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Comment by maxxxxx | Hacker News Reader

My main concern is that with tolls that high that only people with a lot of money can afford them (I make six figures but I doubt I would ever pay $40 for a toll. I would need much more money). These are also often the most influential people so they may think that everything is OK because they can afford the toll and never suffer in traffic. I think the same is happening with health care. Most people in Congress have enough money and get a nice insurance plan so they don't even understand how bad the US health system is for people in the lower incomes. They think it's perfectly fine and no need to change anything.

It's very problematic when in a society the people at the top never experience life the same way regular citizens do.

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Exactly. Creating separate "deluxe" and "plebe" lanes only ensures that the quality of the latter degrades, because no-one with money and power sees any problems or is forced to care about them.

You see this same problem with public vs. private schools (public schools get ignored and degrade when everyone with means avoids them), the "projects" (in which quality of life is allowed to degrade as various factors lead to police disengagement), and many public transit systems (politicians can afford to drive/be driven and thus are blind to the issues faced by obligate transit users).

Arguments equating high-toll roads with "first-class airplane seating" or (I shit you not) "Bitcoin mining" (there's a candidate for @shit_hn_says) completely miss the mark by ignoring that these domains are market-driven (e.g. the quality of a SECOND-class airplane seat is still a function of the market). This is not true for freely-available (or subsidized) public anything (schools, housing, public transit, etc.)

Except there aren't separate deluxe and plebe lanes. Those paying the toll are using the same lanes as those utilizing HOV to not pay.

I think there is a 1st principles economic rationale that agrees with you.

In a nutshell, you need to get down to the "utility" concept. It's used (for example) to theoretically prove/support the idea that free exchange is always beneficial for both parties.

Putting prices onto otherwise unrestricted resources likewise optimizes for utility, especially if there are tragedy of the commons issues. The catch is that utility is measured in dollars.

Price systems increase efficiency by introducing trade-offs. If you don't really need to use the road you won't, because there's a cost to it. But (like you say), this trade-off is different for different people. For rich people, $40 is always worth it. For the middle class, $40 might be worth it if you can get home in time for date night. For poor people, $40 means you can't afford a date night this week. It's never worth it.

Basically, dollar-utility conversion is different for people with more or less money. To call this a utility-efficient outcome, you need to concede that a poor person's family dinner time is worth less. That's obviously false. We can't measure utility in dollars, if we have inequality.

On top of all that, roads are not "full" markets. This is not a free market solution. You can add a price system. but you don't have supply side effects. Prices don't reflect marginal costs of commuting, because there isn't competition. Price signals don't control supply, or lead to more supply. Even if supply wasn't exogenous in practice, the fixed/marginal cost ratio would make the "market" unresponsive anyway. This is not really a "free market" vs "public good" because free market just isn't an available option.

I would like to see some less idealistic economists take over on these issues. One interesting option is creating a fake "currency" for fast lanes. Ideas that assume people's time, enjoyment of the road and transport needs are equivalent. You probably can't take money entirely out of the equation, but there are ways of doing this without handing out benefits to the wealthy at the expense of the poor.

I would like to see some less idealistic economists take over on these issues. One interesting option is creating a fake "currency" for fast lanes.

If poor people don't have enough money, then we should give them money instead of fake currency. Giving them fake currency reduces utility.

If we give them money they can buy whatever they want/need the most. If we give them scrip that can only be used on one thing then they have to buy that even if they would value it less than something else.

If it is some fake currency, say, HOV-credits, that is distributed on a monthly basis, equally, to everyone, then to a first approximation, you're providing for equivalence in capacity to pay. You can choose to spend, or not spend, your HOV-credits, on any given day.

This also offers the opportunity for rationing, as it's possible to increase or decrease the allocations based on net usage.

If the credits expire after some time, say a few months, then there's the ability to bank them, but not indefinitely. This is not a form of perpetual wealth accumulation.

The argument could be made for either making the credits transferable, so that those less wealthy in other regards could sell them for other units of trade, or not, and/or to set limits on such transactions.

All of this occurs independent of actual currency, though there would be an overall budget to the programme.

And it accomplishes the goal of setting an opportunity cost to highway travel, and congestion, which could itself be varied according to circumstances (higher charges at peak hours / during high-congestion events, lower off-peak or when uncongested).

Then there's the question of interactions with alternative transit, telecommute, or similar schemes.

1) If your roads are being overused you can easily ration that by raising the dollar price.

2) What is wrong with wealth accumulation? If credit recipients would rather do that than drive on roads they should be able to do so. They's how they get less poor!

3) If they credits are transferable then you are effectively giving people money. Just in an ass-backwards and overly confusing way.

All depends on what problem you are trying to solve.

IMO, the problem is "how do we allocate road so that high utility use gets precedent over low value use, without defining high/low value as 'rich/poor person wants to get from a to b'"

Expiring credits is an idea, as are a lot of options. Designed markets are a devil-in-the-detail endevours. A market is a good tool for this job, that's why economists and wonks like tolls. But, not every market needs to be the market. In this case, The Market is probably worse than the no market free-for-all.

Raising the HOV-units price provides equal purchasing capacity amongst all drivers.

I mentioned the option of transferability for completeness. I'm not advocating for or against it. I am noting that it would change the dynamics somewhat.

Your #2 is a rather more involved and tangential discussion. Historically, it has a strong tendency to end in tears, or worse.

3) You're giving them things that cost you nothing to produce which they can then sell for money.

I actually think this was a bit of an aha moment for me re: cryptocurrency and government.

It's possible for a government to setup a market for a public good, create a currency for that good and distribute that currency equally to people. All without spending actual currency(ignoring administrative costs of setting up a blockchain).

The value of the public good for people then determines the USD exchange rate, but poor people are never excluded from using the good and at the same time you are not massively inflating the money supply.

edit. In fairness, nothing about this requires a cryptocurrency/blockchain. It's more a general argument in favor of governments charging for public goods by creating custom (maybe fiat) currencies which they distribute equally to all citizens.

