To Market, to Market, to Buy a Fat Pig

The year before my grandmother was born, 16th Street looked like this:

16th Street in 1911, likely outside Van Raalte farm - photo courtesy of the Holland Archives
16th Street in 1911, likely near Van Raalte farm – photo courtesy of the Holland Archives

Today, it looks like this:

16th Street approaching 104th Avenue in 2013
16th Street approaching 104th Avenue in 2013

One hundred years before the first picture was taken, this was likely deep woods with no path at all. It’s a platted road, so it’s not one that was likely to have evolved from an old Ottawa path.

When we talk about infrastructure, it may be helpful to remember this starting point. This is what formed the paradigms that we are currently working with, paradigms that aren’t working well for the world that we live in today.

Let’s imagine that you are Farmer van der Wel, living at the far end of this dirt road. Which situation would you find more profitable: the ability to get your pigs to just a few people, slowly, or having access to a large number of people, quickly? Remember, every hour that you’re bumping along this road in your wagon is an hour that you’re not getting work done on the farm. If it takes four hours to get to town, does it make sense to go to market every week? Or might you limit your trips to every other week, or once a month?

Or supposing you are Housewife TerHaar, who is going to market to buy a good, fat pig (to bring home again, home again, jiggity-jig). Would it be beneficial to you to have more than one option, so you could choose the very best pig for your pigs-in-a-blanket? Or so you could avoid the farmer who sold you the weevily flour last week?

These questions are rhetorical; we know that having these options is better, both for an individual and an economy.  And this is how transportation infrastructure does serve as a form of economic stimulus: simply by bringing people, along with their needs and their stuff and their ideas, within trading distance.  The farmer doesn’t need to worry that a customer won’t show up, because he has access to many customers; the housewife doesn’t have to wonder if she’ll be able to get meat this week because she has access to many farmers. Duplication of resources is one of the things that adds resilience to the system.

Adam Smith, often described as the father of modern capitalism, explains why improving infrastructure is important to a regional economy in The Wealth of Nations.

Good roads, canals, and navigable rivers, by diminishing the expense of carriage [meaning how much it costs to transport something], put the remote parts of the country more nearly upon a level with those in the neighbourhood of the town. They are upon that account the greatest of all improvements. They encourage the cultivation of the remote… They are advantageous to the town, by breaking down the monopoly of the country in its neighbourhood. They are advantageous even to that part of the country. Though they introduce some rival commodities into the old market, they open many new markets to its produce.

The Wealth of Nations, I.11.14

So, he says, roads create jobs because they reduce barriers to markets. Producers now have access to a new market, and customers to a new product. Competition increases; quality improves; price drops.  The economic impact of the infrastructure improvements extend in both directions. They even extend to those who don’t personally use the infrastructure, because they benefit from the overall improvement in both what they’re able to purchase and in an economy that is stronger overall.

In the past, there was a one-to-one correlation between building infrastructure and an increase of accessibility. New road construction was considered an unalloyed good because it really was such a sure-fire form of economic development. The old saw that “building roads creates jobs” was true, and I’d like to argue that this was likely true for thousands of years.  It’s not surprising that we have a hard time getting past this.

But we need to get past it. It doesn’t work anymore.

As it turns out, this paradigm can only work when the infrastructure project improves access to a market substantially enough to increase economic output at a level greater than the cost to both construct and maintain the road in perpetuity.

(I don’t accept equal economic output to be a satisfactory goal, by the way, because there is always some sort of trade-off involved. The economic impact must be greater than the expected expenditures in order to account for that.)

Now, that’s easy enough when your national infrastructure looks like 16th Street did in 1911. I don’t doubt that it would still have an effect in many parts of the world yet today. For example, slide to around 3:40 in this video for a few shots of Mongolian and Russian infrastructure from the documentary Long Way Round.

LOVE that movie.

Nothing there looks much like home, though.  Our system of automobile transport is so heavily built that there are precious few projects that still meet the criteria stated above. The new Detroit-Windsor bridge may be one that does; the Bridge to Nowhere is perhaps the most well-known example of one that does not. Unfortunately, the latter stands out to us only because it’s an extreme example, and not because it’s unusual.  Many of our projects are equally purposeless – they give the appearance of improvement while actually offering a negative payoff.**

What do you think? Are you persuaded that what we’re doing now isn’t getting us the results we want? For that matter, what results do think we want? What’s important to you? If you’re looking for more on this, Chuck Marohn has plenty of good ideas over at Strong Towns. We’ll be alluding to some of his work in Part II on Thursday, where we’ll also discuss where we might go from here.

**M-6 may have been one of those projects with a negative payoff.  This route, which bypasses the City of Grand Rapids to the south, has both dramatically increased sprawl in southern GR and eaten up plenty of farmland – a costly trade, given that agriculture is Michigan’s second-largest industry. Although it shortens trips to certain friends’ houses by ten minutes, or so, my understanding was that it was supposed to make the commute from Holland to Lansing shorter. Taking M-6 from my house to the State Capitol now takes 1 hour and 25 minutes, while going the old way through Grand Rapids takes 1 hour and 31 minutes. It cost $700 million to build ($35 million per mile). The construction cost is the same as it costs to run the operating budget of MAX Transit (the Lakeshore’s only fixed-route service for ten years. I’d like to see someone run the numbers on this one.

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