The Privatization of Roads and Highways - Ludwig von Mises Institute

40 The Privatization of Roads and Highways
specifications of quality and dimensions at any given place, then
neither can steel.
But if we reverse matters, and use the word “place” in such a
way that two different things (two different pieces of steel, with
different specifications) can exist in one place (side by side, or
close to each other) then steel may indeed be produced to different
specifications at any given place, but so may roads! For many
different roads, through the technique of multiple decking, can
flow along the same pathway, or exist in the same “place.”
Another objection charges that competition among roadway
entrepreneurs would involve wasteful duplication. Says George
M. Smerk: “[C]ompetition between public transport companies,
particularly public transit firms with fixed facilities, would
require an expensive and undesirable duplication of plant.” 29
This is a popular objection to market competition in many
areas; railroad “overbuilding,” in particular, has received its
share of criticism on this score. However, it is fallacious and misdirected.
We must first of all distinguish between investment ex ante
and ex post. In the ex ante sense, all investment is undertaken with
the purpose of earning a profit. Wasteful overbuilding or needless
duplication cannot exist in the ex ante sense; no one intends,
at the outset of his investment, that it should be wasteful or
unprofitable. 30 Ex ante investment must of necessity, be nonwasteful.
Ex post perspective is another matter. The plain fact of our
existence is that plans are often met by failure; investments often
29Smerk, Urban Transportation, p. 228.
30Even if someone intends, for some reason, to purposefully invest in a
“losing” proposition, we would still deny, ex ante, that he intends to worsen
his position. That people act in order to benefit themselves is an axiom of
economics. If a person intends to lose money through his investment, it
could only be because, by so doing, he thinks he will increase his psychic
income by enough to more than compensate himself for his loss of money.
In short, he is engaging in charity.