There might be administrative and/or psychological benefits to running all these custom currencies on blockchains.

Setting up a traffic-ration system fairly is probably a lot simpler than giving poor people money.

I disagree. We have all the technology and processes we could ever need to distribute and charge people dollars for things.

Creating a whole new kind of currency with its own special rules is a huge undertaking. Not to mention the ongoing pain-in-the ass cost to every citizen when they have to carry around and think about a new special kind of money that can only be used for one thing.

The tech isn't the problem, it's that the avalibility distribution that is imposed on roads is the same as the income distribution. In a way it creates the same problems as removing net neutrality.

If you did that with roads, what's stopping the upper income distribution from excluding everyone else from entire cities? A gated community concept might scale to an entire upperclass city with a private airport, hostpital, and 1000$ entry fee to keep out the poor. This might even effectively reduce overall costs for the municipality since homeless and property crime would be greatly reduced.

On the other hand if other currency is used, it makes everyone easily trackable.

I think the dumb pipes model still has some advantages.

> it makes everyone easily trackable.

zkSNARKs for the rescue! It's surprisingly easy to roll with that. (See Zcash, Monero, ETH and whatever.)

There are simple and effective (from a traffic-flow-control perspective) solutions:

https://en.wikipedia.org/wiki/Ramp_meter

I'd focus more on one of my other punts above: ways of drawing a correspondence between traffic and congestion, on the one hand, and alternative transit options (buses, rail, cycling, telecommuting, etc.) on the other. Market pricing signals fail to provide the coordination many of these options require. Typically, planning-based approaches are required.

> alternative transit options

I like driving, but I'm very bad at managing the stress associated with owning a car, finding a parking spot, sitting in congestion, trying to be there in time (speeding to gain a few minutes that makes no sense), hence I don't have a car.

And I wouldn't live in a place that requires one.

And I can't understand how the US is so deep in the hole with regards to mass transit / public transport, commute time, etc.

Sure, I know, it's a classic coordination problem, and I'm probably very biased by having access to a very cheap and efficient public transit network.

Finding a parking spot is usually not an issue for US citizens since we mandate lots of parking through zoning laws.

The problem in this case is not really "not enough money" in an absolute sense. To use the fast lane in a floating price system, you need to outbid the rest of the people. IE it's a function of income distribution.

You'd need to solve inequality. That's a great thing to do, but meanwhile we can just fix fast lanes separately. ...just in case inequality still exists in 10 years.

The issue here is that you are prioritizing using "the fast lane in a floating price system" as the most important thing when for a lot of people that will not be the case.

They might rather spend that money on housing, or education or chewing gum or who the hell knows what.

The utility maximizing choice it to let them make their own decision as they know more about their preferences than you do. You making that decision for them destroys utility.

(op)

I don't know why the downvotes, you make valid points.

I think what you say is true, but not in the context of this specific scenario. This scenario starts with a public good that is freely available to all.

In the free-for-all, everyone has equal access to the good. The total value of that is somewhat diminished in theory, because the lack of a price system causes overconsumption ... traffic jams.

In the price system, there is a luxury option. In principle, options are good. If you really want to travel fast, you can for a price. In practice though (because income distribution), most of that negotiation does not happen within one person debating if he really wants that fast lane today. There will be some people (wealthy) for whom it is almost always worthwhile and others for whom it is never worthwhile.

What I am arguing is that calling this highest value use is just false.

Choice here does not extend to substitutes. You don't get anything for taking the slow lane.

This is why I'd like to see some less theoretically pure economists tinker with this. It's possible to create a system where what you say is true. This one is impractical, but one example could be a system where fast lane drivers pay slow lane drivers. Ie, negative pricing.

Maybe you earn fast lane credits for taking the slow lane, to be used in lieu of £40. That way all commuters get a taste.

Seems to me that increasing the toll price with increasing levels of road usage would be the best way to ensure that those of lesser means still have access to the express roadway.

Example: Using the express roadway once a month is $10/use. Using it 100 times is 50/use.

This is similar to how California tries to restrict water usage by the wealthy.

> "Maybe you earn fast lane credits for taking the slow lane"

This does nothing to help fund roads or alleviate congestion.

Agree that dollars are not the ideal measure of utility, primarily because of of diminishing marginal returns as you get more wealthy. But they are pretty good for the majority.

Appealing to a right to an egalitarian "family dinner time" is also not terribly convincing. There are plenty of rich people who don't care much about family dinner time. There are plenty of poor who would eagerly spend half their day's wages to make it home on time.

Also, I'm not sure I buy the whole no competition argument regarding highways. The competition are the non-toll highways and driving on streets. There are several free options, and a paid option. The paid option has to compete against the free ones by setting a price that corresponds to the value it provides. If all roads were a toll road, then that would be a monopoly and a broken market, but this one seems okay.

I don't think that's fair. I'm not making an emotional appeal. I'm making (or attempting, at least) a rational one.

You can put it in diminishing marginal value terms, but I'm basically saying the same thing with fewer assumptions. Family time (or TV time or whatever) is an example to demonstrate that utility does not scale with money.

On the whole poor people commuting enjoy their free time, pleasant commutes and the other things at stake just as much as rich people. That's a fairly intuitive point.

Given that, the price that does not correspond to the value it provides^, inasmuch as income is unequally distributed. It corresponds to the wealth of the person making a decision and the value it provides.

The value of the fast lane is fairly evenly distributed between commuters. Everyone wants to get home. Everyone hates traffic. There are differences, but they're not huge on average.

What isn't evenly distributed is income. Therefore the sorting that this mechanism does is a little bit of utility based sorting and a lot of income based sorting.

If income was more even, there would be an argument for such a system. Given the actual distribution, the system is probably utility destroying.

Tolls are just a revenue raising mechanism, not an efficient allocation one.

