The Privatization of Roads and Highways - Ludwig von Mises Institute

26 The Privatization of Roads and Highways
have a comparative advantage over governments. For, as we
have seen, if a government fails in this kind of mission, there is
no process whereby it is relieved of its duties; whereas, let a private
enterprise fail and retribution, in the form of bankruptcy,
will be swift and total. Another street company, and still another,
if needed, will evolve through the market process, to improve
matters.
It is impossible to tell, in advance, what means the private
street companies will employ to rid their territories of this threat.
Just as private universities, athletic stadiums, etc., now
enforce rules whose purpose is the smooth functioning of the
facility, so might road owners levy fines to ensure obedience to
rules. For example, automobiles stuck in an intersection could be
registered by the road’s computer-monitoring system, and
charged an extra amount for this driving infraction, on an itemized
bill. 17
4. What Problems would Ensue for Each Street Owned by a Separate
Company, or Individual?
It might appear that the problems are insoluble. For each
owner would seem to have an incentive to encourage motorists
on his own street to try as hard as they can to get to the next
block, to the total disregard of traffic on the cross street. (The
more vehicles passing through, the greater the charges that can
be levied.) Main Street, in this scenario, would urge its patrons,
traveling north, to get into the intersection between it and Side
Street, so as to pass on when the next light changed. The Side
Street management would do the same: embolden the drivers
heading west to try to cross over Main Street, regardless, whether
there was room on the other side. Each street owner would, in this
view, take an extremely narrow stance; he would try to maximize
his own profits, and not overly concern himself with imposing
costs on the others.
17 I owe this point to David Ramsey Steele, of the Department of Sociology,
University of Hull.