HomeBudget & Tax NewsMake New York City Subways First Class by Privatizing Them

Make New York City Subways First Class by Privatizing Them

Among the problems besetting what could otherwise be a world-class city transit system are signal slowdowns, and broken-down infrastructure. But those are only the tip of the iceberg. More obvious is the feces, urine, blood and vomit on staircases, platforms and on the trains themselves. Nor are these messes thoroughly cleaned. One would think that self-respecting criminals would give the place a wide berth, but this is not the case. They ply their trade all too often with impunity. Only some two-thirds of trains ever reach their destinations even close to their scheduled arrival times. In addition to a lousy, dangerous ride, these facilities simply cannot be relied upon.

Actually, the title of this essay should be, instead, re-privatize IRT, BMT; privatize the IND. Many people do not realize that the Interborough Rapid Transit Company, and the Borough of Manhattan Transit were originally private concerns. They were nationalized, or, rather, municipalized, because they were about to raise their fares from a nickel to a dime. The politicians at the time could not abide any such supposed violation of the public trust. Of course, soon after they took over, you will never in a million years guess what they did. Yes, they doubled the fare they had used as an excuse to take over these private properties. Only the Independent Subway (IND) was originally created by government. Thus, the first two should be reprivatized, and only the latter should be privatized for the first time.

What is the case in favor of this policy? This is justified because there is a wealth of empirical evidence, and pure logic, attesting to the fact that commercial enterprises are better run by private profit and loss business firms than by bureaucrats. Why is this? It is not due to the fact that the former are smarter than the latter. There is no empirical indication in favor of that hypothesis, and it may well be that the very opposite is true. No, the reason private enterprise has the inner track in this regard is that when an entrepreneur errs, he suffers financial setbacks. If he does this too often, bankruptcy beckons. The same system simply does not apply to bureaucratic endeavors.

Economist Thomas Sowell said it best when he wrote: “It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.”

Well, the present managers of the IRT, BMT and IND are making poor decisions and are not suffering any financial setbacks. Were these transportation facilities in private hands, erring managers would indeed pay a “price for being wrong.”

What would private managers do to rectify the situation? This is an entrepreneurial issue, not one of pure economics, but it does not hurt to speculate as to the possible courses of action. A thorough cleaning of human waste should be a high priority. Another would be physical safety; more police, no “defunding.” Yes, fares should likely be raised, so as to finance replacement for some of the century and older facilities.

Don’t get me started on the years long missing parts of the West Side Highway. If this facility were in private hands, they never would have been allowed to disappear.

Walter Block holds the Harold E. Wirth Eminent Scholar Endowed Chair in Economics at the J. A. Butt School of Business at Loyola University New Orleans, and is a senior fellow of the Ludwig von Mises Institute.
Walter Block
Walter Block
Walter Block holds the Harold E. Wirth Eminent Scholar Endowed Chair in Economics at the J. A. Butt School of Business at Loyola University New Orleans, and is a senior fellow of the Ludwig von Mises Institute.

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