The Privatization of Roads and Highways - Ludwig von Mises Institute

Transition to Private Roads 283
Blockades. One argument for the thesis that roads are different,
and thus either cannot or should not be privatized, or, if so,
that special provisions applicable nowhere else must apply here,
is based upon the “blockade problem”: if the four streets surrounding
the block in which my home is located are privatized,
then I can be blockaded in, or entrapped. Alternatively, I can be
made to pay such a high price for egress and access to my own
property that virtually the entire capital value of it would end up
being captured by these private road owners, e.g., the “entrapping”
firm or firms will charge a fee just below the present discounted
value of the house. We know that this scenario could not
occur in the natural operation of a free market in road provision
(see chapter 1). No one would purchase such a home, initially,
unless access and egress rights were first stipulated, and at a
mutually agreeable price, at present and in the future as well. Just
as “title search” is now the order of the day in real estate transactions,
so, too, would “access search” come to be a commonplace
in the free society earmarked by private roadways. This
being the case, no proper disbursement of public streets into private
hands could ignore this issue. For, to do so would in effect
be to give to the private road owners not only the streets themselves
which is part of the explicit privatization plan, but also
(the value of) virtually all the property “entrapped” by these traffic
arteries. What, then, could be done to obviate such a monumental
injustice? One possibility would be to add a codicil to the
transfer of the roads (however else effectuated); to wit, that due
weight would have to be given to the contrary-to-fact, hypothetical
bargaining over these access rights that would have, but did
not, take place, since no private road market existed. Here, the
new private firms would own the street, but they would be subject
to the side order constraint that they grandfather in all extant
property owners abutting their newly owned roads. As for complete
newcomers to the area, e.g., those traveling through it for
the first time or those who purchase real estate lying within the
bounds of these recently privatized avenues, they could be
charged as much as the market will bear. But, for those already
established, and also their visitors, repairmen, deliverymen, etc.,