Transportation

OPEN MARKETS TRANSPORTATION INITIATIVE

THE PROBLEM

The U.S. transportation system is crumbling. Airline passengers endure increasing fees, cancelled flights, and a general loss of quality, while cities and regions across “fly over” America are cut off from air service. Breakdowns in the ocean shipping supply chain have created shortages and aggravated inflation while making it increasingly difficult for American importers and exporters to get their goods to market. Financiers are rapidly liquefying key rail infrastructure, thereby threatening the rebirth of U.S. manufacturing, forcing more freight to shift to pollution-spewing trucks, and foreclosing opportunities to rebuild passenger rail in the United States.  

The root cause of these multiple failures is a radical shift in government policy. Beginning in the late 1970s, the federal government largely abandoned its traditional role in structuring competition in the transportation sector by rolling back the enforcement of antitrust laws and by abandoning regulations that had long ensured that key transportation infrastructure served public purposes. The result today is a highly monopolized transportation sector that maximizes returns to shareholders by degrading service standards and engaging in a myriad of forms of price gouging and discrimination that hurt economic growth and erode economic equality.

OUR SOLUTION  

Transportation is a core infrastructure upon which every other sector of the economy depends. In order for the free-market system to maximize wealth, competition must focus on who produces the best products and services at the best prices, not over who is favored or not by the owners of basic transportation systems. Thus, to avoid unfair and economically distorted market competition, access to transportation must be available on broadly equal terms.  

Historically, public policy addressed this reality by requiring owners of canals, railroads, ships, trucks, pipelines, and airlines to adhere to principles of “common carriage.” Broadly speaking, common carriage principles ensured that owners of transportation systems operate neutral networks, just as today’s interstate highway do, by offering equal access to all classes of users on equal terms. Where necessary, public policy also ensured equality of access across regions through direct and indirect subsidies, which help bring balanced and resilient patterns of economic development.  

Today, through its groundbreaking scholarship and analyses, our team at Open Markets is working on how to reapply principles of common carriage to modern transportation systems and adapt them to today’s public purposes. These purposes include imperatives to reduce carbon emissions, rebuild supply chain resiliency, and recognize the broadest possible range of stakeholders, including historically disadvantaged groups, neighborhoods, and regions.

Publications