09 December 2004

9/12. Road pricing, Bit of ancient history on

Sent: Thursday, December 09, 2004
To: NewMobilityCafe@yahoogroups.

P.S. I thought to take a minute of your time with this, since road pricing is so important to us and to the future of traffic in towns (as someone put it a bit back).

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Dave Wetzel on Wed 12/8/2004 7:56 PM wrote: "As always our Ken got it right ." Well, maybe. ;-)

Well thanks so much for that information and view Dave, but if I may respectfully say, the "true story" behind how all this stuff on road pricing first got started is quite precise. Since I was in on it rather early and with in fact all the named protagonists, let me see if I can give it to you from the horse's mouth on this.

Professor William Vickerey, who tried to teach me economic theory in the early eighties and who deserved his Nobel Prize if only for that hopeless mission, told me the following story about rp when I went back to visit him in his office in the later sixties when I was visiting Columbia.

His interest was first piqued when he was still a junior faculty member at Columbia he was still living in downtown Manhattan in an apartment from which he could observe the traffic piling up in front of the Lincoln tunnel. As a rational thinker with a interest in economic pricing for social objectives, he asked himself why ever did the authorities not ease their task and costs by charging the tool only on the Jersey side (where land was much cheaper) and in the process keep the traffic rolling. He then wrote a short piece on that, which later led to an assignment with The Mayor's Committee on Management Survey in 1951 in which he set out a number of proposals, including several variants of what he had already called for several years "road pricing".

Professor Vickerey - who by the way was not only a splendid economist and teacher but a brave (quite literally), kind and wonderful man who could listen as well as he talked -- was concerned both about overall inefficient use of costly urban infrastructure, and of the time axis. Of the former he wrote later when I was studying with him: "In no other major area are pricing practices so irrational, so out of date, and so conducive to waste as in urban transportation." (1962 in "Pricing in Urban and Suburban Transport"). And here is a sample of his most standard short statement of the issues in terms of the time axis. "There can be no efficient solution to the urban traffic problem that does not include provision for charges on automobile use that are differentiated according to time of day." ("General and specific financing of urban services", Resources for the Future, Washington D.C.,1962)

This is not to say that Professor Freidman did not, as Mayor Ken tells us in his gracious acceptance talk, roll out his only early ideas on the subject, but to the best of my information Bill was there first and that's that. It is of course attractive to pin this one MF, since it lines up so nicely with the usual like 'the market economy', 'money matters', 'only money matters', 'pricing', etc. That said, it's an easy mistake to make. . . particularly if you want it to be true. And indeed, the intellectual link is there. (Professor Freidman also by the way failed in the task of turning me into a real economist though I did in fact study monetary economics with him at the time and with great interest. But you can't, as they say, turn a pig's ear into a silk purse.)

A few words to close on the two other interesting people that Dave cites which I find interesting in our present context and very much to the point, just in case they escaped your attention.

Bob Poole is director of the Transportation Center of Reason Foundation's Public Policy Institute and has been a strong and effective voice for free-market transportation alternatives such as toll roads and express highway lanes for commuter buses. Reason is a libertarian think tank dedicated to "promoting choice, competition, and a dynamic market economy". You can see more about their work and accomplishments at http://www.rppi.org/surfacetransportation/index.html. They are strong competitors in the market place for ideas leading to new ways of doing things.

Gabriel Joseph Roth, the other person to whom Dave refers in his note, is quite another story. If you go to Google you will get at the site of the Independent Institute at http://www.independent.org/aboutus/person_detail.asp?id=I3 the relatively
bland: "Gabriel Roth is a transport and privatization consultant and a research fellow at the Independent Institute, where he is editing a book on private-sector roles in the provision of roads". But there is a lot more to it than that. Gabe it can be said did more to put road pricing on the street during the years he was at the World Bank then anyone else in sight, during which time he stood four square behind the Singapore project -- at a time when he was almost put on the sidelines by his senior colleagues. But he persisted and refused to back off. His first breath of publication on the subject was a 1966 publication for the free market Institute of Economic Affairs based in London he put forward a then radical proposal for paying for roads. Today, a generation later he is still very much at it. Wonderful important stuff and such a fine stubborn man.

This completes my short personal tour on the long road of road pricing, and if you are still there I hope you find something useful in all that. And of course, if you have comments and corrections they are as always much appreciated. In any event, I think it is important that we have a common understanding of the past, so that we can together build the future.

Eric Britton

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