The Privatization of Roads and Highways - Ludwig von Mises Institute

Free-Market Transportation: Denationalizing the Roads 15
the accident toll piled up under his domain. But if he were a private
owner of the road in question, in competition with numerous
other highway companies (as well as other modes of transit
such as airlines, trains, boats, etc.), completely dependent for
financial sustenance on the voluntary payments of satisfied customers,
then he would indeed lose out if his road compiled a poor
safety record (assuming that customers desire, and are willing to
pay for, safety). He would, then, have every incentive to try to
reduce accidents, whether by technological innovations, better
rules of the road, improved methods of selecting out drunken
and other undesirable drivers, etc. If he failed, or did less well
than his competition, he eventually would be removed from his
position of responsibility. Just as we now expect better mousetraps
from a private enterprise system which rewards success
and penalizes failure, so could we count on a private ownership
setup to improve highway safety. Thus, as a partial answer to the
challenge that private ownership would mean the deaths of millions
of people in traffic accidents, we reply, “There are, at present,
millions of people who have been slaughtered on our
nation’s highways; a changeover to the enterprise system would
lead to a precipitous decline in the death and injury rate, due to
the forces of competition.”
Another common objection to private roads is the spectre of
having to halt every few feet and toss a coin into a toll box. This
simply would not occur on the market. To see why not, imagine
a commercial golf course operating on a similar procedure: forcing
the golfers to wait in line at every hole, or demanding payment
every time they took a swipe at the ball. It is easy to see
what would happen to the cretinous management of such an
enterprise: it would very rapidly lose customers and go broke.
If roads were privately owned, the same process would occur.
Any road with say, five hundred toll booths per mile, would be
avoided like the plague by customers, who would happily
patronize a road with fewer obstructions, even at a higher money
cost per mile. This would be a classical case of economies of scale,
where it would pay entrepreneurs to buy the toll collection rights
from the millions of holders, in order to rationalize the system