Do We Fear Markets Won't Work?
"Status quo bias" keeps people from trying good ideas. It is the human tendency to resist changing a behavior. Even as a society, we avoid potentially beneficial changes simply because it means change. In particular, we often hesitate to replace government-run institutions with markets. Even though markets do a good job of providing milk, books, and cars, we resist turning over health care, education, garbage collection, or public transit to the market. It just seems too dangerous.
There are valid reasons the government might best provide certain goods or services. Yet, often our hesitation to choosing market-driven solutions is more fear than fact. We worry things will go haywire the second the good (if inefficient) governing hand is released.
For this reason, it is nice when we can get a glimpse of what the market will do if given the chance.
Slug Lines Anyone?
Public transit is one area that could benefit from market reforms. Not only are many transit systems hurting for funds, but the partial monopoly hurts the poor and essentially criminalizes trips to the grocery store. This is one area we should be thinking about incremental market liberalization. We should let more private firms and private citizens open up their vehicles for hire.
What's great is that we know from experience that "public transportation" can be provided by private citizens. Every work day in Washington, DC, private citizens become taxi cabs for perfect strangers. These "Slug Lines" work remarkably well and have developed into highly organized and efficient markets.
"Slugging" works because drivers need 3 people in the car to use the HOV lanes. Other commuters offer their presence in the car to satisfy this requirement. This is a simple trade whereby the riders get a free commute and the driver can use the HOV lane. Both parties benefit even though no money changes hands.Continued on the next page