The Privatization of Roads and Highways - Ludwig von Mises Institute

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12 Overcoming Difficulties in Privatizing Roads This chapter considers, and rejects, four arguments against the privatization of roads, and in favor of our present system of road socialism. They are: (1) Eminent domain is cheap, efficient, and necessary, but only government can avail itself of the “benefits.” (2) Roads are not perfectly competitive, but rather, necessarily, are characterized by monopolistic elements, which only the state can address. (3) Roads are different than everything else; people impose waiting costs on others without taking them into account; this externalities problem is a market failure that, again, only government can solve. (4) Road privatization is unfair to abutting property owners. This chapter also deals with four objections to, or difficulties with, street and highway privatization: (1) The government has violated “Non- Compete” clauses to protect private investors in roadways. (2) Private industry would find it impossible to discern rational prices for its services. (3) Should public roads be commercialized before being privatized? That is, should the state first charge a price for these services and then privatize, or do the opposite? (4) Road privatization would be a public relations nightmare. How should this be dealt with? 255
256 The Privatization of Roads and Highways INTRODUCTION For the purposes of this chapter, we will take it as a matter of stipulation that it is desirable to privatize all traffic arteries. That is, all extant streets, roads, avenues, highways, etc., should forthwith be taken out of the control of governments, whether federal, state or local, and placed into private hands. There is a wealth of literature attesting to the benefits of market provision of goods and services vis-à-vis governmental, in general, which is well known especially since the demise of the Soviet economy, and also with specific reference to roadways, 1 which is far less well known. 1 David Beito, “From Privies to Boulevards: The Private Supply of Infrastructure in the United States during the Nineteenth Century,” in Development by Consent: The Voluntary Supply of Public Goods and Services, Jerry Jenkins and David E. Sisk, eds. (San Francisco, 1993), pp. 23–48; David Beito and Linda Royster Beito, “Rival Road Builders: Private Toll Roads in Nevada, 1852–1880,” Nevada Historical Society Quarterly 41 (Summer 1998): 71–91; David Beito, “Voluntary Association and the Life of the City,” Humane Studies Review (Fall, 1988); idem, “Owning the Commanding Heights,” Essays in Public Works History (1989), vol. 16; Walter Block, “Free Market Transportation: Denationalizing the Roads,” Journal of Libertarian Studies 3, no. 2 (Summer, 1979): 209–38; idem, Zoning: Its Costs and Relevance for the 1980s (Vancouver, B.C.: Fraser Institute, 1980), pp. 299–330; idem, “Public Goods and Externalities: The Case of Roads,” The Journal of Libertarian Studies 7, No. 1 (Spring, 1983): 1–34; idem, “Theories of Highway Safety,” Transportation Research Record 912 (1983): 7–10; idem, “Road Socialism,” International Journal of Value-Based Management 9 (1996): 195–207; “Roads, Bridges, Sunlight and Private Property: Reply to Gordon Tullock,” Journal des Economistes et des Etudes Humaines 8, nos. 2/3 (June–September 1998): 315–26; idem, “Private Roads, Competition, Automobile Insurance and Price Controls,” Competitiveness Review 8, no. 1 (1998): 55–64; idem, “Road Privatization: A Rejoinder to Mohring,” Privatize Roads and Highways (Lewiston, N.Y.: Edwin Mellon Press, 2005), also reprinted as chap. 19 in the present volume; Fred Foldvary, Public Goods and Private Communities: The Market Provision of Social Services (Cheltenham, U.K.: Edward Elgar, 1994); Walter Block and Matthew Block, “Roads, Bridges, Sunlight and Private Property Rights,” Journal des Economistes et des Etudes Humaines 7, nos. 2/3 (June–September 1996): 351–62; Michelle and Walter Block, “Privatize the Public Highway System,” The Freeman 47, no. 2 (February 1997): 96–97; Bryan Caplan, “A
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The Privatization of Roads and High
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This book is dedicated to my fellow
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vi The Privatization of Roads and H
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viii The Privatization of Roads and
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x The Privatization of Roads and Hi
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Acknowledgments Iwould like to than
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Introduction Most people who read t
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Introduction xvii dealing with obje
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1 Free-Market Transportation: Denat
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Free-Market Transportation: Denatio
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48 The Privatization of Roads and H
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3 Public Goods and Externalities: T
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Public Goods and Externalities: The
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Part II Applications
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6 Road Socialism * What are the bes
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Road Socialism 185 of the state app
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Road Socialism 187 It is in order t
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Road Socialism 189 indicates that v
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Road Socialism 191 vehicle inspecti
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Road Socialism 193 that “The domi
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Road Socialism 195 imaginative and
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Road Socialism 197 2. Perhaps the p
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Road Socialism 199 bouncer, to each
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7 Compromising the Uncompromisable:
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15 Comment on “Roads, Bridges, Su
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Comment on “Roads, Bridges, Sunli
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16 Roads, Bridges, Sunlight, and Pr
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Roads, Bridges, Sunlight, and Priva
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17 Who is Responsible for Traffic D
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Who is Responsible for Traffic Deat
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20 Aiding and Abetting Road Sociali
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Aiding and Abetting Road Socialism
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Part V Conclusion
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APPENDIX I Annual U.S. Street & Hig
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Appendices 423 It cannot be denied
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