A growing movement of local governments and communities across the United States is beginning to grapple with an unfortunate realization: The highway boom of the 1950s and ’60s produced a massive amount of infrastructure that seems to have done more harm than good.
“Highways radically reshaped cities, destroying dense downtown neighborhoods, dividing many Black communities and increasing car dependence,” Nadja Popovich, Josh Williams, and Denise Lu wrote in a recent New York Times article.
Many cities “basically destroyed themselves” in order to accommodate motorists, said University of Connecticut professor Norman Garrick, who is studying the effects of transportation infrastructure on American cities.
Destruction and Regrowth in Rochester
Rochester’s Inner Loop, completed in 1965, is one prominent example. This freeway destroyed hundreds of businesses and homes while separating downtown from the rest of the city, the New York Times reports. And in recent years, local officials have been trying to undo the damage.
In 2013, Rochester spent roughly $25 million to take out an eastern segment of the freeway. Apartment buildings have since been built in its place, and smaller roads once separated by the Inner Loop have now been reconnected, facilitating the easy transportation of walkers and bikers in the area. Following the $25 million removal project, over $300 million of private investment was brought into the city, according to a Rochester City Newspaper article.
Now, Commissioner Norman Jones and other city officials are pushing for the rest of the Inner Loop to be removed. Jones estimates that the removal project would cost between $70 million and $250 million. This likely would be a worthwhile investment for the growth of the local economy, judging by the success of the previous removal project.
Similarly, according to the Times, “Nearly 30 cities nationwide are currently discussing some form of removal.”
Detroit, New Haven, Somerville, and Syracuse have all committed to some form of highway removal. And in the enormous infrastructure plan released at the end of March, President Biden proposed allocating $20 billion to reconnect neighborhoods divided by the ill-conceived highways.
These damages to communities and neighborhoods are often irreversible. Once you’ve severed relationships between local businesses and institutions, they can’t necessarily be reconnected.
And due to the compounding nature of cumulative economic growth, losing a few decades between the installation of a problematic highway and its eventual removal is not just a problem during those decades. It is a problem for every subsequent decade, during which the locals could have been building on a more robust economy, but instead may forever be stuck a few steps behind where they would have been.
But perhaps the most significant unseen cost of such expenditures is the loss for whatever projects those resources should have gone to. The millions of dollars spent building a highway, and then the millions more to remove it, could have been spent improving people’s lives instead of devastating their communities. If the money were left in the hands of individuals to spend as they saw fit, instead of taxed away from them and spent at the discretion of bureaucrats and policymakers who have little insight into their lives, the money would almost certainly have gone to much more beneficial uses.
Such alternate uses are rarely even considered when it comes to public works like Rochester’s Inner Loop, as Henry Hazlitt explained in his seminal 1946 book Economics in One Lesson. For this, Hazlitt blames economic illiteracy and a lack of imagination. Proponents have the public construction clearly in view, but what they fail to see is all the things that go uncreated for the sake of it: “…the unbuilt homes, the unmade cars and radios, the unmade dresses and coats, perhaps the unsold and ungrown foodstuffs. To see these uncreated things requires a kind of imagination that not many people have. We can think of these non-existent objects once, perhaps, but we cannot keep them before our minds as we can the bridge that we pass every working day. What has happened is merely that one thing has been created instead of others.”
And private spending tends to have far better results for the community than government spending. The strong incentive to improve one’s own life, and the specific knowledge of one’s own needs and desires, position private institutions and individuals much better than any government bureaucracy to invest their own private capital. Therefore, tax-funded investments like those made during the highway boom of the 1950s and ’60s are usually destined to be worse than whatever potential private investments they have inevitably replaced.
Infrastructure of a Free Society
Given the countless beneficial uses of a few million dollars, or a few billion, building a bridge or a highway is probably not usually the best possible investment. But sometimes it undoubtedly is, in which case private people and institutions can be left to invest in it on their own, if the money is left in their hands instead of taxed away from them. (And if regulatory measures don’t prevent them from making such decisions.)
Basic infrastructure such as roads and bridges are often listed as examples of things that simply can’t be left to the private sector. But if private individuals and institutions are left free to spend their resources as they see fit, there is nothing preventing them from making whatever investments they deem most beneficial, which history suggests has often included basic infrastructure when regulatory forces didn’t get in the way.
Private sector road building was common throughout much of American history until, as University of Georgia historian Stephen Mihm has written, “Private roads went out of fashion in the late 19th century, as reformers sought to bring everything from utilities to roads under centralized control and regulation.”
These private ventures were funded partially by toll revenue (despite price control legislation making them less profitable). However, private investors were also motivated to fund hundreds of roads for reasons other than direct profit. “They sought the indirect benefits of having a road run through their communities, which helped increase trade and also the stature of the road’s pioneers,” Mihm writes.
If something is truly valuable, people will generally be motivated to invest in it without being forced to through taxation. And free individuals, companies, and communities, knowing their own wants and needs in infinitely greater detail than any centralized authority, are in a far better position than government officials to make such decisions.
The ignorance and corruptibility of anyone given power over the private capital of others is a recipe for needless waste and destruction. Rochester, and the dozens of other American cities that are rethinking the highway mistakes of the past, have learned this the hard way. If we learn from their example, we won’t have to.
This article was originally published on FEE.org