Responding to criticisms of road privatization

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In a recent post about a criticism of the privatization of roads, I received a number of comments by “emilchoski.”  Welcome to the site, Emil, and instead of answering in the comments section, I figured I would write an entire post to go through each point since the critiques brought up are typical and I want to reach a more general audience as opposed to just Emil.

Roads are not like other products. Roads are like oil. When gas prices go up, the whole economy suffers. Similarly, if a highway owner decided to raise prices, the whole community relying on that road would suffer, and really would have no recourse other than fly helicopters to work, or more likely suffer the cost.

Should gas prices or the oil industry as a whole be socialized as the roads are?  Food prices can have the same effects as well.  Should the food industry be socialized?

Emil is assuming that if the highway were too expensive, the only other alternative would be to fly.  Flying would be an option, however, why is rail travel not considered an option?  Furthermore, the assumption that there are no alternative highways is being made.  I know right now, I could take several ways to get to work every day.  I choose the one I do now because it is the quickest.  If the roads were privatized and a highway owner raised the prices of using his road, people would find alternate routes.

Also, it is incorrectly assumed that tolls would be the way that road owners would collect money.  There are numerous other alternatives such as selling advertisement space or maybe the local businesses that are located on the road would pay for the road in order to entice people to patronize them.

Finally, people may decide to carpool to save money, lowering the volume on the road, lowering profits.

Free markets are not necessary where there is no possibility for competition. This is why I see no point to making roads private. This is the type of thing that governments do when they’re really in the dumps.

It is simply not true that there is no possibility for competition.  There is air travel and rail travel, not to mention the competition between road owners.

This is the type of thing that governments do when they’re really in the dumps.

Is there any truth to this claim?  I do know that originally in the United States, roads were privately owned.  The government came later and took control of them.

No, there is no competition when it comes to roads. There is a single highway connecting Philadelphia and New York. It’s called I-95. You make I-95 private, and everyone who doesn’t want to take it will be stuck taking the local roads, which will take 2-3 times as long. You can’t build a parallel highway next to I-95 because its surrounded by private land, and because it would be downright silly.

I happen to live in the Philadelphia area.  And first of all, if I were to make a trip to New York, there’s no way I’m driving.  I would take a train, like most people do.  There’s one instance of competition.

Maybe more importantly, I-95 is not the only major road in the area.  According to Google Maps, right now it would take 1 hour 50 minutes to drive from Philadelphia to New York using I-95.  Using a combination of the New Jersey Turnpike and I-95, it would take 1 hour 44 minutes.  Taking I-476 and I-78 would take 2 hours 32 minutes.  Cutting across New Jersey to take the Garden State Parkway would take 2 hour 38 minutes.  Clicking on the “Avoid Highways” box, Google gives me three routes to choose from, ranging from 2 hours 48 minutes to 2 hours 51 minutes.  While taking I-95 may be the best alternative, there are other major roads that you could take to get to New York.  They may add some time, but it’s not the two to three times as long as you claimed.

And remember, this is using Google Maps time.  Good luck driving to New York in two hours!

Roads are not like cars. There are several companies competing to make better cars. There are not several “road companies” competing to make a better road. I mean its just common sense.

Why wouldn’t there be competing road companies?  Maybe one company figures out there are materials that make the surface of the road more robust, reliable, and smoother?  Maybe one road company figures out a way that allows drivers to travel at higher speeds while still being safe?

Use some imagination and critical thinking.

But I don’t think common sense has any priority in libertarian ideology.

Statements like this weaken your argument and make it look to me as though you’re not actually interested in rational discussion.

Please explain how one would go about building a competing road. How would I convince investors that there will be profit.

One of the problems that we face with privatizing roads is how badly the government messed up building the roads in the first place.  It’s much more efficient to live in more densely populated areas with more methods of mass transportation so that many people could travel in one vehicle as opposed to one person traveling in one vehicle.  This doesn’t mean that the problems couldn’t be solved, but it makes it more difficult.

Maybe you’re thinking that you can’t build a competing road because you’re thinking that you’re only in urban settings.  There is a lot of open land all across the country.  And even in urban settings, why can’t you build over or under the existing roads?  That would be expensive, but like my article about Amazon’s Prime Air, expensive and not cost-effective now doesn’t mean expensive and not cost-effective in the future.

How would I convince investors that there will be profit.

I don’t know, I guess you’d write up a business plan or something and present it to them.  This is no different than any other business that you’d like to start up.

How will I seize all the private property necessary to build it?

It’s interesting that you used the term “seize.”  I guess that you’re okay with a government agent knocking on your door and saying, “Under the rules of eminent domain, this is now our property.”

You would acquire the land you need to build your road the same way you would acquire land for any other purpose that is already owned: you buy it.

Roads should not be part of the market. Roads are what the market sits on top of. They are the foundation. A foundation for something has to be solid and secure and it can’t keep shifting. Take as an analogy the island of Manhattan. It is a giant slice of bedrock, solid enough to build the tallest buildings in the world. But on top of it, is some of the highest concentration of free market economic activity. Now if it wasn’t for the bedrock, no one would bother in investing in construction there, because any day the foundations could shift.

