Economic road map failure

by Richard Denniss in The Canberra Times

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Originally published in The Canberra Times on July 8, 2011

Economics is often called the dismal science. The accusation was justly made after Thomas Malthus predicted that “misery and vice” were the only check on world population growth. Of course these days many economists argue the exact opposite and suggest that population growth is essential for community wellbeing, but despite the U-turn the dismal tag stuck. These days, economists maintain the role of fun police by pointing out to people that there aren’t any free lunches. We use the term “opportunity cost” to describe the fact that whenever “scarce resources”, such as land, minerals, water, food or money, are used for one purpose they cannot be used for another. Except, of course, when it comes to building roads. In this country, we seem to assume the billions we spend on roads each year most certainly could not be spent on hospitals or schools. The money could not be spent tackling climate change and it most certainly could not be spent on public transport. While the economics textbooks don’t have this chapter in it, most politicians know that road funding is “different”.

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