^or to marginal costs

I see your point now. I think you could go further with it. Arguably, a poor person who has never been on an airplane would get far more "utility" from a flight on a private jet than someone who flies every day. So one could argue (a stretch), that the poor, and not the rich, should ride that toll road if it would increase total happiness more.

But that seems ridiculous, and I think the issue here is that we're conflating capitalism with utilitarianism. Utilitarianism strives to maximize utility, i.e., total happiness. Capitalism strives for efficient use of scarce resources. They often overlap, but they are fundamentally different concepts.

Going back to the example, I buy your argument that tolls are a crude way of maximizing utility. However, they are a good way of putting a scarce resource (fast commuting time) to economic use.

Capitalism is another kettle of fish perhaps.

A lot of liberal market ideas (Smith, Ricardo, etc) are essentially utilitarian. That is, they use utilitarian arguments to prove their points, so they're basically tied into the same assumptions. Ricardo's theory of comparative advantage is pure utilitarianism, and is the classical economics "proof" that trade is efficient. To this day, the most important theory of trade.

Efficiency in economic theory is almost all utility efficiency. The If not, what does efficiency? I guess you could say that in this case it's about maximizing revenue from willing payers. That's ok, but calling it efficiency is misleading.

When you say putting a scarce resource to its (most productive) use, what do you mean if not the enjoyment and benefit of its users?

Incidentally, there is a cool example of an artificial market for allocating food to US food banks. It uses a highly. Manipulated fake currency, with negative pricing and competitive bidding to improve "efficiency." The trick to making it work was all about being willing to define utility in non monetary terms.

Stating efficiency in dollar terms can lead to circular logic.

Utilitarians have struggled for decades to properly define "utility". The approach Bentham took (the father of utilitarianism) is completely different from John Stewart Mills, also a giant in utilitarianism. "Utility" is a far more vague concept than "efficiency".

Maximizing efficiency is less complex than utilitarianism. Capitalism strives for efficient allocation of resources based on supply and demand, i.e., what people have and what people want, it makes no promises on maximizing total happiness or equitable distribution.

For a utilitarian "putting a scarce resource to its (most productive) use" would indeed be to provide the maximum amount of enjoyment. But for a capitalist, it's simply the amount that someone is willing and able to pay for it.

I know some free market proponents use utilitarian ideas to make their point, and there is overlap, but they are a bad fit. Utilitarianism is a moral theory based on maximizing total good. Capitalism is an economic system that seems to have worked more than most other systems. There are moral arguments for capitalism, but they are based on individual freedom, not collective happiness.

> There are plenty of poor who would eagerly spend half their day's wages to make it home on time.

How does that not drive a person insane? Let's assume an 8 hour workday (so this would be a $10/hour job). How would you feel if you knew that after working your first 4 hours of the day, you basically aren't making any more money for the next 4 hours: all the money you make from that point on will be spent on getting home early. Why not just go home after your first 4 hours? You'll be home even earlier than when you take the $40 toll road, and you bring home the same amount of money for half the hours worked?

It seems to me that if you are regularly spending half your day's wages just to make it home on time, you are urgently in need of a different job (either closer to home or with different hours).

Low income and few choices are pretty interlinked. That's why you find absurd commute/labour, childcare/labour or other ratios at the bottom.

I'm surprised by your surprise, this insanity happens all the time. Parents miss baseball games, kids birthdays, and anniversaries because they are stuck in the office or at the plant. People work underpaid jobs for years with the hope that if they stick it out, they might get their reward. Parents sacrifice their entire lives to give their children a better shot.

The world is tough and trade-offs between time, money, and future opportunity are constantly being made at every income level.

> On top of all that, roads are not "full" markets. This is not a free market solution. You can add a price system. but you don't have supply side effects.

The solution is to auction road capacity and use the auction proceeds to fund maintenance of that road and construction of others. Besides being vastly more efficient (from a market perspective) than an arbitrary fixed rate, it also means that resources are allocated towards roads more efficiently (if your fund allocation mechanism makes some sense).

How do you propose to run an auction on autos entering a given roadway?

The dynamic toll pricing, based on utilization, on this roadway is very nearly an auction.

Yes, but that's not an auction: one bidder raising over another.

You might be able to do this in a two-at-a-time case, with two lanes of cars. Problem is that the lane behind the car that consistently underbids is being affected by a third party's decision.

It seems that there's a problem with the feedback/response cycle in one-at-a-time pricing systems. The more effective systems approach is to set a scheduled or contingent pricing, perhaps at 10-15 minute increments, minimum. A regular schedule (as with peak / off-peak rail or transit schedules) is another option.

Hence: how does OP propose to run an auction?

"For poor people, $40 means you can't afford a date night this week. It's never worth it"

That's a slightly naive view of what 'poor' means. Try "can't eat this week."

You've misunderstood GP - the $40 is not being taken from the hypothetical poor person - it's a 'get home in time for date night' product being sold for $40, so not affording date night means not doing it; not spending the $40.

The ability to afford food for the week is then unaffected, as it would be if the figure were $4 or $400.

However, this does impact gas, which could be significant if the difference in time is large enough.

(This is assuming that the poor person is not driving e.g. a (more expensive, fewer available as used) hybrid car that can idle in traffic without wasting gas)

> My main concern is that with tolls that high that only people with a lot of money can afford them...

Yes, the toll is high, but only during peak usage hours. And there are other routes to take (that low income people presumably have been already using).

In general, progressively pricing services is a mistake. Instead, we should be progressively supplementing incomes (minimum income, negative income tax, commuter cards, etc.) until people can afford market-priced bills, goods, and fees. Until we approach problems this way, end-consumers don't really feel the impact of discrepancies in costs.

Consumers aren't dumb. If they see the bus is $5 but the toll is $20 because that's the actual demand-based market price, they'll change their commute habits, change what they'll pay in rent, the prices of homes, the lobbying of their representatives for more public transportation, and so on.

