The Timeless Appeal of Triumphalism

What is it about intellectuals that seem to, generation after generation, fall in love with totalitarian regimes because of their grand and triumphal projects?  Whether it was the trains running on time in Italy, or the Moscow subways, or now high-speed rail lines in China, western dupes constantly fall for the lure of the great pyramid without seeing the diversion of resources and loss of liberty that went into building it.  First it was Thomas Friedman, and now its Joel Epstein in the Huffpo, eulogizing China.    These are the same folks who tried, disastrously, to emulate Mussolini's "forward-thinking" economic regime in the National Industrial Recovery Act.    These are the same folks who wanted to emulate MITI's management of the Japanese economy (which drove them right into a 20-year recession).  These are the same folks who oohed and ahhed over the multi-billion dollar Beijing Olympics venues while ignoring the air that was unbreathable.  These are the same folks who actually believed the one Cuban health clinic in Sicko actually represented the standard of care received by average citizens.  To outsiders, the costs of these triumphal programs are often not visible, at least not until years or decades later when the rubes have moved on to new man crushes.

Epstein, like Friedman, seems to think that the US is somehow being left behind by China because its government builds much more stuff.  We are "asleep."  Well, I have a big clue for him.  Most of the great progress in this country was built when the government was asleep.  The railroads, the steel industry, the auto industry, the computer industry  -  all were built by individuals when the government was at best uninvolved and at worst fighting their progress at every step.

Epstein in particular thinks we need to build more trains.  This is exactly the kind of gauzy non-fact-based wishful thinking that makes me extremely pleased that Epstein in fact does not have the dictatorial powers he longs for.   High speed rail is a terrible investment, a black hole for pouring away money, that has little net impact on efficiency or pollution.   But rail is a powerful example because it demonstrates exactly how this bias for high-profile triumphal projects causes people to miss the obvious.

Which is this:  The US rail system, unlike nearly every other system in the world, was built (mostly) by private individuals with private capital.  It is operated privately, and runs without taxpayer subsidies.    And, it is by far the greatest rail system in the world.  It has by far the cheapest rates in the world (1/2 of China's, 1/8 of Germany's).  But here is the real key:  it is almost all freight.

As a percentage, far more freight moves in the US by rail (vs. truck) than almost any other country in the world.  Europe is not even close.

modalsplieuusjapan (source)

You see, passenger rail is sexy and pretty and visible.  You can build grand stations and entertain visiting dignitaries on your high-speed trains.  This is why statist governments have invested so much in passenger rail -- not to be more efficient, but to awe their citizens and foreign observers.

But there is little efficiency improvement in moving passengers by rail vs. other modes.   Most of the energy consumed goes into hauling not the passengers themselves, but the weight of increasingly plush rail cars.  Trains have to be really, really full all the time to make an energy savings for high-speed rail vs. cars or even planes, and they seldom are full.  I had a lovely trip on the high speed rail last summer between London and Paris and back through the Chunnel -- especially nice because my son and I had the rail car entirely to ourselves both ways.

The real efficiency comes from moving freight.  More of the total energy budget is used moving the actual freight rather than the cars themselves.  Freight is far more efficient to move by rail than by road, but only the US moves a substantial amount of its freight by rail.    One reasons for this is that freight and high-speed passenger traffic have a variety of problems sharing the same rails, so systems that are optimized for one tend to struggle serving the other.

Freight is boring and un-sexy.  Its not a government function in the US.  So intellectuals tend to ignore it, even though it is the far more important, from and energy and environmental standpoint, portion of transport to put on the rails.  In fact, the US would actually probably have even a higher rail modal percentage if the US government had not enforced a regulatory regime (until the Staggers Act) that favored trucks over rail.   If the government really had been asleep the last century, we would be further along.

The US has not been "asleep"  -- at least the private individuals who drive progress have not.  We have had huge revolutions in transportation over the last decades during the same period that European nations were sinking billions of dollars into pretty high-speed passenger rails systems for wealthy business travelers.   One such revolution has been containerization, invented here in the US and quickly spreading around the world.  Containerization has revolutionized shipping, speeding schedules and reducing costs (and all the while every improvement step was fought by the US and certain local governments).  To the extent American businesses are not investing today, it has more to do with regime uncertainty, not knowing what new taxes or restrictions are coming next from Congress, than any lack of vision.

I would argue that the US has the world's largest commitment to rail where it really matters.  But that is what private actors do, make investments that actually make sense rather than just gain one prestige (anyone know the most recent company Warren Buffet has bought?)  The greens should be demanding that the world emulate us, rather than the other way around.  But the lure of shiny bullet trains and grand passenger concourses will always cause folks like Epstein to swoon.

