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Whenever traffic jams occur, one inevitably hears arguments of the following sort:
“It is this crowded, and on top of that the tolls are this high—what is going on? Lower the tolls.”
This reaction is understandable emotionally, but if we think for a moment about why expressways are congested, we can see that the argument is backwards.

Expressways are congested because everyone wants to use them. People are willing to pay high prices because they still consider them a good deal. A traffic jam is, in effect, a situation in which people rush to obtain a “good product at a low price.”

However good a product may be, people will not buy it if it is too expensive. With ordinary products, prices rise in this way, demand shrinks, and supply and demand come into balance. Where that does not happen, people form a line because they see the product at that price as an exceptionally good deal.

That is right: expressways become congested because the tolls are too low for the service they provide.

How to Relieve Traffic Congestion

If we look only at expressway congestion, then raising prices would ease it. In fact, even during Golden Week, if expressway tolls rose into the hundreds of thousands of yen, the number of users would surely drop sharply and traffic would flow freely. Of course, the local roads would become even more crowded.
This should not be called preferential treatment for the wealthy. Bringing supply and demand into balance through price changes is the essence of a free economy. Preventing that is a planned economy, where, as in the former Soviet Union, queues become an everyday occurrence. If asked to choose, I would choose a free economy.

On the other hand, even the most congested expressways have times when they are empty. They are then genuinely high-speed roads, and some might say it is unavoidable to charge expressway tolls for them. I do not think so. Charging a high price at such times is also irrational, because demand is below supply. While demand remains below supply, the price should be 0.

A Long-Term Perspective

Now, the foregoing was a short-term perspective. In the short term, roads and other means of transportation cannot be created, so adjustment through prices is the only option. In the long term, however, things are different.

When prices are high enough to generate profits, new entrants emerge in that industry over the long term, increasing supply. But roads are an area in which private businesses find it difficult to enter, so if left alone, supply will not increase and move toward efficiency as it does in other industries under free competition. This is why government intervention is needed. In the long term, the government must provide roads, or alternative transportation, in congested places. How much should be provided is a field of public economics known as the theory of optimal provision of public goods, so I will not address it here; however, the works of Professor Yukio Noguchi, author of “The Super Organizing Method,” may be useful references.

So, the conclusion:
Expressway prices should rise as roads become more crowded and fall as they become less crowded, tracking congestion so that traffic is always kept at a consistent level.
Under this system, places that are always congested should generate considerable profit, and that profit should be pooled to expand transportation infrastructure.
It does not seem like a bad idea to me—what do you think?

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