This post originally appeared on FEE
On an ill-timed and ill-fated trip during rush hour today, I was reminded of something I’ve wanted to write about: one of most practical reasons for having private ownership of roads. Moral and ethical reasons aside – and it could be strongly argued that using forcibly appropriated funds (i.e. taxation) to build infrastructure is unethical and morally indefensible – government management of roads is just ridiculously inefficient.
There is a simple way to diminish the impossible congestion at rush hour: charge people more (or at all) to use the roads at those times. This is exactly the reason why subway systems (like the London Underground) charge significantly higher rates during “peak times,” and why Uber institutes “surge prices” during excessively busy times.
This entices people to arrange their schedules or commute so that they are not traveling during the busiest times, thereby reducing traffic. In the case of Uber, the surge prices also serve to incentivize as many drivers as possible to work.
Higher prices reduce traffic by encouraging those who don’t have to be traveling at that time to travel later, or to use other means of transportation. This leaves only those who have no other options available using the train or Uber. This same principle could be easily applied to freeways and all roads.
Tolls and Taxes
The usual answer is: tolls. But tolls are not market prices. They do sometimes work to ration road space, but they aren’t necessarily rational. They end up serving not economics, but politics; just another way to extract money from the people.
Also, roads are considered “publicly owned” (which in reality just means they are coercively controlled by the government). People could, correctly, argue that they pay for the roads through their taxes, and so they have as much right to use them as everyone else. They could further argue that these “surge prices” bar them access to the roads, and so they shouldn’t have to pay taxes for them at all. I can also imagine the typical platitudes damning the rich for being able to afford the high prices, while poorer people are forced out.
These are the problems that arise when things are effectively owned by no one (as is the case with public ownership) and when people do not have control over where their dollars are spent. People shouldn’t have to pay taxes for roads that additional charges effectively prevent them from using. Additionally, when something is touted as being owned by “everyone,” then no one really has the right to prevent some of that group from using it.
So the arguments against having higher prices for road use during rush hour are completely valid – so long as the roads are coercively controlled and operated by the state.
A Multiplicity of Forms
These problems would be solved, however, were the roads made private. Since roads have already been built, some method would have to be established for turning them over to private hands. Whether that would be through some sort of auctioning or homesteading is debatable.
Highways and major roads would probably end up being owned in sections (or in entirety, but that may be prohibitively expensive) by private companies. The companies would make money off them by charging prices or membership fees. They could also collect maintenance fees from major businesses on their route.
When there is money to be made in something, entrepreneurs figure out a way to make it a reality.
Residential roads, on the other hand, could be owned collectively, with each resident owning a stake and having a say in the operation. I could also imagine many, if not most, non-highway roads being owned and maintained by the businesses they service. For example, a Walmart would pay for the local roads leading to it because they want their customers to have safe and easy access to their store.
Nor would it necessarily be the case that roads would be priced at all. Think of the Google search engine: it is unpriced, free for everyone. It is a revenue generator through advertising. It is even possible that road entrepreneurs would pay drivers through coupons or other incentives, as a way a boosting ad revenue, just as websites do.
In other words, private roads could take many forms, but we can rest assured that spontaneous order will take care of it. Well-maintained roads are a necessity for modern society which means that there is money to be made in providing them. When there is money to be made in something, entrepreneurs figure out a way to make it a reality.
Introduced on a national scale, this could even have the effect of reinvigorating passenger train service and induce railway expansion in the US. It could even push inventors and entrepreneurs to create a whole new mode of transport–maybe something like flying cars or “It” from South Park (let’s hope that whatever it is is just a bit better ergonomically designed).
If we eliminate paradoxes and contradictions like public or government “ownership,” then we will allow people to fix problems associated with those things. Let the market and economics reign supreme and let entrepreneurs solve the issues that present themselves. Freedom will always win.