President Obama recently announced massive spending on the nation’s railways. The decision brings to the fore the decidedly unglamorous issue of transportation infrastructure. Often it is the mundane issues of everyday life, those aspects of civil society that we take for granted, that allow us best to examine our assumptions about how society is organized, and look at how it might be. This is such a case.

In the United States, passenger rail has not been a major part of the transportation system for many years. At first glance, it seems a mystery why this should be the case. There certainly seems to be a need; the United States is geographically large, gas prices keep rising, and the country once had a thriving passenger rail system. The death and continued absence of the passenger train from the American landscape is no mystery, however. It is a direct consequence of policy. The advent of the automobile certainly would have substantially reduced rail’s market share, but there is no reason it should have essentially eliminated it. But from the beginning, the automobile industry received special privileges. Passenger railways had nearly all been built with private money, but roads used tax dollars. The construction of the National Highway System was, in effect, a massive subsidy to the automobile industry. Meanwhile, a World War II excise tax of 15% on passenger rail travel was not repealed until 1962. Railways had to pay property taxes on their tracks, whereas roads were publicly owned and auto makers were not required to pay for their upkeep. There is substantial reason to believe that the free market would have preserved a substantial amount of the passenger rail system that was destroyed by government meddling.

But if not the government, it might be objected, who would build and maintain roads? The question points to the idea that a private road system would be impractical if not impossible. Yet, existing private roads link up with the public road system just fine. My family lived on a small private road when I was in high school. Maintenance costs and the cost of snow removal were divided among the houses on the street, weighted according to distance from where it intersected the nearest public road. The division of costs was specified in the contracts we signed when we bought the property. For larger roads, tollbooths might be a more effective funding method. The exact mechanics of how a completely private road system might work are unimportant; what is essential is to recognize that one should not assume that such a system would be inherently impossible. From there, we can look at ways in which government policy has shifted the transportation sector away from its natural evolution.

Operating under the assumption that increased use of passenger rail would be on the whole a good thing for the country, a policymaker has essentially two options. First, privatize the highway system or look for ways to mitigate the effects of its nationalization on the transportation sector. Second, nationalize the passenger rail system to put it on an equal footing with the highways and airports. It would be tempting to look for a middle way, buy any such attempt is destined to fail. A partially socialized economy will lead inexorably to a fully socialized one.

The nation’s automobile infrastructure has been nationalized essentially from the start. This contributed to the failure of the passenger rail system, which was partially nationalized in 1971 with the creation of Amtrak. Airport construction had always been nationalized, and after the September 11th terrorist attacks, airport security was as well. This gradual nationalization of the transportation sector is an excellent example of the Hayekian model of “creeping socialism.” Failures in the system prompt ever-increasing levels of intervention and nationalization. Moreover, as people are forced to pay for highway construction and maintenance through taxation, they are faced with the proposition of either paying for their transportation needs twice and taking the rail, or using the highway system they are already paying for. In this way, private alternatives get pushed out of the market. This latter point is less relevant after the creation of Amtrak, although it does affect the extant private passenger rail system.

An outright privatization of the entire transportation sector would likely be a political impossibility. The public assumes that the government is responsible for the road system. There is a moral case to be made against the public funding of transportation as well, but it lacks political traction. Public funding of roads is a transfer of wealth without consent, and contrary to what is frequently claimed, does not necessarily benefit everyone. The business owner with a storefront in the busiest section of town certainly doesn’t benefit when the construction of a new highway shifts traffic patters away from his business. In a modern democracy, however, the complaints of the shopkeeper will be drowned by the large numbers who benefit at their expense or by the well-connected interests who can sway the system to their own ends. The moral case is a hard sell. Many people see nothing inherently wrong with the coerced transfer of wealth, and almost all accept existing socialization in the transportation sector without objection. Barring a complete privatization as, for the moment, impossible, there are other steps that could be taken. Efforts should be made to make the highway system as self-sufficient is possible. The use of toll roads should be increased, with offsetting tax cuts. Revenue from tolls should be used only to expand or maintain transportation infrastructure. Unprofitable roads should be downsized, not subsidized. Taking these steps would help offset the impact of the nationalization of roadways on the rest of the transportation sector, by revealing the true cost of road travel to consumers. Coupled with the privatization of Amtrak, this would facilitate the growth of a private passenger rail system.

The other option is to simply nationalize everything. In this case, the political difficulties are minimized, but only to be replaced with management problems. In the absence of profit and loss signals, it becomes difficult to recognize and correct mistakes in rail infrastructure and train scheduling. These challenges could be met by looking at where other countries have succeeded and through extensive market research, although even these steps will not give the same quality of information as would a market solution, and it would be delayed, whereas markets work in real time. By choosing the nationalization route, one sacrifices quality of service in exchange for saving the huge amount of political effort that would be required to privatize the entire transportation sector. Although shifting political mores might someday make privatization practicable, the choice today is a worse public train system now or a better private train system after all of us are dead. With the exception of those who have moral objections to nationalization, most people will prefer the former.

But where does that leave those of us who do have moral objections to nationalization? Well, by some measures there are more important battles to fight. But in another sense, there aren’t. If our society can’t get the easy questions right (garbage collection, education, transportation) we have no hope when it comes to the hard ones (narcotics, national defense, healthcare). Sure, transportation infrastructure isn’t the most pressing issue we face, nor is it the most exciting. But if central banking can become a hot-button issue in all of three years, I won’t say it’s impossible. Road privatization strikes me as something that would be possible to do locally, since with the exception of the interstates, road maintenance is often a local government service. The time probably isn’t ripe for such a project, but it is certainly something I’ll be keeping in the back of my head. Until then, I’m afraid it’s all aboard the Socialism Express.

Facts and figures about Amtrak taken from Wikipedia.