Automobile-Focused Industrial Policy

Americans tend to stupendously underrate the extent to which public policy in the postwar years was driven by a deliberate car-focused industrial policy paradigm centered around the automobile, road building, highway building, coal, steel, and oil industries. After all, if you think about it there’s a huge chicken and egg problem with cars. If cars don’t exist, then cities won’t be built to accommodate them which makes investment in an expensive car look questionable. And if relatively few people own cars, then there’s relatively little constituency for creating grade-separated roadways that exclude pedestrians and cyclists. And absent grade-separated highways, there’s relatively little supporting infrastructure for the creation of auto-focused suburbs. Lather, rinse, and repeat. But the US government made a “big push” to build highways, promulgate auto-focused zoning codes, subsidize the purchase of suburban homes, etc. and push us onto a car-centric paradigm that many on the right mistake for a free market outcome.

Alon Levy finds a clever natural experiment in the Caribbean that helps us understand how big the impact is:

It’s common to attribute the failure of American transportation policy to uniquely American features such as new urban design or low density, but when the same policy was tried elsewhere, it produced the same result. For example, compare Puerto Rico to Antigua and Barbuda, Barbados, and Trinidad and Tobago, which have comparable density and income: Puerto Rico has Interstates, the rest have no freeways; Puerto Rico’s car ownership is higher than in most European countries, and twice that of the other middle-income Caribbean nations.

Now, clearly, the automobile is a useful technology and lots of people would be owning cars under any reasonable policy paradigm. But that’s a huge difference. And these issues are something that gives me continuing pause about the federal rescue of the American automobile industry even though in practical terms it’s worked out much better than I anticipated. As long as the federal government remains formally and informally committed to the proposition that “what’s good for General Motors is good for America” it’s not really possible to have sound transportation policies writ large. You can try to take this cars/oil/steel industrial policy and nudge it in a greener direction with subsidies for electric cars, but no car-focused industrial policy is going to be as green as backing away from having the most energy intensive possible built environment of roads, homes, and offices. Yet sprawl-promotion is integral to the interests of the auto industry.