Sunday, October 05, 2008

Lesson of I-35W Bridge: Private Enterprise Works

So what is the primary lesson of the St. Anthony Bridge (I-35W bridge in Minneapolis, see photo above) rebuild? Private enterprise works. Most road and bridge construction in America gets performed by state agencies who subcontract bits and pieces out while retaining the general-contractor role. In this case, the bridge replacement was so badly needed that Minnesota dumped that model to use one that would produce a bridge in a shorter period of time — and incentivized the contractor to get it done fast.

Private enterprise works. Businesses understand this. When they need project work done, especially for projects where speed is essential and the work outside the scope of their expertise, they hire contractors to do it rather than hire the expertise onto their own payrolls. Contractors who fall behind can be penalized or even replaced without having to worry about employment law and other administrative headaches. They can also get bonuses without invoking other kinds of payroll issues.

Related 1: "5 Engineering Lessons From the New, Reopened Minnesota Bridge" in Popular Mechanics

Related 2: As economist Steven Landsburg reminds us, "Most of economics can be summarized in just four words: People respond to incentives. The rest is commentary."

6 Comments:

At 10/05/2008 11:50 PM, Blogger Tom Davis said...

If the only differences are because of employment or tax law, then the correct statement would be, "Capitalism works in this particular legal environment."

Of course if we were talking about actual free markets, then all of the private road owners would create a need for quick and cheap bridge building, and there would probably have been a company to fly in stock bridge spans, and place them, in less than two weeks and for half of what was paid. The downside would be that almost all bridges would look the same except for the advertising hanging off the sides.

 
At 10/06/2008 1:21 AM, Blogger OBloodyHell said...

> Of course if we were talking about actual free markets,

Roads, unfortunately, are not appropriate for absolutely free markets, since it creates massive issues in terms of who pays and how, since it's not generally the case that there can be two competing roadways going to one destination (unless they are very far apart).

Roads are, clearly, a form of "natural monopoly", much like phone and cable were until recently, as wireless has made alternatives much more practical.

The ideal system, then, is likely public ownership with private maintenance, preferably easily switched if the maintenance is not done to the satisfaction of the populace. Private planning for building and actual building is also called for -- In my area, for example, the libtards in charge give in to the businesses which want to build the hell out of everything then refuse to use the impact fees assessed to build the necessary road expansions and improvements in an idiotic effort to force people to use mass transit. Hence we wind up with two-lane roadways in places which any rational planning would have at six.

Mind you, at some point we could have private ownership with wireless tags tracking who used what road, in order to properly distribute fees and costs, for true private ownership, but the obvious danger to that is clear -- do you really want to give ANY entity the ability to track all of your comings and goings, even down to the routes used? Think of the movie Enemy of the State ("sort-of" sequel to The Conversation) if you're in a paranoid mood.

 
At 10/06/2008 6:07 AM, Blogger save_the_rustbelt said...

"Most road and bridge construction in America gets performed by state agencies who subcontract bits and pieces out while retaining the general-contractor role."

This statement is wildly false. Contractors bid for the entire package and then sub out specialty work (guardrails), the state does design and supervision.

I do not know of a single state that routinely does general contracting.

 
At 10/06/2008 8:53 AM, Anonymous Anonymous said...

Let's apply this lesson to public schools. Let's hire a contractor to teach the kids and do away with the featherbedding payrolls..!!

 
At 10/06/2008 4:33 PM, OpenID sethstorm said...


Contractors who fall behind can be penalized or even replaced without having to worry about employment law and other administrative headaches

That does not excuse the lack of , the removal of and/or the gutting of regulation.

 
At 10/06/2008 9:54 PM, Blogger OBloodyHell said...

> Let's apply this lesson to public schools. Let's hire a contractor to teach the kids and do away with the featherbedding payrolls..!!

Let's instead put a voucher in the hands of the parents and let them find a suitable instructor of their choosing. Since the parents have a substantial vested interest in this, it will provide adequate coverage of the issues of concern.

Require and provide licensing for eligible voucher recipients. That should provide suitable verification that, for most circumstances will prevent any fraud, since it requires someone with a vested interest (the parent) to collude with someone with appropriate checks to see that they are doing their job. It might happen, but it's less likely.

 

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