Update #2: The author Joel Epstein emailed me a response to this post.  I will give it to you in its entirety:  "You should get out of the country more often."  Wow, he played the provincial American card on me.  Except that I have been to about 20 countries, from Singapore to Argentina to Hungary.  Besides, I really don't understand what the hell he means by this in the context of my post, except as a bid for some sort of intellectual superiority.   Anyone else understand?

Postscript

Boring, but environmentally friendly and cost-effective:

10.9.2004-04

Sexy, but environmentally useless (at best) and tremendously costly:

high-speed-rail21

So, explain to me what drives these guys investment thinking.  Can it be anything but triumphalism?

Update: Energy use comparison of passenger modes. Note how close rail transit and cars, both at average occupancies, are in this analysis.  The differences in freight are much larger:

transenergy

  • Frederick Davies

    That graph (and this article) should be in Mark Perry's Carpe Diem; for here is economic truth distilled.

  • Danny

    From a comparative advantage perspective, railroads are much more useful for freight travel than road travel anyway. Sure, rail might be a more efficient method of human transportation than jets or cars...but if we account for the fact that we have limited rail capacity, we must understand that it is quite a bit more efficient to move passengers to jets or cars, because the savings of passenger rail pale in comparison to the savings of freight rail over the alternatives.

    To use a more proper term, we are in nash equilibrium...Europe is not.

  • Bill

    The railroads could be a great example for many of your arguments, but not for the one you are making here. The American rail system is almost as far removed as possible from being "built (mostly) by private individuals with private capital."
    Mostly it was built with massive government subsidies by rent-seekers who distorted the the track to maximize government monies. Just follow the twisted path of the UP around Omaha.
    Warren, if you haven't read "Empire Express," you should do so. You will love it.
    http://www.amazon.com/Empire-Express-Building-Transcontinental-Railroad/dp/product-description/0140084991

  • Gorgasal

    The source you give for the bar chart above notes that geography plays a major role in the modal split (which, AFAIK, is accepted wisdom): the longer distances that freight needs to be carried over in the US compared to Europe makes rail more attractive - trucks are better for shorter hauls, and the cost savings of rail only kick in if distances are long enough.

    And Japan is of course yet another problem: building railroads through the rugged and mountainous interior is a pain, but coastal shipping will reach almost any inhabited point.

    But none of this is to say that you don't have a point, of course.

  • http://togetrichisglorious.blogspot.com Colin

    Oh dear, where to begin? First off, if Epstein had done a simple google search he would have found that South Korea's airports are a fiscal nightmare as they seem to have a fair amount of John Murtha-style politicians there as well:

    http://news.bbc.co.uk/2/hi/asia-pacific/8055957.stm

    As for Shangai's maglev train, according to wikipedia it runs at only 20% of capacity and Henry Blodget calculates it's losing serious money:

    http://www.slate.com/id/2115114/

    As for US railroads, government involvement in the transcontinental sure proved a mess according to wikipedia:

    Each railroad was subsidized $16,000 per mile ($9,940/km) built over an easy grade, $32,000 per mile ($19,880/km) in the high plains, and $48,000 per mile ($29,830/km) in the mountains. To allow the railroads to raise additional money Congress provided additional assistance to the railroad companies in the form of land grants of federal lands. They were granted 400-foot right-of-ways plus ten square miles of land (ten sections) adjacent to the track for every mile of track built.

    ...Because of the nature of the way money was given to the companies building the railroad, they were sometimes known to sabotage each other's railroads to claim that land as their own. When they first came close to meeting, they changed paths to be nearly parallel, so that each company could claim subsidies from the government over the same plot of land. Fed up with the fighting, Congress eventually declared where and when the railways should meet.

    ...Both railroads soon instituted extensive upgrade projects to build better bridges, viaducts, dugways, heavier duty rails, stronger ties, better road beds etc. The original track had often been laid as fast as possible with only secondary attention to maintenance and longevity. Getting the subsidies was initially the primary incentive, upgrades of all kinds were routinely required in the coming years.

    And California's high-speed rail initiative is running into problems before shovels have hit the dirt:

    http://reason.com/blog/2010/01/12/about-that-san-andreas-travers

    Anyway, good post.

  • ElamBend

    @bill, any large investments inevitably find government involvement as politicians try to buy business into their towns. However, the investment was almost all private. There was so much money poured into rail in just over 100 years ago that there was a huge over-capacity created. In fact, over the last several decades, the trend had been to tear up old under- or un-used lines, so that the rail companies could avoid higher taxes on them.
    DESPITE that trend, the US remains the largest and most complete rail system in the world.

