Category: Politics and Society

What Does It Mean to Run the State Like a Business?

There’s a common expression, run it like a business, connoting a set of organizational reforms that intend to evoke private-sector efficiency. Unfortunately, the actual implementation as far as I’ve seen in public transportation agencies has always fallen short. This is not because the private sector is inherently different from the public sector – it is, but not in ways that are relevant here (for example, in marketing). Rather, it’s because the examples I’ve seen always involve bringing in an outside manager with experience in private-sector management but not in the industry, which tends to be a bad practice in the private sector too. Many of the practices bundled with this approach, like the hiring freeze, are harmful to the organization and well-run private firms do not engage in them.

So, instead, what would it mean to run public transportation like a business?

Internal workings

A public transit agency that wants to access the high productivity of frontier private-sector industries in the United States had better imitate common features to large corporations. These include all of the following:

1. Smoother HR. Jobs need to fill quickly, with a hiring process that takes weeks rather than months or years. HR should follow private-sector norms and not civil service exams, which represent the best reform ideas of the 1910s and are absent from the strongest bureaucratic public sector norms out there. Moreover, the pay needs to be competitive and largely in cash, not benefits. Some European countries (like Sweden) get away with having a fully laden cost of employment that’s about twice the gross salary because their tax structures have such high employer-side payroll taxes that this is more or less also the case for the private sector; but in the US, the private-sector norm is a multiplier of about 1.3 and not 2 and the public sector needs to do the same. Benefit cuts should go one-to-one to higher base pay, which should be competitive with high-productivity industries – public transit agencies should want to hire the best engineers, not the engineers who couldn’t get work in the private sector.

2. Promotion by merit and not seniority. Seniority systems in private businesses are a feature of relatively low-productivity countries like Japan, whereas the more productive American and Northern European private sectors promote by merit and have paths for someone to have decisionmaking power in their early 30s if they’re good. In contrast, American public transportation providers are bound by rigid notions of seniority at all levels – including even how bus and train drivers are scheduled (in the German-speaking world, schedulers set everyone’s work schedules on the principle of spreading out the painful shifts equally) – turning one’s 20s into a grueling apprenticeship, and even at my age people are always subordinate to a deadwood manager who last had an idea 20 years ago.

3. Hiring successful leadership, from within the industry if not through internal promotion. In some cases I can see hiring from adjacent industries, but so far this has meant national railroads like Amtrak and SNCF hiring airline executives, who do not understand some critical ways trains differ from planes and therefore produce poor outcomes. The practice of hiring people whose sole expertise is in turnarounds must cease; in Massachusetts, Charlie Baker’s foisting of Luis Ramirez on the MBTA was not a success. In the United States, the best example of a successful outside hire for leadership is Andy Byford, who Andrew Cuomo then proceeded to treat with about the same level of respect that he has for the consent of women in the room with him and for the lives of residents of New York nursing homes. This is really an extension of point #2: people with a track record of success in public transit should run public transit, and not hacks, washouts, and personal friends and allies of the governor.

4. Professional development. A planner earning $60,000 a year, who should probably be earning $90,000 a year, gets to regularly fly to a conference abroad for $2,500 including hotel fees to learn how other countries do things. The core of a high-value-added firm is its employees; the biggest risk when one invests in them is that they then take their skills and go elsewhere, but public transit is a local monopoly and if a New York planner takes their skills and moves to Philadelphia, on net New York has lost nothing, since SEPTA is complementary to its services rather than a competitor.

Note that this list avoids any of the usual tropes of hiring freezes, rank-and-yank systems, or the imposition of a separate class of managerial overlords who get to tell the experienced insiders what to do. These are not features of successful, high-productivity businesses. Some are features of failing companies, like the hiring freeze. Others are a feature of long dead industrial traditions, superseded by more modern ones: the class system in which the recently-hired MBA is always superior to the experienced worker, faithfully reproduced in most militaries with their officer-enlisted distinction, is inferior to the classless system in which people are hired and among them the most successful and most interested in a leadership role are more rapidly promoted.

Outside funding

The above points are about how a public transit agency should restructure itself. But the private sector has some insights about how external funding, such as federal funding in the US, should work.

Central to this is the venture capital insight that the quality of the team of founders matters at least as much as the proposal they bring in front of the VC team. If public transit agencies are to be run as frontier businesses (such as biotech or software-tech), then it stands to reason that federal funding should look at how the VC system funds them. In addition to following the above agency norms for their own hires, grantors like the FTA and FRA should then look at who exactly they’re funding. This means at least three things:

1. YIMBYer regions get more money than NIMBYer ones. New York can still get some money if it has exceptionally strong proposals, but overall, regions with stronger transit-oriented development, which in the US mainly means Seattle, should be getting more funding than regions without. This is on top of the purely public-sector negotiation process, common in the Nordic countries, in which an area that wants rail access to city center jobs is required to plan for more housing, even over local NIMBY objections. The Nordic process is a negotiation, whereas what I’m proposing here is a process in which the FTA and FRA get discretion to invest more money in regions that have pro-growth, pro-TOD politics without rezoning-by-rezoning negotiation.

2. Regions with recurrent corruption problems get defunded. If there’s a history of poor project management (for example, at California High-Speed Rail), or of actual corruption (as in Florida with Rick Scott), or of leakage of federal funds to unrelated goals such as creation of local jobs or overpriced betterments, then outside funding should not be forthcoming. There are other places that need the money and don’t abuse federal funds.

3. Regions with healthy ecosystems of transit advocacy get more money than regions without. NGOs are part of the local governance structure, and this means the FTA and FRA should be interested in the quality of advocacy. The presence of curious, technically literate, forward-looking groups like TransitMatters in Boston and 5th Square in Philadelphia should be a positive mark; that of populist ones like the Los Angeles Bus Riders’ Union with its preposterous claims that trains are racist should be a negative mark. This also extends to the local nonprofit grantors – if they are interested in good governance then it’s a sign the region’s overall governance is healthy and it will not only spend federal money prudently but also find new innovative ways to run better service that can then lead to a nationwide learning process. But if they are ignorant and incurious, as Boston’s Barr Foundation is (see incriminating article here by Barr board member Lisa Jacobson, falsely claiming Britain has no interest in equitable investment and the Netherlands has no interest in pedestrians), this suggests the opposite, and regions with such people in positions of power are likely to waste money that they are given.

Giving the state discretion

A lot of people are uncomfortable with the idea that the public sector should ever have the discretion to make its own decisions. In practice discretion is unavoidable; the American solution to the conundrum has been to bury everyone in self-contradictory paperwork and then any decision can be justified and litigated using some subset of the paperwork. So the same discretion exists but with far too high overheads and with a culture that treats clear language as somewhere between evil and unthinkable.

Because the idea of running the government like a business is disproportionately common among people who don’t like the public sector, programs that aim to do just that are bundled with programs that leash the state. The leash then means politicization, in which personal acquaintances of the mayor, governor, or other such heavyweight run agencies they are not qualified to work at, let alone manage; the professionals are then browbeaten into justifying whatever decision the political appointees come to, which is a common feature of dysfunctional businesses and a rare one at successful ones.

