Annotated Response to “Antiplanner” Post: No. 50. Lessons from an Iconoclast

By Michael D. Setty & Leroy W. Demery, Jr.

Note: This article responds to Randal O’Toole’s April 17, 2020 post on his “Antiplanner” blog. We believe this requires a detailed response since O’Toole is outlining lessons he says he has learned in his past four decades as a public intellectual. We find that some of O’Toole’s assertions are valid, but most are not.

Our responses are shown in bold text. O’Toole’s original text is shown in plain text. Copyright 2020 Randal O’Toole; used under the Fair Use provisions of U.S. copyright law, for critique and educational purposes.

50. Lessons from an Iconoclast
By The Antiplanner | April 17, 2020  Original Location:

Fifty years ago this week, I was planning the events for my high school’s version of the first National Environmental Teach-In (later called Earth Day). All of the speakers my friends and I invited were either politicians or government officials. If I knew then what I know now, that event would have been much different. Here are a few of the main lessons I’ve learned since then.

1. Don’t trust the government

Everyone knows that “I’m from the government and I’m here to help you” is a joke. Yet too many people still believe that government works the way their high school teachers taught them. I recently watched some college students debate whether to privatize public transit, and one of them said, “I think transit should be run for the public interest and not for profits.” I wondered what made him think that any public agency operates in the public interest, but that’s what we are taught and that’s what many implicitly believe.

People in Congress and state legislatures know better; they’ve seen how the sausage is made. Yet most of the legislation they pass assumes that the bureaucracies they create and fund will automatically work in the public interest. The Supreme Court put this assumption into a legal precedent called the Chevron decision. In reality, we can’t trust any level of government — the legislators, the executives, or the bureaucrats — to work in the public interest, even if we could define it.

Another way of putting this is “trust the government to put its own interest first.” Private companies also put their own interest first, but to succeed they have to sell something that the public wants to buy. Public agencies don’t have to produce anything the public wants or needs; they just have to convince the legislature they are producing something that will be good for the legislators.

The underlying, if unstated assumptions here ask that the reader:

–Ignore the fact that governments exist to maximize the satisfaction of the public from available resources.

–Ignore the fact that people demand services that

1. the private sector cannot provide, because investors cannot capture a sufficient share of the value of the benefits provided – and

2. require funding at levels that the nonprofit sector cannot provide. Downsizing of government is an American conservative – and libertarian – pipe dream.

–Ignore the fact that “trust the government to put its own interest first” is a veritable mantra for non-participation – that is, apathy. After all, if “we can’t trust any level of government — the legislators, the executives, or the bureaucrats — to work in the public interest,” then why should we participate? Why should we vote, attend public meetings and hearings, and so forth? And why should we be surprised if, in response to public non-participation, “the legislators, the executives, [and] the bureaucrats” put their own interests first?

2. Incentives count

Someone — no one is sure who — once said, “Never attribute to malice that which is adequately explained by stupidity.” I would rephrase that to, “Never attribute to malice that which is adequately explained by incentives.” Incentives drive the world’s institutions. Sometimes they lead people to do the right thing; sometimes they lead people to do the wrong thing, which I call “perverse incentives.” But don’t blame the people when something goes wrong; blame the incentives.

Again: governments exist to maximize public satisfaction. Obviously, if the public chooses not to participate (or is prevented from doing so), then one should not be surprised if leaders place their own interests (and those of special interests) ahead of the non-participants. Who are, as if by magic, absolved from all responsibility: “don’t blame the people when something goes wrong.”

3. Trust government data

This might be a surprise, since I don’t trust the government, but I’ve found that government data are generally reliable. It isn’t until the government starts using, misusing, or ignoring the data that it becomes untrustworthy. Another way of looking at this is it is better to use the other side’s own data against them than to try to generate your own data.

One reason I trust government data is that it is replicable. The Census Bureau, Department of Transportation, and other agencies collect data every year, and year-to-year changes are minor even if long-term trends are not. Moreover, the people who collect the data are usually not influenced by incentives.

On the contrary, they do have very strong incentives. A strong, irrefutable reputation for accuracy is of paramount importance at the U.S. Census Bureau and many other statistical units of various government agencies. See discussion below.

If Congress told transit agencies that it would fund them according to how many riders they carried, ridership numbers would take a sudden and suspicious rise. But if it said it would fund them according to how much fare revenue they collected, the agencies would have to find genuine ways to increase ridership and make transit travel valuable to riders. Most data collection, such as census data and highway travel data (which is based on road sensors), is not subject to such incentives.

