Urban Renaissance Institute

September 29, 1995

The passenger-kilometres (pkm) traveled on intercity buses fluctuated wildly during the period 1970 to 1995. From 3.6 billion pkm in 1970, bus ridership rose to 4.4 billion pkm in 1980 before sinking to a low of 3.4 billion pkm in 1990. While the annual level of ridership has been fairly stable during the present decade, at slightly more than four billion pkm, it peaked at 4.8 billion pkm in 1995.

Source: http://www3.ec.gc.ca/~ind/English/Transpo/Tables/pttb06_e.HTM

The market share of passenger travel claimed by intercity buses fell from 1.7% in 1970, to 0.8% in 1990, and has fluctuated between 0.9% and 1% since.

For analyses of other modes, or for an overview of the trends in the modal split between 1970 and 1995, click on…

The following may also be of interest: Urban Transport.

Urban Renaissance Institute
January 11, 2000

The reasons for a global rethink into how airports should be owned and operated are three-fold:

• an airport is no longer an instrument of social and economic policy.

   

• as a result, the air transport industry is witnessing the evolution of the airport from a subsidized support system for the airline community, to a highly profitable enterprise in it’s own right.

   

• at the same time, the investment required to keep pace with the growth in air transport — estimated by Britain’s Jane’s Information Group to be more than US$120 billion over the next 20 years — can no longer be absorbed by a cash poor public purse.

More to the point, expenditures to facilitate the commercial transport of people and cargo across the country and around the world, never should have been the responsibility of the taxpayer.

Lawrence Solomon, Reply by Peter Bauer
The New York Review of Books
November 7, 1985

In response to City Lights (November 7, 1985)

To the Editors

Peter Bauer is one of the world’s foremost economists and a fitting reviewer for Jane Jacobs’ Cities and the Wealth of Nations, which is recognized by many as a seminal economic work [NYR, November 7, 1985]. But rather than dealing with the nub of Jacobs’ thesis—that the city and not the nation is the relevant economic unit and thus the key to development—he has chosen instead to use this review as a platform for his own theories. I have read these theories in his own books and am much impressed with them, but he does Jane Jacobs and your readers a great disservice by setting up straw men in her book for his theories to knock down.

One of Bauer’s main quarrels is with the view that "commercial contacts with the West have harmed rather than benefited [backward regions]," a view he assumes Jacobs holds.

But nowhere in her book does she imply that backward regions should forego trade with advanced regions. She does not say, as Bauer claims several times in several ways, that for backward regions "external commercial contacts are damaging, or that they would have fared better if they had not produced cash crops."

Quite the opposite. Time and time again, Jacobs in her book shows how external contact with affluent areas has provided the impetus for development: this is how backward Venice did it in the sixth century, how colonial American cities did it in the eighteenth century, and Southeast Asian cities in the twentieth. But what she does say, and she could not say it more clearly, is that the cities which become successful are those that do not limit their trade to wealthy regions:

It is fatal if backward cities confine themselves to that kind of trade, for such trade is only a springboard for embarking on a different kind of intercity trade: trade with cities in much the same circumstances and stage of development as themselves. This means that backward cities must trade most heavily with other backward cities. Otherwise, the gulf between what they import and what they can replace with their own production is too great to be bridged.

If Bauer disagreed with this springboard theorem, we might all have profited from his perspective. But he did not deal with it at all, preferring the ground he himself has well traveled before. So he has given us a spirited defense of colonialism, attacking Jacobs for her presumed view that "colonialism has been a major factor holding back poor countries." (In fact, she points out how colonies like Hong Kong benefited from that same springboard effect in their trading relationships with their colonial masters.) And he seems to be criticizing her for failing to realize that tariffs often benefit groups in the city at the expense of the rural population, apparently oblivious to her view that "in large nations or small, tariffs victimize rural economies lying outside of city regions."

But Jacobs doesn’t think they need to. Tariffs, she explains, act to counter the poor feedback received by cities tied to national economies. Distinguish between the city and national economy by allowing the city to issue its own currency—which she argues provides automatic feedback on its economic health—and the tariff becomes unnecessary.

Sadly, few cities have their own currencies, yet all need feedback. Tariffs may be a poor second to a city currency; they may harm consumers and the rural areas; they may have a host of other drawbacks (such as inviting retaliation), but they have as their virtue the occasional success: American, Swedish, and Japanese cities, as Jacobs points out, and as Bauer does not refute, all avoided economic stagnation and prospered because of the tariff.

Bauer is himself a provocative and refreshing writer, with much to say of substance about development. I find his theories reconcilable with Jacobs’, and I commend him to your readrs. But Bauer, the economist’s iconoclast, in his review of Cities and the Wealth of Nations shows himself to be first and foremost an economist who rushes to defend his discipline from Jacobs’ "scathing criticism." In his rush, he has presented Jacobs’ remarkable theories without delving into them, instead using his finely honed powers of analysis on the axes he wanted to grind.