    @gorgasal,
    Japan is kind of a special case. WWII left the country devastated, but the basic pre-existing freight rail system was in place. It was decided to rebuild this as a passenger system and once that decision was made, it precluded the frieght system working on the tracks (for the reasons Warren mentions). Had that not happened and the Japanese just decided today to create such a system, it would make no sense whatsoever.

  • Bill

    ElamBend,
    The stock was sold privately, but the capital was provided by the government in the form of land grants. "Between 1850 and 1870, over 129 million acres -- seven percent of the continental United States -- had been ceded to 80 railroad companies." http://www.landandfreedom.org/ushistory/us13.htm

    I would have invested too!

  • http://lorenzo-thinkingoutaloud.blogspot.com/ Lorenzo (from downunder)

    Bill: the story is a bit more complicated than that. Railroads are a network good with strong positive externalities (which is why they raise the price of land around them). If private railroads have no way of tapping into those externalities, railroads will be seriously underprovided.

    The typical solutions to this problem are
    (1) have the government build them (since it can tax the externalities via, for example, increased land taxes)
    (2) allocate adjacent land to the railroad companies, which they can then rent or sell and realise some of the externalities their efforts are creating.
    The US typically did the latter. Now, clearly, this was never likely to be a "pure" process, but the mere fact that the railroads got allocated land is not, of itself, pernicious but a rational response to a genuine issue.

    Network goods, with their positive externalities and tendency to monopoly (due to their sunk costs and increasing returns to scale), are always regulatory nightmares of varying degrees.

  • Danny

    Bill,

    You really only have a point when it comes to the Transcontinental Railroad. It was scandal after scandal there no doubt. But the vast majority of our rail system was built with private money...in fact, pretty much any rail line that still exists today was built with private money.

    You see, private money had more discriminating attitudes as to where and how to build. When a line needed to be built with someone's private funds, they built them straight, finding the most efficient routes that could be built. The land-grant and credit mobilier type routes however have gone the way of the dodo...since the money was given based on the number of miles built, they built inefficient winding routes to maximize their profits. After hundreds of bankruptcies and major consolidation and track abandonments, only the efficient routes remained...the ones built with private funds.

    Even given the massive amount of government funding of railroads, the government didn't even start funding rail construction until more than half of our current railroad trackage had already been built.

  • http://www.dr5.org Daniel

    Railroad companies are working to be more energy efficient with their trains. Union Pacific just ran a 3 1/2 mile long train this past weekend in California to test how a train of that length would work. http://latimesblogs.latimes.com/lanow/2010/01/safety-traffic-concerns-raised-when-35mile-freight-train-rolls-through-la-basin.html

  • Bill

    Lorenzo,
    I don't dispute that there may have been a good economic reason to subsidize the building of the railroads. That doesn't make them less subsidized, which was the point I was raising in response to Warren's initial assertion.

    Danny,
    Your last paragraph is demonstrably false. There were fewer than 3,000 miles of track before the great land giveaway began. Land grants supported far more than the UP/CP transcontinental. Your assertion that the land grant lines are gone and only the private lines remain, although completely wrong, is touching.

  • Another guy named Dan

    Let's see, a small group of investors leverage their political connections to attract subsidies to an industry. They then use the promise of subsidized returns to attract private investment, while taking out large consulting fees and salaries. Eventually, the subsidies end, the returns go negative, and the later round investors are left holding worthless paper while the original crew becomes the next round of statesmen.

    Railroads in 1870, windmills in 2010? An interesting AlGorithm for success.

  • Bill

    Another guy named Don,

    You should come to my part of the country, where you can see scores of windmills, none of them turning, because they can't be efficiently connected to the grid.

    At least even the worst of the railroads did something useful for awhile.

  • O Bloody Hell

    > So, explain to me what drives these guys investment thinking. Can it be anything but triumphalism?

    Ah, I see your problem. It's with that word, "thinking".

    You make the false assumption that libtards think.

    They feel. They emote.

    Thinking is not in their repertoire.

  • O Bloody Hell

    > Your last paragraph is demonstrably false. There were fewer than 3,000 miles of track before the great land giveaway began. Land grants supported far more than the UP/CP transcontinental. Your assertion that the land grant lines are gone and only the private lines remain, although completely wrong, is touching.

    Hey, Bill -- Thanks for all those GREAT links demonstrating your blind assertions!

    Oh.

    Wait...

    *Never mind*.

