical level, winning the argument on ideas will take decades. As practical policy in 2006, however, it is highly unlikely that congestion charging in cities such as London will have much to do with the doctrines of Murray Rothbard or Adam Smith.

    (BTW, I like your pen-name. Obviously a big fan of naval fiction!)

  • Just for a bit of light reading, if today at work is a bit slack, Professor Block has helped me unearth a few more articles on road privatization, which includes one on how congestion charging can work under a privatized road system. Unfortunately the Samizdata anti-spambot process has prevented me from posting them here, but if you believe that it might be possible for private roads to exist, but need a little more convincing, I’ve posted the article links here, on AngloAustria.

  • On a theoretical level, winning the argument on ideas will take decades.

    Well, here I agree with you and to follow a Two Ronnies policy, I also disagree with you. Yes, it will be a large effort, but I don’t think it will be a gradualist process which will slowly wear opposition away, over decades. Public opinion can flip, and flip very suddenly; witness all the revolutions over the history of humanity. We, as libertarians, should not be gradualist, but we should be revolutionary in our outlook. I’m not talking about muck and bullets, but revolutionary in terms of ideology. We need to convince the majority of people that the state is simply unnecessary, but this will never be more than an unspoken undercurrent running through society. And then one day, hopefully, there will be a tipping point.

    Who knows what it will be the trigger; a cataclysmic winter of discontent, a crack-up currency crisis, a catastrophic shortage of iPods, but at that tipping point our revolutionary ideas could come to fore and wither the state within a relatively short period of time. Just think how secure the Soviet Union looked, until just the day before the Berlin Wall came down, or think how secure British administration looked in North America until the ride of Paul Revere.

    The only way we will be in a position to secure this revolutionary shift, when the opportunity occurs, will be to build a large corps of libertarian intelligensia. The more Professors and pHD holders belong to our corps, the better, until we have intellectually destroyed the ideological base of Marxism, especially in the Universities, and especially, as Ayn Rand pointed out, in the social science departments within the Universities (such as psychology, philosophy, politics, and economics). With a strong intellectual base, which could take decades, and with Marxism destroyed, ridiculed, and made a laughing stock among the intellectuals, our libertarian ideas will then seep gradually into the general population until a tipping point is reached, when we must be ready to pounce. At least, that’s the hope!

    So gradual, yes. Explosive on the day, absolutely. My betting is it will be a currency crisis, due to the criminality of counterfeiting at the government money printing presses, perhaps allied to Chelsea failing to win the league and a pension crunch due to the buck finally coming home for the welfare state.

    As practical policy in 2006, however, it is highly unlikely that congestion charging in cities such as London will have much to do with the doctrines of Murray Rothbard or Adam Smith.

    I’m afraid I don’t think we can be Fabians. The socialist Fabians were highly successful, both here and in the US, because with their gradualism all they were doing was telling governments what governments wanted to hear. ‘You need to control this’, ‘You need to tax that’, ‘You need to nationalize this’. Those who hunger for power, i.e. politicians, just love to be told that the solution is that they should take more power.

    We, on the other hand, as libertarians, have a message that the politicians don’t want to hear. Our message is that they should have less power and less control. The attempt of organisations such as the Adam Smith Institute, to be libertarian Fabians is doomed to fail because the politicians will only take those parts of their message which increase their power, not decrease their power. Pragmatism is, and can only be, the neoconservative route to Tony Blair and David Cameron. Why do you think both these men exist? Because democracy and pragmatism insists that they exist. It was Margaret Thatcher that was the abberation, not David Cameron.

    We can see this failure of libertarian pragmatism clearly with road congestion charging in London. I’ve no problem with road pricing. But all the libertarian Fabians have done is add another tax to all those road taxes we currently pay. Their attempt to introduce more liberty has created less liberty. So now when I drive in London, I not only pay petrol tax and road tax, like a used to, I also pay road use tax, on top. Nice one.

    What’s even more dangerous to us, is that Red Ken says, “Don’t blame me, blame all these libertarians who’ve been advising me to introduce road congestion charges”, and then we get the blame as the causers of yet further taxation and regulation misery. Even better.

    Libertarians should abandon libertarian Fabianism. It is, and I hope you’ll pardon the pun, simply the wrong road to take. We should be revolutionary in our outlook. And if that means arguing for the full privatization of all roads, we should hold fast to that and stop dismissing it as unrealistic nonsense. Do you think Karl Marx was put off by those people in the London Library who told him his ideas were unrealistic nonsense? Look at his ideas now, which have swept the world red and given us all of the bloodshed of the twentieth century, plus a cornucopia of Marxoid welfare states, with virtually every person in Britain, in one way or another, holding predominantly Marxoid views. He achieved this by holding fast to his unrealistic views and propagating them amongst the intelligensia. We should learn his lesson.

    If we want to be rid of his ideas we should attack him with his own weapons. We should stop giving in to the Art of the Possible, i.e. the corruption of politics, and go for the throat. How? By making the life of every politician a complete misery. We should openly loathe and ridicule every single one of them, we should point out all of the flaws of all of their ideas all of the time, and we should continuously point to an uncompromised future which is free of their of influence.

    This is the only route to liberty. Samizdata does a great job doing this most of the time. But if we dismiss ideas such as private roads as ‘utopian’, without any further discussion, we dismiss ourselves as worthy contenders as guides to the possible free future of humanity. And deservedly so.

  • Johnathan Pearce

    Jack M. great comment. I agree with you 99.9 pct. I am particularly in agreement that we should not overlook the fact that things can change very fast, in a sort of tipping point. (Maybe I was being too gloomy, not normally a failing of mine. Usually I get accused of being a starry eyed optimist). There is no doubt that a lot of ideas once thought daft by the usual purveyors of conventional wisdom can be overturned very quickly.

    My point was not to challenge the idea of road-pricing or indeed the idea of privately owned roads. I think it is a great idea worth pursuing vigorously. (There are all kinds of interesting side issues to do with this but I have not the time to go into that here). My point is that there is a great danger that the London C-Charge will be seen, for the forseeable future, as a revenue grab rather than a part of a free market in transport. Ken Livingstone has not, for obvious reasons, gone out of his way to plug the capitalist aspect of road pricing.

    Which is a shame.

  • I guess that I’ll have to write a more in-depth explanation of the congestion taxes of Stockholm. Stay tuned…