Wednesday, January 02, 2008

Planes to Nowhere

Responding to Marginal Revolution, Planes to Nowhere, criticizing subsidies paid to airlines to provide service to small rural centers.

You will find, if you look more deeply into it, that this is just one of numerous subsidies paid to residents and services based in rural areas.

A similar pattern exists inside cities, where the taxes paid by businesses and residents in the denser urban core subsidize residents and services living in the more dispersed suburbs.

It is worth noting - even though others have made the same point - that recipient communities tend to vote conservative (Republican in the U.S., Conservative in Canada, etc.).

Residents in such communities are very often (ironically) anti-subsidy and anti-big-government. An analysis of their criticisms, though, shows that their platforms are based on self-interest: they oppose in the larger part measures that help people living in urban centers (notable examples include their opposition to support for welfare, support for the arts, support for urban transportation, etc.).

When in government, these same conservatives tend to be financially irresponsible, accelerating subsidies and other supports to their 'base' in the rural community, creating large government deficits as a result (which they inevitably blame on the subsequent more liberal administrations elected to clean up the result).

This situation is exaggerated by the distribution of voting districts, which tends to grant disproportionate representation to rural residents.

Speaking as someone from the left, I understand the need to provide these subsidies to rural and suburban regions. They are necessary because the free market, left to its own devices, would leave these regions completely unserved.

This would greatly exaggerate the 'time warp' effect, whereby rural regions would be decades behind urban regions, not only in technology, but also education and health care, and ultimately, attitudes and behaviours.

This - not coincidentally - is the same result we see worldwide, especially in areas where subsidies are not in place. The same supports that keep the rural regions of the United States (marginally) in the twenty-first century are simply not in place in Africa, Asia and South America.

This - it should be noted - is why we see decades-old attitudes and behaviours, things like tribalism, religious fanaticism, and the like. And we see the same antipathy toward more liberal (and wealthier, and more generous) regions. And (interestingly) for the same reasons: the fear that government is changing traditional values, making too many demands, and costing too much.

It turns out - and we have the empirical evidence for this now - that it is much cheaper to provide subsidies to these regions rather than to take a 'law and order' approach. Responding to religious fanaticism, tribalism and the like by war and invasion costs hundreds of billions of dollars - a non-productive subsidy that amounts to thousands of dollars per resident.

It is understandable that voters in rural and suburban regions in the U.S. (and elsewhere) support the 'law and order' approach. They just don't *get* the other approach, they don't understand it, can't accept it, because it flies in the face of their own myth of self-reliance. People should not receive subsidies, they cry - while at the same time accepting subsidies of their own, and paying even *more* to try to enforce law and order.

Recognizing that a subsidy to rural regions exists is the first step. Understanding *why* it exists is the second step, and the step that most populist and conservative politicians and supporters are unable - or unwilling - to take.

For after all, the way to address 'needless' expenses on 'planes to nowhere' is, of course, to eliminate the disproportional representation received by rural residents in the legislature, to ensure that one rural vote is worth exactly the same as one urban vote. And what right-winger is willing to do that?

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