Willingness to pay, of course, is also a function of ability to pay, and a market mechanism implicitly attributes worth to a person’s desires in proportion to the money they have to spend.
Thoughtful neoclassical economists know this, but they usually choose to ignore it, presumably because the consequences of confronting it would be too politically uncomfortable. Their own theories tell them that, due to the decreasing marginal utility of money, an extra dollar is worth more to the poor than to the rich. It follows that asking an extra dollar for parking hurts the well-being of the poor far more than the rich, and systematically privileges those who don’t need to think twice about paying six dollars for a parking space. To which a good left neo-liberal would no doubt reply that the issues of rational pricing and wealth redistribution are logically distinct and should be thought separately. But politically, this means that redistribution is the lonely last instance that never comes.
All of which is enough to make a good progressive recoil from such a thing as “the market price for street parking”. But this position is not nearly audacious enough. Rather than a rejection of market relations, this is merely a rejection of a novel form of planning, in favor of the older, more obscure, more unfair and more inefficient methods of planning the use of public space. We could say instead that what’s needed is a direct assault on the inequalities of wealth and income that subvert the functioning of prices, and thereby impede the realization of the plan.What I don't understand, to be frank, is why we have all these bright fellows seeking to resolve epiphenomenon when the real problem, as Frase points out, is economic inequality. Basing any set of social or political responses to the problems of humanity in society on market mechanism necessarily results in a society based on wealthy people's desires.
So how about everyone on the loft leave Yglesias to blather on in the well-funded obscurity of Slate except, perhaps, to point out that his solutions to life's problems are the "and a pony" of "left" policy discourse.