The Unseen Consequences of Governmental Spending on the Interstate Highway System

Highway to Collapse: Spending on Infrastructure

By Jacob G. Hornberger, The Future of Freedom Foundation
April 1993

Bill Clinton believes that spending on infrastructure will bring jobs and prosperity to America — and, in the process, finally prove, after sixty years of failure, that the welfare-state, managed-economy way of life can be a success after all. But spending on infrastructure is just another highway to collapse. It will only result in higher taxes, more impoverishment, and greater destruction of people's lives.

The Interstate Highway System is the infrastructure that is the pride and glory of national politicians and bureaucrats. They point to the highways and proclaim, "Look at the interstates. We created jobs and prosperity for you."

The Interstate Highway System was the biggest public-works project in history. It outranks even the public works of the pharaohs of ancient Egypt, the Caesars of Rome, and the most powerful totalitarian dictators of the 20th century.

Did it provide jobs? Yes — for those who were among the politically privileged. The beneficiaries of the governmental largess were all of the special interests who built the highways — the engineers, contractors, cement companies, and the like — and, of course, the automobile industry itself.

The American people see only that which the politicians and bureaucrats want them to see: the highways, along with all of the special-interest jobs that came with them. People block out of their minds that the money to build the highways was taken from the citizenry through taxation. And they fail to see the unseen: all the jobs that failed to come into existence because people were not permitted to spend their money the way they wanted.

For example, suppose a person has $10,000 in the bank. He decides to spend the money on home improvements. He hires a contractor who purchases supplies and hires sub-contractors. Jobs are created in the home-improvement industry as a result of the money that he is spending.

But suppose that before he has a chance to spend his money, the government takes it from him and uses it to build a road. The public officials point to the road and say, "Look at the jobs we created by having this road built." Will the person see through the charade? Will he see the home improvements and the related jobs that never came into existence?

But not even the unseen consequences of governmental spending reflect the true horror of the Interstate Highway System: the thousands of people who were financially destroyed by this federal monstrosity.

Let us look at a few examples. Most Americans are familiar with Route 66 — the highway which ran from Chicago to Santa Monica. While Route 66 was itself a governmental project (and one with a notorious history, too), thousands of our fellow Americans had built their lives and fortunes around this road across America. What happened to all of the thousands who tied up their life's savings in the restaurants, motels, and souvenir shops which dotted Route 66? By redirecting traffic away from their places of business, America's governmental officials condemned them to financial destruction.

Michael Wallis' recent book, Route 66: The Mother Road, provides some glimpses of what happened all across America. The personal accounts of Arizona residents Nyal Rockwell and Angel Delgadillo provide good summaries:

"Those old cabins over there were once filled with people. When they put in I-40 the government claimed that I had been taking petrified wood from their park and so they cut me off with a fence and then the new highway sliced through here, and they didn't leave me a gate or an access ramp, so I was marooned." (Rockwell)

"Back in the early years, the town had a big Harvey House and motor courts galore and we accommodated many, many people in this little town. When we got bypassed by the interstate in 1978 business shriveled up some and we struggled.. . . " (Delgadillo)

And this only pierces the surface of the highway horror story. For an in-depth account of how highway officials destroyed the lives of so many of our fellow Americans, read Robert Caro's 1974 book, The Power Brokers: Robert Moses and the Fall of New York. Although little known outside of New York, Moses was one of the most powerful public officials in world history. His power to build highways and parks — and to smash those who got in his way — was virtually unlimited.

Not even the so-called "Long Island barons" could stand against Robert Moses. Using powers of eminent domain, Moses sent his storm-troopers onto the estates of some of the wealthiest people on Long Island and confiscated their land for the construction of highways and parks.

And lest the average American begin cheering too loudly over the wealthy having their land taken against their will, Moses did the same thing to the poor — like those living in East Tremont, New York.

East Tremont was a long-established, Jewish community. Here, as in neighborhoods all across America in the 1950s, there was a sense of community — of friendship — of culture — of tradition. But Moses decided that "progress" demanded that the Cross-Bronx Expressway be built — and that it be built across the homes of the people of East Tremont.

The residents petitioned, pleaded, begged to have their homes and neighborhood spared. They even showed that the highway could just as easily be built a short distance away, with significantly less destruction. But they learned a lesson: when the wealthy cannot stand against raw political power, neither can the poor. The Tremont residents were thrown out of their houses and given some money to find new ones. Their houses and neighborhood were destroyed. The Cross-Bronx Freeway was built.

As Helen Leavitt pointed out in her 1970 book, Superhighways-Superhoax, it was the same in cities all across America. Homes and neighborhoods were threatened with destruction in the name of "highway progress." Citizens petitioned for relief, trying desperately to save what they had developed. But the highway czars scoffed at the "little people" who dared stand in the way of "progress." Homes and neighborhoods were smashed — and the people who lived in them were scattered apart by the eminent-domain machinery.

Why are Americans so attached to their Interstate Highway System? Because, like so many others around the world, they are still clinging to the dual ideas of (1) public ownership of the means of production and (2) central planning over peaceful activities — the core elements of the socialist nightmare. And that is exactly what the Interstate Highway System is: government ownership over land and central planning of transportation. And with the taxes, congestion, and pollution which it brought in its wake, the Interstate Highway System is as big a failure as socialist schemes all over the world.

Unfortunately, Americans are about to receive more of the same. Infrastructure spending is the centerpiece of Clinton's "economic-recovery" plan. Moreover, Clinton's new Transportation Czar, Frederico Peña, is "Mr. Public Works, par excellence." Peña, the former mayor of Denver, is primarily responsible for the construction of Denver's new $3.1 billion government-owned airport — even though Stapleton Airport is satisfying consumer demands perfectly. And even though socialism has failed all over the world, not once has Peña suggested that the new airport be privatized. Even worse, Peña wants to keep the old airport facilities publicly owned and managed-sort of a "little Cuba" in the middle of Denver. (For his devotion to public works, Peña was awarded the life-long dream of every politician and bureaucrat: a public street named after him.

What is the solution to all of this? To do what Americans have been telling the Russians and Eastern Europeans to do: privatize their governmental boondoggles and have faith in the market process. Will this immediately solve the problems that have built up as a result of sixty years of central planning and public ownership? Of course not. But it will take America off of its highway to collapse and return our country onto the road toward freedom and prosperity.

Mr. Hornberger is founder and president of The Future of Freedom Foundation.