Beak wetting 101: “Why Does Infrastructure Cost So Much?”

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You’re advised to click through and read Marohn’s essay in its entirety. In the interim, the points below are significant. I’ve underlined a key passage from the standpoint of our experience in Pay to Play City.


Why Does Infrastructure Cost So Much?
, by Charles Marohn (Strong Towns)

… There are many technical reasons why infrastructure is so expensive—pick your favorite as they are all elusive to broadly discern—but it’s clear that there are two underlying drivers that are not merely technical.

The first underlying driver of U.S. infrastructure costs is that the U.S. has felt so rich as a country that, for decades, we spent freely on infrastructure and never asked serious questions about the return on that investment. Never. As I’ve suggested many times, a study of human behavior in complex environments suggests that, with an abundance of resources, complex feedback loops break down. At this point, it’s difficult to identify one underlying cause because the real cause is systematic. And worse, the players involved work in single-discipline silos where a standard way of operating has become normalized; they don’t even know which questions to ask.

Do we really need a third interchange or can we get by with the two we have? (Traffic counts justify a third and we have two big box stores ready to build.) Do we really need to acquire that five feet of right-of-way so we can have 12-foot lanes when 11.5 foot lanes would be just fine? (Of course we do because that’s our standard.) Do we really need to pay a premium price for that five feet of land, as if it were valuable real estate in Manhattan and not the edge of some parking lot buffer? (Of course, unless you want the project delayed for years and for every case to end up in court.) Do we need ten signs or can we get by with eight? (Remember that one time we were threatened with a lawsuit—don’t want any chance of that happening.)

Individually, these are all reasonable reactions, especially when viewed from within a professional bubble that focuses on one or two metrics for success. Collectively, they are disastrous. The richer you are, the more you can throw money at solving your problems. The more money you can throw at a problem, the less you are confronted with the nuances of that problem and the less pressure there is to be creative. The complex becomes merely complicated. Painful feedback and uncomfortable balancing of priorities are avoided. Costs go up and nobody understands just why.

It’s also important to note that technical professions within the engineering and construction fields have a lot of built-in incentives to not think too critically about this problem. Compensation schedules are often written as a percent of project costs (the more things cost, the more the compensation). When public agencies prioritize fewer, larger projects, it means fewer players making cost decisions, spawning a kind of informal collusion even within a system of competitive bidding. It’s way more rewarding—especially among your peers within a profession—to complain about cheap taxpayers and politicians than to systematically question your own industry practices (trust me, I know).

It’s a little like asking teachers why the cost of public education is so high or asking doctors why medical costs keep going up. Both professions have their preferred scapegoat—administrators and insurance companies, respectively—but neither is in a real position to objectively evaluate their own contribution to the problem. That makes them human, not corrupt. But being human is nonetheless deeply flawed in this regard.

The second underlying driver of U.S. infrastructure costs is how deeply embedded infrastructure spending is within our model of economic growth. We have to spend on infrastructure because we don’t have a mechanism to experience broad economic growth without it, and we must have broad economic growth or everything in our Ponzi-bubble economy will collapse. It’s really that simple.

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