The Privatization of Roads and Highways - Ludwig von Mises Institute

62 The Privatization of Roads and Highways
block in half the cases. And the greater the number of prohibited
turns, the greater the difficulty in maneuvering. In New York
City, for example, it is illegal to make left-hand or right-hand
turns on 42nd Street during rush hours. Thus, many (perhaps
most) motorists have to go several blocks out of their way to
reach their destinations. Clearly, turn limitation can actually add
to the already great use of the streets during rush hours.
How would the one-way versus two-way street conflict be
handled under private ownership? It is not possible to be specific,
but we can say with absolute confidence that the competition
inherent in the market will ensure that road entrepreneurs
will be guided by customer preferences. Let us suppose, as an
example, that the Jones Road Company insists upon maintaining
Jones Road as a one-way street, despite its customers’ overwhelming
desire for the convenience inherent in a two-way
street. The Jones Co., clearly, will not earn as much profit as it
would otherwise have done. Marginal tenants and storekeepers
will move to other streets, where their wishes are more nearly
satisfied. The Jones Street addresses will become less popular for
potential customers as well.
It might well happen that, while the local inhabitants prefer
a two-way street, those who are just passing through would
favor unidirectional traffic. But this case presents no difficulties
not already encountered by entrepreneurs faced with customers
of nonhomogeneous tastes. The installation of smoking and
nonsmoking sections has already solved similar problems in
industries as disparate as airlines, restaurants, theaters and
movie houses. 24 In like manner, there is every reason to expect
24 As can be expected from our analysis of the differential incentives
involved in government and private enterprise, it was the latter that first
initiated this response to differential customer desires, and which continues
in the forefront of consumer satisfaction. In contrast, the response of governmental
agencies has been to prohibit smoking, thus satisfying one segment
completely at the expense of the other.