“If Congress told transit agencies that it would fund them according to how many riders they carried, ridership numbers would take a sudden and suspicious rise.” This particular fantasy scenario ignores the degree to which Federal Transit Administration staff members review annual reports by transit agencies – thoroughly and scrupulously. Moreover, the second fantasy scenario (“if [Congress told transit agencies] that it would fund them according to how much fare revenue they collected, the agencies would have to find genuine ways to increase ridership and make transit travel valuable to riders”) ignores the reality of small towns and rural areas, where transit services are operated as explicit social services.

O’Toole’s last paragraph begs the question in Item 1, which he partially answers in the last paragraph of #1 and in “2. Incentives Count.” Obviously the private sector has a strong incentive to make a profit. A money-losing business will quickly cease to exist.

The real question is NOT “don’t trust the government.” Among other things, “which” government do you mean? In the U.S., there are literally thousands of local and regional governments, from mosquito control to schools, to hospitals, etc. In a phrase we are sure will annoy knee-jerk ideologue libertarians like O’Toole, “it all depends…”

In general, citizens of developed urban and suburban societies demand a lot of government-provided services: e.g., fire, police, clean water, sewers, roads, transit, schools, parks, etc. Local government is usually the best provider of these services, e.g., governments that are “close to the people” and much more likely to understand unique local conditions.

Strong incentives exist among elected local officials and the bureaucracies they command to provide good services, in the former case to be reelected, the latter to keep their jobs, pass local tax levies for more services, and so forth. In Napa County, the local junior college passed a capital improvement bond several years ago. However, a second bond was placed on the ballot in 2014 but failed because most taxpayers believed that the college district had mismanaged the first bond, with cost overruns particularly on a performing arts center that was not really needed by the community. In 2018 they talked about yet another bond issue, but shelved the effort when it was apparent the public was still highly skeptical of them.

At the larger scale of states and the federal government, one has to look hard at the incentive package a particular bureaucracy has in order to evaluate whether the particular organization can be trusted. On the one hand, agencies that collect statistics have a reputation to uphold; if the Census or the statistical sections of the CDC weren’t deemed trustworthy and reliable by the private sector and other parts of government, you’d see widespread use of privately-funded data collectors and analysts on a huge scale.

Mr. Setty can personally attest to the “accuracy” mantra of the U.S. Census Bureau since I worked as a local team leader on the 2010 Census. “Accuracy” is gospel; if a field worker was not following the Bureau’s data accuracy protocols, they were very quickly let go (Setty had to fire a few before the other slackers got the message!)

At higher levels of government, the incentives facing any particular bureaucracy is usually “site specific.” (sic) For example, the California Department of Transportation (Caltrans), and local traffic engineers, have been infamous for its dogmatic insistence that street and highway widening and expansion must continue, despite efforts by various governors, local communities and alternative transportation advocates for alternative approaches.

It has taken the Coronavirus crisis to have many elected officials to override the traffic engineers, taking away street space from automobiles in order to allow sufficient space for Coronavirus-related “physical distancing” by pedestrians and bicyclists. This includes many cities in California including Oakland, San Francisco, Los Angeles and San Diego. How well this new pedestrian and bicyclist space will “stick” remains to be seen. However, there is now a strong constituency for these projects that we believe will mostly override the dogmatic traffic engineers.

When considering the incentives of various government bureaucracies, one almost must look at “regulatory capture” and other ways that corporate capitalist interests have “baked in” through sweetheart deals in legislation and the ongoing “revolving doors” between the Pentagon and its related “deep state” agencies, as well as various regulatory agencies at both the state and federal levels. The potential for lucrative employment in regulated industries after “leaving government” (sic) and/or as highly paid lobbyists is the norm facing top level bureaucrats in Washington, D.C. as well as 50 state capitols.

4. Don’t trust computer models

From the Forest Service to the Federal Reserve, too many government agencies base crucial decisions on computer models that few people understand and fewer still consider reliable. As one Forest Service computer modeler told me, “Garbage in, gospel out.”

I was one of the few people who understood Forest Service computer models in the 1980s. That understanding helped save millions of acres of wildlands from below-cost timber cutting as I discovered numerous ways that agency officials manipulated the models to achieve predetermined outcomes. As a result, unless I know exactly how a model works and what data was entered into it, I don’t trust models.

Models are necessarily oversimplifications of the world. Planners too often respond to the oversimplified model by attempting to simplify the world so that it fits the model. Forest planners simplify by clearcutting mixed-age, mixed-species forests and replacing them with even-aged, single-species forests. Urban planners simplify by attempting to impose one design on all new developments. Neither work very well but that doesn’t discourage them.