> change what they'll pay in rent, > the prices of homes, > the lobbying of their representatives for more public transportation,

Those things all have a not insignificant cost that makes them potentially unavailable to the folks at the less wealthy end of our society.

Lobbying of local city council isn't expensive. It mostly involves time: contacting them, writing letters to local media, forming online groups to organize the neighborhood, etc.

The price of homes and rent are actually really important. If low-density housing is much more expensive, it should be reflected in the cost of living for those places. If having the entire city on the same 9-5 commuting schedule is expensive, it should be reflected in the cost of driving during rush hour.

Now, granted, raising the price of commuting 10000% overnight isn't fair. But introducing and phasing in tolls during peak hours is a step in the right direction in my opinion. Housing prices will slowly adjust. Employees will gradually convince employers to allow more flexible work arrangements or give raises to compensate. The indirect effects of these changes are highly desirable. But realizing them is stalled while the inefficient and unsustainable practices are subsidized like this.

> Lobbying of local city council isn't expensive. It mostly involves time

Time is something poor people have very little of, as they generally spend most of it trying to make money to make ends meet.

(This is something I've often seen poorly understood: some people seem to think that because a rich person makes more money, their time is "worth more" to them. Nothing could be further from the truth. Each hour of a poor person's time spent gaining income has a significantly higher impact on their quality of life than the same for a rich person.)

> Time is something poor people have very little of, as they generally spend most of it trying to make money to make ends meet.

I'm not talking about forming a DC lobbying firm. I'm saying they should ask Councilman Chalmers about these problems at the soccer game, after church, at the grocery store, at the Fourth of July fireworks display, or wherever she tends to be. One of the advantages of local government is that it doesn't take piles of money or tons of energy to speak your mind.

And, yes, I've been poor, so I know how things work. And, while young and poor, I have seen plenty of blue collar (at best) folks speaking out at town hall sessions, etc. The show Parks and Rec makes fun of blue collar citizen activism quite a bit, actually. They generally portray them as crazy, loud, and stupid while Leslie Knope (or someone) puts up with them. If they all said "we need a bus line running more often down Grand Ave", the message would get across.

> If they all said "we need a bus line running more often down Grand Ave", the message would get across.

That kind of activism requires time and energy that those working multiple jobs to feed their kids do not have. Doubly so if there is someone on the other side opposed to expansion of the bus routes (either due to NIMBYism or tax aversion or what-have-you).

That you see blue-collar people at town halls doesn't negate my point that doing so is expensive for them, and relatively more so than for the local well-off NIMBY.

They haven't raised the price of commuting at all, because the only people that have to pay the toll are solo drivers, and this road was not previously available to solo drivers during rush hour.

> In general, progressively pricing services is a mistake. Instead, we should be progressively supplementing incomes (minimum income, negative income tax, commuter cards, etc.) until people can afford market-priced bills, goods, and fees.

OP acknowledges this and proposes an (albeit vague) solution.

Handing out free toll tags with SNAP isn't vague at all. That's what commuter cards referred to.

Tolls aren’t a market priced good. Treating them like one is just misusing the mechanism, with the net result being the people getting to use the road are chosen roughly to be the wealthiest people who want to.

There are other resource allocation schemes besides giving resources to the wealthiest, for example by giving resources to the least wealthy. Or, as I suggested elsewhere, giving “highway passes” away by random lottery to everyone (with win probability set so that the expected number of winners is the correct number of road users).

Why aren't they a market-priced good?

It's a market with a fixed supply, but other markets like that work just fine. For example, the USA has a fixed amount of land, and that is sold at a market, and has settled on mostly reasonable rates.

Market rates for land in desirable place are anything but reasonable. I have no idea how you came to the conclusion you did, but in actual desirable places, land is unaffordable to all but the very wealthy.

Private land sales happen between voluntary buyers and sellers. From that perspective, prices are fair.

Road capacity is a scarce resource, and it should be allocated with a market mechanism like every other resource. You can then take the economic gain created by the increased efficiency and tax it to provide more public transit services.

Ouch! Regulating infrastructure purely by market mechanisms is an ugly anti-pattern that is well-known for decades, if not centuries.

Among others, this creates an incentive to keep the resource scarce and to not invest into maintaining and expanding it. Why? Because the lowest level infrastructure is a natural monopoly: Even if it was technically feasible (put wires next to existing wires, put pipes next to existing pipes, put streets next to existing streets), nobody can afford to do this. The lowest level infrastructure is only efficient if shared.

And for this simple reason, it only works well as long as the lowest level infrastructure is public good. This is true for all basic needs: water (pipes, sewer), electricity (wires), transportation (streets, rail roads) and even the internet (wires, radio masts and towers).

The debate about the latter one is also known as net neutrality. But it's really just a special case of the general pattern - if you accept internet as a basic need in today's world.

On top of that public infrastructure, a free market can and should evolve. But note that it will only be a free market if the basic layer access is non-discriminatory, which in particular means that it is easy for newcomers to get in. Otherwise you have maket distortion from day one, and all arguments about market mechanisms are moot. Which is unfortunately the reality in many areas, although its badness varies from country to country.

I would like you to reconsider this point.

Specifically,

1. driving causes pollution

2. people local to the freeway are heavily impacted by the pollution,

3. global warming is a real issue - solo drivers are a heavy contributor.

4. the freeway cost money and should have to pay its costs same as transit systems are made to pay their costs.

fyi - i carpool to work / take transit. I would rather see free buses and heavily charged car usage.

Add in that subsidising commuting by comparison punishes locating closer to your destination.

That's what gas taxes are for. Living near a freeway you are better off if they reduced congestion. Increasing congestion increases pollution as cars accelerate and break more frequently etc.

Fuel taxes are a very crude tool, road tolls are much better instrument to actually regulate the behavior you care about.

If you raise fuel taxes because there's too much congestion that's going to equally affect someone who lives in some rural area where congestion isn't an issue at all, and someone who's driving down a busy freeway every day contributing to congestion.

