The American Society of Civil Engineers does a flashy study every year called “America’s Infrastructure Report Card.” The wrench-turners give a grade of “D” to the mainly-government infrastructure they examine. Based on the low grade, they ask for taxpayers to cough up another $2.2 trillion so the engineers can fix the supposed mess.
There are two big problems with the ASCE report. The first is that it is devoid of economic thinking. Every infrastructure asset that is old and less than perfect is apparently a disgrace to the engineers. But economists would point out that to maximize our standard of living we generally want to wear out fixed assets pretty thoroughly before we buy new stuff.
Consider America’s automobile stock, which includes everything from brand-new cars to old clunkers. The engineers would probably give the nation’s automobile infrastructure a “D” because it includes many old cars like my wife’s 11-year-old Honda. But it would be hugely wasteful—both economically and environmentally—to throw out all the old cars and give everyone brand new Acuras.
Instead, it’s efficient if car owners compare the likely stream of benefits and costs of their current used cars with the likely stream of benefits and higher costs of possible new cars, and then make an optimal choice. That’s what my wife is doing, but the ASCE would probably give her a “D” grade, castigate her frugality, and insist she immediately blow her savings on a new Rolls Royce.
The other problem with the ASCE report is its naiveté regarding the efficacy of central planning. I’ve discussed federal infrastructure failures in this op-ed and this testimony, but the ASCE seems to believe that all-knowing visionary leaders in Washington can direct us to infrastructure salvation.
Here are some excerpts from the “Solutions” portion of the ASCE report:
America’s infrastructure needs bold leadership and a compelling national level vision… Currently most infrastructure investment decisions are made without the benefit of a national vision. That strong national vision must originate with strong federal leadership and be shared by all levels of government and the private sector. Without a strong national vision, infrastructure will continue to deteriorate…
Infrastructure investment at all levels must be prioritized and executed according to well-conceived plans that both complement the national vision and focus on system wide outputs…
[P]lans must reflect a better defined set of federal, state, local, and private sector roles and responsibilities and instill better discipline for setting priorities and focusing funding to solve the most pressing problems.
If I were an engineer, I might also question whether our infrastructure is really as crummy as the ASCE claims. Yesterday, I pointed to federal data showing that the condition of the nation’s bridges has steadily improved over the years.
However, I’m not an engineer, so my main recommendation to the ASCE is to hire economists to help write next year’s report. Hopefully, they would be economists who have read Hayek and understand the shortcomings of ASCE’s central-planning approach.
