I worry that explanations like these are the technocrats' version of, say, left-wing social science on power dynamics. Just a bit too neat & tidy, appealing to all the author's priors. I say this, of course, as someone with a lot of technocratic sympathies myself.
If I compare the view that normal people have of their railway system across different countries I've been to, and my own impression of riding it, there is a very obvious through-line: Public disorder and crime. The details of the technocratic railway management of course matter for financial reasons, but even highly inefficiently managed railway will generally be well-liked if you can ride the train without being assaulted by piss smell, accosted by beggars, or in the worst case, literally assaulted. Contrariwise in high-crime countries, public transport suffers no matter how well you may manage the company internally.
That's not to mean that managing it well is pointless; But Japan's railway is uniquely pleasant at least partially due to the countrie's astonishingly low crime rate and low tolerance for disorderly conduct of any kind.
I would think this is highly disincentivized with privatization. Trains not being run as a social service would not need to tolerate bad behavior and the higher cost of a train journey the less likely it is that people down on their luck can afford getting on to begin with to beg or try to use the service as a shelter.
Also they run shopping centers, apartments, offices, etc on top of the stations, so unlike other countries where the station itself has no activity and is generally an unpleasant place to be - meaning low numbers of people, plenty of space to loiter and dark corners to harass people in - instead the stations are full of shops and people whose destination literally is the station. Not the kind of place you’d ever be able to camp out or commit crimes without being caught red handed.
Japan’s low crime rate definitely helps but it’s also structural. Anyway, if the argument is “anywhere with crime can’t have nice public infrastructure”, then the future of those places is bleak. You have to start somewhere.
I'm not quite sure how your theory fits with other transit systems people find pleasent to use. London, Paris, Barcelona, Berlin, they're not exacty known for low crime and low tolerance for disorderly conduct
This is a good overview of Japan's past wrt the rail networks and companies. Moving forward, due to the slowly falling population, and the move from rural to urban centers, rural train lines are closing as they become unprofitable. Tanner and Brandon Mosconi on YT are documenting some of these lines before they close.
Recently, in 2026, there was news that the Tohoku Shinkansen was adding freight to the shinkansen itself due to a lack of truck drivers. So things are changing here in Japan, due to macro changes in population and the lack of staff for key roles in industry.
There couldn't be a better text book illustration of the institutional economics of the "synchronization tax" than Tokyu Corporation.
By bringing trains, real estate, hospitals, and retail under a single corporate umbrella, Japanese rail companies eliminate the massive coordination costs we have in the United States of coordinating across municipal, transit, housing, and commercial constraints on development. Tokyu Corporation provides a unified platform (or what we might call standard "description"). Japanese residents seamlessly coordinate around this standard description, drastically reducing the transaction costs of daily urban life.
It's very important to note that even when we do manage to coordinate well enough to establish public infrastructure in the United States, we underinvest in maintenance. The Japanese system solves this problem by allowing Tokyu Corporation (and its competitors) to internalize enough of the benefits of the system to fund maintenance. Of course that's much easier to do when you don't have to waste energy on the coordination we do in the United States.
A key objection many in the United States would raise to moving toward the kind of system they have in Japan relates to zoning and land use restrictions. I believe that the problem we have with zoning and land use reform in the United States is rooted in the way it tends to happen in a "top down" way after powerful interest groups win political control. The Japanese system is also so helpful as a comparison because it demonstrates how, at the level of zoning and land use, we *could* be more bottom up by allowing micro-local zoning — that is, by allowing for the 2/3 consensus of landowners in a neighborhood to agree to replan. No system is going to leave everybody happy, but allowing finer-grained zoning at least would avoid the situations in which entire municipalities get top-down reform crammed down by the state.
The financial constraint argument says housing supply is ultimately governed by investor behavior. Developers and capital providers will only fund projects that clear their required returns, which means they are unlikely to support construction that significantly drives prices down. In this view, even if regulations improve, capital will still avoid oversupplying housing because falling prices compress margins and undermine financing assumptions. The strength of this argument is that it correctly describes how institutional capital behaves in modern real estate markets, especially where projects depend on credit, securitization, and return thresholds. However, its weakness is that it treats housing supply as fixed within those constraints, when in reality returns can still be met through higher density, lower unit costs, and larger volume, meaning affordability can improve without eliminating profitability.
It seems the limiting factor is less about political, business strategy or cultural impacts and more about energy.
No scenario works without energy resources. If Japan could produce its own petroleum, automobile infrastructure would have likely been more dominant.
If the US didn’t have petroleum, rail might have been the primary mode and infrastructure and business would have been similar to how they operate in Japan.
Given Japans adoption of nuclear energy, trains win out. Cars require fuel to be imported so the economics don’t work as well.
The debate about which transportation mode would/should have won matters little if the energy sources are not there.
Fantastic article, thank you! Here is an article that you might enjoy: https://anima-urbis.org/p/osakas-ghost-in-the-american-cityItIt dives deeper into what made that approach possible: what specific political economic conditions, what convergence of interests, how America tried it and failed. It then comes to the basic question every long-lived city eventually answers: who owns the infrastructure, what value are they able to build around it, and who captures the surplus it generates?
I worry that explanations like these are the technocrats' version of, say, left-wing social science on power dynamics. Just a bit too neat & tidy, appealing to all the author's priors. I say this, of course, as someone with a lot of technocratic sympathies myself.
