Auto industry requires massive public subsidies to survive

When are capitalists in favour of public ownership? When it earns them a profit. Nowhere can this be seen more clearly than when looking at car companies.

As auto interests have pocketed stupendous profits over the past century they’ve also pushed to socialize huge amounts of urban land. While this may contradict textbook economics, capitalists often prioritize socialized costs/privatized profits over “free markets.”

Ignorance of the auto industrial complex’ drive to socialize public space was highlighted in a number of leftists’ recent criticism of tolling two Toronto highways. Bemoaning Mayor John Tory’s “neoliberal policies” and “neoliberal lens of public infrastructure,” Nora Loreto argued the tolls might pave the way to privatization. “Getting people used to paying to use the Gardiner and the DVP [Don Valley Parkway] would make it possible to start talking about full-scale privatization of these roads,” she wrote. “If you’re opposed to privatization, a toll plan under a right-wing administration is effectively creeping privatization. If you can’t put that cat back into the bag, do everything you can to not let it escape in the first place.”

While it’s not inconceivable the city would privatize the Gardiner and DVP, the broader concern reflects a fundamental misunderstanding of the auto industrial complex (car, tire, oil, asphalt, etc. companies, as well as big box retailers and suburban developers). Cars are produced for profit, owned by private individuals, but are completely dependent upon public roads. It is even hard to conceive of a large-scale privately owned road network. While there are a good number of toll highways financed and operated by private corporations, it is almost impossible to envision an entire city road system — let alone that of a province or nation — financed and operated privately. Simply put, cars need roads and the state must pay for them; otherwise most of us would still be riding public transit because an unsubsidized private automobile would be too expensive and too inefficient.

The private car’s ability to offload costs onto the public is at the heart of its rise to dominance. German auto historian Winfried Wolf explains: “In road transport there is a possible separation, based on modern technology, between the transport infrastructure (the motorway or road) and the means of transport (the car, truck etc.) This transport technology can therefore be easily organized according to the principle of private appropriation of profit, socialization of costs and losses. Private profits are appropriated by the vehicle manufacturers, the insurance companies, and the motorway construction firms; costs are socialized by means of public financing of motorway construction, policing, hospitalization of the injured and repairs to the environment.”

Out of every economic sector, the auto industry receives by far the most public support. In 2001, reports Heat: How to Stop the Planet From Burning, the world’s 30 richest governments spent $1.1 trillion (1,100,000,000,000) on road transport. The costs of auto infrastructure are so great Carfree Cities claims: “The savings on street maintenance in a car free city probably exceed the operating costs of the transport system.”

Curbside parking alone sucks up tens of billions of dollars in government subsidies each year. A century ago North American cities began devoting tens of millions of dollars to widen streets and cut down trees to increase parking space. Today it’s hard to find a street without space for curb parking, which the author of The High Cost of Free Parking, Donald Shoup, argues, “may be the most costly subsidy Americans cities provide for most of their citizens.”

For those of us of left-wing persuasion, it’s counterintuitive to call for the privatization of public lands. But, often the less public space there is in a neighbourhood, the more pleasant it is. And the less of a toll it takes on the planet. Why is this? The answer is simple and so overwhelmingly a part of our shared existence that we have trouble seeing it: Most public land in urban areas is devoted to noisy, dangerous and polluting vehicles, which contribute significantly to the climate crisis.

Of the 40 per cent of Toronto that is public land, roadways make up 27.4 per cent, while parks and open spaces cover 13 per cent. Many beautiful, walkable, old cities have less than half as much public land. On the Old Urbanist blog Charlie Gardner writes, “the traditional city of narrow streets and small squares, typified by towns of medieval plan, find ten or fifteen per cent [public space] perfectly adequate.”

So, privatizing the arteries that feed the automotive cancer could lead to healthier, more pleasant and ecologically sustainable cities.

Or, an alliance of environmentalists, urbanists, public health advocates and housing rights activists could campaign to turn roadway into co-ops/social housing. But, a prerequisite for this type of “Leap Manifesto coalition” is leftists recognizing the need to move beyond the private automobile.

This is the second of a four part series on the “Great Toronto toll debate’.

Comments Off on Auto industry requires massive public subsidies to survive

Filed under Stop Signs

Comments are closed.