Shoupista or Sandinista – Does the Left Love Market Pricing for Parking?

I’ve had to go back to school a bit to try and understand the economic theory that is being espoused  here and here. The links were sent by Don Shoup to the Cities of LA and SF (Parking Departments) and copied to me as examples of how the far left likes SF Park and LA’s Expresspark — the real life manifestations of the good professor’s theories.

The Blogger in the first case, Mike Konczal, is from Chicago and in fact, juxtaposes the Chicago Privatization with  LA’s ExpressPark, which will use market based dynamic pricing to set parking rates. Its really fairly benign, He hates the privatization in Chicago since it takes all decisions out of the hands of the ‘people,’ and seems to like the LA and SF approach, since pricing is going to be based on the market, but in the last analysis, ‘control’ rests with the government.

In the second case, a college professor, Peter Frase, who it would appear has economic beliefs somewhere to the left of Lenin, seems to be more concerned about the ‘fairness’ of the pricing system:

It’s captured in the second phrase I bolded in that first passage: “people will park based on how much they’re willing to pay versus how far they are willing to walk to a destination.” In just three words, “willing to pay”, we have swept away the inequality of wealth and power that any attempt to turn market mechanisms toward planned ends must confront. Willingness to pay, of course, is also a function of ability to pay, and a market mechanism implicitly attributes worth to a person’s desires in proportion to the money they have to spend.

He ends his piece thus:

All of which is enough to make a good progressive recoil from such a thing as “the market price for street parking”. But this position is not nearly audacious enough. Rather than a rejection of market relations, this is merely a rejection of a novel form of planning, in favor of the older, more obscure, more unfair and more inefficient methods of planning the use of public space. We could say instead that what’s needed is a direct assault on the inequalities of wealth and income that subvert the functioning of prices, and thereby impede the realization of the plan.

Wow! Its been 40 years since I have had to try to wrap my thoughts around this stuff. Don thinks these folks support his concepts, I’m not so sure. In Konczal’s case, he seems to like the LA/SF approach as the lessor of two evils, as compared with full blown privatization as in Chicago.

Frase is concerned about the social impact of the theories, that is it is unfair to charge more for some things than for others, since then all people can’t equally partake of the marketplace. Poor people won’t be able to park as close as rich people and that certainly is a stigma that we cannot have in a truly ‘fair’ society. Forget everything and provide a “direct assault on the inequalities of wealth and income that subvert the functioning of prices…”

Frankly, its hard for me to tell if Frase is serious or writing satire. Based on reading his credentials, I say he is serious. And therein lies the tale.

I think Don may be reaching a bit here. He uses the term “like” and I think at best “lessor of two evils” may work for Konczal and Frase, well who can tell.

JVH

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One Response to Shoupista or Sandinista – Does the Left Love Market Pricing for Parking?

  1. JVH says:

    Don sent me this note:

    John,

    Here is Frase’s description of SFpark:

    “The city begins by decreeing a production target, which in this case is maintaining one empty parking space on each street. The complex system of sensors and pricing algorithms is then used to create price signals that will meet the target. The key point here is that the capitalist market’s causal arrow has been reversed: rather than market price fluctuations leading to an unpredictable level of production, it is the production target that comes first, and the prices are dictated by the quota.”

    If you use words like decree, dictate, and quota, SFpark makes sense to a radical sociologist.

    And if you need a complex system of sensors and pricing algorithms, all the better.

    Code words like “voluntary” and “flexible” immediately reveal the speaker a willing tool of the 1%.

    Donald Shoup

    My Response:
    Isn’t it also true that if a company wants to sell a certain number of gizmos it can set a number, and then manipulate the price to ensure that number is sold. This works only if the competition either doesn’t care or doesn’t decide to set prices lower than the first company and assumes that price is the only factor involved. If they do that and the first company keeps lowering and lowering, there reaches a point, does it not, when the company goes out of business.

    I’m not sure how ‘market based’ dynamic pricing is actually a ‘free market.’ There is no real competition, there is no requirement for true ‘profit.’ It seems that we are using a ‘tool’ of the free market to affect the amount of available parking. We are not, in fact, instituting a complete ‘free market’ parking operation. To do that, we would have to have numerous suppliers competing for customers and using quality, marketing, pricing to affect demand. This might work in off street.

    The discussion is nonsense – there is no “production.” The quantity of product is fixed. It’s supply never changes, it’s the demand that changes based on various factors, most times out of the control of the ‘owner.’ The only thing that the owner can change to affect demand is price. This is not true in a ‘free market’ economy since demand can be affected by marketing, change in the product brought on by customer input, etc.

    To compare on street parking to a free market makes no sense and these two are blowing smoke.
    JVH

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