At Reason, Christian Britschgi (“Do Not Under Any Circumstances Nationalize Greyhound”) celebrates America’s “extensive network of private, for-profit (and profitable) intercity bus services primarily serving lower-income people” as “a great example of how the free market can provide an essential service without public subsidies.”
There are a lot of questionable, or outright ahistorical, assumptions implicit in this brief statement that are begging to be dissected. But first, let’s get a minor point out of the way before we tear into the “meat” — such as it is — of Britschgi’s piece.
In response to Ben Burgis’s suggestion that a nationalized bus service could be financially self-sufficient like the Post Office, Britschgi responds: “That the Postal Service is “financially self-sufficient” would be news to USPS, which reported a $6.5 billion net loss this past fiscal year. Indeed, the Postal Service is currently shuttering facilities and raising prices as part of a 10-year restructuring plan meant to get it out of the red.”
The main reason the Postal Service wound up in this fiscal mess is that, as mandated by the 2006 Postal Enhancement and Accountability Act — repealed less than two years ago — the Postal Service was required to fully pre-fund its retirement pensions for the next 75 years. It’s especially despicable that Eric Boehm, also at Reason, had the nerve to write that the Postal Service had “been hemorrhaging money for years — more than $78 billion in red ink since 2007 — thanks to a business model that the Government Accountability Office has termed ‘unsustainable.’” Not only did he leave out the reason why the problem began, specifically, in 2007; he actually opposed repealing the mandate that put them in that position, and framed the repeal as a “bailout.” It’s hard to get much more intellectually dishonest than that.
With that out of the way, let’s get back to Britschgi’s main point. He continues:
The whole point of nationalizing Greyhound would be to expand service to unprofitable routes and improve facilities while still keeping prices affordable for people whose only option is taking the bus. That’s unlikely to happen if this nationalized bus service is to remain committed to being “financially self-sufficient.”
That all would be technically possible by providing a nationalized intercity bus service with endless government subsidies and no expectation that the money will ever be paid back. The obvious parallel is Amtrak, the government-owned corporation that provides intercity rail service.
Amtrak is currently in the process of expanding service and improving train stations, despite ridership continuing to be below pre-pandemic levels. The rail service’s expansion is only made possible by billions of dollars in additional subsidies provided by the 2021 infrastructure law.
This is all true — as far as it goes. The problem is that, when it comes to “subsidies,” right-libertarians lack any sense of object permanence.
Where to begin? For starters, those “free market” bus lines, which have managed to thrive absent any government subsidies whatsoever, have actually supplanted passenger rail on the scale that they did because of a little thing called the Interstate Highway System. Perhaps Britschgi has heard of it. Its creation and continued functioning have involved no small amount of government subsidies.
Even when he tries to address the issue of subsidies, he gets the issue exactly backward: “Ensuring motorists pay the full costs of their interstate highway trips could produce a similar effect by getting some would-be drivers to take the bus instead.”
It’s true that car culture is subsidized at the intra-urban level. But when it comes to “interstate highway trips,” it’s actually motorists who are subsidizing heavy vehicles like semi trucks and buses. Those heavy vehicles cause nearly 100% of road bed damage, but around half of all highway revenue comes from gasoline taxes paid by car owners.
Britschgi also contrasts Amtrak, unfavorably, to the “for-profit airlines.” But government was, if anything, more heavily involved in the creation of the American civil aviation system than of the Interstate Highway System. For some background information on the role of the federal government in creating both of them, see here.
For right-libertarians, if a subsidy was more than three weeks ago it never happened. It’s totally irrelevant to the structural position of one form of transportation relative to others. So long as you didn’t actually see the turtle get lifted up onto that fencepost, and you do your best not to think about it, you can pretend it climbed up there in the “free market.”
More broadly, this is indicative of the right-libertarian perception — or lack thereof — of the general role of subsidies and protections in capitalism as a whole. One of the most important functions of the capitalist state is to socialize the operating costs of capital.
Right-libertarianism, as a legitimizing ideology, serves primarily to frame as “natural” and “spontaneous” the core features of a capitalist system that would never have existed absent massive, violent structural transformation by the state.
