Capitalism Guide Ignores Inconvenient Truth About Transport Subsidies

In an otherwise glowing review of “The Politically Incorrect Guide to Capitalism,” Editor David Kinchen of the Huntington News Network (WV) takes author Robert Murphy to task for myopically singling out Amtrak as a wasteful excess of the public purse:

What about Amtrak and why does Murphy hate it so much? On pages 128-30, he says that Amtrak benefits from generous federal subsidies, while providing no service to major cities like Nashville (where he lives), Phoenix and Las Vegas. He makes the outrageous statement that few people use the intercity trains like my beloved Cardinal line and that Amtrak an example of pork that should be abolished. Yes, abolish Amtrak, however limited its service is, and we’ll be worse than a Third World country, at the mercy of airlines that delivered the most miserable service in their history this past summer, according to official statistics and news reports.
Dr. Murphy, sir, I know you can’t board a train in Nashville as I can in Podunk, er, Hinton (Pop. 2,800), but the nation as a whole – especially those of us living in areas far from major airports—benefits from Amtrak service. Furthermore, the train was packed in both directions with smart consumers who don’t want to do the airport strip-tease or spend all their traveling money on gasoline and parking fees once they get to the big city.
Founded in 1971, after the failure of capitalism in the form of private ownership of rail service, Amtrak is well worthy of the relatively meager federal subsidy it receives. Nobody loses his or her luggage on Amtrak, because there is no checked baggage! The train attendant on my recent trip warned us about keeping an eye on our belongings. And what about the EAS (Essential Air Service) subsidies for small airports like the ones in Beckley, Bluefield and Lewisburg, which Dr. Murphy doesn’t mention. Yes, Dr. Murphy, we subsidize airports, too.

Indeed, Amtrak Cardinal service in West Virgnia, while marginal by many standards, provides a lifeline for the region.  It represents one of many ways Amtrak provides for mobility needs in rural and urban America, at a bargain to the taxpayers.

More importantly, a true self-described conservative or libertarian wishing for less government intervention in any market would naturally call for a level playing field.  Decades of bias on the federal level towards direct and hidden subsidies for aviation and roads have placed passenger rail and other modes of transportation at a distinct disadvantage, and have hamstrung state governments wishing to diversify their transportation investments.

It’s a myth to say that current transportation outcomes reflect the Invisible Hand; they reflect market distortions of the worst kind, courtesy of Uncle Sam.

—Matthew Melzer