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> Normally, a competitive market has no surplus. The owner of a restaurant, the developer of a building in an unconstrained area like suburban Texas, the seller

> Normally, a competitive market has no surplus. The owner of a restaurant, the developer of a building in an unconstrained area like suburban Texas, the seller of cloth masks on Etsy, the freelance web developer – none of them is making a killing. People enter the market until profits are driven down to levels low enough to essentially be the owner-manager’s wage. The majority of the surplus goes to the consumer, yes. > Gratuitous tunneling instead of above-ground construction. This is usually a demand made of high-speed rail, but there are some gratuitous tunnels in suburban rail as well, for example Crossrail 2. The surplus here is that NIMBYs do not like to see trains from their houses; the emotional value of their views is naturally a fraction of that of the cost of tunneling. I'm not sure how the author puts a value on someone else's preference for a view. This seems paternalistic. The view out the window of your home has a significant impact on your quality of life. > Extortion of community benefits to activists, for example demands for larger stations to act as neighborhood centers. A large degree of the cost explosion of the Green Line Extension in Boston came from the policy of accommodating local demands, leading to oversize stations. But such overbuilding can also occur absent extortion – the surplus can vanish into poor practices, representing incompetence rather than malice, as in the oversize viaducts of California High-Speed Rail. Uselessly oversize aqueducts are wasteful but there's a lot of value in building a new road around an existing useful building rather than using the power of the state to demolish someone's community center because it happens to be where you want to drive cars. > Even more recent attempts to create equity have failed. Slowing down the state and empowering community is always bad for equity, because the community is where inegalitarian traditions live. At least the author doesn't mince words. > What it does say is that the role of the state is to safeguard surplus and keep it socialized, against demands from many special interests, which should be disempowered through legal changes making lawsuits harder and reducing the ability of consultants and unions to drive up costs. Then agents of the state can capture surplus for themselves by autocratically dictating what is to be done and the people from whom the surplus is captured have little to no recourse. > In that sense, the role of the planner is to say no – and moreover, to say no to charismatic groups representing much-romanticized people. No, dear mother with children, we will not build you a noise wall just because you think 140 km/h electric trains will reduce your quality of life. If only politicians were this honest about their true motives. This is a refreshingly honest blog. > No, dear tradesman much-profiled as a non-college white voter, we will not hire you for $110/hour when there exist people who will do your job better than you can at $35/hour. This is actually why markets are better than central planning. > No, dear third-generation business owner, we will not listen to what you think about traffic as we replace parking spots with bus lanes. This is why cities are dying. > No, dear white flight homeowner, we will not build you a tunnel just to avoid taking a few houses through eminent domain. What makes someone so callous about using the power of the state to expropriate people from their homes? > No, dear deindustrialized city leader, we will not require companies to set up factories in your city at high cost when we can get cheaper imports. Which is why people buy plastic crap made by slaves in Asia and toss it in the landfill. > It’s never going to be no, dear criminal, or no, dear Nazi, because criminals and Nazis are not used to making such requests and having people listen. Which is why the criminals and Nazis get jobs as urban planners if they want to, say, evict homeowners and put noisy trains next to daycare centers. Good article, I wish more people were as forthright about their beliefs and values. One last thought: > the role of the state is to safeguard surplus and keep it socialized > Slowing down the state and empowering community is always bad for equity, because the community is where inegalitarian traditions live. Community centers enjoying surplus is socialization of the surplus. When the state extracts surplus from a community its more likely to spend it on noisy trains and oversize aqueducts than distribute it to other needy communities.

pdonis 6y ago
> The majority of the surplus goes to the consumer, yes. Which is different from what the author says--and at least it is usually correct, whereas what the author says is simply wrong. It is not true that in a competitive market there is no surplus. What is true is that in a competitive market, price gets driven down to marginal cost, and there is usually no opportunity for the seller to practice price discrimination, so everyone pays the same price for the product--not just the marginal buyer, for whom the product is just worth what it costs, but also all the non-marginal buyers, for whom the product is worth more than what it costs (in the sense that they would still buy the product even if the price were higher). The extra worth of the product to all of those non-marginal buyers is the surplus, and without price discrimination, the seller has no way of capturing any of it, so there is little or no margin for the seller. > I'm not sure how the author puts a value on someone else's preference for a view. He's assuming that those people would be willing to pay some amount to have the tunneling done and thereby avoid having to see rails. That amount, that they would be willing to pay but which the owner of the rail has no way of capturing from them, is the surplus. Here the author is using the concept of "surplus" correctly; unfortunately, in many other places in the article he doesn't. He also, as you point out, has a misguided fondness for central planning.
AnimalMuppet 6y ago
> > No, dear white flight homeowner, we will not build you a tunnel just to avoid taking a few houses through eminent domain. > What makes someone so callous about using the power of the state to expropriate people from their homes? First: "Expropriate" is both emotionally loaded and inaccurate. It looks like you're trying to be manipulative here rather than present a sound argument. Second: If we're going to build a road or a rail line, we're either going to spend some money and buy peoples' homes, or we're going to spend more money and create a tunnel. But money doesn't grow on trees for local governments; if they spend it, they have to take it. So either we're going to take money from people to buy houses from people, or we're going to take more money from people to create a tunnel. Why should they take more money from people to save peoples' houses? Why should my taxes go up to save your house? Note that this is a completely separate discussion from whether eminent domain actually pays people market prices for their homes.

pdonis 6y ago

> The majority of the surplus goes to the consumer, yes. Which is different from what the author says--and at least it is usually correct, whereas what the author says is simply wrong. It is not true that in a competitive market there is no surplus. What is true is that in a competitive market, price gets driven down to marginal cost, and there is usually no opportunity for the seller to practice price discrimination, so everyone pays the same price for the product--not just the marginal buyer, for whom the product is just worth what it costs, but also all the non-marginal buyers, for whom the product is worth more than what it costs (in the sense that they would still buy the product even if the price were higher). The extra worth of the product to all of those non-marginal buyers is the surplus, and without price discrimination, the seller has no way of capturing any of it, so there is little or no margin for the seller. > I'm not sure how the author puts a value on someone else's preference for a view. He's assuming that those people would be willing to pay some amount to have the tunneling done and thereby avoid having to see rails. That amount, that they would be willing to pay but which the owner of the rail has no way of capturing from them, is the surplus. Here the author is using the concept of "surplus" correctly; unfortunately, in many other places in the article he doesn't. He also, as you point out, has a misguided fondness for central planning.

AnimalMuppet 6y ago

> > No, dear white flight homeowner, we will not build you a tunnel just to avoid taking a few houses through eminent domain. > What makes someone so callous about using the power of the state to expropriate people from their homes? First: "Expropriate" is both emotionally loaded and inaccurate. It looks like you're trying to be manipulative here rather than present a sound argument. Second: If we're going to build a road or a rail line, we're either going to spend some money and buy peoples' homes, or we're going to spend more money and create a tunnel. But money doesn't grow on trees for local governments; if they spend it, they have to take it. So either we're going to take money from people to buy houses from people, or we're going to take more money from people to create a tunnel. Why should they take more money from people to save peoples' houses? Why should my taxes go up to save your house? Note that this is a completely separate discussion from whether eminent domain actually pays people market prices for their homes.