Yes, we agree with O’Toole about computer models, particularly the “black box” variety. One must discount “black box” computer models that are really only understood by their designers–and one cannot be sure about such understanding. Outside the analysts, there is no way to be sure what “garbage in” is producing “garbage out” results. I’ve gotten to the point where I just do not take black box models seriously, preferring those that the data input was obvious, and most importantly, one can readily explain to elected officials, the media and everyone else.

It’s been our experience that “direct demand” models (often using Excel) for predicting transit demand are much more reliable and not subject to manipulation unlike “black box” computer models. Unfortunately, anti-transit sprawl advocates like O’Toole have often badly misconstrued black box models when claiming transit ridership projections for new lines that were generated by said models have not been met. In most cases we examined, when service on new transit lines has begun, the actual level of onboard capacity provided was well below that assumed in the models. Reaching predicted levels of demand would have required transit occupancy levels well above what U.S. residents would tolerate–given that most Americans have alternatives such as automobiles.

We conclude that “experts” in computer modeling are just another variety of high-tech 21st Century witch doctors, e.g., just like economists and many “tech bros.” The “results” of various computer models designed by “experts” that said Coronavirus would kill many millions in North America and Europe were orders of magnitude off.

This is because they assumed viruses would grow exponentially, e.g., assumptions with no basis in empirical reality, and not follow the actual “bell curve” growth and decline patterns of all previous pandemics. In reality (except perhaps in Italy), only a fraction of the medical capacity rallied to fight the disease was used while most economies in Europe and North America crashed.

5. Don’t trust predictions of the future

No one can accurately predict the weather ten days from now. Predictions of events twenty or more years from now nearly all have one thing in common: they are wrong. Basing plans on predictions that are wrong will create more problems than they solve.

The world has enough problems today. Solve these problems rather than worry about the future. As Gandalf said in Tolkien’s Lord of the Rings, “It is not our part to master all the tides of the world, but to do what is in us for the succour of those years wherein we are set, uprooting the evil in the fields that we know, so that those who live after may have clean earth to till. What weather they shall have is not ours to rule.”

This is a favorite mantra of political factions who oppose projects designed for the obvious needs of the future. For example: Within the past 10 years, Seattle’s rail opponents wanted all long-range (more than five years) transportation planning stopped (per the “Sane Transit” website).

“The world has enough problems today. Solve these problems rather than worry about the future.”
This implies, for example, that California should ignore demographic forecasts and stop making provisions for a larger population. (The University of California demographic models that predict this are available online and can be manipulated by users. If one disagrees with the 10-year forecast – 44.1 million people by 2030 – then one can manipulate causal factors to see how this changes the outcome.

6. Don’t trust special interest groups

I worked with the environmental movement for 25 years and I’m proud of what I accomplished. But I also learned that it is hard for activists to have a political impact unless they can convince Congress or other legislators that there is a crisis. As a result, everything has become a crisis: obesity, vanishing farmlands, acid rain, peak oil, and so forth. Not only should we be wary of dire pronouncements made by special interest groups, we should treat bureaucracies as their own special interest groups.

Keep in mind that this is the same individual who advocates, albeit tacitly, that the proper orientation toward “government” is apathy, and asserts that people are not to be blamed if “something goes wrong.”
Bureaucracies will, quite naturally, behave as special interest groups if the people within them believe that the public will respond with apathy no matter what “goes wrong” – or goes right.

7. Don’t trust the media

Whenever I read or watch a story about an issue I know about, the reporters get at least some of the facts wrong. If they are wrong about things I know about, how can I trust them about things I don’t know about?

It was bad enough when “the media” consisted of one or two newspapers per city and three major television networks, all of which pretty much told us the same things. Now we have hundreds of news sources that are more oriented towards confirming our preconceived notions than informing us. I don’t believe any of them. Until and unless I’ve independently verified the information, I don’t believe the ones I agree with any more than I believe the ones I disagree with.

Apathy is defined as a lack of feeling, emotion, interest or concern about something – a state of indifference. Global apathy – as evidenced by a list of “Don’t trusts” – is the proverbial “easy way out” from having to deal with others, whose ideas, beliefs and opinions do not coincide with one’s own – and whose perspectives about what public-policy decisions should be taken do not coincide with one’s own.

The message – that is, the content and character delivered by the medium – does not spontaneously self-separate from that medium. Nor do content and character spontaneously explain themselves. Apathy is a convenient perspective when one does not want to be bothered with sorting and filtering incoming information – not being bothered, so to speak, with understanding and sharing the ideas and opinions of other people. Consider the following mantra for studied indifference:

“Until and unless I’ve independently verified the information, I don’t believe the ones I agree with any more than I believe the ones I disagree with.”

