How to End Traffic Jams - and Grow Smartly

How to End Traffic Jams – and Grow Smartly

August 1, 2002

Most people think traffic jams are a fact of life. However, we could eliminate traffic congestion with the stroke of a pen. Traffic jams are the inevitable and foreseeable consequence of current government policy. If we changed the policy, the traffic congestion would disappear.

In the United States – with a few toll road exceptions – the use of highways is for free. Imagine what would happen if seats to Redskins games were offered for free. It would be like current traffic jams. Mobs of people would show up early, they would jostle for places in line, and only a fortunate few would get through the stadium gates and obtain seats. In effect, the “hassle” of getting into a Redskins game would substitute for the price that we now pay for seats.

Our present highway system works like that. It might be described as a last bastion of socialism in the United States. Under socialism, everyone is equal – equally poor. In northern Virginia, we are all equally stuck in traffic.

In the old Soviet Union, the price of apartments was very cheap, but you had to wait fifteen years to get one. The price of meat was subsidized, but it took hours of waiting in line to buy any. When communism finally died in the old Soviet Union, the one immediate change most noticeable in the daily life of the citizenry was the elimination of lines. Market prices, instead of waiting in line, became the rationing device for scarce goods and services.

In northern Virginia, we could do the same thing with traffic congestion – the long waits in traffic would disappear as rapidly as the food lines disappeared in the new Russia. All we have to do is to price the use of space on our highways at its market value.

In a market, when something is scarce, you pay more for it; that is elementary supply and demand. The available space on our highways is scarcest at peak hours. If you want to drive at 2:00 A.M., there should be no cost to anyone. If you want to drive at 8:00 A.M., many thousands of other people want to drive then as well, more people than the highways can accommodate. Instead of raising the price, however, we use the old socialist approach – everyone has to wait in line for an extra twenty minutes to one hour as traffic jams steadily increase during rush hour.

Proposals to eliminate traffic congestion through highway pricing at peak times are nothing new. Columbia University economist William Vickery won a Nobel Prize in economics in part for developing the economic details many years ago. What is new is low-cost technology to implement congestion pricing of highways. Satellite tracking systems now make it possible to follow the precise highway location of any vehicle by time of day. Trucking companies at present routinely monitor the locations of each vehicle in their fleet for management purposes. We could easily do the same for cars. It would be like a satellite based “Easy – Pass” system.

If you wanted to cross the Potomac River on the Wilson Bridge, use the Beltway, or drive on I-66 at 8:00 A.M., you would have to pay. It would be similar to a cell telephone system. You would pay depending on where you are, where you are going, and the time of day. A computer would keep track, and at the end of the month you would get a bill.

For highway users, they perhaps could see on a screen in their car what they were paying at any given moment. If they wanted to plan a future trip, they could inquire as to what alternative driving times and routes would cost. If the price was too high, they could choose a different route, travel at a different time, or join a car pool. Once the kinks were worked out, traffic jams would be eliminated. If traffic started to build regularly – say at the Wilson Bridge at 5:45 P.M. – the price would automatically increase. The price might have to be adjusted a few times, but we can be sure that the lines would eventually disappear.

Some people will object, no doubt, that highway pricing favors the rich. Because they can afford it, the well-off will be able to sail along the Beltway at the prime times without any delays. It is true that in any market system the rich are more likely to drive Mercedes Benzes and the poor used Chevrolets. That is how market capitalism works. However, we must realize that a highway pricing system will raise large revenues. These revenues could be used to improve the public schools for the urban poor, or perhaps reduce the sales tax (a regressive tax that disproportionately falls on the backs of the socioeconomically disadvantaged).

The “smart growth” movement is feeding off suburban discontent with traffic and other inconveniences of increasing numbers of people moving into new areas. This is a legitimate complaint. However, smart-growth proposals merely address the symptoms of the problem and, in fact, make things worse. Smart-growth proposals to increase densities actually jam more cars into less space.

The real cause of traffic congestion is the absence of any pricing system for the use of our highways. Real “smart growth” would address this problem directly. If we really want to be smart, we should abolish our socialistic system of free public use of highways and instead finally put market methods to work in this outmoded area of our economy.