The Privatization of Roads and Highways - Ludwig von Mises Institute

376 The Privatization of Roads and Highways
to be room for his answer in his lexicon. Alternatively, suppose
that the benefits are greater than the costs. Again, we are like a
ship without a rudder in terms of determining whether this
means that the good in question should be nationalized by government
or produced by profit-making firms.
If revenues are not great enough to exceed costs, then the
issue is not whether governments or markets should be assigned
to produce the good or service in question. Rather, from the perspective
of promoting consumer welfare, no one should do so.
Let us take a real world example of a case where costs always
exceed revenues: rat burgers, mud pies, and dirty water. Here,
the costs of putting together a factory to produce these items, hiring
the necessary labor, conducting sufficient advertising, will
always exceed the revenues there from, since there will be no customers
for them at any positive price. Should the state then supply
them? To ask this is to answer it.
4. Equity and pricing
Mohring announces himself as having “long supported marketable
peak period road scholarships for the poor” on grounds
of equity, 45 since he thinks that overall “congestion pricing
would, indeed, be regressive.” 46 But bread and movies, too, are
regressive. Surely, the poor spend a higher proportion of their
income on these items than the rich. The clear implication, here,
is either that no charges should be made for these items, e.g.,
everyone should get all the bread and movies he needs “for free,”
or, if there is to be pricing for them, then the poor should receive
a subsidy to help them with these purchases.
But the bread and movies enjoyed by the impoverished in a
relatively free47 country such as the U.S. are the envy, not only of
45Mohring, “Congested Roads,“ p. 165.
46Ibid., p. 164.
47James Gwartney, Robert Lawson, and Walter Block, Economic Freedom
of the World, 1975–1995 (Vancouver, B.C.: Fraser Institute, 1996).