You also raise the price of gasoline, which has other uses that have nothing whatsoever to do with road transport.

If you want to discourage specific behavior you should tax that specific behavior, not tax something one or two steps removed from the behavior you care about.

You could have regional fuel charges. However, you don't want to discrage driving in a specific place you want to reduce it everywhere to reduce pollution everywhere.

PS: People often say you can't out build congestion, but the data in no way supports that argument. D.C. Metro area for example has horrible traffic, but just looking at road layout the failures are obvious.

Discouraging driving in general is one thing with one market price, discouraging driving where it leads to congestion is another thing with a higher market price.

Not all vehicles that cause congestion even use gasoline, which is another reason for why trying to solve congestion with higher fuel taxes is a bad idea. Your Tesla is just as bad for congestion as a gas guzzler.

Even ignoring that, regional fuel charges don't fix the problem. There's plenty of big cities where you can drive in specific areas or at specific times without causing any congestion problems, which is why it makes sense to charge road tolls on specific roads at specific times.

Vehicles can also drive to different regions to fill up, which becomes a big problem of arbitrage if you try to make the regions too granular.

Congestion already has it's own price directly in increased travel time. Which pushes people to use optimal routes to a destination. However, routing around congestion increases pollution via trip length. So you want to increase peoples ability to go from A > B, not hinder peopling moving from A > B with increased cost.

PS: We want higher mileage people to get electric cars, so having no transit tax actually efficiently promotes higher mileage people from making the switch first. It's just one of many subsides associated with electric cars, but we will eventually just charge based on odometer readings.

    > Congestion already has it's own price
    > directly in increased travel time.

Which is clearly not enough, as detailed in the article. If people only had to pay with their own time they would, and the road would be congested, hence the high toll. This is basic supply & demand.

You just keep asserting that people should pay for their pollution, I agree! But that's not always the maximum price you should pay.

    > charge based on odometer readings.

Which would be another case of not charging based on the actual cost. You could drive your street legal car around in circles on a private track, and you should pay almost no road tax, but someone who exclusively uses public roads should pay more. Under this scheme you'd pay the same for both cars.

> Which is clearly not enough, as detailed in the article.

40$ is actually close to the market rate of time saved for a large percentage of people driving on that road. So, you might not think costs that don't evenly map to dollars as equivalent, but clearly the market disagrees.

> around in circles on a private track.

Easily tracked and an exception could be made, but most people would not feel the savings as worth the effort. Remember laws are thousands of pages long first and second order objections can easily be included.

PS: In effect every road in the US is a toll road, you might not agree with the prices and exceptions but people still pay billions.

Pressure to take transit, coupled with few transit stations and low-rise/single family zoning around those transit stations, is worse: now instead of sitting in traffic, commuters with the least access to premium real estate must walk the furthest.

> Among others, this creates an incentive to keep the resource scarce and to not invest into maintaining and expanding it.

Price signals are exactly the sort of thing that can be used to optimize (and fund) the maintainance of infrastructure. Right now roads are placed and funded by fiat, which is why they’re often located nonsensically or in highly irregular states of repair.

I'm a really market-oriented guy, but I have concerns about wealth's distorting effect on markets. That is, the "cost" of an item is much less to a wealthy person than to a non-wealthy person.

Billionaire Bob can spend $100,000 on a whim, but Pauper Paul can't scrounge $10,000 for life-critical health-care. Or after a natural disaster, market theory says equilibrium prices rise to balance demand, but prices cannot rise enough so that Bob hesitates to buy all the ice for his drinks, pricing Paul out of buying ice to keep his insulin cold.

It almost feels like there needs to be some fixed currency that everyone gets equal amounts of per day and that can be exchanged for the really important things. But then some people will accumulate that currency, and we're back to wealth distortions.

Some interesting ideas on this front:

1) Using markets to allocate resources without real money: http://review.chicagobooth.edu/economics/2016/article/why-fa...

2) Finland charges road fines on a "day-rate" that varies depending on the offender's income: https://www.theatlantic.com/business/archive/2015/03/finland...

Making fees and fines dependent on income is a good way to get incentives right. In Germany for example health insurance is based on your income, not a fixed amount like here.

I believe that health care in the US is subsidized to some degree by people with higher income.

—- Medicare payroll taxes are proportional to salary.

—- Low income people that use hospitals generally don’t end up paying for their surgery and care which is passed on to people that do pay their bills.

—- Big pharma offers heavy discounts to low income patients for expensive drugs resulting in higher costs for the rest of us.

—- Under the current Afforadable Care Act free/low cost insurance is provided by raising taxes on the upper income people.

I don’t know what’s the best way to improve the system; I just wish the costs, who was paying for it, and where the money was going was more transparent. It appears that it is intentionally designed to be inscrutable.

But only up to a certain point: the tax is only on the first 50k EUR or so of your salary, and there is a minimum charged (about 100 EUR/mo.) no matter how little you make.

Still fairer than the US, though.

No, they should just improve the economy and supplement income (minimum income, negative income tax) to ensure that everyone can afford the cost of living, $40 tolls included.

Great examples - thanks!

Both the "fake money" and the "cost scales with income" are great ways to extend the applicability of markets to areas without currency or to minimize wealth effects.

For (1) there was a really good Planet Money podcast (#665)

You are talking about ration cards. This has been tried. https://en.wikipedia.org/wiki/Ration_stamp

It is still being used in the United States with the food stamps program.

Food stamps are equivalent to cash. A true rationing program as proposed would prevent you from using cash. This creates black markets which is why it is bad.

The resources people need: ice to cool insulin, food, healthcare, day care, basic housing, etc. are not scarce, or at the very least scarcity is fixable for little money.

You just need to be a little less greedy.

> healthcare, day care, basic housing, etc. are not scarce

“Scarce” in economics doesn’t mean “rare”, it means “has a non-zero marginal cost” and usually “has a concave supply curve”.

My point wasn't to say that these were free.

