The Privatization of Roads and Highways - Ludwig von Mises Institute

Road Privatization: Rejoinder to Mohring 375
financial repercussions. If there is any “monopoly” of the piece,
surely it is CalTrans, not CPTC.
2. Acquiring rights of way for private roads
States Mohring: “if road entrepreneurs are to obtain rights of
way at less than overwhelming costs, action by the state is essential.”
42
However, we have already seen that eminent domain is not
so much cheaper than private action in assembling a land package
as it is better at camouflaging costs. When the government
commandeers a right of way at an artificially low price, the true
cost is not limited to this out of pocket expense, but rather
includes, also, the alternative or opportunity cost suffered by the
owner, which is an intrinsically subjective matter.
3. Sufficient toll revenues
Mohring asks: “How can we tell whether toll revenues would
be great enough to justify publicly or privately financed road
expansion?” 43
One might be excused for thinking that, for him, the question
as to whether a good or service can be provided by markets
depends upon its costs. But here we would run into a problem: if
the costs are greater than the benefits, 44 does that mean that the
state or private enterprise should undertake them? “Neither”
would appear to be the proper answer, but there does not seem
42Ibid. 43Ibid., p. 163.
44We stipulate that these can be meaningful terms despite their inherent
subjectivity. See on this William Barnett II, “Subjective Cost Revisited,”
Review of Austrian Economics 3 (1989): 137–78; James M. Buchanan and G.F.
Thirlby, L.S.E. Essays on Cost (New York: New York University Press, 1981);
James M. Buchanan, Cost and Choice: An Inquiry into Economic Theory
(Chicago: Markham, 1969); Thomas J. DiLorenzo, “The Subjectivist Roots of
James Buchanan’s Economics,” Review of Austrian Economics 4 (1990):
180–95; Mises, Human Action; Murray N. Rothbard, Man, Economy, and State,
2 vols. (Auburn, Ala.: Ludwig von Mises Institute, 1993); idem, “Buchanan
and Tullock’s The Calculus of Consent.”