The rush-hour traffic congestion caused by thousands of people going to work separately in individual automobiles has been denounced by social critics as “irrational” and explained by some mysterious psychological attraction of Americans to automobiles. It is, however, a perfectly rational response to the incentives and constraints conveyed. The actual costs and benefits of automobile-sharing are forcibly prevented from being conveyed by prices. As in other areas, claims of public irrationality are a prelude to arguments for a government-imposed rational “solution” to the “problem.” Also as in other areas, it is precisely the government’s use of force to prevent the accurate transmission of knowledge through prices that leads to the suboptimal systemic results which are articulated as irrational intentional results of a personified “society.”
Private force is used to prevent price transmission of knowledge of the availability of drivers. Many unemployed people are perfectly capable of driving, but are prevented from competing for such work, either as employees or as owner-operators of vehicles. Labor unions are the private force. This is not
It is not enough that the union have a contract for
Unions do not simply set the wages paid on a predestined number of jobs. The wage rate charged determines how a certain task will be performed — that is, how many “jobs” it will involve. In the case of municipal transit, high wage rates for bus drivers create incentives for large buses — the substitution of capital for labor in transporting a given number of passengers. A leading transportation economist estimates that about eight passengers per vehicle would be optimal in a system where prices were allowed to convey accurate costs of vehicles, drivers, and roads20 — in contrast to the usual forty- to fifty-passenger buses actually used. If only one fifth as many passengers were carried per bus, there would be five times as many small buses, meaning five times as many jobs for drivers and only one-fifth the waiting time between buses for passengers. It would also be possible to have a far greater variety of bus routes, as the jitneys had, rather than clogging a few main thoroughfares during rush hours and letting passengers off farther from their destinations than necessary, as at present. Under these conditions buses would also be a far more attractive alternative to private automobiles for many people.
Disastrous as the effects of political decision making have been in municipal transportation, it is by no means irrational politically. Indeed, the same set of policies have emerged in so many different cities across the country, and reappeared again and again in national transportation policy regarding passenger railroads and airline routes that it is clearly a consistent effect, reflecting consistent causes rather than anything as random as “irrationality.” Central to the decision making in this area has been the maintenance of