Merely that they idea that everybody can't have it, and there it must be rationed by economic means is a little crazy.

We can't all have private jets; but efficiency gains in food production suggests we can easily produce enough food. We are choosing not to distribute it.

Isn't that the point of using the money for public services, as rayiner suggested?

That works for this one example, where the government is selling something, effectively creating a tax on people willing to pay to save time.

But most market exchanges do not involve the government (except sales tax). The government can't efficiently capture the excess funds Bob is willing to spend on ice to provide ice for Paul (though the increased price should provide great incentive for people to increase the supply of ice...)

> It almost feels like there needs to be some fixed currency that everyone gets equal amounts of per day and that can be exchanged for the really important things.

Votes could be that, but they too are depreciating.

> Or after a natural disaster, market theory says equilibrium prices rise to balance demand, but prices cannot rise enough

This happened recently in Texas not because of a market failure, but because Texas has “anti-gouging” laws that prevent people from raising prices around a disaster, which entirely predictably had the effect of people being unable to get what they needed (wood, water, etc.) during Harvey.

Yes, anti-gouging laws are well-known for preventing supply increasing to meet the demand.

https://hbr.org/2013/07/the-problem-with-price-gouging-laws

"A well-known gouging case involves the invisible hand actions of John Shepperson. After the Hurricane Katrina disaster, John bought 19 generators, rented a U-Haul truck, and drove 600 miles from Kentucky to Mississippi. In return for his efforts and risk, he hoped to sell the generators at double his purchase price. Instead, he was arrested for price gouging, spent 4 days in jail, and the generators were confiscated. It’s a tricky issue: while Mr. Shepperson’s morality can be debated, his initiative would have unequivocally added supply and made some people better off. We all are charitable, of course, but how many of you would have rented a truck and driven twelve hundred miles round trip to sell generators for the price you purchased them?"

> Instead, he was arrested for price gouging, spent 4 days in jail, and the generators were confiscated.

But we have a free market. /sarc

Usually yes, but when one or a few suppliers are the sole source of a resource it’s not that simple. Especially when that resource is very widely used for a huge variety of applications. That’s becaus the benefit to society isn’t simple captured in the monetary cost.

Consider police vehicles, ambulances and utility maintenance vehicles. Does anybody really think they should have to pay tolls? A real market forces purist would say yes, but in reality passing along those costs efficiently isn’t practical. Similarly in theory all roads could be toll roads, but the cost of raising those tolls would massively increase the cost of the road infrastructure, driving up tolls in a vicious cycle. The gas tax is a reasonable compromise by taxing road use indirectly, it doesn’t capture the differing costs of different segments of roads and the demands on them, hence tolls on specific roads. So in the real world you can’t just treat everything like a nail and hit it with a market forces hammer. It’s a powerful and useful tool, one of the best we have, but still needs to be wielded responsibly with an eye to the intended outcome.

While it varies there are toll bridges and roads where emergency vehicles must pay. It helps that they are electronic tolls where the vehicle does not have to stop.

Here's the infamous Tacoma Narrows Bridge as an example: http://www.seattlepi.com/local/article/Even-police-cars-ambu...

History has shown that in many cases, it's finding an efficient way to measure and charge for a resource which is the real breakthrough to utilizing the resource.

If the electricity meter hadn't been invented, or cost millions of dollars, it's doubtful your home would even have electricity today.

Very true, but that’s a fact regardless of whether market forces are a send to determine price. Ideally they should, because markets are usually good at determining relative value, but not always as for example in the case of industrial pollution. Eventually over hundreds of years we are beginning to implement some ways of factoring that onto market costs, but it’s been a long and painful process and there’s still a long way to go. For most of that time direct regulation has been the only workable answer, figuring out how to factor it into markets would have been too late.

A big reason of income gap is opportunity gap. We keep widening the opportunity gap by adding 'fast lanes' to people who can afford it, rather than improving the situation for all. In this particular case, perhaps, there is no short term solution to improve for all but it makes me little sad anyway.

Ability to pay is not the only way to ration scarce resources, neither is it proven to be the best in all scenarios: this is why you can’t pay to bring your court date forward

But should you be able to pay all the people ahead of you in line enough to convince them to let you move in front of them?

This is a very slippery slope if some people have much more money than others.

Also a great way to ensure people jam up the court system for profit

Or even just to hand it out as yearly lump sum all citizens: than even the poorest person can afford the tolls, as long as they use the average amount or less of road capacity.

The problem with _not_ charging any money for road capacity is that you are still rationing, but now the price is measured in people's willingness to waste time in traffic. And that time is just that, wasted. The money collected can be re-routed to other purposes.

>> a market mechanism like every other resource.

Well... the mechanism is prices. A market machaninism, but not really a market in the full sense...

Anyway the result of this mechanism are fairly predictable. Fixed, scarce, resource. Price system. Unequal distribution of wealth/income. Most of the scarce resource will be allocated to the wealthy, who will outbid the rest.

At present, the non market price-like mechanism is generally time, and all people get 24 hrs per day.

Donated organs are a scarce resource

Radio spectrum is a scarce resource

You can't solve those with market mechanisms

Electrical transmission and generation facilities are somewhat scarce and we all see how the "free marked" worked great in the Enron case there

Are you trolling?

Radio spectrum auctions are fairly commonplace these days.

Organ markets work reasonably well in Iran, and would be great for the rest of the world as well.

Electrical transmission and generation work really well in a market setting in most places that's been tried. What does Enron have to do with it?

> What does Enron have to do with it?

Before accusing others of trolling make sure you understand the arguments presented, which you clearly don't.

Enron did some internal trading of energy. Or what else do you mean?

The lack of market mechanisms for organ donations has lead to an huge undersupply of them in the United States. It's literally causing a massive number of people to die that wouldn't under a more market oriented system.

I live in DC and I recently took a trip to a rural part of America. I must say I was a bit shocked. I have been in my little metro bubble for so long that I was completely out of touch with how rough rural areas are looking.