8. Don’t trust peer review

Scientific research and debate are important. But just because something has been published in a peer-reviewed journal doesn’t make it the truth. I realized this when a smart-growth group did a study that found a weak correlation between the suburbs and obesity. They published this result in a peer-reviewed journal and then issued a press release proclaiming that they had proved that the suburbs cause obesity. Many journalists reprinted the press release as if it were gospel.

Since then, studies have found that more than half of peer-reviewed experimental results can’t be replicated. Even when results can be replicated, they aren’t necessarily important. Many studies rely on statistical significance, so when a study finds that, say, people who eat oatmeal are 0.5 percent less likely to have heart attacks than those who don’t, it might be statistically significant but 0.5 percent is not going to make me change my eating habits, especially considering Bayesian probability.

The fact that some applications are bad does not mean that the procedure should be downplayed, distrusted or ignored. The most robust findings are those that have been enhanced by good peer-review.

9. Become an expert in something

If we can’t trust government, interest groups, the media, peer review, models, or predictions of the future, how are we to make our way through the world? My answer is to develop enough expertise in one or more fields that I can safely say I know more about those fields than 99.99 percent of the people. Then I can focus on those fields and try to ignore everything else. When I have to consider topics outside of my area of expertise, I try to draw lessons by analogy.

For example, my analyses of natural resource and transportation issues have taught me that markets are imperfect, but government failure is much worse than market failure, leading to greater waste and often greater environmental damage. The appropriate approach for the government to take to market failure is to make the market work better, not to try to be a substitute for the market. Thus, when it comes to issues outside my areas of expertise, I’ll tend to support proposals to make the market work better and oppose proposals to have the government replace the market.

The writer’s “expertise” obviously does not extend to economics.

“Market failure” takes place when voluntary exchanges between buyers and sellers do not provide efficient allocation of scarce resources – in other words, when the value of goods produced is not equal to the value of “foregone” production. When this takes place, the self-correction aspect of market efficiency (the “invisible hand”) does not bring supply and demand into equilibrium, and cannot eliminate surpluses and shortages.

The very existence of governments may be attributed largely to market failure of public goods.

Market failure occurs as the result of public goods, market control, externalities, and imperfect information.

“Public goods” refers to the fact that non-payers cannot be excluded from consumption, and this prevents voluntary exchanges.

“Market control” arises when competition is limited among buyers or sellers (e.g. monopoly or monopsomy), and this prevents equilibrium – equality between demand price and supply price.

“Externalities,” i.e. external costs or external benefits, prevent market efficiency because demand prices or supply prices do not fully reflect the value of goods produced (or not produced).

“Imperfect information” among buyers or sellers means, for example, that buyers might be willing to pay more (or less) for a good because they do not know the true value of benefits provided. Or sellers might be willing to accept less (or more) than the true value because they do not know the true opportunity cost of production.

In response to market failures, governments use:

–Direct provision of public goods, such as national defense and “public utilities.”

–Regulation – of consumption, production or exchanges.

–Taxation, to discourage undesirable activity (or, by subsidy, encourage desirable activities and address the external benefits – received by some – of market failure).


“The appropriate approach for the government to take to market failure is to make the market work better, not to try to be a substitute for the market.”

“. . . government failure is much worse than market failure . . .”

These are platitudes – obviously and flagrantly. Market failure – related to “public goods” – is one of the factors that gave rise to governments in the first place. The writer asserts – tacitly as usual – that public goods are best secured by people through their own devices, and that direct provision through organized, collective action should not occur. Moreover, the writer offers not a clue about what the government might do – short of direct provision of public goods, regulation and taxation – to improve the structure and operation of markets.

10. To promote change, use a wide variety of tactics

I consider myself a policy activist — neither a pure policy analyst nor a grassroots activist. Instead, I do the policy analysis but follow it up by working with grassroots activists who support the institutional changes that my analyses suggest should be made.

My years with the environmental movement taught me that policy analysis is important but is only one component of social change. Environmentalists devoted no more than perhaps 5 percent of their resources to it. The rest went to grassroots organizing, lobbying, lawsuits, and public education. I’m not trained for or particularly good at any of those things so, if I want my policy analyses to be meaningful, I have to work with people who are.

During my transition from environmentalist to libertarian, I noticed a major contrast between the two movements. Environmentalists were highly decentralized and used a wide variety of tactics, while libertarians were (ironically considering their political views) fairly centralized and their tactics consisted of policy analyses and running someone for president every four years. Environmentalists accepted people of all political views so long as they supported the environment while libertarians applied a variety of litmus tests to everyone and anyone who didn’t measure up was rejected as a potential ally.