If I compare the view that normal people have of their railway system across different countries I've been to, and my own impression of riding it, there is a very obvious through-line: Public disorder and crime. The details of the technocratic railway management of course matter for financial reasons, but even highly inefficiently managed railway will generally be well-liked if you can ride the train without being assaulted by piss smell, accosted by beggars, or in the worst case, literally assaulted. Contrariwise in high-crime countries, public transport suffers no matter how well you may manage the company internally.
That's not to mean that managing it well is pointless; But Japan's railway is uniquely pleasant at least partially due to the countrie's astonishingly low crime rate and low tolerance for disorderly conduct of any kind.
I would think this is highly disincentivized with privatization. Trains not being run as a social service would not need to tolerate bad behavior and the higher cost of a train journey the less likely it is that people down on their luck can afford getting on to begin with to beg or try to use the service as a shelter.
Also they run shopping centers, apartments, offices, etc on top of the stations, so unlike other countries where the station itself has no activity and is generally an unpleasant place to be - meaning low numbers of people, plenty of space to loiter and dark corners to harass people in - instead the stations are full of shops and people whose destination literally is the station. Not the kind of place you’d ever be able to camp out or commit crimes without being caught red handed.
Japan’s low crime rate definitely helps but it’s also structural. Anyway, if the argument is “anywhere with crime can’t have nice public infrastructure”, then the future of those places is bleak. You have to start somewhere.
This is a great point—station design + surrounding land use probably matter as much as policing in shaping day-to-day safety.
Yeah, privatization can indirectly filter behavior through cost, but it also raises questions about accessibility vs exclusion.
Agreed, a lot of “systems analysis” underweights how much crime, disorder, and social norms shape whether people actually enjoy public transport.
I'm not quite sure how your theory fits with other transit systems people find pleasent to use. London, Paris, Barcelona, Berlin, they're not exacty known for low crime and low tolerance for disorderly conduct
This is a good overview of Japan's past wrt the rail networks and companies. Moving forward, due to the slowly falling population, and the move from rural to urban centers, rural train lines are closing as they become unprofitable. Tanner and Brandon Mosconi on YT are documenting some of these lines before they close.
Recently, in 2026, there was news that the Tohoku Shinkansen was adding freight to the shinkansen itself due to a lack of truck drivers. So things are changing here in Japan, due to macro changes in population and the lack of staff for key roles in industry.
Demographics quietly reshape everything—Japan’s rail system is basically adapting in real time to population decline and labor shortages.
There couldn't be a better text book illustration of the institutional economics of the "synchronization tax" than Tokyu Corporation.
By bringing trains, real estate, hospitals, and retail under a single corporate umbrella, Japanese rail companies eliminate the massive coordination costs we have in the United States of coordinating across municipal, transit, housing, and commercial constraints on development. Tokyu Corporation provides a unified platform (or what we might call standard "description"). Japanese residents seamlessly coordinate around this standard description, drastically reducing the transaction costs of daily urban life.
It's very important to note that even when we do manage to coordinate well enough to establish public infrastructure in the United States, we underinvest in maintenance. The Japanese system solves this problem by allowing Tokyu Corporation (and its competitors) to internalize enough of the benefits of the system to fund maintenance. Of course that's much easier to do when you don't have to waste energy on the coordination we do in the United States.
A key objection many in the United States would raise to moving toward the kind of system they have in Japan relates to zoning and land use restrictions. I believe that the problem we have with zoning and land use reform in the United States is rooted in the way it tends to happen in a "top down" way after powerful interest groups win political control. The Japanese system is also so helpful as a comparison because it demonstrates how, at the level of zoning and land use, we *could* be more bottom up by allowing micro-local zoning — that is, by allowing for the 2/3 consensus of landowners in a neighborhood to agree to replan. No system is going to leave everybody happy, but allowing finer-grained zoning at least would avoid the situations in which entire municipalities get top-down reform crammed down by the state.
https://www.symmetrybroken.com/maintaining-divergence/#the-three-part-decomposition
The “railway that builds a city” model is fascinating—Japan basically turned transit into a full ecosystem, not just transport.
The financial constraint argument says housing supply is ultimately governed by investor behavior. Developers and capital providers will only fund projects that clear their required returns, which means they are unlikely to support construction that significantly drives prices down. In this view, even if regulations improve, capital will still avoid oversupplying housing because falling prices compress margins and undermine financing assumptions. The strength of this argument is that it correctly describes how institutional capital behaves in modern real estate markets, especially where projects depend on credit, securitization, and return thresholds. However, its weakness is that it treats housing supply as fixed within those constraints, when in reality returns can still be met through higher density, lower unit costs, and larger volume, meaning affordability can improve without eliminating profitability.
It seems the limiting factor is less about political, business strategy or cultural impacts and more about energy.
No scenario works without energy resources. If Japan could produce its own petroleum, automobile infrastructure would have likely been more dominant.
If the US didn’t have petroleum, rail might have been the primary mode and infrastructure and business would have been similar to how they operate in Japan.
Given Japans adoption of nuclear energy, trains win out. Cars require fuel to be imported so the economics don’t work as well.
The debate about which transportation mode would/should have won matters little if the energy sources are not there.
Fantastic article, thank you! Here is an article that you might enjoy: https://anima-urbis.org/p/osakas-ghost-in-the-american-cityItIt dives deeper into what made that approach possible: what specific political economic conditions, what convergence of interests, how America tried it and failed. It then comes to the basic question every long-lived city eventually answers: who owns the infrastructure, what value are they able to build around it, and who captures the surplus it generates?
Excellent effort ... enjoyed this article