The Privatization of Roads and Highways - Ludwig von Mises Institute

24 The Privatization of Roads and Highways
demand. No less is true of the roadway industry. Just as it is
important for the functioning of the body that dead cells be
allowed to disappear, making way for new life, so is it necessary
for the proper functioning of our roadway network that some
roads be allowed to pass away.
Bankruptcy may serve a second purpose. A business may fail,
not because there is no longer any need for the road, but because
private management is so inept that it cannot attract and hold
enough passengers to meet all its costs. In this case, the function
served by bankruptcy proceedings would be to relieve the ineffective
owners of the road, put it into the hands of the creditors
and, subsequently, into the hands of better management.
3. How would Traffic Snarls be Countered in the Free Market?
If the roads in an entire section of town (e.g., the upper east
side of Manhattan), or all of the streets in a small city were completely
under the control of one company, traffic congestion
would present no new problem. The only difference between this
and the present arrangement would be that a private company,
not the government road authority, would be in charge. As such,
we could only expect the forces of competition to improve matters.
For example, one frequent blocker of traffic, and one which in
no way aids the overall movement of motorists, is the automobile
caught in an intersection when the light has changed. This situation
arises from entering an intersecting cross street, in the hope
of making it across so that, when the light changes, one will be
ahead of vehicles turning off that street. In the accompanying figure
1 (see below) a motorist is traveling west along Side Street.
Although Side Street west of Main Street is chock full of cars, he
nevertheless enters the intersection between Main Street and Side
Street; he hopes that, by the time Main Street again enjoys the
green light, the cars ahead of him will move forward, leaving
room for him to leave the intersection.
All too often, however, what happens is that traffic ahead of
him on Side Street remains stationary, and the motorist gets