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I agree; real time surge pricing for congested roads would be the optimal solution. But just imagine the outcry in the population when you try to implement road

by jcfrei 12y ago

I agree; real time surge pricing for congested roads would be the optimal solution. But just imagine the outcry in the population when you try to implement road charges for all inner city roads. This is another example of an economically perfectly sound concept which is in many parts of the world politically completely unfeasible (at least for the moment). On top of that, couldn't you argue that transportation is a basic human right? If so, you would have to either discriminate against the poor or adjust the rates based on income, which again makes this a politically very hot and difficult topic.

drivingmenuts 12y ago
> real time surge pricing for congested roads would be the optimal solution. Except where people are too poor to afford surge pricing, even though they may need to travel just as much as anyone else. Libertarianism is great right up to the point where you actually need something you can't afford, like medical care or travel to a job. Then it's pretty much a big FU because you're not profitable.
- tormeh 12y ago
  The problem is that mainstream economic theory assumes your utility to society is equal to your income and therefore discriminating based on income is an optimal strategy for society. Of course, wages are about negotiation power, not utility. It's so misguided it's bizarre.
- SilasX 12y ago
  This comes up every time someone suggests pricing a scarce good (either with Pigovian taxes or privatizing a scarce resource), but it has an easy solution: [p]rebate everyone the amount of tax they would pay for poverty level consumption of the resource. That preserves all of the incentives to cut back on a marginal unit, without penalizing someone for being poor. Facing economic realities doesn't mean keeping staying with systems that rewards the wrong thing.
avn2109 12y ago
Idea: In the same way that the Alaska Permanent Fund has created a vocal pro-industry constituency out of nothing (aka the residents of Alaska, who are paid from extractive revenues), maybe we could drum up political support by distributing the revenues directly to the people. As in, "Dear Mr. Smith, you live here, therefore here is your monthly check for your share of the dynamically-priced congestion tax revenues that we collected on your behalf. Have a nice day." That might be more palatable than "We invisibly 'lowered' your tax bill elsewhere, Mr. Smith."
innguest 12y ago
Interesting how you ended up reaching the libertarian conclusion. If roads were private (and in places where they are we do see this) you can change the charging fee based on time of day, congestion, etc, and optimize it in such a way as to keep the traffic flowing. No way to do that when things are public.

by jcfrei 12y ago

drivingmenuts 12y ago

> real time surge pricing for congested roads would be the optimal solution. Except where people are too poor to afford surge pricing, even though they may need to travel just as much as anyone else. Libertarianism is great right up to the point where you actually need something you can't afford, like medical care or travel to a job. Then it's pretty much a big FU because you're not profitable.

tormeh 12y ago
The problem is that mainstream economic theory assumes your utility to society is equal to your income and therefore discriminating based on income is an optimal strategy for society. Of course, wages are about negotiation power, not utility. It's so misguided it's bizarre.
SilasX 12y ago
This comes up every time someone suggests pricing a scarce good (either with Pigovian taxes or privatizing a scarce resource), but it has an easy solution: [p]rebate everyone the amount of tax they would pay for poverty level consumption of the resource. That preserves all of the incentives to cut back on a marginal unit, without penalizing someone for being poor. Facing economic realities doesn't mean keeping staying with systems that rewards the wrong thing.

avn2109 12y ago

Idea: In the same way that the Alaska Permanent Fund has created a vocal pro-industry constituency out of nothing (aka the residents of Alaska, who are paid from extractive revenues), maybe we could drum up political support by distributing the revenues directly to the people. As in, "Dear Mr. Smith, you live here, therefore here is your monthly check for your share of the dynamically-priced congestion tax revenues that we collected on your behalf. Have a nice day." That might be more palatable than "We invisibly 'lowered' your tax bill elsewhere, Mr. Smith."

innguest 12y ago

Interesting how you ended up reaching the libertarian conclusion. If roads were private (and in places where they are we do see this) you can change the charging fee based on time of day, congestion, etc, and optimize it in such a way as to keep the traffic flowing. No way to do that when things are public.