The Privatization of Roads and Highways - Ludwig von Mises Institute

Congestion and Road Pricing 85
extended to the “freeway flyers” 57 during the rush hour, it is an
important advantage indeed. Automobiles are prohibited from
entry, except in some cases for short spans, or in order to make
turns. This often allows the bus lane traffic to move at 40 to 50
mph, while hordes of private automobiles must sit by impotently,
choked in congestion made even worse by the special treatment
accorded the mass-transit mode.
As we have seen, this scheme is fatally flawed by the mistaken
homogeneity postulate. It is only if the collective preferences
of the bus passengers outweigh those of the motorists that
any economic rationale can be used in defense of this plan. But
since there is no market, by assumption, there is no way to register
or compare competing desires for scarce, peak-hour-highway
lane space. Shorn of any possible economic underpinning, the
scheme is exposed as a return to a society of status, not contract.
Certain groups are privileged. Others are downtrodden. Castelike,
bus travelers, whatever their intrinsic “merits,” are placed in
a higher category than automobile users.
A sharp distinction must be drawn between two seemingly
similar situations: (1) special bus lanes by fiat, and (2) special bus
lanes that are the result of the operation of the price system. Paradoxically,
the exact same result may follow—that is, the identical
road use pattern may come about from road pricing as from executive
orders. Nevertheless, the economic welfare implications
will be very different. If, as a result of the free-market price system,
buses are able to outbid automobiles for use of reserved,
limited access peak-hour highway lanes, then we may legitimately
conclude that all parties to the transaction are beneficiaries—otherwise
they would not have entered into contractual
arrangements. No such conclusion follows, however, from the
establishment of bus lanes without benefit of the price system.
Bank Staff Occasional Papers (Washington, D.C.: International Bank for
Reconstruction and Development, 1978), p. 21; Smerk, Urban Transportation,
p. 194; and Owen, The Metropolitan Transportation Problem, p. 121.
57 See Bish and Kirk, Economic Principles and Urban Problems, p. 146.