Ancaps are coming quick post infrastructure is the post.

And this is the thread of interest.

note the picture is of a rural limited access highway

Also note, I am not here to defend /u/TotesNotAWorkAccount (TNAWA) but, I expect better from /u/besttrousers (BT).

Too common failure modes in instruction of Micro

*My TL;DR of Mankiw Micro 101 (which I use here because it was what we used at my University)

*TL;DR - Markets are awesome, except when they are not, and when they are not here is what a omniscient planner could do to bring about the socially optimal outcome.

*Failure mode 1: Markets, Markets, Markets as represented in TNAWA initial comment and everyone of their other comments were they are not talking about their degrees or what a shithole r/neoliberal is.

*Failure mode 2: Market Failures exist so government is obviously the way to nirvana on earth in every situation as represented by BT [here](), here, here, here, here, etc.

*Failure mode 3: Calling publicly provided goods "PUBLIC GOODS". As shown by a user who has deleted their comment before I could get around to writing this up. I believe the user realized their mistake on some level because they used the weasel word QUASI public good.

Solutions to the too common instructional failures

*Failure mode 1: make sure students stay awake during the second half of the class.

*Failure mode 2: make public choice a required class

*Failure mode 3: I don't know how to make students memorization stick past the second midterm

Proper economic arguments

*Failure mode 3: Remember the definition of the terms you are using. In Mankiw he defines a public good as one that is non-excludable and non-rival. A long time ago I got in an argument that everything is technically excludable. They convinced me that the much better definition is not-feasibly-excludable. On the other hand remember that the context of this post is this piece of infrastructure, a rural limited access highway. Given the existence of Jersey barriers and RFID toll tag technology rural limited access highways are eminently feasibly excusable. You can see a mention of the Roman highways those were not excludable. As someone who is about to drive from Houston to Dallas tomorrow I can swear to you that rural limited access highways are also often rival. So at best for this argument against TNAWA rural limited access highways are at best common resources and could completely end up being private goods.

*Failure mode 2: Point out the market failures and externalities that exist in the market. (This will be the fun part because I would really like to know the externalities and market failures I miss.)

Pollution: in a free market the participants will under value the cost of their emissions and the degradation to area local to the infrastructure.

Network effects: A new private highway from Dallas to Tulsa will increase the value of the existing private highway between Houston and Dallas. Then a new highway between Tulsa and St. Louis will increase the value of the two existing highways. People considering building an additional highway between St. Louis and Chicago will not consider the increase in value of the previous three highways.

Natural Monopolies: Long distance highway projects have a high fixed cost and thus have a tendency to be Natural Monopolies. This will tend to lead private infrastructure development to provide less than the socially optimum throughput at higher than the socially optimum price.

The holdout problem: Large infrastructure projects tend to require the cooperation of many individuals and thus are susceptible to the hold out problem where one individual can hold the project ransom to an unreasonably high buyout demand requiring eminent domain.

*Failure mode 3:

Pollution: The current govt. solution of "user pays" gas taxes doesn't even cover the cost of maintaining the existing infrastructure. This also doesn't take into account that it is not even a "user pays" tax because you pay the federal tax even if you never drive on federal highways and you pay the state tax even if you never drive on state highways. This also implies that the govt. is doing a damned thing about the environmental costs of driving. Ah, but CAFE standards, you say, yes it is completely efficient that we make cars $3000 more expensive for both the roughneck driving from Houston to Midland every two weeks and the Grandma who just drive back and forth to church every Sunday.

Network effects: While I know airlines aren't exactly popular they have been completely capable of forming alliances across the globe. Are you telling me we won't see the same type of cooperation between companies operating in Texas and Illinois?

Natural Monopolies: You are going to start talking about monopolies and then say I need the biggest monopoly around to solve them.

The holdout problem: Actually we see plenty of infrastructure projects built all the time, for small scale see flag lots and negotiations for driveways through properties (which also helps the case for the lack of need for local public provision of roadways(although personally I actually support that)) all the time. The only projects that you hear about, you hear about because they are asking for eminent domain because that does make it easier for them. Although it is a little weird that you use govt. interference to argue for govt. interference. We are talking about rural infrastructure were there are multiple routes and it is not actually all that difficult to pay very low option fees for a large buyout if that particular route gets built. Additionally if a project doesn't have a large enough benefit vs. cost to compensate the land owner's loss then maybe it doesn't need to get built.