Market Urbanism

Liberalizing cities | From the bottom up

“Market Urbanism” refers to the synthesis of classical liberal economics and ethics (market), with an appreciation of the urban way of life and its benefits to society (urbanism). We advocate for the emergence of bottom up solutions to urban issues, as opposed to ones imposed from the top down.

Newsflash: there’s no supply and demand in a centrally-planned market

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The NYT has an absolutely boneheaded article about the shortage of taxicabs in Manhattan during the evening rush-hour. They blame rising Manhattan rents and cabbies’ schedules, but the statists at the New York Times don’t see the obvious glaring issue: controlled prices and a taxicab cartel! They cite it as an “apparent violation of the laws of supply and demand,” without recognizing that for supply and demand to work, you need drivers to be able to charge their own prices and enter markets at will.

Aside from that supply and demand bit, I’d say the second stupidest quote comes from David Yassky, leader of the cabbies’ cartel:

Mr. Yassky said the city “should be circumspect about substituting its judgment for the judgment of business people.”

Hmm, that’s odd, because last I checked, Yassky was in charge of a state organ devoted to protecting incumbent taxi drivers from the judgment of business people.

Comments

  4. Steven, I’m struck by how well you couple true insight with meaningless insults that undermine your credibility to those who don’t share your point of view. I thought the question he answered (why does this happen, given the laws as they are) was an interesting one and his answer interesting as well. You choose a different level of analysis: “if the laws were different, how would this phenomenon differ?” and provide great insight at that level of analysis.

    So why the insult? Not everybody chooses to analyze at the particular level that you find more interesting. Personally, I think both the reporter’s explanation and yours are quite interesting.

    Finally, what has he written that makes him seem like a “statist”? He doesn’t show any preference for or against the existing taxicab laws; I’m not sure he’s even pondered the question. Yet you assume he opposes you. Why?

  5. Yeah ignorance on this issue is unbelievable.

    Maybe you should post the level of distortion caused by the medallion system, I’d be interested to see the tally (I think the level of distortion is the summed market value of all the medallions in issue).

  6. I think it is reasonable to presume that the author has not considered the true underlying cause of the taxi shortage (which is, of course, simply an artificial cap on supply, combined with price fixing). And I think the point Smith was getting at was that people just take these ridiculous systems for granted without questioning them. Calling the guy statist is pretty extreme (statists are often critical of government policies whatever their objectives) but it drives people like me and Smith crazy to read these articles because the only way voters can learn about these issues (and potentially make a difference with their votes) is by reading about them in the paper. For the writer to just look at the problem and scratch his head misses an obvious opportunity to inform everyone that the root cause of the situation is successful rent-seeking on a massive scale by a small number of individual medallion holders (I think the distortion is in the tens of billions of dollars), and could be rectified by the government at massive benefit to people who want to ride or drive cabs.

    Most people probably don’t realize this, and after reading this article about the taxi shortage, will continue to not realize it. I do think that’s a failure in reporting.

  7. I’m struck by how well you couple true insight with meaningless insults that undermine your credibility to those who don’t share your point of view.

    If I ever write a book, that’s going on the dust jacket.

  8. Finally, what has he written that makes him seem like a “statist”?

    Stephen stated it as follows,

    but the statists at the New York Times don’t see the obvious glaring issue

    It’s a generalization of the staff at that newspaper, which has a pretty good track record at defending government. They probably wouldn’t take being called a “statist” as an insult. The writer of the article may not know anything about economics, but there are plenty of editors at the NY Times who know enough about economics to know about price fixing and cartelization in the taxi industry. It’s pretty basic microeconomics…. So why didn’t any editors at the Times suggest some simple edits to correct for his economic ignorance?

  9. I would take “statist” as an insult, because I’ve only ever heard the term used pejoratively by market proponents. People in favor of more of a government role in the economy tend to call themselves “social democrats”, “socialists”, “market socialists”, or any number of other terms.

  10. There’s still supply and demand in a centrally planned market; it’s just that the market doesn’t respond to them.

    Of course, it’s so badly planned that it doesn’t respond to the people who are supposed to be running it, either…

  11. There’s still supply and demand in a centrally planned market; it’s just that the market doesn’t respond to them.

    Of course, it’s so badly planned that it doesn’t respond to the people who are supposed to be running it, either…

  13. The medallion system is really the worst of all worlds – state determines amount of cabs, and how they can be furnished, but do not require the drivers to have any substantive qualifications. At least in London, the barrier to entry is that cabbies must demonstrate their complete knowledge of the streets of London (and I do mean complete – they will recognise any road, as long as you use its correct name).

    My experience of gypsy cabs (in NYC) is that they are cleaner, cheaper, and of course more available. My only problem is that they are moderately difficult to identify and flag down.

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