The Privatization of Roads and Highways - Ludwig von Mises Institute

78 The Privatization of Roads and Highways
a man and his pregnant wife, rushing desperately to the hospital
for a delivery. Not only is it not true that the bus is doing ten
times the work of the auto; it is by no means clear that the bus is
even doing more valuable work than the private vehicle. William
Vickrey, one of the few economists to clearly apply this point to
transport, criticizes “an aggregate made up of components
which, through happening to have a common physical unit of
measurement, are economically quite disparate.” 46 It is, moreover,
impossible to determine whether the bus or the automobile,
in any given case, is doing more valuable work, in the absence of
a road pricing system which allows them to bid against one
another for scarce road space.
Issue has been taken with this point by Thompson, who holds
that under certain circumstances “an outright ban on automobile
traffic becomes an approximation of and a rational substitute for
a cost-based price.” And the special circumstances? “If it is generally
agreed that the price that would be charged for automotive
access to the Central Business District (C.B.D.) . . . is so great that
no one would pay it.” Thompson reasons: “Whether the demand
for automobile movement was priced out of the core area by
[high prices], the effect is the same.” 47
46Vickrey, “Maximum Output or Maximum Welfare? More on the Off-
Peak Pricing Problem,” p. 305. See also Meyer, “Urban Transportation,” p.
66, who objects to “physical controls” on the ground that “they will not differentiate
. . . between different classes of user and the intensity of different
groups’ desire to use urban highways.” See also, with regard to the heterogeneity
criticism, Harold Torgerson, “Comment [on Brownlee and Heller],”
American Economic Review 46 (May): 262, wherein it is argued that highway
monies ought to be allocated on the basis of necessarily homogeneous “traffic
counts”; Schreiber, Gatons and Clemmer, eds., Economics of Urban Problems,
p. 93, also err in making use of “homogeneous service units . . . in comparing
modes of transportation.” An author who takes account of the
nonhomogeneity phenomena is Winch, The Economics of Highway Planning,
p. 21.
47Thompson, A Preface to Urban Economics, p. 350.