But successful businesses are not leashed. To run the government like a business means to imitate successful business ecosystems, and those are not leashed or politicized, nor are their core office workers subjected to a class system in which their own promotions are based on seniority and not merit whereas their overlords are a separate group of generalists who move from agency to agency. What it does mean is to hire the best people and promote the best among them, pay them accordingly, and give them the explicit discretion to make long-term planning and funding decisions.

I Gave Two Talks About Construction Costs Yesterday

We gave two talks about construction costs yesterday, as I said in my invite earlier this week. There are no slides to upload, so I’ll just give brief overviews.

The 11 am talk had with Aaron Gordon as moderator and comprised me, Eric, Elif, and Marco, in front of an audience of about 40, including a few people in official capacity from the MTA or the more reform-oriented sections of politics. It was recorded, and the video has been uploaded via the Marron channel. The four of us went over our backgrounds and what brought us to this issue, and then we talked about what we’d done – we tallied around 200 personal interviews and correspondences and countless academic and gray studies reviewed – and what the conclusions are (see above link for some of them).

Audience questions were markedly friendly, and so were followup conversations Eric had with people at the MTA about this; Eric and I had spent the previous day catastrophizing about what if we’d encounter a hostile audience with questions insisting that no, New York can’t possibly be an order of magnitude more expensive to build subways in than our comparison cases, but none of that happened there.

The political response is also interesting. I’m not going to name names but I’ve found it striking that there’s interest in this from both politicians who ideologically identify with the radical left and the Democratic Socialists of America and ones who ideologically identify with the neoliberal movement (currently rebranding itself as New Liberals, in parallel with the New Democrat Coalition).

In a way, it’s not too surprising. Both groups are motivated by ideology and not by the petty concerns that lead to NIMBYism and to the politics of delay for its own sake. More subtly, while the term neoliberalism evokes a retreat from state methods and toward privatization, in practice the people who use the label today talk about state capacity all the time, they just have a vision of the state that centers efficiency. The sight of a New York that can, on its present capital budget, build 200 km of rail tunnel in 10 years while also completing investments in accessibility and high-capacity signaling is uplifting to such movements, even if those movements may disagree about driverless trains.

This does not mean everyone is on board, unfortunately. I can’t tell what exactly goes on at the MTA; clearly, there are some people there who are unhappy, although I can’t tell who except in the broadest, least certain outline. In politics, I will say that the people I’ve talked to are not nearly as well-known or powerful as Alexandria Ocasio-Cortez or the staff of Pete Buttigieg.

The 8 pm talk was much less formal and was just me in front of a crowd of about 25 that was more advocacy-oriented. It was from the start the secondary event, designed for people who would like to come but couldn’t make it during business hours. I expected 12 people and got 25, with an awkward signup process at the lobby of the building, for which I am grateful to security for being understanding. I managed to possess the AV system in the room with the help of an audience member and share my screen to showcase some more examples and talk more about our report, but there was no recording.

Audience questions covered a variety of topics: the applicability of our work to California High-Speed Rail (I went on a long rant about the problems of early commitment), how the different factors mentioned in the link at the start of this post interact, what the role of utilities is, etc.

A more interesting question, which I didn’t immediately have an answer to, was what advocates can do about it. People don’t vote based on subway construction costs, or at least not directly. I did bring up the political popularity of mani pulite and the anti-corruption reforms in Italy that have helped bring down costs, and, echoing more experienced activists who I’d asked, recommended that people raise the issue with their state legislator, member of City Council, or mayor if they’re in an inner suburb and not the city. In an American context, there is no criminal corruption that we’ve found, unlike in Italy in the 1970s and 80s, but instead of mani pulite, a popular process for making government more efficient is viable. Even people whose entire political career is built on wrecking the ability of the state to do anything talk about how It’s Time to Build or about Getting to Yes.

I want to say I’m optimistic based on what we saw, but not everything has gone as smoothly, and there are people in powerful positions who should not have them – they just didn’t show up this time. So we’ll see; I’ll know much more at the end of the year.

Who Learns from Who?

My interactions with Americans in the transit industry, especially mainline rail, repeatedly involve their telling me personally or in their reports that certain solutions are impossible when they in fact happen every day abroad, usually in countries that don’t speak English. When they do reference foreign examples, it’s often shallow or even wrong; the number of times I’ve heard American leftists attribute cost differences to universal health care abroad (in most of these countries, employers still have to pay health benefits) is too high to count. Within the US, New York stands head and shoulders above the rest in its incuriosity. This is part of a general pattern of who learns from who, in which the US’s central location in the global economy and culture makes it collectively stupid.

Symmetric learning

Some learning is symmetric. The Nordic countries learn from one another extensively. The Transit Costs Project’s Sweden case study has various references in the literature to such comparisons:

This goes beyond transportation. People in the four mainland Nordic states constantly benchmark their own national performance to that of the other three on matters like immigration, education, energy, corona, and labor. This appears in the academic literature to some extent and is unavoidable in popular culture, including media and even casual interactions that I had in two years of living in Sweden. Swedes who criticize their country’s poor handling of the corona crisis don’t compare it with Taiwan or South Korea but with Norway. Likewise, Swedes who think of a country with open hostility to immigration think of Denmark rather than, say, the United States, Italy, or Lithuania.

Other macro regions exist, too, with similar levels of symmetric learning. The German-speaking world features some of this as well: the advocacy group ProBahn has long championed learning from Switzerland and Austria, and the current Deutschlandtakt plan for intercity rail is heavily based on both Swiss practice and the advocacy of ProBahn and other technically adept activists. Switzerland, in turn, developed its intercity rail planning tradition in the 1980s and 1990s by adopting and refining German techniques, taking the two-hour clockface developed in 1970s Germany under the brand InterCity and turning it into a national investment strategy integrating infrastructure construction with the hourly timetable.

This, as in the Nordic countries, goes beyond transport. Where Swedes’ prototype for hostility to immigrants is Denmark, Germans’ is Austria with its much more socially acceptable extreme right.

Asymmetric learning

Most of the learning from others that we see is not symmetric but asymmetric: one place learns from another but not vice versa, in a core-periphery pattern. Countries and cities prefer to learn from countries that are bigger, wealthier, and culturally more dominant than they are. In our Istanbul case, we detail how the Turks built up internal expertise by bringing in consultants from Italy, Germany, and France and using those experiences to shape new internal practices.

In Europe, the biggest asymmetry is between Southern and Northern Europe. Few Spaniards, Italians, and Turks believe that their respective countries build higher-quality infrastructure than Germans – some readily believe that the costs are lower but assume it must be lower quality rather than higher efficiency. The experts know costs are low, but anything better from Northern Europe or France penetrates into Southern European planning with relative ease. It didn’t make it to the infrastructure-focused Italian case, but Marco Chitti documents how the German clockface schedule is now influencing Italian operations planning, for example here and here on Twitter. Spain’s high-speed rail infrastructure provides another example: it was deeply influenced by France in the 1990s, including the idea of building it, the technical standards and the (unfortunate) operating practices, but the signaling system is more influenced by Germany.

In contrast, in the other direction, there is little willingness to learn. Nordic capital planners and procurement experts cite other Northern European examples (in and out of Scandinavia) as cases to learn from but never Southern European or French ones. The same technically literate German rail activists who speak favorably of Swiss planning look down on French high-speed rail, and one American ESG investor even assumed Italy is falsifying its data. In the European core-periphery model, the North is the core and the South and East are the periphery, and the core will not learn from the periphery even where the periphery produces measurably better results.

