The Privatization of Roads and Highways - Ludwig von Mises Institute

Road Privatization: Rejoinder to Mohring 357
SIMILARITY?
OBJECTIONS
The main objection to highway privatization we will consider
is articulated in “Congested Roads” by Herbert Mohring. This
article is a frontal attack on the idea of road privatization. This is
somewhat more than passing curious, in that Mohring begins
with an avowal that there is no real intrinsic difference between
road transportation and pretty much anything else:
Economists’ basic theories of price and value—the tools they
use to determine the optimal input combinations and output
levels for a dam, a steel mill, or an orange grove, or to place a
value on any of them—can, without fundamental alteration,
provide the same services for transportation activities. 4
And again:
If the standard tools of microeconomics can be used to understand
the supply and demand for transport, then might it not
be possible to rely on market processes—the method on which
we rely to provide most commodities—to provide transport
services? 5
Even in terms of congestion, he analogizes road services along the
lines of that provided by the department store and the cinema:
The wait for service in a department store is typically substantially
longer during the week before Christmas than in late January.
As for quality of product, as the number of people attending
a movie performance increases, the odds of finding a seat
4Herbert Mohring, “Congested Roads: An Economic Analysis with Twin
Cities’ Illustrations,” in Gabriel Roth, ed., Street Smart: Competition, Entrepreneurship
and the Future of Roads (New Brunswick, N.J.: Transactions Publishers,
2006), p. 142.
5Ibid.