There are towns that have given up maintaining parts of their road networks and are intentionally turning some hard-to-maintain paved roads into gravel roads - "depaving".

https://www.wired.com/2016/07/cash-strapped-towns-un-paving-...

Even my home state (Texas), which isn't in an obvious economic crisis (though its budget situation is arguably a self-made crisis by our crazy legislature), has been doing it for a few years now:

https://www.texastribune.org/2013/08/19/conversion-of-roads-...

But Michigan is the example I remember hearing about the most: http://www.ttnews.com/articles/lacking-proper-funding-mainte...

I live in New Orleans but am not a native. Visiting DC this past fall (although not for the first time, I have been there when I was little), coming out of the Metro station on King St (in Alexandria) was absolutely cause for my jaw to drop.

" Most people in Congress have enough money and get a nice insurance plan" -- hehe they get government insurance that pretty much covers 100% of everything you can't really buy an equivalent commercial policy but they sure will argue all day that you def. don't want that horrible gov. insurance.

If you make one friend with someone in your neighborhood or your workplace and carpool the express lane is free. It's that easy. That's what one of my coworkers' wife does. Another person I work with comes to work at 0500, others come after 1000.

This $40 was a charge that allowed willing, solo drivers to use the car pool lanes. No one had to pay the $40; they could continue to drive solo in the non car pool lanes as they had previously. This option was just added.

Yes, and now there's a privileged option for privileged people, whereas before it was just banned / equal for everybody (everybody driving solo, that is). That's what the GP was getting at, I think.

Should first class seating on airplanes be eliminated?

Should seats to sporting events all cost the same?

Should all of us drive the same model car or should all models just be priced the same?

Should steak be priced the same as hamburger?

I observe that economic discussions here on HN are dominated by two interesting perspectives:

(1) We should have a Star Trek like economy: no one wants for anything.

(2) If smart people like us had our hands on the steering wheel we could regulate the economy into good shape—-Friedrich Hayek described this as “The Fatal Conceit” in his book with that title.

The answer to all of your questions is no and here's the important distinction to the roads-problem: private vs. public goods / services.

The same applies to public goods/services though. E.g. if you can afford the electricity (public utility) to mine bitcoins, should we not?

Bitcoins? Here's a better analogy:

Say the public grid is notoriously unstable. Electricity is on maybe 50% of the day. (This is in fact true in some countries.) Now the government (who pretty much has sole domain over running utility wires) offers a "deluxe" service, with 100% availability, for the low-low price of a week's worth of food for one day of service.

Congratulations. Now you've stabilized a scenario in which everyone with money and power is sated, and the government has little reason to allocate any resources to improving the service to the remainder of the public.

The important thing is that the rules for using publicly financed goods/services are the same for everybody. If you pay for your electricity of course you are free to choose what you do with it.

This is not the same as with roads though, since they are a finite resource (whereas, arguably, electricity can be seen as infinite in this case). You can't ask people to pay for roads which they then can't use because they can't afford the tolls for it. It's already bad enough that so much tax money flows into building roads, which can only be utilized by people wealthy enough to own and maintain a car in the first place. (I'm reading the book "Happy City" at the moment, so this topic struck a chord with me)

But the rules remain the same for everyone: if you want to use the road and don’t want to carpool, you pay.

If you make $550 per day, $40 is 7% of your daily income; if you make $82 per day, it's 49%. That's not the same for everyone. Of course, there are people who make well more than $550 per day and people who make significantly less than $82 per day.

($200,000/365=$550; $30,000/365=$82)

By that logic, almost every single rule in this world is 'unfair' towards the poor, because of course things cost disproportionately more for the poor.

Public goods.

And, yes, most rules are unfair to poor people. Who do you think makes the rules?

The privileged were already using the road because

* 1) they can afford the ticket

* 2) the probability of getting a ticket is quite low

So it seems more money might get captured from the privileged now.

Not quite...there aren't, and haven't been for over 20 years, any non-HOV lanes on the road at rush hour. They expanded the rush hour HOV time period, so it catches people that left early or late to avoid it. They also removed an exception for hybrid vehicles with special plates and traffic to the airport.

The real issue is that the NIMBYs in Arlington won't let them expand the road at all.

Right, if the rush hour times hadn't changed (and the other exceptions) the toll wouldn't seem like as much of a money grab.

One interesting thing, is how this might incentivise people to ignore the toll altogether since the price over even a short period of time are likely to be higher than the fines.

Expanding roads doesn't help with congestion ([Induced Demand][0]). So no, NIMBYs in Arlington are not the real issue.

[0]: https://en.wikipedia.org/wiki/Induced_demand

Your own link says it's less absolute than you're making it out to be:

> A comparison of congestion data from 1982 to 2011 by the Texas A&M Transportation Institute clearly demonstrated that additional roadways reduced the rate of congestion increase. When increases in road capacity were matched to the increase demand, growth in congestion was found to be much lower.

> ... one study ... found that "over a six- to eight-year period following freeway expansion, around twenty percent of added capacity is 'preserved,' and around eighty percent gets absorbed or depleted. Half of this absorption is due to external factors, like growing population and income ...

Though it is likely true that expanding metro lines into VA would be more cost-effective here.

Whenever I see "problematic" it's always someone who is pointing out something that is not actually a real problem, ie. supported by data or facts, but they desperately want it to be because it doesnt make them "feel" right or it seems like the "right thing to do". More often than not it runs counter to their initial goals (increasing exclusion in the name of inclusion, hurting everyone in the name of punishing the top few, etc).

...No one is being excluded when a service is being underutilized and a small group of people pay extra to reach optimal capacity. There is no way for them to fill this small extra space without flooding it (ie, hybrid only, or Dulles airport cars as they already tried was obviously too much traffic), so why not use it to capacity and earn the city more money from these wealthy people?

Would you rather the government make less money from the wealthy?

