Monday, 1 March 2010

Economic rationalism

The idea that decisions should be analysed by reference to economics is often criticised. In many cases, I think the criticism is justified. I think though that economic rationalism has never properly been tried out. The mistake is only to look at money rather than the true cost of a particular decision. For example, nobody seems to bat an eyelid when a huge block of land is turned into a warehouse store surrounded by a car park. See for example the new Dan Murphy liquor store on Payneham Road right in the middle of St Peters. It seems assumed that it will create jobs locally and that because people can drive in and park for nothing, it will benefit the local economy. The thing is though you must consider the opportunity cost of that decision. That is, the cost of missing out on the next best thing. What if that land were instead used as a school or childcare centre. Bearing in mind that is what you have missed out on, is the Dan Murphy's really a good decision. Also, by surrounding it with car parks and, as is always the case, making no provision for bikes or pedestrians, is it really good for business?

If you properly consider all of the costs and benefits, both short and long term, the argument for investing in cycling and walking infrastructure becomes compelling and the suggestion that we should spend more money on roads becomes quite silly.

Portlandize put it much better than I ever could. The reasons for investing are as follows:
  1. Lower maintenance costs
  2. Cyclists and pedestrians are better for business
  3. Health
  4. Less time and money wasted sitting in traffic

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