The Privatization of Roads and Highways - Ludwig von Mises Institute

374 The Privatization of Roads and Highways
Inadvertently, perhaps, Mohring provides evidence for the
fact that private-enterprise road operation is very robust. He
states:
the California Private Transportation Company (CPTC) built an
expressway in the median strip of heavily traveled State Route
91 (SR 91) which connects Orange and Riverside Counties in
Southern California. Fearing monopolistic excesses, the California
Department of Transportation (CalTrans) attached strings to
the right to build SR 91. It required lower—initially zero—tolls
for vehicles with more than two passengers and limited the rate
of return that CPTC may earn. 41
The fact that a private enterprise, CPTC in this case, could
even contemplate remaining in business under these very onerous
conditions is ample testimony to its ability. At the best of
times, it is difficult for entrepreneurs to compete with government;
for the latter can give away their product for free, and
finance their losses out of tax revenues, while this option is not
open to the former. Can you imagine if there were government
restaurants where meals could be had for free, and still private
providers were able to turn a profit? Surely this would constitute
strong evidence for the viability of the one, and the absence of
such for the other.
Another difficulty with Mohring’s presentation is that he
supports the notion that CalTrans “feared monopolistic
excesses.” What is this other than the pot calling the kettle black,
when the former, but not the latter, is of that color? If there is any
“monopoly” in this scenario, it is surely CalTrans, not CPTC. It is
CalTrans, not CPTC, that can endure in business even if rejected,
totally, by consumers. It is CalTrans, not CPTC, that can force
travelers to finance it through taxation. It is CalTrans, not CPTC,
that is prevented from bankruptcy, no matter how poor a job they
do. It is CalTrans, not CPTC, that can manage its roads so that
people die like flies on their premises, without any necessary
41 Ibid., p. 162.