The Privatization of Roads and Highways - Ludwig von Mises Institute

30 The Privatization of Roads and Highways
sity of staggering. Since this is precisely what the main roads
desire, it seems that some mutually advantageous agreement
could feasibly be made.
Another possibility is that the main roads, better able to utilize
the staggering capabilities which intersection ownership
confers (and perhaps better able to utilize the other advantages
bestowed upon their owners) will simply arrange to purchase the
intersections outright. If so, the pattern would change from one
where the side street corporations owned the intersections to one
in which these came under the possession of the main street companies.
Still another alternative would be integration of ownership.
We have no idea as to the optimal size of the road firm (single
block, single road, continuous road, small city, etc.), so thoughts
in this direction can only be considered speculative. With regard
to the ease of coordinating staggered light systems, however, it
may well be that larger is better. If so, there will be a market tendency
for merger, until these economies are exhausted.
Let us recapitulate. We have begun by indicating the present
mismanagement of roads by government. We have claimed that
improvements, given the status quo of government management,
are not likely to suffice. We have briefly explored an alternative—the
free market in road ownership and management—
and shown how it might deal with a series of problems, and
rejected some unsophisticated objections. We are now ready to
examine in some detail how private road owners actually might
compete in the market place.
HOW PRIVATE ROAD OWNERS MIGHT COMPETE
On the rare occasions when the feasibility of private road
ownership has been considered by mainstream economists, it has
been summarily rejected, based on the impossibility of competition
among private road owners. Seeing this point as almost intuitively
obvious, economists have not embarked on lengthy chains
of reasoning in refutation. Thus, says Smerk, rather curtly, “High-