Domestically, it’s often the case that smaller cities learn from larger ones in the same country. Former Istanbul Metropolitan staff members were hired by the state, and many staff and contractors went on to build urban rail projects in Bursa, İzmir, and Mersin. In France, RATP acts as consultant to smaller cities, which do not have in-house capacity for metro construction, and overall there is obvious Parisian influence on how such cities build their urban rail. In Italy, Metropolitana Milano has acted as consultant to other cities. This is the primary mechanism that makes construction costs so uniform within countries and within macro regions like Scandinavia.

In this core-periphery model, the Anglosphere is the global core, the United States views itself as its core (Britain disagrees but only to some extent), and New York is the core of the core. New Yorkers respond to any invocation of another city or country with “we are not [that country],” and expect that their audience will believe that New York is superior; occasionally they engage in negative exceptionalism, but as with positive exceptionalism, it exists to deflect from the possibility of learning.

This asymmetry may not be apparent in transportation – after all, Europe and Asia (correctly) feel like they have little to learn from the United States. But on matters where the United States is ahead, Europeans and Asians notice. For example, the US military is far stronger than European militaries, even taking different levels of spending into account – and Europeans backing an EU army constantly reference how the US is more successful due to scale (for examples, here, here, and here). Likewise, in rich Asia, corporations at least in theory are trying to make their salaryman systems more flexible on the Western model, while so little learning happens in the other direction that at no point did Europe or the US seriously attempt to imitate Taiwan’s corona fortress success or the partial successes of South Korea and Japan.

In this schema, it is not surprising that New York (and the United States more generally) has the highest construction costs in the world, and that London has among the highest outside the United States. Were New York and London more institutionally efficient than Italian cities, Italian elites would notice and adapt their practices, just as they have begun to adapt German practices for timetabling and intermodal integration.

Superficial learning

On the surface, Americans do learn from the periphery. There are immigrant planners at American transit agencies. There’s some peer learning, even in New York – for example, New York City Transit used RATP consultants to help develop the countdown clocks, which required some changes to how train control works. And yet, most of this is too shallow to matter.

What I mean by “shallow” is that the learning is more often at the level of a quip comment, with no followup: “[the solution we want] is being used in [a foreign case],” with little investigation into whether it worked or is viewed positively where it is used. Often, it’s part of a junket trip by executives who hoard (the appearance of) knowledge an refuse to let their underlings work. Two notable examples are ongoing in Boston and the Bay Area.

In Boston, the state is making a collective decision not to wire the commuter rail network. Instead, there are plans to electrify the network in small patches, using battery trains with partial wiring; see here and follow links for more background. Battery-electric trains (BEMUs) exist and are procured in European examples that the entire Boston region agrees are models for rail modernization, so in that sense, this represents learning. But it’s purely superficial, because nowhere with the urban area size of Boston or the intensity of its peak commuter rail traffic are BEMUs used. BEMUs trade off higher equipment cost and lower performance for lower infrastructure costs; they’re used in Germany on lines that run an hourly three-car train or so, whereas Massachusetts wants to foist this solution on lines where peak traffic is an eight-car train every 15 minutes.

And in San Jose, the plan for the subway is to use a large-diameter bore, wide enough for two tracks side-by-side as well as a platform in between, to avoid having to either mine station cavern or build cut-and-cover stations. This is an import from Barcelona Metro Lines 9 and 10, and agency planners and consultants did visit Barcelona to see how the method works. Unfortunately, what was missing in that idea is that L9 is by a large margin Spain’s most expensive subway per kilometer, and locally it is viewed as a failure. In Rome, the same method was studied and rejected as too risky to millennia-old monuments, so the most sensitive parts of Metro Line C use mined stations at very high costs by Italian standards. Barcelona’s use case – a subway built beneath a complex underground layer of older metro lines – does not apply to San Jose, which is building its first line and should build its stations cut-and-cover as is more usual.

No such superficiality is apparent in the core examples of both symmetric and asymmetric learning. Swedes, Danes, Finns, and Norwegians are acutely aware of the social problems of one another, and will not propose to adopt a system that is locally viewed as a failure. At most, they will propose an import that is locally controversial, with the same ideological load as at its home. In other words, if a Swede (or more generally a Western European) proposes to import a solution from another European country that is in its home strongly identified with a political party or movement, it’s because the Swede supports the movement at home. This can include privatization, cancellation of privatization, changes to environmental policy, changes to immigration policy, or tax shifts.

This includes more delicate cases. In general the US and UK are viewed as inegalitarian Thatcherite states in Sweden, so in most cases it’s the right that wants to Anglicize government practice. But when it comes to monetary policy, it was Stefan Löfven who tried to shift Riksbank policy toward a US-style dual mandate from the current single mandate for price stability, which the left views as too austerian and harsh toward workers; globally the dual mandate is viewed as more left-wing and so it was the Swedish left that tried to adopt it.

In contrast, in superficial learning, the political load may be the opposite of what it is in its origin country, because the person or movement who purport to want to import it are ignorant of and incurious about its local context. Thus, I’ve seen left-wing Americans proposing education reforms reinvent the German Gymnasium system in which the children of the working class are sent to vocational schools, a system that within Germany relies on the support of the middle-class right and is unpopular on the left.

Individual versus collective knowledge

Finally, I want to emphasize that the issue is less about individual knowledge and learning than about collective knowledge. Individual Americans are not stupid. Many are worldly, visit other countries regularly and know how things work there, and speak other languages as heritage learners or otherwise. But their knowledge is not transmitted collectively. Their peers view it at best as a really cool hobby rather than a key skill, at worst as a kind of weirdness.

For example, an American planner who speaks Spanish because they are a first- or second-generation Hispanic immigrant is not going to get a grant to visit Madrid, or for that matter Santo Domingo, and form horizontal ties with planners and engineers there to figure out how to build at low Spanish or Dominican costs. Their peers are not going to nudge them to tell them more about Hispanic engineering traditions and encourage them to develop their interests. American culture writ large does not treat them as benefiting from bicultural ties but instead treats them as deficient Americans who must forget the Spanish language to assimilate; it’s the less educated immigrants’ children who maintain the Spanish language. In this way, it’s not too different from how Germany treats Turks as a social problem rather than as valuable bicultural ambassadors to a country with four times Germany’s housing production and one third its metro construction costs.

Nor is experience abroad valued in planning or engineering, let alone in politics. A gap year is a fun experience. Five years of work abroad are the mark of a Luftmensch rather than valued experience on a CV, whereas an immigrant who comes with foreign work experience will almost universally find this experience devalued.

Even among the native-born, the standard pipelines through which one expresses interest in foreign ideas are not designed for this kind of learning. The United States most likely has the strongest academic programs in the world for Japanese studies, outside Japan itself. Those programs are designed to critique Japanese society, and Israeli military historian of Japanese imperialism Danny Orbach has complained that from reading much of the critical theory work on the country one is left to wonder how it could have ever developed. It goes without saying such programs do not prepare anyone to adapt the successes of the big Japanese cities in transportation and housing.

