Not to long ago in an geography class I took at the university we read and article on how cities developed because of the automobile and that the automobile was not the original preferred form of transportation but was developed because of payoffs or financial incentives that were being paid to cities by automanufacturers to develop infrastructure that supported and to promote the use of the automobile. We then discussed in the class how the modern day cities have developed based on this form of technology and how our modern living style is different form what it might have been had these payments never occured. The class alluded to the fact that the reason why cities are the way today is strongly attributed to this influence and felt that it wasn't 'natural'. Oh if only I had taken Urban Economics prior to this class. Although in reality the points that I made were clearly rooted in basic Economic theory and didn't necessarly require our Urban Economics studies to made.
This is something of a 'reverse' situation to the paper we discussed in class, where the idea that the government subsized roadways and the automobile industry was discussed and analyzed. The argument that was being made in class is only partially right, it begins in this analysis with the idea that even if automobile manufacturers did have some influence on the development of cities and their infrastructure that this was 'unnatural'. I agree that it is unnatural but not because the incentives were made, that is probably the most 'natural' or market based portion of the scenario (I know I know it's not a true market transaction because of the governments involvement but the motivations behind it were market based on the side of the automobile industry thus my use of the term 'natural'). The fact that the city and it's planners were involved at all with the process should be the percieved failure. The automobile industry was making a calculated transaction that was driven by market forces even though one end of the deal was not an ordinary market participant. Their funds were derived form market interests and the desired outcome was to remain competitive in the marketplace. Had a private infrastructure been established then they would have most likely attempt a similar market based transaction, the factors and it's success may have differed but the motivation behind the attempt would have been the same. We might also assume that the trolley and rail car industry who was described as being the major competitor at the time would have made similar attempts had they had the financial resources and business acumen from their market transactions to do so.
Even despite the automobile industries exertion of these forces the idea that this was the 'moment' that created the market for cars and developed the modern city system is somewhat far fetched. It leaves out the idea of trial and error we've discussed and totally neglects to consider the fact that the consumer, the market participants will ultimately decide through their market transactions what industries will succeed and which will fail.