[Excerpt from "Suburban Nation" by Andres Duany and Elizabeth
Plater-Zybeck, pp. 94-7.]

But the real question is why so many drivers choose to sit for hours
in bumper-to-bumper traffic without seeking alternatives. Is it a
manifestation of some deep-seated self-loathing, or are people just
stupid? The answer is that people are actually quite smart, and their
decision to submit themselves to the misery of suburban commuting is a
sophisticated response to a set of circumstances that are as troubling
as their result. Automobile use is the intelligent choice for
Americans because it is what economists refer to as a "free good": the
consumer pays only a fraction of its true cost. The authors Stanley
Hart and Alvin Spivak have explained that:

We learn in first-year economics what happens when products or
services become "free" goods. The market functions chaotically; demand
goes through the roof. In most American cities, parking spaces, roads
and freeways are free goods. Local government services to the motorist
and to the trucking industry - traffic engineering, traffic control,
traffic lights, police and fire protection, street repair and
maintenance - are all free goods.

THE AUTOMOBILE SUBSIDY
To what extent is automobile use a "free" good? According to Hart and
Spivak, government subsidies for highways and parking alone amount to
between 8 and 10 percent of our gross national product, the equivalent
of a fuel tax of approximately $3.50 per gallon. If this tax were to
account for "soft" costs such as pollution cleanup and emergency
medical treatment, it would be as high as $9.00 per gallon. The cost
of these subsidies - approximately $5,000 per car per year - is passed
directly on to the American citizen in the form of increased prices
for products or, more often, as income, property, and sales taxes.

This means that the hidden costs of driving are paid by everyone: not
just drivers, but also those too old or too poor to drive a car. And
these people suffer doubly, as the very transit systems they count on
for mobility have gone out of business, unable to compete with the
heavily subsidized highways.

Even more irksome is the fact that spending on transit creates twice
as many new jobs as spending on highways. In fact, every billion
dollars reallocated from road-building to transit creates seven
thousand jobs.' Congress's recent $41 billion highway bill, had it
been allocated to transit, would have employed an additional
quarter-million people nationwide.

Because they do not pay the full price of driving, most car owners
choose to drive as much as possible. They are making the correct
economic decision, but not in a free-market economy. As Hart and
Spivak note, an appropriate analogy is Stalin's Gosplan, a Soviet
agency that set arbitrary "correct" prices for many consumer goods,
irrespective of their cost of production, with unsurprising results.
In the American version of Gosplan, gasoline costs one quarter of what
it did in 1929 (in real dollars). One need look no further for a
reason why American cities continue to sprawl into the countryside. In
Europe, where gasoline costs about four times the American price,
long-distance automotive commuting is the exclusive privilege of he
wealthy, and there is relatively little suburban sprawl.

The American Gosplan pertains to shipping as well. In the current
structure of subsidization, trucking is heavily favored over rail
transport, even though trucks consume fifteen times the fuel for the
equivalent job. The government pays a $300 billion subsidy to truckers
unthinkingly, while carefully scrutinizing every dollar allocated to
transit. Similarly, we try to solve our commuter traffic problems by
building highways instead of railways, even though it takes fifteen
lanes of highway to move as many people as one lane of track. This
predisposition toward automobile use is plainly evident in the
prevalent terminology: money spent on roads is called "highway
investment," while money spent on rails is called "transit subsidy."
The American Gosplan is not a conspiracy so much as a culture-albeit
one strongly supported by pervasive advertising-and it is probably
unrealistic to hope that legislators will soon take steps, such as
enacting a substantial gasoline tax, to allocate fairly the costs of
driving. Pressured by generous automobile industry contributions on
the one hand and a car-dependent public on the other, politicians have
lately been using gas-tax elimination as an election strategy, with
some success. But there is encouraging information suggesting that a
gas tax may not be the political suicide that most politicians
suspect. According to a recent Pew Foundation poll, 6o percent of
those asked favored a twenty-five-cent-per-gallon gas tax to slow
global warming.*

While there are many supposedly "anti-business" arguments for a higher
gas tax - from fighting global warming to supporting public transit -
the real justification is economic: subsidized automobile use is the
single largest violation of the free-market principle in U.S. fiscal
policy. Economic inefficiencies in this country due to automotive
subsidization are estimated at $700 billion annually, which powerfully
undermines America's ability to compete in the global economy.