This, as usual, goes beyond transportation. I saw minimal curiosity among Americans in the late 2000s about universal health care abroad, while a debate about health care raged and “every rich country except the US has public universal health care” was a common and wrong line among liberals. Individual Americans and immigrants to the US might be able to talk about the French or Japanese or Israeli or Ghanaian health care system, but nobody would be interested to hear except their close friends; political groups they were involved with would shrug that off even while going off about the superiority of those countries’ health care (well, not Ghana’s, but all of the other three for sure, in ignorance of Israel’s deep problem with nosocomial infections, responsible for 9-14% of the national death rate).

The result is that while individual Americans can be smart, diligent, and curious, collectively the United States is stupid, lazy, and ignorant on every matter that other parts of the world do better. This is bad in public transportation and lethal in those aspects of it that use mainline rail, where the US is generations behind and doesn’t even know where to start learning, let alone how to learn. It’s part of a global core-periphery model in which Europe hardly shines when it comes to learning from poorer parts of Europe or from non-Western countries, but the US adds even more to that incuriosity. Within the US, the worst is New York, where even Chicago is too suspect to learn from. No wonder New York’s institutions drifted to the point that construction costs in the city are 10 times higher than they can be, and nearly 20 times as high as absolute best practice.

What Does Pete Buttigieg Think the US has to Teach the World?

On the 27th, Secretary of Transportation Pete Buttigieg announced the creation of a new program called Momentum, to export what he calls best practices around the world. Buttigieg said he invites global civil society to engage with USDOT, linking to the Momentum website – not so that the US can learn from the rest of the world, but so that the rest of the world can learn from the United States on matters of transportation and climate change.

It’s remarkable that the areas covered by Momentum are consistently ones on which the only thing to learn from the United States is what not to do. There are seven target areas: transport infrastructure projects, climate change mitigation, transport safety, regional corridors, logistics supply chains, emerging tech (e.g. smart cities), good regulatory practices.

That the US has the world’s worst urban rail construction costs is just the beginning. Climate change, so central to this plan, is another example of American failure; Wikipedia’s list has the US near the top in CO2 emissions per capita, and the US is lagging in not just decarbonizing transport, which the entire developed world is failing at, but also in installing renewable energy (or nuclear power). Transport safety is almost always better in rich countries than in poor ones, but in 2018 the US had the highest per capita car accident death rate in the developed world, and rates rose during corona (in Germany, they fell). The supply chain issues in the US are often localized to the one country – the baby formula shortage is worse than in Europe. Good regulatory practices are to be learned from countries with strong apolitical civil service apparatuses, and not from the US, with its grabbing-hand regulators and government by lawsuit.

There is approximately one thing the US has to teach other countries, but it’s nowhere within USDOT’s portfolio: people who are familiar with the history of infrastructure construction in the early 20th century, when it was labor-intensive because everything was labor-intensive then by today’s standards, should teach these methods to countries with similar GDP per capita to Gilded Age and Progressive Era America, like India or Nigeria, so that they can use their advantage in low-cost labor and avoid importing expensive machinery or use techniques that only make sense with modern first-world wages.

However, exporting that history requires taking the exact opposite approach of Momentum. Momentum tells other places “you can be like the US!”. The historical approach tells them “your GDP per capita is $5,000, get over your cultural cringe and your tendency toward isomorphic mimicry and think how to get from $5,000 to $20,000.” As it is, any country that participates in the Momentum program is likely to be importing bad practices, including a politicized civil service, anti-housing NIMBYism, slow government that is supposed to protect civil rights and environmental standards but doesn’t, and a can’t-do attitude.

I don’t know where the idea for such a stupid scheme came. I know USDOT was interested in dialog with other countries to learn best practices, but I don’t know how far up that idea went. Not knowing Washingtonian well, I can’t tell from Buttigieg’s language whether his junket trip to Germany impressed him with how public transport here is run. But somewhere in that game of telephone, the notion that the US should learn from other countries turned into that the US should teach other countries, and that’s just wrong.

I’ve heard the Momentum program analogized to having Saudi Arabia export its human rights practices. And this analogy, unfortunately, goes further than intended. It’s not just that Saudi Arabia is a notorious human rights abuser and the US is (among people with comparative knowledge) notorious for the poor state of its transport infrastructure. It’s that Saudi Arabia does in fact export its human rights practices – dictators all over the world are impressed by Mohammed bin Salman and wish they had the ability to murder international journalists with a US green card. Countries with wealth or cultural cachet have soft power like this.

And unfortunately, this is not just hypothetical when it comes to infrastructure. A lot of public transit construction badness originates in the United Kingdom, where the privatization of the state in the late 20th century exerts considerable soft power anywhere that interacts with the London elite. The peripheral Anglosphere learned those practices and has subsequently seen its construction costs explode: Canada, Singapore, and Hong Kong all built subways at reasonable costs until, depending on the country, 15-25 years ago, and in Canada the explosion can be traced to the adoption of bad practices like design-build contracts and poor oversight of consultants. The Nordic countries and France are British-curious as well – the bibliography of the Stockholm cost report, to appear very soon, is replete with papers discussing how Sweden should privatize infrastructure construction and maintenance on the British model, written by the Swedish civil service or by academics who are contracted to do research for it, none questioning whether such privatization is wise.

The US has fortunately not been able to export its own variety of dysfunction so far, which differs in some key ways from the British dysfunction that consultants so often recommend. This is because Americans have been insular in both directions so far; after the failure of programs in the 1960s to create heaven on Earth (and defeat communism) within the span of one presidential administration, the US reduced its global presence, and now it’s much more likely that a poor country seeking infrastructure advice will buy Japanese or Chinese dysfunction (and almost never the positive things in those countries’ infrastructure – Chinese investments in African railways build palatial stations outside city centers, but not actual high-speed rail).

Unfortunately, Momentum seems set up to export this dysfunction after decades of neglect. And even more unfortunately, American dysfunction is worse than British dysfunction and much worse than Japanese or Chinese dysfunction. Japan builds subways domestically for maybe $400 million per km – more in Central Tokyo, less in very suburban areas; Japanese-financed projects elsewhere in Asia, such as the Jakarta, Ho Chi Minh, and Dhaka Metros, are largely elevated, but correcting for that, they’re more expensive, and the mostly-but-not-wholly-underground Dhaka MRT manages to get up to $600 million per km even without such correction. But Los Angeles, San Jose, and Seattle are all worse than this, and New York is worse than all three with its $2 billion/km projects. Far from acknowledging that these are all failures, the Biden administration named San Jose’s Nuria Fernandez as the head of the Federal Transit Administration, and in her capacity as FTA head, Fernandez gave a keynote talk at Eno’s symposium on construction costs that displayed total indifference to the problem and consisted of a litany of excuses.

I hope that nobody should make the mistake of participating in the Momentum program. USDOT should take it down and replace its pretense of teaching the world with the humility of learning from it. The Bipartisan Infrastructure Law touted by Buttigieg in the video spends tens of billions on urban mass transit and tens more on intercity rail. Done right – that is, done not in the American way – it can create amazing things for American transportation and set up a success that will leave Americans wanting more and then going ahead and building more. But the US needs to lower its head and learn from places that build urban rail for $150 million/km instead of stepping on a soapbox and towering over everyone else.

