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.

Another objection against a system of private roads is the danger of being isolated. The typical nightmare vision runs somewhat as follows: A man buys a piece of land. He builds a house on it. He stocks it with food, and then brings his family to join him. When they are all happily ensconced, they learn that the road fronting their little cottage has been purchased by an unscrupulous street owning corporation, which will not allow him or his family the use of the road at any but an indefinitely high price. The family may “live happily ever after,” but only as long as they keep to their own house. Since the family is too poor to afford a helicopter, the scheming road owner has the family completely in his power. He may starve them into submission, if he so desires. This does indeed appear frightening, but only because we are not accustomed to dealing with such a problem. It could not exist under the present system, so it is difficult to see how it could be solved by free-market institutions. Yet, the answer is simple: no one would buy any plot of land without first insuring that he had the right to enter and leave at will.

This does not mean that were thoroughfares placed in private hands that the death toll would be zero. It would not. But, at least, every time the life of someone was tragically snuffed out, someone in a position to ameliorate these dangerous conditions would lose money, and this tends, wonderfully, to focus the minds of the owners. This is why we do not have similar problems with bananas, baskets, and bicycles, and the myriad of other goods and services supplied to us by a (relatively) free enterprise system.

Do not be mislead by the oft made contention that the actual cause of highway fatalities is speed, drunkenness, vehicle malfunction, driver error, etc. These are only proximate causes. The ultimate cause of our dying like flies in traffic accidents is that those who own and manage these assets supposedly in the name of the public—the various roads bureaucrats—cannot manage their way out of the proverbial paper bag. It is they and they alone who are responsible for this carnage.

Second, the market already has developed digital cash, similar to a prepaid long-distance card. Just as you can now purchase long-distance telephone minutes anonymously at convenience stores, you would be able to purchase toll-road miles with cash, and stick the magnetic miles card under a fender. Road owners and transaction-management networks would never have to know who you are. This technology is already in widespread use. Only if you prefer to drive on credit, and be billed monthly by a network management provider, would there be any possibility of an electronic record of your whereabouts. And there would be a market even for this—for example, many young, single women, such as college students and young professionals, might desire that someone, somehow can always find out where they are.

And what about Cirrus et al. knowing your whereabouts? This possible privacy problem is already being solved by the market. First, most private roads likely would not even charge a toll. Streets in business districts would be maintained by local merchants, who would have incentive to keep the roads in good order and to allow free access. Residential streets, for their part, would not be so highly traveled that the residents would have an incentive to charge tolls. Hence, there would be no road sensors recording vehicles’ movements in business and residential areas.

We have what we have. Abolishing government is the way to improve what we have.