osewalrus (osewalrus) wrote,

When Did 538.com Pick Up the Market Fundamentalist Dude?

Was reading 538.com and was struck by this piece in favor of congestion pricing by Robert Frank. What struck me was how much Frank resembles the economists I know among my opposite numbers. Very narrow focus and a conviction that public policy and economic policy are identical, combined with an almost religious belief in the theoretical models that justify the U of C School.

Congestion pricing in a market mechanism for addressing certain problems. After London adopted it in 2003, it became the great cornerstone for a number of anti-regulatory folks trying to address traffic congestion. I'm not sure why "congestion pricing" plays better than "congestion tax," which is what it is. But the fact that it is a tax on use of the common asset isn't what concerns me.

Rather, I am concerned by (a) the disproportionate impact (which Frank waves away by arguing that it could be addressed without worrying much about the cost of implementation, and (b) non-economic considerations in how human beings react to congestion pricing. It is this later which Frank simply does not wish to acknowledge. The fact that congestion pricing sends a strong social message that social value is assigned by the ability to pay more is -- IMO -- problematic. I have never accepted this argument wrt to SCA membership (i.e., that willingness to pay the membership fee makes one an intrinsically more valuable SCA participant) or spectrum auctions (that those willing/able to pay the most at auction are those most capable of using the spectrum to maximize social utility). the market system works very well to allocate certain kinds of goods, but it is not, and cannot, substitute for all other aspects of public policy.

This does not mean that one can ignore economics or the influence of market incentives -- the common straw man invoked by the Free Market fundamentalists. To ignore economic realities is to court disaster -- as our current sad state of affairs illustrates. But to ignore non-economic factors courts disaster as well. If a proposal repeatedly arouses popular protest, it is important to understand why. To dismiss this as the whining of losers is to demonstrate a failure of understanding about the nature of public policy and the need for consensus and legitimacy in the political process.
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