Quick Note: How to Incentivize Transit-Oriented Development

The Biden administration recently put out a statement saying that it would work to increase national housing production. It talks about the need to close the housing shortfall, estimated at 1.5 million dwellings, and proposes to use the Bipartisan Infrastructure Law (BIL) to dole out transport funding based on housing production. This is a welcome development, and I’d like to offer some guidelines for how this can be done most effectively.

Incentives mean mistrust

You do not need to give incentives to trustworthy people. The notion of incentives already assumes that the people who are so governed would behave poorly by themselves, and that the governing body, in this case the federal government, surveils them loosely so as to judge them by visible metrics set in advance. Once this fundamental fact is accepted – the use of BIL funding to encourage housing production implies mistrust of all local government to build housing – every other detail should be set up in support of it.

Demand conflict with community

Federal funding should, in all cases, require state and local governments to discipline community groups that fight housing and extract surplus from infrastructure. Regions that cannot or do not do so should receive less funding; the feds should communicate this in advance, stating both the principle and the rules by which it will be judged. For example, a history of surrender to local NIMBYs to avoid lawsuits, or else an unwillingness to fight said lawsuits, should make a region less favored for funds, since it’s showing that they will be wasted. In contrast, a history of steamrolling community should be rewarded, showing that the government is in control and prioritizes explicit promises to the feds and the voters over implicit promises to the local notables who form the base of NIMBYism.

Spend money in growth regions

In cities without much housing demand, like Detroit and Cleveland, the problem of housing affordability is one of poverty; infrastructure spending wouldn’t fix anything. This means that the housing grant should prioritize places with growth demand, where current prices greatly exceed construction costs. These include constrained expensive cities like New York and San Francisco, but increasingly also other wealthy cities like Denver and Nashville, whose economic booms translate to population increase as well as income growth, but unfortunately housing growth lags demand. Even poorer interior cities are seeing rent increases as people flee the high prices of richer places, and encouraging housing growth in their centers is welcome (but not in their suburbs, where housing is abundant and not as desirable).

Look at residential, not commercial development

In the United States, YIMBY groups have focused exclusively on residential development. This is partly for political reasons: it’s easier to portray housing as more moral, benefiting residents who need affordable housing even if the building in question is market-rate, than to portray an office building as needing political support. In some cases it’s due to perceived economic reasons – the two cities driving the American YIMBY discourse, New York and San Francisco, have unusually low levels of job sprawl for the United States, and in both cities YIMBY groups are based near city center, where jobs look especially plentiful. At the local and state level, this indifference to commercial YIMBY is bad, because it’s necessary to build taller in city center and commercialize near-center neighborhoods like the West Village to fight off job sprawl.

However, at the federal level, a focus on residential development is good. This is a consequence of the inherent mistrust assumed in the incentive system. While economically, American cities need city centers to grow beyond the few downtown blocks they currently occupy, politically it’s too easy for local actors to bundle a city center expansion with an outrageously expensive urban renewal infrastructure plan. In New York, this is Penn Station redevelopment, including some office towers in the area that are pretty useful and yet have no reason to be attached to the ill-advised Penn Station South project digging up an entire block to build new tracks. Residential development is done at smaller scale and is harder to bundle with such unnecessary signature projects; the sort of projects that are bundled with it are extensions of urban rail to new neighborhoods to be redeveloped, and those are easier to judge on the usual transport metrics.

The Solution to Failed Process isn’t More Process

The US Department of Transportation has an equity action plan, and it’s not good. It suffers from the same fundamental problem of American governance, especially at the federal level: everything is about process, nothing is about visible outcomes for the people who use public services. If anything, visible change is constantly deprecated, and direct interference in that direction is Not What We Do. Everything is a nudge, everything has to be invisible. When the state does act, it must do so in the direction of ever more layers of red tape, which at this point are for their own sake.

Case in point: a 12-page PDF with many graphics and charts manages to fit in two giant red flags, both with serious implications for how USDOT views its mission. They showcase a state that exists to obstruct and delay and shrugs off social and developmental goals alike. The action plan should be dismissed and replaced with an approach that aims to dissolve anti-developmental institutions and favor action over talk.

Contractors, or users?

Most of the document does not concern itself with how to be more equitable for the users of public transportation in the United States. It doesn’t talk about racial differences in commuting patterns – it says poor people spend more of their income on transportation (as is the case for other basic staples) but ignores the issue where 61% of American public transport commuters are racial or ethnic minorities in a country that’s 62% white.

What it does talk about is the needs of contractors. The US has special programs for disadvantaged business enterprises (DBEs). In contracting, this is called MWBE in New York – minority- and women-owned business enterprise. New York requires 20% of contract value to go to MWBE, and since construction is an oligopoly owned entirely by white men and there is no interest in breaking said oligopoly, everything goes through a web of subcontractors to satisfice the law while driving up costs for the end users; one source at the MTA quotes a 20% premium to me just from the subcontracting web caused by this and other special restrictions.

In anti-left American media, the black slumlord who complaints that it is racist to levy fines on him for violating building codes is somehow a sympathetic figure, in preference to the people with the misfortune of living in one of his 100 apartments. Similarly, when Americans speak about income mobility in their country, they center the origin stories of billionaires, most of whom grew up comfortably upper middle-class, rather than whether a working poor person has much hope to ascend to the middle class.

It’s the same with the focus on MWBE. MWBE are not socially relevant. There is no social or developmental purpose in creating a class of business owners shielded from competition – in this case, federal contractors – and then trying to diversify it. Most people are not business owners; most people work for someone else and to get to work they need to commute, and for women and minorities, this is disproportionately likely to be public transport. The path forward is a federal repeal of all MWBE laws and their replacement with preemption forbidding states to enact similar laws. Federal power should dissolve failed local arrangements, free from the need to kowtow to local power brokers who have limited power beyond the local level and none at the federal level.

Process for the sake of process

Community meetings in the United States are a failure. The action plan recognizes this problem, and even begins to understand why:

* Public meetings are a common public involvement strategy, but can be inconvenient or impossible to attend for some. Physical meeting locations may be inaccessible for some, including those with disabilities. Virtual public meetings are inaccessible for people without internet access or computer literacy.

* Various methods may be needed to allow people with diverse circumstances to have a voice in decisions that affect their community. Adaptive engagement strategies can be a resource-intensive but valuable endeavor that is responsive to specific community needs, including different language and cultural backgrounds.

