Public Roads

Privatize the roads

Economist Walter Block reminds us that every year more than 40,000 men die on the public roads of the United States, largely because the roads are not privately owned and hence improperly managed. Unfortunately most consider public roads as public goods which the private sector can’t provide. However, the fact remains that most roads were privately owned in the past. By 1800 there were over 60 private road companies in the United States and by 1830 they had built over 400 private turnpikes.

The oft-repeated argument is that private individuals can’t buy off enough land if some turn curmudgeons. There are many possible solutions to this problem. First, there is no necessity that the road should be absolutely straight. One can think of many different trajectories. Second, it is perfectly possible to build a road above the land of the holdout. Third, it is possible to build a tunnel underneath the land of the holdout.

The utter chaos which complete privatization of roads brings to the mind of statists is unwarranted. Profit loss calculations come into play in the case of road order, just like in any other sphere of the economy. The private road owner will decide whether to employ policemen, and if so how many, based on these calculations. If the road rules are too strict, it will alienate many users. If they are too lenient, it will lead to more accidents, and hence, then too, it will be a deterrent. Hence, economic calculation leads to just, reasonable rules on the road.

Privatization of roads will resolve many externalities which are impossible to be dealt with it in a reasonable manner at present-say, pollution. The Government can’t fine thousands of individual automobiles. It is impossible to know whether doing so is costly or beneficial. It might even be a disastrous policy, imposing more costs than benefits.

If the roads were privately owned, individuals would be free to sue the private road owner. The private road owner will ensures that the road is not polluted by imposing anti-pollution regulations, based on profit-loss calculations. Here it is obvious that it is the Government which creates the problem of negative externalities.

The same could be said of the case of street lights. Even if roads were public, street lights could be provided through voluntary contributions (This is one possibility.) The whole problem goes away when the road is private. The private road owners will have every incentive to provide street lights.

Leave a Reply

Your email address will not be published. Required fields are marked *