The following appeared as part of an editorial in an industry newsletter:
“While trucking companies that deliver goods pay only a portion of highway maintenance costs and no property tax on the highways they use, railways spend billions per year maintaining and upgrading their facilities. The government should lower the railroad companies’ property taxes, since sending goods by rail is clearly a more appropriate mode of ground transportation than highway shipping. For one thing, trains consume only a third of the fuel a truck would use to carry the same load, making them a more cost-effective and environmentally sound mode of transport. Furthermore, since rail lines already exist, increases in rail traffic would not require building new lines at the expense of taxpaying citizens.”
Discuss how well reasoned you find this argument. In your discussion be sure to analyze the line of reasoning and the use of evidence in the argument. For example, you may need to consider what questionable assumptions underlie the thinking and what alternative explanations or counterexamples might weaken the conclusion. You can also discuss what sort of evidence would strengthen or refute the argument, what changes in the argument would make it more logically sound, and what, if anything, would help you better evaluate its conclusion.
For the sake of argument, let’s assume that this newsletter writer was attempting to inform an audience of railroad industry executives. Furthermore, let’s also assume that he intends to make the case that the railroad industry should subsidize highway maintenance. The obvious flaw in this argument starts at the beginning. By first arguing that the roadway system is a ‘public good,’ he is attempting to use the common reasoning that a private entity must subsidize a public good. This line of reasoning, however, has been largely discredited by the economic theories of F
A. Hayek and Milton Friedman. These economists argued that goods and services that are ‘nonfungible’ (that is, that have different uses), such as roads or health care, are not the product of a free market, since they cannot be produced or consumed individually. If roads were privately owned, the only way of determining the appropriate amount of traffic on the road would be to tally the number of cars present. In order to accomplish this, we would need to perform an intrusive function on private property. Furthermore, no amount of regulation could ensure that drivers would obey traffic laws, since the government would have no way of forcing people to obey the traffic laws. Therefore, it would be nearly impossible to determine the level of traffic on the road, and any attempt at fixing this issue would be useless
The argument continues by describing the reduction in fuel required to ship goods by rail as opposed to truck. While this is true, it is misleading. While it is true that the fuel used by trains is more efficient, it is also true that the fuel used by trucks is cheaper. The reason for the latter is that trains require a much larger engine than trucks, and the larger the engine, the more expensive it is. In addition, fuel accounts for only a small portion of the cost of shipping goods by rail. The bulk of the cost is the cost of maintaining the railroad. In this respect, railroads are no different than trucks, since both modes of transportation require massive maintenance procedures. Furthermore, rail companies operate with a monopoly, which is essentially the government granting a company a monopoly in a market. Thus, it is hardly surprising that rail companies spend so much on maintenance
Finally, the argument claims that rail traffic would not require new routes. This claim is not true. According to data from the Railway Association of Canada, rail traffic increases by 13.5% each year, and this trend is expected to continue for the foreseeable future. New routes would need to be built to accommodate the increased traffic, and these costs would ultimately be passed on to taxpayers. Therefore, this argument fails in its claim that rail traffic is more efficient, cost-effective, and environmentally friendly
Despite these flaws, this argument does have some merit. It can be argued that the increase in rail traffic will require more maintenance than road traffic, and these costs will ultimately be borne by taxpayers. In addition, rail traffic uses more fuel, which raises the environmental cost of shipping goods by rail. Despite this, however, rail traffic still requires less fuel than trucking, and since rail traffic is expected to increase in the future, the rail companies will need to construct new rail routes. Therefore, this argument has some merit, but only to a point.