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Thanks for this - this is the correct version of the ID argument against road building that I was struggling to put in ordinary language. In econospeak, the proponents of the new road promised a first-order benefit (shorter journey times for the high-value journeys which are already being made due to reduced traffic) and delivered a second-order benefit (marginal journeys which would not have been made now are, or journeys which would have been timed to avoid rush hour are now made during rush hour for a marginal improvement in convenience). Traffic congestion is pure social waste (in fact it is worse than pure social waste due to emissions of idling or slow-moving vehicles), but if you use efficiently-collected tolls to reduce congestion by keeping marginal drivers off the roads then you can deliver a social benefit from road building - most of which comes in the the form of increased toll revenue.
Interestingly, in cities with successful, widely-used public transport (which includes all European and 1st-world Asian capitals), you see induced demand effects on public transport as well. For whatever reason, the anti-transit-funding libertarian crowd don't normally raise the induced demand objection, and when they do the "unsuppressing suppressed demand is good" response normally is raised, loudly. Whether the transit case is really different depends on what you think about the social costs of overcrowding on roads vs. transit - it feels different because overcrowded tube trains get you where you are going roughly on time, but overcrowded roads cause severe delays.
Yep, congestion pricing plus non-driving alternatives is the correct solution to traffic, not building endless roads.
There's a great youtube video on ID applied to transit: https://youtube.com/watch?v=8wlld3Z9wRc&ab_channel=OhTheUrbanity%21
They make similar points. In particular, it's much easier to both increase capacity (increase frequency of trains, signal priority, etc. which also improves the experience of riding rather than worsening it) and apply congestion pricing (since they already have ticketing systems). It also has a lot fewer externalities, and in the case of walking and cycling, has positive knock-on effects (people getting more exercise).
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