Unfortunately, the solution wants to accrete more process for its own sake. There is no positive use for a community meeting; the defenders of the process in multiple American cities, when I challenged them on this point, could not name to me a single useful thing that came out of them. But the negatives are numerous, and not fixable through multilingual meetings:

  • The times at which meetings are held tend to privilege people who can take time off during work hours – the same class of already overprivileged business owners, comfortable housewives, and retirees, to the exclusion of people who work for someone else.
  • Community as a concept is exclusive; in Cultural Theory terms, egalitarian systems tend toward strong boundedness and this is inherently exclusive in ways that market- and state-based systems lack. Outsiders who attempt to attend community meetings report being verbally harassed for not looking like the typical attendee, for example if they are much younger.
  • Community meeting dynamics favor loudness and adversarial agitation. Social media has the same problem, with a growing body of published work about the effect of online harassment on people, disproportionately people from disadvantaged background. Yelling is believed to get results, and the idea that the state should punish it to let other voices than that of the biggest blowhard be heard is treated as so ridiculous that in popular culture it’s put in the mouth of a junta member.
  • Local community is not relevant to how most people live in metropolitan areas. In New York, only 8% of workers work in the same community board that they live in (and even same-borough commutes are only 39%); the other 92% and their dependents socialize in citywide networks rather than locally. And yet, community boards, representing those 8% with local ties, are taken as closest to the people.
  • People with limited English proficiency need not just government services in the relevant language but also relevant information. For example, Chinese immigrants receive information out of Chinese networks, which are not especially local to one specific Chinatown, but are often pan-Chinese or pan-Chinese-American. With much thinner sourcing than is available in English, they can form opinions about the issues most in the news, which tend to be national, but not about local issues. This is something every intra-European immigrant gets very quickly – it’s easier to find someone who speaks the same language with opinions about Annalena Baerbock than someone who speaks the same language with opinions about Bettina Jarasch, let alone any borough-scale politician (I do not remember a single conversation within queer Berlin spaces about borough-scale politicians).
  • Local knowledge, to the extent it even exists, is not important, but the community meeting foregrounds it. Long-timers insist on talking about the history of every parklet and mural and shop and not about jobs or rents or public services; the community meetings elevates their concerns above memorizing sports statistics or similar trivialities.

The community meeting as a source of knowledge for the state to use or as a source of informal or formal power is a social stain wherever it is tried, and the impacts disproportionately fall on women, the young, minorities, queers, and immigrants. And yet an equity action plan that understands at least some of the problems created by the process cannot bring itself to recommend its abolition in favor of top-down state action, informed by the academic research of ethnographers to create universal design standards. No: it is recommending even more process. Process cannot fail; it can only be failed. Fair outcomes are out; endless red tape with all talk and no action is in.

Quick Note: Regional Rail and the Massachusetts State Legislature

The Massachusetts state legislature is shrugging off commuter rail improvements, and in particular ignoring calls to spend some starter money on the Regional Rail plan. The state’s climate bill ignores public transportation, and an amendment proposing to include commuter rail electrification in the plan has been proposed but not yet included in the plan. Much of the dithering appears to be the fault of one politician: Will Brownsberger, who represents Watertown, Belmont, Back Bay, and parts of Brighton.

What is Regional Rail?

Regional Rail is a proposal by TransitMatters to modernize the MBTA commuter rail network to align it with the standards that have emerged in the last 50-60 years. The centerpiece of the plan is electrification of the entire network, starting from the already-wired Providence Line and the short, urban Fairmount Line and inner Eastern Line (Newburyport/Rockport Lines on timetables).

Based on comparable projects in peer countries, full electrification should cost $0.8-1.5 billion, and station upgrades to permit step-free access should cost on the order of $2 billion; rolling stock costs extra upfront but has half the lifecycle costs of diesels. An investment program on the order of high hundreds of millions or very low billions should be sufficient to wire the early-action lines as well as some more, such as the Worcester Line; one in the mid-single digit billions should be enough to wire everything, upgrade all stations, and procure modern trains.

Benefits include much faster trips (see trip planner here), lower operating and maintenance costs, higher reliability, and lower air and noise pollution and greenhouse gas emissions. For a city the size of Boston, benefits exceed costs by such a margin that in the developed world outside North America, it would have been fully wired generations ago, and today’s frontier of commuter rail electrification is sub-million metro areas like Trondheim, Aarhus, and Cardiff.

Who is Will Brownsberger?

Brownsberger is a Massachusetts state senator, currently serving as the Senate’s president pro tempore. His district is a mix of middle-class urban and middle-class inner-suburban; the great majority of his district would benefit from commuter rail modernization.

He has strong opinions on commuter rail, which are what someone unaware of any progress in the industry since roughly 1960 might think are the future. For example, here’s a blog post he wrote in 2019, saying that diesel engines are more reliable than electric trains because what if there’s a power outage (on American commuter rail systems that operate both kinds of vehicles, electric trains are about an order of magnitude more reliable), and ending up saying rail is an outdated 20th century concept and proposing small-scale autonomous vehicles running on the right-of-way instead. More recently, he’s told constituents that rail electrification with overhead wire is impossibly difficult and the only option is battery-electric trains.

Because he’s written about the subject, and because of his position in the State Senate and the party caucus, he’s treated as an authority on the subject. Hence, the legislature’s lack of interest in rail modernization. It’s likely that what he tells constituents is also what he tells other legislators, who follow his lead while focusing on their own personal interest, such as health policy, education policy, taxes, or any other item on the liberal policy menu.

Why is he like this?

I don’t know. It’s not some kind of nefarious interest against modernization, such as the trenchant opposition of New York suburbanites to any policy that would make commuter trains useful for city residents, who they look down on. Brownsberger’s district is fairly urban, and in particular Watertown and Belmont residents would benefit greatly from a system that runs frequently all day at 2020s speeds and not 1920s speeds. Brownsberger’s politics are pretty conventionally liberal and he is interested in sustainability.

More likely, it’s not-invented-here syndrome. American mainline passenger rail is stuck in the 1950s. Every innovation in the field since then has come from outside North America, and many have not been implemented in any country that speaks English as its primary language. Brownsberger lacks this knowledge; a lifetime in politics does not lend itself well to forming a deep web of transnational relationships that one can leverage for the required learning.

Without the benefit of around 60 years of accumulated knowledge of French, German, Swiss, Swedish, Dutch, Japanese, Korean, Austrian, Hungarian, Czech, Turkish, Italian, and Spanish commuter rail planning, any American plan would have to reinvent the wheel. Sometimes it happens to reinvent a wheel that is round and has spokes; more often, it invents a wheel with sharp corners or no place to even attach an axle.

When learning happens, it is so haphazard that it’s very easy to learn wrong or speculative things. Battery-electric trains are a good example of this. Europe is currently experimenting with battery-electric trains on low-traffic lines, where the fact that battery-electrics cost around double what conventional electric multiple units do is less important because traffic is that light. The technology is thus on the vendors’ mind and so when Americans ask, the vendors offer to sell what they’ve made. Boston is region of 8 million people running eight- and nine-car trains every 15 minutes at rush hour, where the places in Europe that experiment with battery tech run an hourly three-car train, but the without enough background in how urban commuter rail works in Europe, it’s easy for an American agency executive or politician to overlook this difference.

Is there a way forward?

Yes!

Here is a proposed amendment, numbered Amendment 13, by Senator Brendan Crighton. Crighton represents some of the suburbs to the northeast of Boston, including working-class Lynn and very posh Marblehead; with only four years in the State Senate and three in the Assembly, he’s not far up the food chain. But he proposed to require full electrification of the commuter rail network as part of the climate bill, on a loose schedule in which no new diesels may be procured after 2030, and lines would be electrified by 2028 (the above-named early action lines) to 2035 (the rest of the system). There are so far four cosponsors in addition to Crighton, and good transit activists in Massachusetts should push for more sponsorship so that Amendment 13 makes it into the climate package and passes.

How to Spend Money on Public Transport Better

After four posts about the poor state of political transit advocacy in the United States, here’s how I think it’s possible to do better. Compare what I’m proposing to posts about the Green Line Extension in metro Boston, free public transport proposals, federal aid to operations, and a bad Green New Deal proposal by Yonah Freemark.

