The Privatization of Roads and Highways - Ludwig von Mises Institute

Free-Market Transportation: Denationalizing the Roads 29
even 4/5) of green light time for itself, selling only the remaining
small fraction to the intersecting side street. But much the same
result would ensue if the smaller road owned the common intersections!
Although the relatively lightly traveled road company
might like to keep the lion’s share of the green lights for itself, it
will find that it cannot afford to do so. The more heavily traveled
street, representing a clientele willing and able in the aggregate
to pay far more for green light privileges, will make it extremely
tempting for the small street owner to accept a heavy payment,
in order to relinquish most of its green light time. In other words,
the customers of the main street, through indirect payments via
the main street owner, will bid time away from the smaller number
of customers using the minor street. This principle is well
established in business, and is illustrated every time a firm sublets
space, which it could have used to satisfy its own customers,
because it receives more income subletting than retaining the
premises for its own use.
The provision of staggered traffic lights (the lights continually
turn green, for example, as an auto proceeding at 25 mph.
approaches them) may present some conceptual difficulties but,
again, they are easily overcome. Of course, there are virtually no
problems if either one company owns all the roads, or if the main
road (the one to be staggered) is continuously owned. The only
question arises when the side streets are continuously owned,
and it is the main avenues which are to receive the staggered
lights. (We are assuming that staggering cannot efficiently be
instituted for both north-south and intersecting east-west streets,
and that staggering is better placed on the main roads than the
side ones.)
Under these conditions, there are several possible solutions.
For one, the main avenues, being able to make better use of the
staggering system, may simply purchase (or rent) the rights to
program the lights so that staggering takes place on the main
roads. The side roads, even as owners of the intersections, would
only be interested in the proportion of each minute that their
lights could remain green; they would be indifferent to the neces-