Both movements had begun in the 1960s and had roots extending many decades before that, and if anything liberty should have been a more central core of American beliefs. Yet the environmental movement was so much stronger that everyone claimed to be an environmentalist, while libertarians were considered kooks. The relative strengths of the movements, I suspect, was proportional to their decentralization and the variety of tactics they used. I spoke about these concerns to various libertarian groups and wrote about them in Liberty magazine.

As I was moving from one movement to the other, the movements themselves were changing. Thanks to demands from foundations and an infiltration of big-government supporters, the environmental movement became more centralized and less tolerant of dissent. Meanwhile, free-market advocates adopted a wider variety of tactics with the creation of groups such as Institute for Justice (which focused on legal tactics) and Americans for Prosperity (which focused on grassroots organizing). The movement also became more decentralized with the creation of a network of state-based think tanks.

The wide variety of tactics would appear to include dissemination of disinformation and outright falsehoods. Certain falsehoods are carefully presented as rhetorical questions, e.g. Isn’t security camera footage taken by a public agency public information?

(No, of course not, because of privacy concerns).

“Since Japan introduced high‐speed bullet trains, passenger rail has lost more than half its market share to the automobile.”

Mistranslations, purposeful or not: in Japanese, an oku is “one hundred million.” O’Toole went along with on online mistranslation as “one billion” – thereby inflating the capital cost of a Japanese Shinkansen line he was critiquing by a factor of ten. O’Toole also presented ten-year-old traffic statistics for this same line (the Hokuriku Shinkansen) to Congress.

Unfortunately, these examples are no longer available online.
The problem here is the basis of the “policy analysis” methods by O’Toole. Verifiable facts and data, conclusions supported by explicit and transparent analyses are one thing. Unattributed, unverifiable assertions are another.

Consider O’Toole’s statement, “Since Japan introduced high‐speed bullet trains, passenger rail has lost more than half its market share to the automobile.” (O’Toole, Randal. 2008. “High‐Speed Rail: The Wrong Road for America.” Cato Institute Policy Analysis No. 625, October 31, 2008.)

A person not familiar with Japan might seriously misinterpret the demographic and travel-pattern changes after 1960. In particular, one should definitely avoid O’Toole’s apparent underlying assumption: that Shinkansen construction caused a large-scale shift from rail to private automobiles.

Japan had 94.3 million people at 1960 (which four years before the first shinkansen line opened). This grew to 127.1 million at 2015, an increase of 35 percent. Rail travel (annual pass-km) more than doubled during this interval; per-capita rail travel grew from about 1,950 to 3,350 pass-km per capita – an increase of 72 percent.

The large increase in rail travel per capita was, no doubt, one result of large-scale rural depopulation. At 1960, 33.9 percent of the Japanese population was housed in defined “rural” areas – 36.7 percent of the total (at 1960). At 2015, rural population had fallen to 11.0 million – an absolute decline of 67 percent during an interval when the total population increased by 35 percent. The remaining rural population was just 8.6 percent at 2015.

If all road-based public transport modes are considered, total public transport travel grew from about 2,460 to 3,900 pass-km per capita during 1960-2015, an increase of nearly 60 percent. The bulk of this growth was carried by rail: road-based public transport travel grew from about 510 to 560 pass-km per capita during 1960-2015, an increase of less than 11 percent.

A 2013 survey found that annual vehicle-km of travel in Japan for private autos was 3,900. This (assuming an average vehicle occupancy of 1.6) implies about 6,200 pass-km per capita by private auto. If the increase in public transport travel (1960-2015) was carried by private autos, then travel by this mode would have increased by more than 23 percent – an absolute increase of nearly 185 billion pass-km per year. Without question, Japan does not have the road capacity that this would have required.

Without question, travel by private auto in Japan has increased dramatically since 1960, during a time of rapid economic growth – and even more rapid migration from rural to urban areas. The five-fold increase in per-capita pass-km by private autos was sufficient to increase the modal share from about 40 to 60 percent; the public-transport share declined from about 60 to 40 percent.

However, the absolute volume of public-transport travel increased dramatically, and the bulk of this took place on metropolitan and intercity rail services – which expanded significantly during the 45-year interval. To argue that the modal share change was “caused” by high-speed rail is to argue that high-speed rail greatly “reduced” rail travel to levels far below what might have occurred otherwise – and that makes arguments that the earth is actually flat sound like brilliant insights.

Not Done

I’ve taken 50 chapters to describe the last 50 years of my life. But the story isn’t done as I expect to keep working for several more years. In the meantime, I hope these lessons help others who are navigating their way through the polarized world we now live in.

When O’Toole needs to be debunked, we will be there.