The Price of Romance
By Russ Roberts
From the St. Louis Post Dispatch
You've seen the old grainy black and white photos of American cities from the early part of the 20th century-model T's, streets teeming with people, and streetcars. Milk trucks wend their way to make their deliveries and the iceman cometh, bringing merely ice.
We have a nostalgia and romance for those days. It's a selective nostalgia of course. We want the romance of streetcars without the unpleasantness of say, typhoid. Or racial intolerance.
A longing for the rosy part of those black and white memories is behind the proposal to bring streetcars back to University City. And as a University City homeowner not far from the Loop, I can imagine the appeal. I can see my sons in their oversized caps jumping onto the still-moving trolley, holding on with one hand as the bell rings.
What price nostalgia? Alas, there is no free lunch. Reliving the past in this case will cost about $32 million according to one study. Let's assume that figure's accurate. So is that a good deal or a bad one? Proponents will tell us about all the benefits-a further revitalized Loop area, increased business traffic, sales tax revenue, and so on. Maybe those benefits are real. Maybe they're not. If they're real, are they worth $32 million?
That's the $32 million question. To make the University City streetcar project work, $26 million of the $32 million will come from the Federal budget. When at least $26 million of the cost is coming out of the pockets of others, it's easy to be enthusiastic without worrying too much about whether the project's worth doing in the first place.
Milton Friedman illustrates the problem with this kind of financing system in the following way. You spend your own money on yourself very carefully. You spend other people's money on yourself less carefully. You spend other people's money on other people with even less care.
So it's very hard to know whether a trolley is a good idea. You can see the problem clearly when you think of an alternative way of handing out money. Let's just give the $32 million to Joe Edwards. Joe Edwards owns Blueberry Hill and the Tivoli Theater in the Loop. He wants to see the Loop thrive. He's the driving force behind the trolley's planned return.
Just give Joe the $32 million with no strings attached. Well, maybe one string. He can't use the money to buy a condo in Manhattan. He has to spend it on developing the Loop.
When taxpayers outside of St. Louis are footing most of the bill, romance is a bargain. But if the call were totally on Joe's shoulders, romance suddenly comes at a real price. The cost of romance would be what you could have if you gave up the trolley. So you'd have to start weighing the value of that romance against other improvements.
With $32 million, you could really fulfill some dreams. Choose one or two from the following list. You could widen the sidewalks along Delmar Blvd. and put in some incredible gardens. You could take out some traffic lanes and create bike lanes. You could rent out mopeds or bicycles built for two at for free use for the day. You could stable horses and give people some 19th century nostalgia. You could build a sculpture park for kids. You could bring in Cirque De Soleil to perform in the streets a few times a year. You could have the greatest jazz festival in the world. You could probably build a mini-Venice with gondolas. Or how about a less romantic but maybe more powerful vision-you could lower bus fares and help the people who depend on buses.
Are any of those ideas as good as a trolley?
Maybe not. We'll never know. The sad part isn't that the trolley's a mistake. It may be a great idea. But my guess it that when romance is subsidized by others, you tend to buy more than you would then when you're paying the bill.
I know. The Feds won't give Joe Edwards the money. And it comes with strings. But all that means is that we should be careful and perhaps a little bit reluctant to spend other people's money on ourselves.