If you’re thinking how to spend outside (for example, federal) money on local public transportation, the first thing on your mind should be how to spend for the long term. Capital spending that reduces long-term operating costs is one way to do it. Funding ongoing operating deficits is not, because it leads to local waste. Here are what I think some good guidelines to do it right are.

Working without consensus

Any large cash infusion now should work with the assumption that it’s a political megaproject and a one-time thing; it may be followed by other one-time projects, but these should not be assumed. High-speed rail in France, for example, is not funded out of a permanent slush fund: every line has to be separately evaluated, and the state usually says yes because these projects are popular and have good ROI, but the ultimate yes-no decision is given to elected politicians.

It leads to a dynamic in which it’s useful to invest in the ability to carry large projects on a permanent basis, but not pre-commit to them. So every agency should have access to public expertise, with permanent hires for engineers and designers who can if there’s local, state, or federal money build something. This public expertise can be in-house if it’s a large agency; smaller ones should be able to tap into the large ones as consultants. In France, RATP has 2,000 in-house engineers, and it and SNCF have the ability to build large public transport projects on their own, while other agencies serving provincial cities use RATP as a consultant.

It’s especially important to retain such planning capacity within the federal government. A national intercity rail plan should not require the use of outside consultants, and the federal government should have the ability to act as consultant to small cities. This entails a large permanent civil service, chosen on the basis of expertise (and the early permanent hires are likely to have foreign rather than domestic experience) and not politics, and yet the cost of such a planning department is around 2 orders of magnitude less than current subsidies to transit operations in the United States. Work smart, not hard.

However, investing in the ability to build does not mean pre-committing to build with a permanent fund. Nor does it mean a commitment to subsidizing consumption (such as ongoing operating costs) rather than investment.

Funding production, not consumption

It is inappropriate to use external infusions of cash for operations and, even worse, maintenance. When maintenance is funded externally, local agencies react by deferring maintenance and then crying poverty whenever money becomes available. Amtrak fired David Gunn when the Bush administration pressured it to defer maintenance in order to look profitable for privatization and replaced him with the more pliable Joe Boardman, and then when the Obama stimulus came around Boardman demanded billions of dollars for state of good repair that should have built a high-speed rail program instead.

This is why American activists propose permanent programs – but those get wasted fast, due to surplus extraction. A better path forward is to be clear about what will and will not be funded, and putting state of good repair programs in the not-funded basket; the Bipartisan Infrastructure Framework’s negotiations were right to defund the public transit SOGR bucket while keeping the expansion bucket.

Moreover, all funding should be tied to using the money prudently – hence the production, not consumption part. This can be capital funding, with the following priorities, in no particular order:

  • Capital funding that reduces long-term operating costs, for example railway electrification and the installation of overhead wires (“in-motion charging“) on bus trunks.
  • Targeted investments that improve the transit experience. Bus shelter is extremely cost-effective on this point and a federal program to fund it at a level of around $15,000/stop (not more – it’s easy to make local demands that drive it up to $50,000) would have otherworldly social rates of return. Washington bureaucrats are loath to be this explicit about what to do – they try to speak in circumlocutions, saying “standards for bus stops” instead of just funding shelter, or “transit asset management” instead of just committing to not playing the SOGR game.
  • Accessibility upgrades. This require close federal control to eliminate local waste, because much of the money would be going to New York, which has a long-term problem of siphoning accessibility money to other priorities like adding station access points or repairing stations, and has a uniquely incompetent local environment when it comes to construction costs.
  • Planning aid for improving bus-rail interface; these two modes are often not planned together in American cities, and commuter rail is not planned in conjunction with other modes. San Jose, for example, has a proposal for large expansion of bus service, part of which is parallel to Caltrain; the local agency, VTA, owns one third of Caltrain and could expand rail service within the county and integrate it with bus service better, but does not do so.
  • Rail automation, to reduce long-term operating costs. Bus automation could go in this bucket too but is at this point too speculative; save it for one or two stimuli in the future.

Avoiding local extraction

Local government has very little democratic legitimacy. It’s based on informal power arrangements, in which direct elections play little role; partisan elections are rare and instead primaries reign with severe democratic deficits (for example, it’s hard to form any kind of base for opposition to challenge a sitting New York mayor or governor). Without national ideology to guide it, it is the domain of cranks and people with the time and leisure to attend community meetings on weekdays at 3 pm. Local community takes its illegitimate power and thieves what others create, whether it is the market or the state.

Recognizing this pattern means that federal funding should not under any circumstances coddle local arrangements. If, for example, California cannot spend money cost-effectively because it is constrained by referendum, federal funding can be used to bypass this system, but never work under its rules. If the local business community is traumatized by cut-and-cover construction in the distant past, the feds should insist that subway money that they give will be used for cut-and-cover instead of mined stations.

The typical surplus extraction pattern concerns car dominance. State DOTs are in effect highway departments; transit planning is siloed, usually at separate agencies. They use their power to demand the diversion of transit money to roads. For example, in Tampa, a plan to increase bus service led to a DOT demand to pave the routes with concrete lanes at transit agency expense (with federal or state transit funding). The list of BRT projects that were just highway widenings is regrettably too long. The feds should actively demand to keep transit funding for transit, and not roads, social services, policing, or other priorities.

In particular, the feds should give money for some bus improvements, but demand that agencies prioritize the bus over the car. No bus lanes? No signal priority? No money. Similarly, they should demand they engage in internal efficiency measures like stop consolidation and all-door boarding with proof of payment ticket collection, which a larger and more expert FTA can give technical assistance for.

It may also be prudent to give transitional resources, up to a certain point. Funding private-sector retraining for workers displaced by automation is good, and in some limited cases public-sector retraining, as long as it doesn’t turn into workfare (there is no way for the subway in New York to absorb redundant conductors or surplus maintenance staff). If moderate amounts of capital funding are required for bus improvements, such as traffic signal upgrades to have active control and conditional TSP, then they are good investments as well.

Conclusion

Funding public transportation is useful, provided there is enough of a connection between the source of funds and the management thereof that the money is not wasted. A larger and more technocratic federal government is an ideal organ for this, with enough planning power to propose bus network redesigns, rail planning, integrated fare systems, and intermodal coordination. It can and should have technical priorities – shelter is far and away the lowest-hanging fruit for American bus systems – and state them clearly rather than hiding behind bureaucratic phrases (again, “transit asset management” is a real phrase).

It’s fundamentally an investment rather than consumption. And as with all investments, it’s important to ensure one invests in the right thing and the right people. A local transit agency with a track record of successful projects, short lead times from planning to completion, technical orientation, and the ability to say no to highway departments and other organs that extract surplus is a good investment. One that instead genuflects before antisocial groups that launch nuisance lawsuits is not so good an investment, and funding for such an agency should be contingent on improvement in governance of the kind that will make local notables angry.

No Federal Aid to Transit Operations, Please

This is the third in a series of four posts about the poor state of political transit advocacy in the United States, following posts about the Green Line Extension in metro Boston and free public transport proposals, to be followed by an Urban Institute report by Yonah Freemark.