Lawrence Solomon

Toronto, Ontario

Peter Bauer replies:

I am baffled my Mr. Solomon’s reaction to my review of Jane Jacobs’s book. So far from ignoring her propositions and preferring to rehash my own views, I set out her arguments at great length, as can be readily verified from the first two and a half pages of the four-page review. (Moreover, I commended much of her book.) Nor did I rush to the defense of economics, as is clear from the concluding two paragraphs of my review, which show my very critical stance toward the subject.

I should have thought that Mrs. Jacobs’s discussion of "supply regions" and in particular her references to Uruguay and Zambia (pp. 63–64), which she writes were heavily dependent on distant markets for meat and copper, substantiate that she thinks that insofar as they do not give rise to import-replacing cities, such regions suffer and that contacts with more advanced regions are apt to damage primary producers.

The extensive quotation from the book in Mr. Solomon’s letter encapsulates the basis of two of my criticisms of the book. The first of these is the inappropriate abstraction in treating cities as if they were single decision-making units or homogeneous entities whose components have the same interests. Mrs. Jacobs rightly takes economists to task for this practice in their treatment of nation-states, yet she commits the same error in her own discussion of cities. Second, she is apt to ignore prices and costs when the recognition of their relevance is critical. This applies to her advocacy of trade between backward cities and to her treatment of import substitution. Why is it that the people of Accra, Lagos, and Nairobi, who are conscious of the factors of price, cost, and quality, trade with those of Western cities rather than with one another? The answer, as I noted in my review, is that they have little to offer one another, and what little there might be is obstructed by high costs of transport, lack of public security, political hostility, and officially imposed trade restrictions.

Lawrence Solomon
National Post
September 21, 1999

Private collection offers savings for government, choice for consumers.

Wouldn’t it be nice if our aging population– not to mention people with bad backs and the infirm — could have their garbage collected from their back yards instead of the street curbs? People would become more independent, with one small load lifted from them as they face the growing number of tasks that become difficult with disabilities.

Wouldn’t it be nice if people who will be out of town on their regularly scheduled garbage pickup day could call to have their trash removed a day or two early? Or if streets or neighbourhoods that disliked seeing — and smelling — empty trash cans strewn along sidewalks until evening, when people came home from work, could decide to pay the little extra required to have the garbage collectors return the cans to their proper place?

"You almost never see garbage cans on the street corner here," says Tony Raduazo, the attorney for the City of Jackson, Mich., where citizens wanted cans out of sight, and where any hauler whose trucks pass annual health and safety inspections can compete on price and service for the public’s favour. One of the largest, Emmons Service Inc., an 80-year-old family-owned firm, equips its trucks with two-way radios and its collectors with pagers. If a resident’s garbage isn’t picked up just the way the customer likes it, Emmons makes good by dispatching the nearest truck. Customers who want special pickups — to clear out garden wastes before a garden party, say, or at spring clean-up, can have them. Those on tight budgets, or conscientious recyclers who don’t generate enough trash to fill a garbage can, often share a can with a next-door neighbour, making collection more efficient and urban life more affordable. Residents on some streets decide to limit themselves to one or two haulers, to minimize traffic in their neighbourhood.

"It’s a system that has worked extremely well," says Mr. Raduazo, because no hauler wants to upset a customer. The city, which can refuse to reissue a licence to any irresponsible hauler, has exercised that power only once.

Similar consumer-driven systems also work well in hundreds of other communities — most of them small — throughout Canada and the U.S. Yet big city governments tend to keep a tight lid on the garbage collection services they offer, either by running the collection systems themselves or by contracting them out to private haulers. Contracting out usually doesn’t give consumers any choice, but it does keep costs down: According to the University of Victoria’s Local Government Institute, municipally run garbage collection service costs 42% more.

Even the threat of contracting out helps city budgets. The City of Toronto — which narrowly averted a potentially crippling garbage strike last week — credits the threat of privatization with greatly increasing its staff’s productivity. When in-house staff compete with the private sector for the right to service different residential areas, their performance improves. For example, Indianapolis offered its unionized employees a say in decision-making and a cut of the savings; productivity soared, while costs and complaints from the public dropped. "Our employees have probably done better than any other government employees in the country," enthused Stephan Fantauzzo, executive director of Council No. 62 of the American Federation of State, Country, and Municipal Employees. Accident rates among city garbage staff dropped, and morale increased through the "empowerment of workers, incentives rather than threats and an attempt to be a real partner in the process," explained Steven Quick, president of an Indianapolis AFSCME local.

In contrast, City of Toronto garbage workers, with their history of sky-high absenteeism and morale that’s down in the dumps, will soon vote on a pay package that would give them — after eight years of no wage increases — a mere 2% raise this year. To help finance this meagre increase, areas of the city that once received two weekly pickups have been reduced to one.

Mel Lastman, Toronto’s mayor, and union leader Brian Cochrane both consider this agreement a win, and for them — because a crippling strike would have soiled their reputations — it is. But for those they represent — the citizens of the city who will get less service instead of more, and the city workers who rate a more rewarding work environment — it’s a loss.