    The current system is so far removed from the land-grant system that it's an entirely different system. It's a hundred and fifty years, folks. AND the transition to freight-only and away from now-money-losing passenger (anyone else here heard of "Amtrack"?) rail. AND the transition from steam to diesel.

    Yeah, there's no doubt a vestige of the old system built into the current one, but it's not the same by any means. A lot of places have no lines left any more, and most of what there is is a remnant of the old tracks just from fifty years ago. But if there is a modern government-effect on all that it's via the control of freight transportation pricing for virtually the entirety of the last century. Is that subsidizing? Perhaps.

    You do cite Bain, but, one wonders about his own personal mindset when writing -- I found this interestingly indicative of where he writes from (emphasis mind):

    "Aftershocks", however, is a first book by a young man still imbued with the passions of his anti-war and anti-draft roots. It should not be read as history.

    Not sure I want to trust an anti-industry polemic from a probable lefty, with a history of twisting truth (see the full Aftershocks review) as reliable fact. I'm sure that will have no effect on your position, though....

    ====

    > At least even the worst of the railroads did something useful for awhile.

    Oh, Bill, Bill, Bill, Come ON -- those windmills have made AlGoreCo loads of money. And that was always their intended use, wasn't it?

  • me

    No contest on the freight vs passengers on railroads argument (with a note that the density of cities makes a huge difference in the efficacy of passenger transport). Also no contest w/regards to Epstein.

    But speaking from personal experience with living in China, "totalitarian" doesn't do it justice. The degrees of freedom are different from the US, but, comparing to true totalitarian countries (Eastern Germany, Communist Czechoslovakia and the 3rd Reich) China is a very, very free country. Some types of expression are more repressed than they are in the US (don't go criticizing the State online), but a whole lot is more free. Typical urban Chinese are better able to argue political positions than your average American, the media actually are more nuanced and cops can't f* your life up nearly as much as they can in the US. Degrees and shades.

  • SJChannel

    Something must be wrong with me. The picture of the "boring" freight train makes my heart beat a lot faster than the picture of the "sexy" futuristic passenger train.

  • http://bluntobject.wordpress.com/ bluntobject

    I have a feeling that a lot of the left-progressive love affair with passenger rail comes from the fact that electric locomotives don't belch little clouds of diesel exhaust (like your freight train photo). When a left-progressive looks at, say, a SkyTrain light-rail car in Vancouver, s/h/it sees "clean" transportation. The coal plant (or hydro dam) that produces the power, and the fact that most of the electricity produced does nothing more useful than heat up high-tension lines and transformers, is out of sight and out of mind.

  • http://commonsenseliberty.wordpress.com Terry Noel

    For all their self-proclaimed intellectual superiority, left-progressives appear incapable of a straightforward business thinking. Little things, like where the money to support an enterprise comes from, is well beyond their capacity. In the end, a shiny train is more persuasive than an honest analysis.

  • dr kill

    I read the Epstein article. I can sum it up by observing that he is impressed with new construction. So am I. Epstein is not bothered by Chi Com methods of people relocation and private property rights. I am.

    As always, it comes down to who makes the decisions.

    The American Prog dreams of strongman/dictator/one party/monarchy never die, do they?

  • Max

    Well, there is no option for freight transport in Europe. The US is a less densely settled country that can easily ship things distances longer than 500 km. Usually, freight trains run at a profit when shipping over long distances at low speed (and huge west to east coast trains are slow some 25-30 km/h). This is no problem, because the alternative (ships) is not faster. Also, trucks aren't the best option, when you want to ship huge amounts of wares in a convoy like manner. They are however efficient on short distances with a variety of different locations to reach.

    So, I think it is mostly a problem of Europe being so small and the US being so big that gives the US a comparative advantage on the mode of transportation.
    Of course, Europe could try some more congestion pricing to develop passenger traffic (as the french do with their high way tolls).

  • morganovich

    clearly, model train sets cause fascism.

    the answer is to ban train sets.

  • pacific_waters

    "In fact, only 18,738 miles of railroad line were built as a direct result of these land grants and loans. This figure represents only eight percent of the total railroad mileage built in the United States between 1860 and 1920."

    Encyclopedia.com

  • http://photoncourier.blogspot.com david foster

    Good post. There are a remarkable number of people who seem to think that rail in the U.S. is an almost defunct industry and totally miss the size and importance of the freight rail network.

    Max--part of the problem with European rail may be short distances, but part of it is lack of synchronization among the national rail systems.

    Also, of course, the configuration of the land and water in Europe makes coastal shipping more of a factor there than in the U.S.