Do you really think the small group of people willing to pay $40 is going to slow down the existing traffic?

Would you rather no one uses it, even though the highway can support a small amount of other cars, just for some abstract satisfaction at 'hurting' wealthy people?

My main concern is that the people in power (the ones with money) will direct resources to deluxe infrastructure because they can afford it and neglect basic infrastructure. When I hear people in Congress talk about the US system being the best in the world it's already clear that they haven't experienced it from the view of somebody with little money.

When I drive around LA this trend is visible. Rich neighborhoods have nice roads and don't allow street parking so they don't get much traffic. Poor neighborhoods have bad streets and get a lot of traffic.

You seem to be suggesting the only two options are

1. No one uses the nice thing.

2. Only thing richer people use the nice thing.

There are plenty of other ways of allocating resources besides giving it to the richest people. E.g., there could be a lottery so that everyone gets to use the nice thing sometimes.

I'm curious how they use the money from the $40 toll. If, for example, they used the money to improve roads and other public transportation options so that everyone on average gets where they need to go faster, then that ought to make everyone happy.

Or else just divide up the revenue and mail everyone in the state a check at the end of the year. That would make me less angry about the fact that other people are able to afford the $40 toll.

> "I'm curious how they use the money from the $40 toll."

The article says that it is being used to fund new construction:

"This is what transportation costs!"

"The real reason there's sticker shock is that the real cost of road transportation is hidden from most voters. Gas tax money goes to states and the US Department of Transportation which flows back as what seems like free federal money to build a lot of roads. Meanwhile, every transit project has to scrimp for funds and deal with constant sniping from critics calling it a boondoggle."

Transportation costs are perhaps the most perfect example of Parkinson's law and it's permutations. “purchasing expands to fill the entire budget.”

It's not true. The road had a planned expansion to go to 4 lanes in each direction in 1977. It was blocked by Arlington County, and the only new construction they've done for 40 years is extending the exit lanes. It's so ridiculously under the needed capacity that all of the canards about not being able to build your way out of traffic don't apply.

> "It's not true. The road had a planned expansion to go to 4 lanes in each direction in 1977..."

Doesn't matter that it was planned a long time ago and blocked. Regardless of how or when it was initially built, the cost to build it has to be compensated somehow.

Interstate expansion comes from the national highway fund. Arlington blocking it has little to do with the cost.

Money is fungible. Even if the toll goes to transportation they will just cut that amount from the regular budget. Sending out a check to everybody would be fine but that ain't gonna happen...

And, alas, sending back a check to everybody would probably just drive up rents.

What's wrong about using a tax/fee to fund the general expenditures of the collecting authority?

(That's what eg income tax does.)

Or, people who don't have a lot of money but really, really need to get there in a hurry can use them too. See: late for job interview, in labour, late for flight, etc.

Also if you're driving a vehicle you own you're already not among the poorest folks out there.

I agree with your first point, but:

> Also if you're driving a vehicle you own you're already not among the poorest folks out there.

Is an incorrect notion. Poor people don't not drive (how could they not, to drive across the city from their not-served-by-public-transit residence to their minimum-wage job?), they drive shitty cars. Certainly, I owned a vehicle out of necessity when a $40 expense would have been unthinkable for me. That's half a days' wages for many people. 2.5% of your month's income is a LOT, especially after spending half of it on housing.

Sure, you're correct that the destitute don't own cars, but there's a large swath of the population more well-off than "destitute" but not so well-off as to be able to ever spend $40 on something that is not an absolute necessity.

It won't really be people who are personally rich as much at it will be people who can expense it to their rich employer or bill it to their rich client.

They have a strategy in the UK to get everyone to pay £40 tolls, regardless of your income - by stealth.

There’s been a trend towards digital tolls - that is, no physical means to pay, you just have to know that you need to go online to their site to pay within an hour of leaving the toll road/bridge.

Thing is, many operators have little signage, poor or unavailable websites, and you can end up in a situation where you don’t realise you need to pay, or can’t pay because their tech has failed, or simply forget. So - instead of paying the £2 toll, you get a £40 penalty, payable immediately, appeals at your expense, etc.

Now, it’s easy to go “conspiracy” but there’s one factor that strongly leads me to believe that this is by design. It’s cost. At £2 per transaction, acquirer and network fees will eat a big chunk - much more than the salary for a human, or the cost of an automatic change bucket. Therefore, they rely on the fines as core revenue.

Rubbish. I guess this happened to you once somewhere and now you think it is a 'strategy', but the only automatic toll I can think of is the London congestion charge and everyone knows about that.

Liverpool, merseyflow, and I’m a long way from alone - there’s one sign, a website (merseyflow.co.uk) with major availability and usability issues, and they charge a toll on both the old (used to be toll free) and new bridges.

The first month of operation generated £1M of revenue from fines alone. https://www.google.co.uk/amp/www.liverpoolecho.co.uk/news/li...

The same article asserts a revenue of £50m+/yr from fines for dartford - same administering firm. With toll barriers this revenue would have been zero.

Looks pretty strategic to me.

There's the dartmouth bridge crossing, where there are about 50 signs either side saying "PAY YOUR TOLL ONLINE OR FACE A PENALTY"

Minor nit: It's the Dartford Bridge Crossing, not Dartmouth (which is in Devon).

Although, bizarrely, if you enter "dartmouth bridge crossing" into Google, it'll return the Dartford one.

As mentioned below, Dartford Crossing (bridge + tunnel) is an automatic toll (using ANPR).

There are also a few other places which use ANPR for charging (Betteshanger Country Park car parking springs to mind) but I don't think you can consider those "tolls" in the traditional sense of the word.

> you need to go online to their site to pay within an hour of leaving the toll road/bridge

Pay within an hour? I think you're exaggerating.

Merseyflow and Dartmouth are both midnight at the end of the day after you have crossed. So that's guaranteed at least 24 hours.

Everybody in Congress gets free health-care for life, no?

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