04 July 2012

If I offer everyone chocolate and only redheads take some, am I subsidizing redheads?

Reason: Hit & Run | Nick Gillespie | Breaking: Affluent, Well-Educated White Guys Dig Bicycle Subsidies for Affluent, Well-Educated White Guys

The video notes that [DC's Capital Bikeshare] has received around $16 million in federal, state, and local subsidies and, according to the program's newest user survey, is used exclusively by well-educated, mostly affluent, and mostly white folks. The video makes the bold and apparently novel argument that while biking is fun and wonderful and all kinds of awesome, there is no good goddamn reason that cash-strapped taxpayers should be subsidizing the preferences of elites.
(1) No, Capital Bikeshare shouldn't be subsidized. Let me get that out of the way right now. I supposed I could conceivably be convinced this is worth subsidizing as a congestion-reduction method, but I would need a big heap of convincing.

(2) I'm not convinced subsidies like this are "for the rich." These (subsidized) bikes are available to everybody. (Assuming Capital Bikeshare hasn't put all of their depots in neighborhoods a standard deviation above average income, that is. For all I know they have, in which case please disregard this point.) Some subset of people choose to use them. Those people are rich. There is nothing I can see which is intrinsic to short-term bike rental which favors rich people. The only reason I am aware of which makes this a subsidy to "the rich" is that "the poor" have chosen not to use it.

We have plenty of programs which explicitly transfer money to rich people (e.g., Solyndra, US sugar policy) or people who are on average rich (e.g., Medicare, various house-price inflation measures, assorted student loan schemes). I would not lump those policies together with a program that benefits rich people due to voluntary decisions people make about participation.

(3) I've had this same conversation with people about subsidizing museums. On average, museum attendants are wealthy. That does not mean that a subsidy for a museum is a subsidy for "the rich." Ditto public radio. The decision to subsidize something should be independent of the demographics of the people that freely choose or do not choose to use it.


  1. Don't think of it as "subsidies for everyone, but poor people merely choose not to participate".

    Think of it instead as "subsidies for the preferences of rich people".

    Viewed in that frame, subsidizing bicycles and museums really is perverse and obnoxious.

  2. Okay, that's an interesting way of looking at it.

    I suppose I disagree because I don't see much distinction between "preferences" and "choices." Every government policy is based on some sort of preference. All of the obviously contentious ones, but also widely accepted ones like "reading is good."

    I think we're stuck imposing preferences of one sort or another. If we have to do so, I'd rather do so in the "here's a museum; take it or leave it" way than the "here's some money to grow sugar; you can have it if you're rich enough to own a sugar plantation" way.

  3. "There is nothing I can see which is intrinsic to short-term bike rental which favors rich people." I completely understand your point, and agree with you. Calling it a subsidy "for the rich" is - in one sense - incorrect.

    But it's correct in another sense, as I tried to show in my first comment. I'll go further and assert that my way is the more important way to look at it. There's an assumption here: bikes are good, so we should have more bikes, so let's subsidize them. Put that way it seems uncontroversial. But that actually disguises the nature of a subsidy, which is always this: subsidies are created by the wealthy and powerful to increase their wealth and power. It's not an accident that bikeshare happens to get a subsidy, and rich people happen to like bikeshare. That sort of outcome is inherent in the system.

    "There is nothing I can see which is intrinsic to short-term bike rental which favors rich people." The favoring of rich people is not intrinsic to the subsidized activity; it's intrinsic to the subsidy.