  • http://myweeklycrime.blogspot.com Elliot

    Yesterday I attempted to post this comment on the Huffington Post article, but so far all the comments approved there are just sycophant babbling:

    "
    I've looked at the math in Warren Meyer's response http://tinyurl.com/meyertrain and I don't understand how your impertinent e-mail to him (cited in an update to his article) does anything to address the stark numbers which devastate your argument. Passenger rail is actually worse for the environment than many alternatives and your parents should have taught you that the "everybody else is doing it" argument is invalid.

    Besides the factors mentioned by you and Warren, there is the matter of freedom. Just as I don't think you should be forced to spend one penny to support any wars you oppose (as I do), I don't think anyone who doesn't want and doesn't need any passenger train should have to spend one penny to subsidize it, through any form of taxation (income, sales, property, fuel, automobile registration, etc.)."

  • http://photoncourier.blogspot.com david foster

    The very high weight of passenger rail cars is in part due to safety considerations--ie, avoiding crushing in the event of accident. Also, pax trains on tracks without special signaling systems have a maximum speed limit which is usually far below their technical capabilities, also for safety reasons.

    Ironically, these safety regulations may actually *increase* the death and injury rate, to the extent that they drive people away from safer rail and toward more dangerous driving. (A direct link in the case of the speed limits, an indirect economic link in the case of the train weight)

  • http://cogfactory.net colson

    through a series of missteps, I've ended up in the trucking industry. And it has been an eye opener to say the least. One thing that comes to mind when discussing efficiency of one transport mode over another is that the measure is highly subjective. Energy-wise, trains are an excellent means of moving freight. But the non-monetary costs ought be considered. Moving long freight long distances is most efficient depending on the specific freight involved. I'm with a reefer outfit where a good portion of the freight is better served through trucking than rail. Can a train haul my loads? Probably. Can a train drop that load in your warehouse in two and a half days? Probably not.

    What I really wanted to say is thanks. Warren, you hit the nail on the head with the freight/passenger problem. I've been trying to find a way to illustrate this point to passenger rail fanatics for about a month now. Most passenger rail fans tend to miss the costs when passenger trains are run on freight lines. The cost of building out exclusive lines for passenger rail are insane to say the least. If we figure long distance rail running mixed traffice, the effectiveness, or efficiency will diminish. If anything, it would be a better investment to lay out more intermodal yards and push higher speed freight lines that can shorten the time/cost gap between truck and rail.

    ps, sorry for any typos. I'm fat fingering this on my phone

  • Glen

    Most of the differences can be explained by looking at a map: The Europe lands mass is surprisingly small, but has more ports and viable sea routes. So most freight is shipped by sea, then by truck. America is one large continent with oceans on each end so more freight is shipped by rail. Plus America had a huge Federal project to build highly efficient freeways to almost all major cities - Europe does not have such a system, especially Eastern Europe. Both Europe and Japan have developed high speed rail travel as a means of passenger travel. This is more economical from an energy and pollution point of view than using the more prevalent American passenger air travel for the short distances which predominate in Europe.

  • Veikko

    As an European, i have to comment a little bit. In Finland, the railroad company(the one and only) is highly subsidized. The railroad web is not large, only connecting the biggest cities. I don't know how much percentage is used in freight and how much in human transportation, but humans, by far, got the advantage. Finland is not the simpliest example in Europe, because the landmass is big compared to a small 5,2 million population.

    Rail transportation is used only by students, conscripts and businessmen. Students and conscripts get their ticket half the normal price and businessmen... well if you have money, there are other costly things like time to work.

    For everyone they it would be still cheaper to go by a private car, but the ownership of cars has been made costly (forced insurance, taxes) so it turns out to be a little bit easier to go by train for those who get the allowance. For those who don't get it (working people) the train is not even an opinion.

    Still, parliament members love the trains. "It's environtal" they say and lovely put money on a transportation mode which is not really used, efficient and not even highly positive to the environment. Finland is too coarsely inhabited that going from city to city is not enough for anyone.

    In this country where sozialism and welfare state is highly loved, we have long ago lost the fight but I hope you can do something in USA which is not yet sunk into that welfare state bullshit.

  • me

    One thing that's great about train travel: in countries where you can reserve seats (Germany, China come to mind), you get to read/use your laptop etc. all with no hassle and in great comfort. That's a huge advantage compared to driving by car, or, now that we all get costly front-row admission to airport security theater, flying. Makes me not mind paying the extra cost.

  • Freight Forwarder Philippines

    I believe in it. Railways or freight by train is more utilized than trucking in your country probably because it is more practical and convenient to use.

    Freight Forwarder Philippines