In the United States, political transit activists in the last few years have set their eyes on direct federal aid for operating subsidies for public transport. Traditionally, this has not been allowed: federal aid goes to capital planning (including long-term maintenance), and only a small amount of money goes to operations, all in peripheral bus systems. Urban transit agencies had to operate out of fares and local and state money. Demands for federal aid grew during corona, where emergency aid to operations led to demands for permanent subsidies, and have accelerated more recently as corona recovery has flagged (New York’s subway ridership is only around 60% of pre-corona levels). But said demands remain a bad idea in the short and long terms.

In the early 20th century, when public transport was expected to support itself out of fares, operating costs grew with wages, but were tempered by improvements in efficiency. New York City Transit opened with ticket-takers at every subway entrances and a conductor for every two cars; within a generation this system was replaced with automatic turnstiles and one conductor per train. Kyle Kirschling’s thesis has good data on this, finding that by the 1930s, the system grew to about 16,000 annual car-miles (=26,000 car-km) per employee.

And then it has stagnated. Further increases in labor efficiency have not happened. Most American systems have eliminated conductors, often through a multi-decade process of attrition rather than letting redundant workers go, but New York retains them. The network today actually has somewhat less service per employee than in the 1930s, 14,000 car-miles as of 2010, because fixed costs are spread across a slightly smaller system. Compare this with JICA’s report for Mumbai Metro comparing Japanese cities: Tokyo Metro has 283,871,000 car-km (PDF-p. 254) on 8,474 employees (PDF-p. 9), which is 33,500/employee, and that’s without any automation and with only partially conductor-less operations; Yokohama gets 40,000.

Moreover, the timeline in the US matches the onset of subsidies, to some extent: state and local subsidies relieved efficiency pressure. In Canada, TTC saw this and lobbied against subsidies for its own operations in the 1960s, on the grounds that without a breakeven mandate, the unions would capture all surplus; it took until the 1970s for it to finally receive any operating subsidies.

Federal subsidies make all of this worse. They are other people’s money (OPM), so local agencies are likely to maximize them at the expense of good service; this is already what they do with capital money, lading projects with local demands for betterments figuring that if everyone else hogs the trough then they should as well.

Then there is the issue of wages. Seniority systems in American unionized labor create labor shortages even when pay is high, because of how they interact with scheduling and tiered wage structures. Bus drivers in Boston earn around $80,000 a year, a pay that German bus and train drivers can only dream of, but starting drivers are in probational status and have a lower wage (they are not even given full-time work until they put in a long period of part-time work). Moreover, because drivers pick their shifts in seniority order, drivers for about the first 10 years are stuck with the worst shifts: split shifts, graveyard shifts at inconsistent intervals, different garages to report to. New York manages to find enough bus drivers to fill its ranks but only by paying around $85,000 a year; other American cities, paying somewhat less, are seeing thousands of missed runs over the year because they can’t find drivers.

And outside aid does nothing to fix that. Quite to the contrary, it helps paper over these problems and perpetuates the labor gerontocracy. New York City Transit has learned to react to every crisis by demanding a new source of income; there is not enough political appetite for transparent taxation, so the city and state find ever more opaque sources of funds, avoiding political controversy over wanton inefficiency but creating more distortion than a broad income tax would.

Instead of subsidizing current consumption, a developmental state should subsidize production. Don’t pay money to hire more bus drivers; pay for automating subway systems, for better dispatching, for better planning around intermodal integration. Current American wages, not to mention the unemployment rate, scream “invest in labor-saving technology” and not “expand labor-intensive production.”

Free Public Transport: Why Now of All Times?

This is the second in a series of four posts about the poor state of political transit advocacy in the United States, following a post about the Green Line Extension in metro Boston, to be followed by the topics of operating aid and an Urban Institute report by Yonah Freemark.

There’s a push in various left-wing places to make public transportation free. It comes from various strands of governance, advocacy, and public transport, most of which are peripheral but all together add up to something. The US has been making some pushes recently: Boston made three buses fare-free as a pilot program, and California is proposing a three-month stimulus including free transit for that period and a subsidy for car owners. Germany is likewise subsidizing transport by both car and public transit. It’s economically the wrong choice for today’s economy of low unemployment, elevated inflation, and war, and it’s especially troubling when public transport advocates seize upon it as their main issue, in lieu of long-term investments into production of transit rather than its consumption.

Who’s for free public transit?

Historically, public transit was expected to be profitable, even when it was publicly-run. State-owned railroads predate the modern welfare state, and it was normal for them to not just break even but, in the case of Prussia, return profits to the state in preference to broad-based taxes. This changed as operating costs mounted in the middle of the 20th century and competition with cars reduced patronage. The pattern differs by country, and in some places (namely, rich Asia), urban rail remained breakeven or profitable, but stiff competition bit into ridership even in Japan. The norm in most of the West has been subsidies, usually at the local or regional level.

As subsidies were normalized, some proposed to go ahead and make public transport completely free. In the American civil rights movement, this included Ted Kheel, a backer of free public transit advocates like the activist Charles Komanoff and the academic Mark Delucchi. Reasons for free transit have included social equality (since it acts as a poll tax on commuters) and environmental benefits (since it competes with cars).

Anne Hidalgo has attempted and so far failed to find the money for free public transport in Paris, and other parts of Europe have settled for deep discounts in lieu of going fully fareless: Vienna charges 365€ for an annual pass (Berlin, which breaks even on the U-Bahn as far as I can tell, does so charging 86€/month).

In the United States, free transit has recently become a rallying cry for DSA, where it crowds out any discussion of improvement in the quality of service. Building new rail lines is the domain of wonks and neoliberals; socialists call for making things free, in analogy with their call for free universal health care. Boston has gotten in on the act, with conventional progressive (as opposed to DSA) mayor Michelle Wu campaigning on free buses within the municipality and getting the state-run MBTA to pilot free buses on three routes in low-income neighborhoods.

What’s wrong with free transit?

It costs money.

More precisely, it costs money that could be spent on other things. In Ile-de-France, as of 2018, fare revenues including employer benefits amounted to 4 billion euros, out of a total budget of 10.5 billion. The region can zero out this revenue, but on the same budget it can expand the Métro network by around 20-25 km a year – and the Métro is as far as I can tell profitable, subsidies going to suburban RER tails and buses. For that matter, the heavy subsidies to the suburbs, which pay the same cheap monthly rate as the city, could be replaced with investment in more and better lines.

The experiments with actually-free transit so far are in places with very weak revenues, like Estonia. Some American cities like it in context where public transport is only used by the desperate and no attempt is made at making service attractive to anyone else. Boston is unique in trying it in a context with higher fare revenue – but the buses are rail feeders, so the early pilot piggybacks on this and spends relatively little money in lost revenue, ignoring the long-term costs of breaking the (limited) fare integration between the buses and the subway.

What’s wrong with free transit now?

Free transit as deployed in the California proposal is in effect a stimulus project: the government gives people money in various ways. Germany is doing something similar, in a package including 9€ monthly tickets, a 0.30€ fuel tax cut, and a cut in energy taxes.

In Germany, unemployment right now is 2.9% and core inflation (without food and energy) is 3%. This is a country that spent a decade thinking going over 2% was immoral, and now the party that considers itself the most budget hawkish is cutting fuel taxes, in a time of conflict with an oil and gas exporter and a rise in military spending.

In the United States, unemployment is low as well, and inflation is high, 6.4%. This is not the time for stimulus or investments in consumption. It’s time for investments in production and suppression of consumption. So what gives?