People live in cities, above all, because of the quality of life they offer, which in turn depends on tremendous choices in work, play and services. By rejecting diversity in garbage collection, a service every citizen requires, the city becomes that much less inviting to the healthy and accommodating to the frail. In the process, it denies itself the extra jobs those services would entail, and its residents and workers the dignity they deserve.

Lawrence Solomon
National Post
August 15, 2000

No wonder so many critics of the free market economy abhor him. He’s Canada’s most astute, most daring privatizer, among the very first both to recognize the failure of state ownership of industry and to successfully start to unravel it. Thanks to his efforts, Canadair, de Havilland, Teleglobe and other government-owned businesses were sensibly placed in private hands.

But Maurice Strong also arouses fury among conservatives, and not just because many of them share their ideological opposites’ belief that this 71-year-old is conspiring to somehow rule the world. Mr. Strong is not like the rest of us. Mostly, he operates as a freelancer in the nether world of the United Nations, World Bank and other international institutions, answering neither to national governments nor to multinational corporations. Often, he uses language less to communicate than to confound, speaking in generalities and always, always guarding against words that might come back to haunt him.

Yet his critics are also to blame for failing to understand him: Rather than assuming him an ideologue and attributing to him Machiavellian motives, they should see him as a pragmatist and read him very literally.

The motives of a politician who will say anything to get elected, or a corporate CEO who mouths free-market platitudes while lobbying government to keep out competitors, are easy to understand. We know these people, and understand the extent to which we can trust them. Mr. Strong is hard to trust because he’s hard to pigeonhole.

He calls himself a socialist who employs capitalism to good ends, making himself alien to many in both camps. He is so comfortable in both the public and private sectors, and so fully understands their similarities, that he speaks in generalities encompassing both, raising suspicions among those who regard these spheres as strictly distinct.

I do not share Mr. Strong’s enthusiasm for international organizations. I believe many of them — and in particular, many that he supports — should be shut down. I also do not share his enthusiasm for a global carbon tax — a chief proposal in his recent book, Where on earth are we going? (Knopf Canada), which has reinflamed many of his critics. But Mr. Strong is not a flaky do-gooder who flits from job to job, as some portray. His prescriptions for the planet are overwhelmingly based on the environmental benefits of free markets. And when he has worked at the domestic level, where we can best judge him by what he has done rather than what we think he might be plotting, he has an unsurpassed record at zeroing in on organizational problems and moving deftly to deal with them.

In the early 1980s, Mr. Strong recognized that the federal government’s role in industry was counterproductive. To extract government-held corporations from the ministries that controlled them, he helped convince the governing Liberals to create a divestment agency — the Canadian Development Investment Corp. — to clean up the businesses and make them suitable for sale. The Progressive Conservatives, in opposition, derided the CDIC’s creation and vowed to dismantle it. When the PCs, under Brian Mulroney, took power the next year, they soon recognized the wisdom in CDIC, reversed themselves and carried Mr. Strong’s privatization plans through to completion.

When the Ontario New Democratic party recruited Mr. Strong to rescue Ontario Hydro in 1992, he succeeded a hapless string of chairmen from both the public and private sectors who had let the Crown agency expand willy-nilly. Unlike his predecessors — all empire-building monopolists — Mr. Strong set about dismantling Hydro. To prepare it for privatization and the power sector for competition, he cut Hydro’s staff from 36,000 to 21,000, ended its wildly uneconomic nuclear expansion program, slashed billions being spent on wonky conservation schemes, organized the monolith into logical business units, reduced the company’s debt, eliminated rate hikes and made Hydro profitable.

Equally impressive, he came within a whisker — one vote at a contentious NDP Cabinet meeting — of convincing the government to privatize the utility, losing only because the privatization would have occurred prior to an election in which the NDP needed labour support. Had the NDP been re-elected, Hydro might well be privatized now.

Instead, Mike Harris’ Progressive Conservatives won. Unlike Mr. Mulroney, Mr. Harris did not follow through on Mr. Strong’s privatization plans. Rather than boldly breaking up the Hydro monopoly, selling the system to retire its unsupportable debt and lowering rates for consumers, the Ontario Tories have moved timidly and ineptly through two mandates. Mr. Strong — vilified for being power-hungry — had a vision of decentralized, competitive, privatized electricity markets. His Tory successors resume the string of empire-building monopolists.

As Mr. Strong’s recent book attests, he has turned against foreign aid — it breeds dependency among recipients. He believes private capital — not government ownership — must finance most Third World development. He wants to end an estimated US$700-billion in subsidies that governments worldwide spend on water, energy, agriculture and transportation. His socialist critics abhor him for good reason. His conservative critics do not.

Lawrence Solomon is executive director of Urban Renaissance Institute, a division of Energy Probe Research Foundation. He has been acquainted with Maurice Strong for 20 years.