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July 07, 2008
Munger on public transportation
Russell Roberts
The latest episode of EconTalk is a conversation with Mike Munger about what happened in Santiago when the private bus system was replaced with a public system promising a more equitable and efficient system.
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Entertaining podcast. But, not exactly anything new. The same thing happened in most US cities, including NYC.
There, August Belmont built and ran the city's first subway profitably starting in 1904. But, the city politicians' greed to get in on the profits forced itself as a partner when more lines were built.
That proved fatal, as politically meddling made those profits disappear. The city ended up buying Belmont's interest in 1940 for a pittance.
The Urban Mass Transit Act of 1964 was another such intervention that helped destroy the ability of cities to operate even break-even systems. It required mass transit systems to only deal with labor unions approved by the Dept of Labor.
Posted by: Patrick R. Sullivan | Jul 7, 2008 4:58:34 PM
I am from Santiago, and it is very hard to understate the mess caused by the change in the public transportation system.
Santiago is a city where most of its population use public transportation (including myself) and the significant decrease in its quality caused inmense suffering. People who were used to wait for 10 minutes or less for a bus that would take them accross town in 45 minutes need to wait for over 30 minutes now, having to switch buses (sometimes more than once and at stops that could be several blocks away) and doubling or tripling their travel time. This causes havoc with family and "down" time.
Many areas of the city are not not served (or underserved) by the new buses and the ministry of transport has had to draw new routes with astonishing frequency.
And a system that was self-financed and produced profits for the operators, has caused the government to give huge subsidies and cause losses to the new bus companies. This is a terrible loss of wealth, in financial terms and withr espect to the time lost by passengers, in a country that already had a pretty good system.
This is all due to planners belief that thier intelligence was better than the wisdom of hundreds of bus companies.
At least, this has discredited central planning in Chile for the foreseeable time.
Posted by: Ignacio | Jul 7, 2008 5:24:56 PM
The citizens of Santiago should consider themselves lucky only to have to bear the operating losses of centrally planned transit. In the USA we like to give transit gurus a few billion in capital to invest (i.e. lose) in infrastructure when we give them operational control.
Posted by: Kevin | Jul 7, 2008 5:58:29 PM
One of the best podcasts I've heard this year. I've forwarded it to the Mayor of my town, who was a major force behind a new rail system, and recently re-elected. I've also forwarded it to a good friend (not re-elected) who saw the flaws. I'm sure at least one of them will get a kick out of it.
Unfortunately, the two of them were arguing logistics and implementation -- not privatization vs. socialization -- so I'm guessing neither one will actually take it as the insult it was meant to be.
Posted by: SheetWise | Jul 8, 2008 12:12:59 AM
http://hidalgosypiratas.blogspot.com/2008/07/trfico-anrquico.html
watch this video of traffic without laws..
Posted by: Luke Skywalker | Jul 8, 2008 1:45:36 AM
"At least, this has discredited central planning in Chile for the foreseeable time.
Posted by: Ignacio | Jul 7, 2008 5:24:56 PM"
Ignacio,
Sorry to break it to you, my friend; but, in the socialist world no failure of any kind caused by central planning ever discredits central planning.
The failures of cental planning is, in the socialist excuse factory, always caused by something else: The people just didn't understand the issues. The people were misled by those evil capitalists. The contractor didn't deliver good goods. We didn't spend enough money on educating the people. We didn't spend enough money on central planning.
The list of exucses is endless, but central planning remains the holy grail.
Posted by: vidyohs | Jul 8, 2008 6:05:24 AM
"http://hidalgosypiratas.blogspot.com/2008/07/trfico-anrquico.html
watch this video of traffic without laws."
I hope you're not using this to argue for the necessary role of government.
Notice how people figure out the laws on the fly and the result is zero accidents.
Posted by: Chris O'Leary | Jul 8, 2008 9:04:25 AM
Now that I have had some time to listen to at least the first 16 minutes of this talk, I have one serious question.
I hope the answer is known.
Santiago had a subway system that competed below the suface with all of the private transportation vehicles above ground. I know of no public transportation in the world that shows a profit, so I am assuming that the subway was losing money and being subsidized.
My question is: What was the amount of the subsidy when surface transportation was private, and what was the amount after surface transportation was made public and also subsidized? If those figures can be sorted out.
I am not computer skilled enough to ferret out those numbers. I know that I assume and anticipate large numbers, but how large?
Posted by: vidyohs | Jul 8, 2008 10:07:34 AM
"Notice how people figure out the laws on the fly and the result is zero accidents."
Ok Chris, Mr. Groom Lake, I'm so sure you'd take your wife and kids through that intersection.
Posted by: nate | Jul 8, 2008 12:42:16 PM
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