The Privatization of Roads and Highways - Ludwig von Mises Institute

258 The Privatization of Roads and Highways
OBJECTIONS
Eminent domain is cheap, efficient and necessary
One argument against private roads is that the costs of
amassing rights of way on which to build them would be enormous.
Suppose a private highway company is trying to build a
facility stretching from Boston to Los Angeles, or even from New
Orleans to St. Louis. They have purchased sufficient acreage in
order to do so, when they approach Mr. Harry Holdout, who
refuses to sell at any but an astronomical price. This alone would
put paid to the entire enterprise. Not only would coast-to-coast
highways be impossible under private enterprise, but this
applies to intrastate roads as well. Nor would even city streets be
free of such impediments; after all, Harry Holdouts can be found
anywhere there is money to be made by obstructing progress.
No, what is needed, if roads are to be built in the first place,
is the government, for this is the only institution in society that
can rely upon powers of eminent domain. 3 Here, the state simply
commandeers the property in question, paying what it determines
is a fair market price. This can save millions of dollars, rendering
public provision of highway building far more efficient
than private.
There are difficulties with this objection. For one thing, it
commits a very basic economic fallacy, a confusion of real costs
(December 1992); idem, “From Highways to Buy-Ways,” Spectrum (Fall
1993); idem, “Highway Investment Analysis,” Arizona Department of
Transportation (December 1994); idem, “Privatize Driver’s License, Registration
System,” Tribune, 25 December, 1994; idem, “Privatizing Vehicle
Registrations, Driver’s Licenses and Auto Insurance,” Transportation Quarterly
(Fall, 1995); “Selling the Roads: Privatizing Transportation Systems,”
Liberty; idem, “Goodbye, DMV,” Liberty (January 1996); idem, “Selling the
Roads: Privatizing Transportation Systems,” Liberty (1996).
2 Block, “Road Socialism,” pp. 195–207.
3 This process is called “expropriation” in Canada.