William Vickrey (1914–1996)
Vickrey One Year Later: Catching Up with a Thinker Way Ahead of His Time
Columbia University Record, October 10, 1997
One year later, William Vickrey's ideas are alive and spreading. The Columbia economist, who won the Nobel Prize last Oct. 8 and died suddenly two days after, has gained a recognized and growing influence on public policy, particularly in transportation, across the nation.
The "bully pulpit" he rejoiced in finding when he won the 1996 prize in economics has passed to a dedicated group of colleagues and professionals who advocate such Vickrey objectives as variable tolls on roads to reduce traffic jams and full employment as an economic and social good.
A major conference, meetings and publications have been dedicated to him. Fundraising has begun for an annual lectureship and endowed chair in his name at Columbia. His papers are being archived by the Columbia Libraries, thanks to a Mellon Foundation grant. His arguments for full employment are echoing in Congress, and his "Fifteen Fatal Fallacies of Financial Fundamentalism," his last paper, criticizing many key supply-side basics, is gaining readers via the Internet. It is averaging more than 50 hits a week.
Current efforts nationwide to introduce economic incentives to relieve traffic congestion are his most visible emerging legacy.
"EZ-Pass is just one proof that Bill Vickrey's ideas live," Jeffrey M. Zupan of the Regional Plan Association (RPA) said in a recent interview. "There's tremendous interest now in the next step, which EZ-Pass has made possible: Vickrey's proposal for varying tolls, to shorten commuting times by smoothing out traffic peaks. Studies are under way all over the country to find politically acceptable ways to encourage people not to drive at the peak of the peak."
Vickrey is the father of such "congestion pricing." He first proposed it in 1952, for the New York City subway system, recommending that fares be increased in peak times and in high-traffic sections and be lowered in others. Elected officials considered it risky, and the technology was not ready. Later, he made a similar proposal for road pricing. A Columbia press release almost 25 years ago described how it would work: "One possible detection and billing method would use electronic identifier units carried in each vehicle, which would activate recording devices in or on the road. Computers would sort the information and determine charges; motorists would be billed monthly." Exactly today's EZ-Pass, now with the added convenience of automatic billing by credit card.
"Vickrey's ideas were always ahead of his time," Aaron Warner, head of Columbia's University Seminars and a close friend, said.
In the past two years EZ-Pass has transformed traffic on New York's bridges, tunnels and thruway and is scheduled for the rest of the region's toll plazas by the end of next year. At one point, demand had eager motorists backed up for weeks, waiting to be sent their electronic tags. Chicago has introduced its own EZ-Pass system.
One of the first steps to congestion pricing in this country took place in 1995 in California, where privately-controlled express lanes of State Route 91, east of Los Angeles, electronically adjust tolls to keep traffic flowing smoothly. More than 55,000 motorists signed up for the experiment in its first eight months.
This July, the New York State Thruway Authority began charging trucks more for crossing the Tappan Zee Bridge in peak hours and is studying similar variations for cars. The MTA Bridges and Tunnels (formerly the Triboro Bridge and Tunnel Authority) and the Port Authority of New York and New Jersey are considering studies of congestion pricing, but face potential opposition from drivers, who often think of tolls as taxes, and elected officials, who know that changing tolls is politically sensitive.
"People see it as a tax increase," Vickrey said in May of last year, "which I think is a gut reaction. When motorists' time is considered, it's really a saving."
"The technology has caught up with Vickrey's ideas; now the challenge is public acceptance," said Zupan, who is the RPA's Senior Fellow for Transportation. He's attending a crowded conference this week in Portland, Ore., on the subject.
A special day-long conference, titled "Pricing Transportation Right: William Vickrey's Legacy," brought more than 150 economists, government planners and transit experts to Columbia on Apr. 28. Sponsored by the University and the RPA, it was held in the 15th floor room of the School of International and Public Affairs where Vickrey taught for many years.
RPA President H. Claude Shostal said: "Congestion pricing is an idea blessed by the Nobel Prize. There would be no greater tribute to the legacy of Bill Vickrey but to see whether we can actually advance the idea and tackle the very real practical problems in the political process and make things happen." Such toll pricing is forcefully advocated in the association's Third Regional Plan, published last year.
City and community leaders around the country are now reading a booklet titled Buying Time: A Guidebook for Those Considering Congestion Relief Tolls in Their Communities, published by the Hubert H. Humphrey Institute of Public Affairs at the University of Minnesota in October 1996, days after Vickrey's death.
The American Economic Association's Nobel Prize Luncheon next Jan. 4 in Chicago will be dedicated to Vickrey. Jagdish Bhagwati of Columbia's department of economics will chair the session and three Columbia Ph.D's—Kenneth Arrow, Jacques Drèze and David Colander—will speak on different aspects of Vickrey's work.
Vickrey was not a one-idea man. Throughout his almost 60 years at Columbia, he was admired for finding elegant, intricate ways of solving practical problems, though he was not well known outside his field before his Nobel at the age of 82. Vickrey founded the field of auction theory in 1961. He devised what is now known as the Vickrey Auction, which makes sealed bidding more efficient by ensuring that an offer made truly reflects the bidder's willingness to pay.
"Everyone who worked on the recent auctions by the FCC of various segments of the electromagnetic spectrum started with Bill's papers," said Columbia Economics Professor Brendan O'Flaherty. "His relationship to these auctions is like Einstein's to nuclear energy or Faraday's to electric light bulbs: he had the original ideas that later people put to direct use."
Columbia economist C. Lowell Harriss, who accepted the Nobel for Vickrey in Stockholm last December, told The New York Times this year: "I have known almost all of the persons who have gotten the Nobel Prize in Economics, and there's none who has the range of content or subject matter that my friend had."
Vickrey's ideas on how to achieve full employment may become his most far-reaching influence. Next Wednesday, experts and advocates of full employment will celebrate the publication of a book of essays on the subject, dedicated to him. Titled The Challenge of Full Employment in the Global Economy, the book is a special issue of the international journal Economic and Industrial Democracy.
The dedication notes that in his inaugural address as president of the American Economic Association in 1993 he declared there was no inherent reason not to have full employment, saying "We simply cannot carry on as we have been doing without falling apart as a community." Vickrey was co-chair of the University Seminar on Full Employment at the time of his death.
One of the editors and essayists, Sumner M. Rosen, professor emeritus of social work at Columbia and vice chairman of the National Jobs for All Coalition, of which Vickrey was a founding member, testified this March in Washington before the House Progressive Caucus: "We knew he was going to Stockholm, if he had lived, to say that unemployment is a disgrace, unacceptable, unnecessary and that full employment was his priority."
Rosen notes that one provision in the recently negotiated national budget agreement will fund the first Labor Department survey of job vacancies, which should help correct the imbalance between job seekers and jobs available. "We see full employment as a priority in the labor movement, too," he said. "When we raised the flag 11 years ago to create the University Seminar, Bill was the first faculty member to respond."
Winifred Armstrong, a consulting economist for the RPA and friend of Vickrey's has written to his widow, Cecile: "There are many of us who are building on Dr. Vickrey's work such that it has become also our own. We are grateful for that legacy and will continue it."