Limits to Capitalism: The New York City Subways and When Public Benefits Private

Aside from law firms and the business thereof—my genuine professional passion—I must occasionally share a personal passion, but only if it touches upon economics.  One personal passion is the almost unimaginable centrality of the subway system to New York City as it exists today.

Today's threatened subway strike in New York (which was averted by "stopping the clock" for four more days, at which point we'll be on the brink again barring a settlement), is such an occasion for breaking the rules about what you come to "Adam Smith, Esq." expecting.

What on earth do the subways have to do with economics and business?  Plenty.

If you look at a map of downtown New York in 1900, before the subways were built, there were no skyscrapers.  Look at the same map 10 years later (the first, primary, branch of the IRT opened in 1903, from City Hall to Harlem), and you will see a virtual curtain wall of skyscrapers down Wall Street and Broadway.  Did engineering technology change?  No—what changed was the ability of the subways—the physical infrastructure of the city—to deliver the throngs of office workers from Brooklyn, Queens, and the Bronx needed to make those skyscrapers economically viable.  

The same is no less true today. 

New York could not live without it.

Courtesy of the WSJ:

FAST MTA FACTS