The Privatization of Roads and Highways - Ludwig von Mises Institute

Transition to Private Roads 285
to do so would violate, with a vengeance, all strictures of viable
scale. It would be as if a factory to be privatized were first
divided into 100,000 parts, a brick here, a faucet there, and given
to its similarly numbered owners in that format. 5 The road, as a
unit, consists of far more than any one of these pieces, or even
thousands of them put together. The viable street ownership unit
stretches, at least, for several miles in length, and not one but
both sides of it would be included in the package. Certainly, this
is the format that characterized roads built by private interests
historically.
Second, if we are to transfer the road to private individuals
in proportion to the taxes they have paid for their creation and
maintenance, it is by no means clear that this is proportional to
street frontage. Surely, a smaller piece of real estate in a luxury
neighborhood pays more taxes than does a larger one in a poorer
area. Even assuming away this objection, there is simply no warrant
for dividing the road into 100,000, 10,000, or even 1,000 ownership
units. Instead, if there are indeed to be 10,000 different
owners of a given street, since there are that many homes with
frontage, a more rational plan is to create a new road owning firm
with 10,000 shares, these to be given to each of the owners, not
according to frontage, but rather based on taxes paid in the past.
Any one person, or holdout, could charge exorbitant prices. If
two of these property owners lived at opposite sides of the same
street, they could effectively shut off all traffic, as in the case of
the blockade in the game of Parcheesi. Since privatization is an
attempt to anticipate the market, or to be congruent to it, and this
sort of ownership pattern has never emerged under free enterprise,
there is no reason to suppose that this would be a viable
plan for transferring streets into the private sector.
5 Gabriel Roth (personal correspondence, dated December 20, 2002)
points out that no one even contemplates privatizing elevators in high rises
by distributing them piecemeal, one floor at a time divided by all the occupants
of each floor. Not only are elevators not privatized in this manner, no
one would think, either, of returning the entire elevator to the private sector
apart from the building in which it is located.