Time to End Soviet-Styled Economics



By Dom Nozzi

For several decades now, Americans have employed a very curious way of “solving” the problem of a congested road or an overflowing parking lot. In nearly all cases, the “cure” for this “problem” is to provide more capacity: more travel lanes (widening a road), more turn lanes, and more parking spaces. It seems like such a commonsense solution, doesn’t it?



Why, then, do these widenings, turn lanes, and parking lot expansions never seem to ease the congestion problem for more than a short period of time?

The problem, as any first-year economics student can tell us, is one of supply and demand. Too much demand and not enough supply. From an economics point of view, supplying more of something that is free to use (or underpriced), and in great demand, is an extremely inefficient, ineffective way to eliminate scarcity. The Soviets tried this method with their form of socialist economics, and it was a spectacular failure.soviet

The question that immediately comes to mind here is this: “Why do Americans categorically reject Soviet-style economics in general, but believe an exception can be made for our road and parking lot problems?”

Take, for example, a hypothetical seafood restaurant. Our restaurant generously decides it will provide a fabulous fresh lobster dinner for free. Naturally, folks in the community flock to the restaurant in overwhelmingly large numbers to take advantage of this restaurant offer. Soon, of course, all of the tables are taken up by this hungry horde as they race to the restaurant for a meal. In less than a few hours, the restaurant is unable to seat any more patrons because there are no available tables. Indeed, raging fights are breaking out at the restaurant front door as people try to squeeze in.


Let’s assume that the restaurant then decides to correct this problem by providing more tables and installing more doors. In a short period of time, though, the restaurant learns that the tables are filled again and people are still trying to squeeze through what are now four doors.

Most of us recognize that it would be the height of foolishness for this long-linerestaurant to try to “solve” this overflow problem by providing more tables and installing more restaurant doors. No, as anyone can see, the obvious solution is to start charging people what they are willing to pay for the dinner.

Obvious. Right?

If this is such a clear solution, why do we not apply it to roads and parking lots? After all, roads and parking lots are in great demand, yet they are nearly always free to use (or underpriced). Why have we insisted, for the past several decades, that we provide the equivalent of more tables and doors to ease congested roads and parking lots? Why do we insist on applying Soviet-styled economic principles to our transportation system—and expect a different result from what the Soviets experienced?


Isn’t it time for us to start applying free-market, capitalist principles to our roads and parking lots? Isn’t  it time for us to realize that by ending the unsustainable, bankrupting subsidies for car travel, political pressure will become sufficient to obligate a substantial growth in community design that enables transportation choices?

Not only will proper transportation pricing make it more practical and pleasant to travel by transit, bicycling, and walking; there will also be an enormous growth in demand for more compact, in-town residential and commercial development, rather than sprawl.

The “user fees” I recommend are much more avoidable, affordable, and equitable than the ever-increasing taxes we all complain about. Properly priced user fees can be opted for instead of unaffordable road widenings, and can rein in tax increases, provide sufficient dollars for badly needed transportation facility maintenance, increase fairness, and restore the fiscal health of local and state government.



A version of this essay was published by the Richmond Times-Dispatch on April 12, 2008.




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