There were ghosts in the old City Hall subway station when New York City Mayor Zohran Mamdani took the oath of office January 1. They were not the sentimental kind—not sepia-toned reminders of civic ambition—but the stubborn kind that insist on telling the truth about who really builds great things. They were whispering that New York has been here before and that the story Mamdani told rarely ends well.

Mamdani said he chose the old City Hall Station, which opened in 1904, because it is “a physical monument to a city that dared to be both beautiful and build great things that would transform working peoples’ [sic] lives.”

That is precisely where the irony lies. The station is indeed a monument—but not to municipal socialism or government-led abundance. It is a monument to private entrepreneurs who dared, invested, and delivered and to a city government that later drove them out of business and steadily dismantled the world-class system they built.

Mamdani’s policy agenda—government-run businesses, free bus service, expanded rent controls—echoes a familiar refrain: Governments enter markets promising fairness but often end up delivering scarcity, decay, and higher costs. New York City’s subway system is a case in point.

New York’s first subways were not public works projects. They were privately financed (the city issued bonds, but the private companies paid the interest), privately operated, and astonishingly successful. The Interborough Rapid Transit Company (IRT) opened the city’s first subway line in 1904, after just four and a half years of construction. It was immediately hailed as the most advanced rapid transit system in the world. Demand surged so quickly that within a year the city was planning a massive expansion, eventually formalized in the 1913 Dual Contracts with the IRT and another private company, the Brooklyn-Manhattan Transit Corporation.

By 1920, the private operators had built the largest and busiest subway system on earth. Riders paid a nickel per trip, with no operating subsidies from taxpayers. The operators’ real costs per passenger fell by nearly half, and daily ridership soared into the millions.

But with success came problems. Inflation after World War I steadily eroded the value of the five-cent fare, and the private companies asked for increases. The city refused, with the mayor saying the nickel fare was sacred.

Instead of renegotiating with the private sector, the city chose to compete. In the 1920s it built and heavily subsidized its own subway system—the Independent Subway System (IND). The IND’s fares covered barely a third of its costs. The private companies, denied fare flexibility and forced to compete against a taxpayer-backed rival, slid toward insolvency.

By 1940, the outcome was inevitable. The city acquired the bankrupt private systems and unified subway operations under municipal control, promising that public ownership would preserve lower costs and “substantial sums for future expansion.”

None of that happened.

Losses mounted almost immediately. Fares doubled in eight years and then tripled a few years later. Expansion stopped. Productivity collapsed. Over the next several decades, real costs per passenger nearly tripled, while ridership declined and maintenance was deferred. The system that had once been the envy of the world entered a long, grinding deterioration.

This is the history embedded in the marble arches and tiled ceilings of the old City Hall Station—a history Mamdani invoked but did not acknowledge. New York’s subway did not become more affordable or more expansive when the city took control. It became more expensive, less reliable, and frozen in time.

That lesson matters because Mamdani’s promises rest on the same political logic that doomed the subway: Suppress prices, replace markets with public provision, and assume efficiency will follow. It doesn’t. Costs do not disappear when politicians declare something is free. Costs are simply shifted, hidden, and ultimately magnified.

The ghosts beneath the old City Hall Station are not nostalgic. They are cautionary. They remind us that ambition and vision are not enough, that beauty does not guarantee sustainability, and that cities attain great things by engaging with the private sector, not replacing it. New Yorkers once learned these lessons. Mamdani’s choices suggest the city should brace itself to relearn them the hard way.