You are claiming that the foundation of free market capitalism is socialism.  That doesn’t make any sense.

And also, there’s not much free market economic activity happening in New York.

Realistically speaking, there probably won’t be much difference between a privately run road a government owned road. At least not in the short term. But the question is, if the privately owned and publicly owned road operates same, why would you choose private? Why should something that millions of people depend on daily be in the hands of a single private entity, rather than a government accountable to its citizens. Why should an individual hold so much unchecked power over the lives of so many people, even if they don’t abuse it. Wouldn’t this be a form of tyranny, in a sense. Tyranny by property rights, as opposed to government power? It doesn’t seem appropriate does it? Even if on the surface there isn’t any immediate difference.

Private and public roads likely wouldn’t operate the same way.  I would choose private because it is likely to be cheaper and better.

You are basing this argument on a false premise: that one individual would own the roads if they were private.  Why do you think that there wouldn’t be multiple road companies?  And why do you contradict yourself in that you’re terrified of a single private owner but not worried about a single government owner?  Both are monopolies, why do you consider one so much worse than the other?

Government owned infrastructure allows for greater centralization, which allows for things like standardization and coordination. Take long distance phone calls before AT&T. Every private phone company operated in a unique way, and had a different set of standards. They were not interoperable. It wasn’t until the government allowed AT&T to run a monopoly and standardize the system that it became possible to call NY from CA. Such large scale efforts will never happen if all you have is free markets. You need centralized power to set standards and coordinate.

This is not true and there is plenty of evidence out there right now that points against you.

It’s called spontaneous order and this video called “I, Pencil” does a great job of showing it.

Coordination works in the free market without any direction.  What government agency made sure that your debit card works in every ATM machine?  As an engineer, I use codes and standards every day that were developed by private organizations, namely the ASME (American Society of Mechanical Engineers).  Claiming that the phone companies would standardize their processes without the help of government is the fallacy of denying the antecedent.

I reference this book a lot, but I really think that anyone who’s ever thought about road privatization should read it, whether they are for or against it.  I highly recommend you take a look at it: The Privatization of Roads and Highways by Walter Block.  Click that link for a free PDF copy.

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thorax232
Guest

Roads. The one issue that makes every free market supporter go, “….uuugggghhh really??” There are some really tough issues you one could be criticizing, roads are just…too easy.

Rollo McFloogle
Guest

You’re right, but at the same time, many people still think private roads are a crazy idea. It may be a simple concept, but it’s still one that we need to win minds over on.

emilchoski
Guest
In response to “You are claiming that the foundation of free market capitalism is socialism. That doesn’t make any sense”, I’ll put that in a different way. The foundation of free market capitalism is a relatively wealthy society, with enough social safety nets that allow people to take risks. Say for example, an employee of a company wants to quit his day job and start his own business. Things like ObamaCare help people find cheap insurance while they make these types of transitions, and the laws included in the ACA prevent them from having to worry about going into bankruptcy… Read more »
slappyjones2
Guest

Wow, did you just make that up on your own?

Rollo McFloogle
Guest
The foundation of free market capitalism is a relatively wealthy society, with enough social safety nets that allow people to take risks. This is a completely incorrect view of capitalism. Free markets require people to have the freedom to associate as they choose and engage voluntarily in transactions. That is all that is required. One or both parties don’t even actually need to own any property (other than their bodies), they can trade their labor in a transaction. I mean this with all sincerity, but any correct deductions that you may make from your foundation of capitalism is purely by… Read more »
emilchoski
Guest
The first criteria you mention is all but theoretical. Only in principle is it possible to create a perfectly “free” society where all transactions are voluntary. Coercion and imbalance of power almost always ensue. Take for example contracts of adhesion. We are constantly asked to sign 100-page long contracts for things as simple as downloading an app onto our phones, or signing up for electricity. How voluntary are those transactions where almost all providers of these basic services have the same contracts, mostly written in their favor. No one has time to read every contract they are handed, and very… Read more »
Rollo McFloogle
Guest
Only in principle is it possible to create a perfectly “free” society where all transactions are voluntary. Where did I say that a perfectly free society could exist? How voluntary are those transactions where almost all providers of these basic services have the same contracts, mostly written in their favor. You are casually ignoring the fact that the government’s intrusion into the market adds complexities like this and prevents others from entering into the market to compete with better products or services. No one has time to read every contract they are handed, and very few people will actually understand… Read more »
emilchoski
Guest

No I’m speaking from personal experience as well as knowledge of friends who run businesses who have used the health exchanges to obtain insurance.

As far as corporate profits going to the top, and never the bottom, I think that’s common knowledge. There are some business that do an ok job of providing benefits, such as Whole Foods, Starbucks, but I’m guessing this tends to be an exception not the rule.

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