A Cluster of Errors

Being car free and riding the Massachusetts Bay Transportation Authority’s buses and trains is often like being in an abusive relationship: no matter how much they hurt you, you still go back to them.

If that image seems strong, that’s the point. Like the women (and men) who suffer in such relationships, we shouldn’t put up with this shit. We shouldn’t sit back and take fare hikes, poor service, poor communications and horrible environments. Fortunately, and unlike actual abusive relationships, the MBTA is not psychologically manipulating us — no one is being bullied into thinking they deserve this lack of service.

It’s completely impossible to live any sort of life that takes you beyond walking distance if transit is going to be as unreliable as it is in Boston. How many people have lost their jobs, how many millions of dollars in lost productivity can be notched in the T’s belt? At the same time, we know that good public transit is a huge economic boost for the cities it serves; that automobile alternatives like walking, biking and transit are more environmentally sustainable and more affordable than cars; and cities built around walking, biking and transit are more beautiful, more healthy and potentially more competitive than cities built around the car.

But how can we end the “abuse” and get good transit?

One element has to be public pressure. As a state monopoly beholden to political interests, riders and transit advocates must pressure their representatives, go to public meetings — and speak — and vote. We ought to be willing to vote against politicians who refuse to support transit, but we also have to flood the inboxes of the MBTA’s officers and directors.

Just as importantly, we have to understand how this perverse situation arose. In the Austrian School of economics, one of the core concepts of their theory of the business cycle is that recessions are preceded by a “cluster of entrepreneurial errors” as the firms in the distorted sectors of the economy begin to run up against reality. Mainstream economists, who gave up attempting to explain the cycle as early as Marx, have mocked the idea as implausible — why would rational market actors suddenly start making bad decisions? they ask — but I think it’s actually a good analogy for the MBTA’s mess.

Essentially, mainstream economists have forgotten what reason is. A lot of people use reason as a substitute for science or expect the “rational” to be as objective or impartial as science. But it isn’t: human reason is neither perfect nor objective. Not only can we make mistakes, but our information can be incomplete, inaccurate or out of date. No one would argue with any of this, but it does have consequences: people can act in a market with complete rationality and still make bad decisions. This is especially true for asset bubbles, because then there’s an added incentive for more risk. Similarly, rent-seeking is usually rational even though it’s counter-productive for the economy as a whole. Combined with diminishing returns as a bubble gets further from reality and I think an error cluster sounds just like what you would expect in that situation — everyone has information that’s wrong and the profit margins are shrinking.

In Boston, there are, broadly speaking, five groups involved in the problems: the people who are traveling, the state, the city, the federal government and private enterprises. Each group can be further subdivided: the people and enterprises can be categorized in terms of mode and the governments split up by agency.

The people want to get to and from work, leisure and errands in the least amount of time and greatest amount of convenience. If a person usually uses a car, they are protective of parking and want traffic to revolve around cars; if a person usually uses transit they are most protective of the stops and stations most convenient for them; similarly, the person in charge of logistics for an industrial firm will likely want to see fewer cars so that trucks will have an easier time, but the people looking to locate an office might think that being near a train station will be most helpful for their workers or help them attract better workers.

The MBTA presumably wants to run its lines with the least delays, greatest frequencies and most cost-effective measures, but other state agencies have their own agendas. The Highway Division is concerned with building highways and good traffic flow, the Department of Conservation and Recreation is concerned with protecting parks, operating certain recreational facilities, conserving wildernesses and other forms of environmental stewardship — for instance, they own and build some bike paths. The divisions are similar at the city level — Boston has a department devoted to promoting cycling and its various economic development and planning agencies are always at cross-purposes with neighborhood associations because the planners want to reduce the required number of parking spots for cars for many developments. NIMBYs are completely irrational, however, but must be dealt with.

The federal agencies are a bit different. Their regulations apply across the country, they’re not involved in actually running anything, but they do distribute a lot of money — the witholding of federal highway maintenance funds were famously used to bribe states to raise the drinking age to 21 in the 1980s and the Department of Transportation has frequently shown a preference for grants to transit agencies when they start completely new projects instead of maintaining existing infrastructure. That money is a definite incentive for local agencies to conform to the objectives of the federal ones.

With the multitude of different interests all behaving rationally, but at odds to each other, they collide and the usual way of sorting things out is with some sort of committee or task force. As a result, everything takes a long time and the people who participate in the task forces often feel like they’re being railroaded or are being asked to make Hobson’s Choices. There’s a bit of bad blood throughout the city, from what I’ve seen.

Unlike firms competing in a market, however, there are no price signals or bootblacks with stocktips to make people think twice about things. The agencies lack any mechanism for prioritizing how their interests are balanced and because they are usually required to spend all the money they’re allotted in a fiscal year, they will undertake projects with no real purpose — and then not have money for important stuff next year. As for the people, we don’t have much of a say at all in how our government is actually run.

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One thought on “A Cluster of Errors

  1. “the Department of Conservation and Recreation is concerned with protecting parks […] and other forms of environmental stewardship”
    LOL.
    Seriously, does anybody believe that? It seems like despite the name, they’re mostly a second-rate highway department? But yeah, ultimately, the problem is that a lot of these agencies don’t really have any incentive to change things nor any feedback mechanisms to encourage them to improve.

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