The Privatization of Roads and Highways

Let us take a quite different case. An attractive woman sauntering down the street in a miniskirt provides an external benefit. 22 She is a delight to other pedestrians, yet she is unable to charge them for these viewing pleasures. 23 The recipients, according to the theory, however, are the “free riders,” who benefit without paying their “fair share” of the costs. Ought they to be forced to pay? Although examples cited by the advocates of the view that free riders ought to be made to pay for benefits received are usually far more sober, the miniskirt case is perfectly analogous. In all cases, the so-called free rider’s benefits come to him unsolicited. If it is ludicrous to insist that he pay for an uninvited view of a woman’s legs, it is equally so to insist that he be charged, via tax payments, for the losses accompanying “transport of all types.”

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 stock. Private enterprise, too, would “fail” if it were prohibited from charging a price for services rendered. 43

This question seems important because we are accustomed to governments determining the rules of the road. Some people even go so far as to justify the very existence of government on the ground that someone has to fashion highway rules, and that government seems to be the only candidate. In the free market, each road owner will decide upon the rules his customers are to follow, just as nowadays rules for proper behavior in some locations are, to a great extent, determined by the owner of the property in question.