The Privatization of Roads and Highways - Ludwig von Mises Institute

Homesteading City Streets:
An Exercise in Managerial Theory 241
Assume, however, that the identity of such persons is lost in
antiquity. 8 Which other “stakeholder” would then have the next
best interest in these properties?
One way to discern this is to ask, not as we are now doing,
“Given the status quo, how shall we divide up the streets?,” but,
rather, “What would the world now look like had the city government
never taken over the municipal streets, but had instead
allowed this industry to develop purely under free enterprise
strictures?” Had there been no government intervention, the likelihood
is that the sites would have been claimed, and streets
would have been built, by private road companies. This, at least,
was the experience during medieval European times as well as in
eighteenth century America. Who, in turn, might have invested
in such companies? Although it can only be speculation—call it
an educated guess—one reasonable candidate would be owners
of the property alongside the street. This would be one way for
the market to “internalize the externality” which might otherwise
arise from different ownership of street and neighboring
8 Suppose, to complicate matters, that one or a few taxpayers from the
eighteenth or nineteenth centuries can be identified (or, rather, their heirs),
but that in total the payments owed to them were a very small proportion
of the present total value of the streets. Would these few claimants be given
the streets in their entirety? Not in my view. The money they paid which
went to paving of the streets, the setting up of traffic lights, etc., is a very
small percentage of the site value of these thoroughfares. A similar analysis
applies to the case where only one heir of a slave can be found, and there is
a plantation to be divided up amongst the children of the slaves and the
children of the slaveholders. Does the heir of the single slave obtain the
entire inheritance? Not unless it can be shown that the labor services stolen
from his grandfather, plus interest, amount to all or more of the value of the
plantation. If not, then the heir of the slave owns only the value that can be
attributed to his ancestor. On this see Walter Block and Guillermo Yeatts,
“The Economics and Ethics of Land Reform: A Critique of the Pontifical
Council for Justice and Peace’s ‘Toward a Better Distribution of Land: The
Challenge of Agrarian Reform’,” Journal of Natural Resources and Environmental
Law 15, no. 1. (1999–2000): 27–69; Rothbard, The Ethics of Liberty, p. 75.