The Privatization of Roads and Highways - Ludwig von Mises Institute

Free-Market Transportation: Denationalizing the Roads 43
With Roth’s statement, we also come to the spectre of monopoly
and to claims that a private road market must function
monopolistically. Why are such claims made? There are two reasons
usually given. First, indivisibilities—the fact that many factors
of production cannot be efficiently utilized at low levels of
output. A steel mill or automobile factory cannot be chopped in
half and then be asked to produce one-half of the output it had
previously been producing.
Says Mohring, “But indivisibilities do exist in the provision of
transportation facilities. Each railroad track must have two rails,
and each highway or country road must be at least as wide as the
vehicles that use it.” 32 In similar vein, says Haritos, “To get from
A to B, you need a whole lane, not just half, for the full distance,
not half of it.” 33 And, in the words of Peter Winch, “indivisibility
of highways makes it impractical to have competing systems of
roads, and the responsible authority must therefore be a monopoly.”
34
We do not believe that the existence of indivisibilities is
enough to guarantee monopoly, defined by many as a situation
in which there is a single seller of a commodity. 35 There are indivisibilities
in every industry, and in all walks of life. Hammers
and nails, bicycles and wheelbarrows, locomotives and elevators,
tractors and steel mills, professors and podiatrists, ballet dancers
and bricklayers, musicians and motorists, ships and slippers,
buckets and broomsticks, none of them can be chopped in half
(costlessly) and be expected to produce just half of what they had
been producing before. A railroad needs two rails (with the
32Herbert D. Mohring, “Urban Highway Investments,” in Robert Dorfman,
ed., Measuring Benefits of Government Investments (Washington, D.C.:
Brookings Institution, 1965), p. 240.
33Haritos, “Theory of Road Pricing,” p. 56.
34Winch, The Economics of Highway Planning, p. 3.
35For an explanation of “monopoly as a government grant of exclusive
privilege, see Rothbard (1971), pp. 586–619.