About highways and whether or not they are a public good. Aren't they a club good? Highways aren't rivalrous unless they're congested.
I guess I'd split this into two issues: What kind of good are highways theoretically, and how do we treat them practically. Highways are kind of like movie theaters: you can set up a gate so people have to pay before they can get in, but it's basically the more the merrier after that. Whether I'm in a full theater or an empty one, I still get to see a movie. Analogously, I could drive 55mph on I-94 whether it's empty or has thousands of cars. So I agree that highways are excludable (you can toll them) and non-rivalrous (unless they're congested), and therefore club goods, in theory.
The problem is that we treat them like public goods. So we don't toll them, and as a result they're regularly overcrowded. I'm sure you do things more reasonably in Canada, but here In Minnesota, we only have two segments of highway with a single toll lane (one more is on the way). And that MnPass project was basically the life's work of a civically-engaged, cutting-edge MIT-trained economist, Herbert Mohring. (This part of his obit made me tear up: "We tried to point it out to him," said his son, Stephen Mohring, an art professor at Carleton College in Northfield, noting that the Wikipedia entry [for the Mohring effect] is one of the first things to pop up when they Google their last name. But "he didn't quite get it.")
So if you charge people for big, expensive highways through indirect taxes rather than user fees like tolls, people figure, "Hey, already paid for it, might as well use it." Once I heard Chris Wells relate an economic parable that he used on his students: "If you've already paid for the meal plan, you're not likely to go to Jimmy John's for lunch, even if it's faster, tastier, and cheaper than the cafeteria food. You've paid for cafeteria food whether or not you eat it, so even superior substitutes appear unattractive."
So funding this club good like it's a public good encourages more people to use it. But as more people use a highway, it becomes congested, and each additional driver slows down all the drivers behind her. At this point, the highway has become rivalrous. Economic theory calls things that are excludable and rivalrous private goods. Treating a private good like it's a public good is a really dumb thing to do.
That’s how I feel about highways. They're club goods in theory that have turned into private goods because we don't toll them so they get congested but we're treating them like they're public goods.
