Every major urban area in the United States is facing a similar dilemma. Transportation infrastructures are decades old, at best, but must now accommodate much heavier volumes of traffic than originally intended. Road problems never are really corrected and what repairs their “public” owners manage are often slight and frequently run over-time and over-budget. New construction tends to lag months behind need and in the interim homeowners and businesses fight over right of way, routes, and access.
The idea of privatizing streets and highways appeals to many people who are becoming more and more frustrated with the perpetual debt, corruption and incompetence that presently exists. The term “privatize” has deservedly fallen into disrepute because of its association with government-protected trusts, but private ownership is intended, in its true, unadulterated form.
Could a system of privately operated roads actually work? The same question might be asked of any field currently dominated by government, such as social security, healthcare, or education. If anything at all has been learned from our experiences with government influence in these areas it is that failure is the norm, where in the private sector success is imperative. Would anyone actually wish to undertake the responsibility of road ownership in a for-profit environment? Certainly it is beyond dispute that people need roads, and the entire system of free enterprise is patterned after just such a requirement. Without need, no one would bother supplying anything. It is exactly because Americans need roads that entrepreneurs would be willing, and better able, to invest in them, and the resultant competition would insure that it be done right.
Privatization would not necessarily turn the country into one big turnpike. Toll roads are merely one of an indeterminate number of solutions the free market would inspire were streets and highways to be transferred to private hands. Ultimately, the market would determine the best way to provide the best service to customers, at the greatest convenience. Exorbitant charges would not be inevitable under a private road system either; many enterprises pass on virtually no expenses to consumers despite the incredible expenditure necessary to provide their services. Broadcasting is an obvious example. No one offers up their credit card or writes a check every ten minutes while listening to the radio or watching television. Advertising pays for these, and the only “fee” customers face is the cost of a TV or stereo. Come to think of it, we are charged for broadcasting—public broadcasting. (Ironically, this is not unlike how road taxes work—you pay whether you use it or not, and those who use it the most get subsidized by those who use it the least.)
The beauty of capitalism is that it allows businessmen to find what consumers want most—determined by a vote at the cash register—and competitors in their attempts exceed that success.
It has been suggested that market principles could not properly regulate road ownership because one person or company would own all the roads. But under a system of privately operated roads we would not be simply shifting responsibility to some road management corporation granted monopoly-status by the state. Competition means non-coercion. The only legitimate roles for the government would be transferring domain and title by way of negotiated contracts, taking the money (which ideally would be given back to the taxpayers), and arranging for courts to settle any disputes.
It is possible that, assuming no one else entered the bidding, one agency could wind up owning all the streets—but not very likely. A glance down any urban area’s main thoroughfares shows thousands of businesses that are accessed from streets essential to their livelihood. When facing the fact that the roads outside their shops will no longer be funded by the state these supermarkets, car dealers, fast food joints, and strip malls will quickly purchase and begin sustaining those roads themselves. The last thing they would want would be to allow their roads to fall into the hands of anyone that might raise prices high enough or allow conditions to deteriorate enough to turn away customers.
The only way for a company to procure and maintain the entire road system would be by offering a superior product at a lower price, then buying up the road-properties of less-efficient competitors through voluntary acquisition. This would certainly be good for consumers in the short term, but even fears that an eventual monopoly could then “force” users to pay above-market costs are groundless. If drivers became displeased enough with prices or conditions in a particular city, or a specific part of it, they wouldn’t drive there and the local economy would suffer. With no cars on the road its owner would become very unpopular with local enterprises, who might choose to relocate where driving costs aren’t so high. Those that chose to stay would probably negotiate lower rates on behalf of their clientele. Either way, customer happiness is the overriding consideration.
Another remedy for excessive charges under monopoly control of the roads would be the incentive it created to avoid high prices. Employers would feel the pinch as potential employees negotiated for higher wages to offset their travel costs, and might instead turn to a larger home-based workforce. Others would carpool, and bicycle path development would certainly boom. Filling stations, auto mechanics, and insurance companies, all of whom would suffer financially from a reduction in the overall amount of driving, might support road maintenance and construction themselves to take the pressure off drivers, or even lower the price of their own goods and services. Who knows, a new industry providing affordable light aircraft could even be born! However it worked out, the free market would lesson contention by inducing innovation—and often at the monopolist’s expense.
A pay-as-you-go highway system could also cut down emissions. Supply and demand would dictate that the most heavily traveled roads, cross-town and in-bound expressways, be more expensive to use. When the number of cars on these roadways reached a peak the charge would go up. This increase in price would concurrently decrease demand and limit congestion and pollution by restricting the total number of cars on the road at any one time. Incidentally, fewer cars during rush hour would also mean fewer accidents.
In conclusion, the reason our roads and highways are in such terrible shape, congest so miserably, and spell death for thousands each year is precisely because they are not in private hands. Government, unlike business, has the luxury of ignoring signals of consumer unrest, and therefore has no incentive to improve its products. We will always be paying for roads. The question is whether we will continue to trust our money, maintenance and safety to the same system that routinely brings us inefficiency and corruption, or the free market. Who do you trust to deliver the mail on time, the post office or Federal Express?
The history of mankind shows that when the instruments of force and coercion are removed from men’s relationships they find for themselves the benefits of trade. Businesses need elasticity to meet the ever-changing demands of the economy, and private road owners would have every motivation to adhere to the principles of the free market, or suffer the consequences. Exactly how and in what manner the roads would function without the interference of the state is unimportant. It is enough to know that a multiplicity of entrepreneurs will always rush to satisfy any demand if the opportunity for profit is present. This power of the purse will provide the necessary incentives for owners to improve roads, keep them free of gridlock, and maintain safety, all at the lowest possible cost and the greatest possible convenience.
Clearly, privatization would not usher in a utopian age. But if people could choose the roads they wanted to drive on, from cheapest to best to most direct, customer satisfaction, if not guaranteed, would finally be possible on America’s streets and highways.
01/25/00
1,320 words