For the government, that is.

For the government, that is. Prices are often low for riders, but that’s only because of large, and growing, subsidies from taxpayers. On my AIER podcast Econception, Marc Scribner talked to me about the enormous costs of running public transit systems. And it’s not just the huge costs of construction and regulatory compliance: Operations costs are soaring as transit workers become less productive. Marc has a whole paper on it for Reason Foundation; we cover some of the same ground on the podcast.

I also discuss the importance of remembering that prices are ratios. That means there are always two ways to lower prices: Make the numerator smaller or make the denominator bigger. That’s why “cheaper goods” and “higher pay” are, in the end, two ways of saying the same thing.

Then, I talk about why defined-benefit pensions aren’t as popular as they used to be. It turns out that forcing employers to actually fund their pension promises to employees made defined-benefit plans less attractive than defined-contribution plans. And for most workers, the good old days of pensions were really not so great to begin with.

For the Paper of the Episode, Marc picked “Sprawl and Urban Growth” by Ed Glaeser and Matthew Kahn. It turns out that the widespread use of cars isn’t the result of a conspiracy and that cars make people better off — a finding that is surprisingly controversial.

Please listen and subscribe to Econception by clicking here.