When the sovereign hoards the road-building money

The New York Times reports that Congress has appropriated billions of dollars for large transit projects, and yet the executive branch is not spending them — a pattern one observer in the piece describes as "a deliberate slowdown of these grants." I am not in a position to verify the precise administrative machinery behind this, but I will take the reported fact at face value and reason from it, as is my habit.

Let me be direct about what this is. In The Wealth of Nations I argued that the proper duties of the sovereign are three: defense, justice, and the maintenance of those public works and institutions that private commerce will never adequately provide for itself. Roads, canals, harbors — the arteries through which the produce of labor flows from maker to buyer — fall squarely in that third category. The toll a private proprietor might collect on a road will never cover the full social benefit of a road well-made, any more than a single merchant will voluntarily fund the harbor that serves a hundred ships. The public must therefore provide it, and having resolved to provide it, must actually do so.

The argument against spending appropriated funds is sometimes dressed in the language of economy — of fiscal prudence, of reducing waste. I have no quarrel with genuine economy. A sovereign that spends carelessly injures the public as surely as one that taxes excessively. But there is a difference between economy and obstruction. When a legislature, representing the public that bears the cost, has examined a set of works and voted the money, the executive that then withholds it has not practiced economy; it has substituted its own judgment for the nation's lawful deliberation. That is not frugality. It is a kind of unilateral taxation-in-reverse — the public bears the cost of the foregone works without receiving the benefit that was promised.

Consider who suffers. The workman who would lay the track goes without employment. The commuter in a growing city continues to sit in traffic that a better transit line would relieve. The local merchant whose customers cannot easily reach him loses trade. These are dispersed, largely voiceless losses — precisely the kind I warned against when I wrote about the tendency of the well-organized producer interest to make itself heard while the consumer bears the burden in silence. In this instance, the well-organized interest is not a guild or a trading company but a set of political preferences inside the executive, and the dispersed sufferers are the public at large.

I will mark what follows as inference, not recollection, since I cannot know the full political reasoning at work: it is possible the slowdown reflects a genuine dispute about the design of certain projects, or federal-state cost-sharing arrangements, or contracting standards. Those are legitimate debates. But if the Times's framing holds — if the slowdown is deliberate and not project-specific — then the institutional question is plain: what mechanism exists to compel the executive to spend what the legislature has lawfully authorized? The courts are the natural answer, and I would expect this to arrive there. The rule of law means precisely that appropriated public funds are not the executive's private reserve to dispense or withhold at pleasure.

The deeper principle is this: markets and private enterprise are magnificent engines for producing what individuals want and can pay for. But they are not engines for producing what everyone needs and no one alone will fund. That is the province of the sovereign, and the sovereign who neglects it — or worse, who deliberately frustrates it — does not thereby shrink government. He merely shifts the cost onto the backs of those least able to bear it, while leaving the road unbuilt and the public worse off than it needed to be.