The Privatization of Roads and Highways - Ludwig von Mises Institute

Congestion and Road Pricing 75
the rush. Instead, they will travel closer to the time of their
actual preference. Thus as traffic capacity increases, there is a
shortening of the rush hour, but very little reduction in congestion
during the new shorter peak-hours of travel. 42
It would appear that the “build more roads” solution to traffic
congestion cannot withstand the force of the “equilibrium”
argument leveled against it. But before we move on, let us consider
a possible criticism. We have already stated that the market,
unlike the government, looks upon “congestion” as a simple case
of excess demand and, in effect, “rolls up its sleeves in glee” in
the anticipation of new and profitable sales. In other words, the
market expands seemingly to meet excess demands. Why then,
when the government tries to “expand” its offering, by building
more roads, does it fail so dismally and apparently so inevitably?
The answer lies in the concept of price: when charges are prohibited,
i.e., when there is a zero price for highway use, then and
only then, attempts to build our way out of congestion are
doomed to failure. As long as highway services are “free”—as
long as people pay for them whether they use them during peak
periods or not, and pay no more for this use than for nonuse—
then the “equilibrium” phenomenon will tend to consign to failure
all attempts to cure congestion by adding to the highway
42 Bish and Kirk, Economic Principles and Urban Problems, p. 139. See also
Anthony Downs, Urban Problems and Prospects (Chicago: Markham Publishing,
1970), p. 176; William Vickrey, “Maximum Output or Maximum
Welfare? More on the Off-Peak Pricing Problem,” Kyklos 24 (May 1971): 305,
Thompson, A Preface to Urban Economics, p. 334; Meiburg, “An Economic
Analysis of Highway Services,” pp. 648, 653; Wohl, “Must Something Be
Done About Traffic Congestion?,” p. 406; and Sam Yagar, “Potential
Demand Response to Improved Roadway Service,” Traffic Quarterly (January
1973): 133. Gabriel Roth, Paying for Roads: The Economics of Traffic Congestion
(Middlesex, England: Penguin) objects as follows: “It is doubtful
whether cities as we know them today could ever be designed to accommodate
all the vehicles that would appear if free uncongested roads were
made available to them” (p. 15).