The Privatization of Roads and Highways - Ludwig von Mises Institute

14 The Privatization of Roads and Highways
As such, all the usual benefits and responsibilities that are
incumbent upon private enterprise would affect roads. The reason
a company or individual would want to build or buy an
already existing road would be the same as in any other business—to
earn a profit. The necessary funds would be raised in a
similar manner—by floating an issue of stock, by borrowing, or
from past savings of the buyer. The risks would be the same—
attracting customers and prospering, or failing to do so and
going bankrupt. Likewise for the pricing policy; just as private
enterprise rarely gives burgers away for free, use of road space
would require payment. A road enterprise would face virtually
all of the problems shared by other businesses: attracting a labor
force, subcontracting, keeping customers satisfied, meeting the
price of competitors, innovating, borrowing money, expanding,
etc. Thus, a highway or street owner would be as much a businessman
as any other, with much the same problems, opportunities,
and risks.
In addition, just as in other businesses, there would be facets
peculiar to this particular industry. The road entrepreneur would
have to try to contain congestion, reduce traffic accidents, plan
and design new facilities in coordination with already existing
highways as well as with the plans of others for new expansion.
He would have to set up the “rules of the road” so as best to
accomplish these and other goals. The road industry would be
expected to carry on each and every one of the tasks now undertaken
by public roads authorities: fill potholes, install road signs,
guard rails, maintain lane markings, repair traffic signals, and so
on for the myriad of “road furniture” that keeps traffic moving.
Applying the concepts of profit and loss to the road industry,
we can see why privatization would almost certainly mean a gain
compared to the present, nationalized system of road management.
As far as safety is concerned, presently there is no road manager
who loses financially if the accident rate on “his” turnpike
increases, or is higher than other comparable avenues of transportation.
A civil servant draws his annual salary regardless of