The Road to Freedom
This article is excerpted from The Privatization of Roads and Highways.
Question: Suppose the state is taken out of the equation; let’s presume private road owners can write and enforce the rules of the road. As it is in their best interest to ensure safety, the roads will be used more and therefore become more profitable. Given that this is the case, do you speculate that road rules will become more strict or less? Do you think drunk driving, speed limits, and seat belt laws would be scrapped by these private road owners — and they would instead institute a contract agreement with each driver stating that if they cause death, injury, or property damage to other travelers on these private roads, they must take full responsibility for restitution?
Walter Block: It is difficult for me to speculate as to how a free market in roads would actually operate. I’m a theoretical economist, not the entrepreneur to whom such questions would be better addressed. However, with that proviso, here are my thoughts. I speculate that some road owners would have more strict rules, others less strict, some slightly lenient, and others very lenient. Then, the market would sort things out. That is, possibly, consumer desires would impel road entrepreneurs into either a more or less strict stance — I don’t know which. Or, possibly, such diversity would endure. In some venues (bars, hockey) there are less strict rules; in others (tea parties, basketball) there are more strict rules. In hockey, for example, they allow and even encourage the players to fight; this is strictly banned in basketball. Some road owners might go one way on this, others, the other way, and the market (the blessed market, the "magic of the marketplace") would confer greater profits on those who supply consumers with a better product (rules of the road in this case) at a lower price. I am trying to apply economic analysis as it is commonly applied to ordinary issues (bubble gum, beans, beer) to an area (roads) to which it is unusual to do so.
Question: I have heard it argued that privatizing roads will lead to cleaner air. Drivers having to pay the market price for roads would find it more costly to drive, prompting a shift to bus, trolley, train, and car-pooling. I realize this is crystal-ball gazing, but do you foresee an increase in driver cost, or a decrease? If, as I’m sure you will suggest, the bottom line decreases making driving more accessible to all, how will you answer the greens who will condemn such an assault on planet earth?
Walter Block: I foresee a decrease in cost in road use compared to now. This is the ordinary expectation when we privatize things like garbage removal, postal services. There is even a general "rule of two" promulgated by Steve Hanke, E.S. Savas, and others: it costs the public sector roughly twice as much to do anything as the private. I’d be amazed if roads were an exception.
Air pollution, with one exception to be mentioned below, is entirely a separate issue. The reason we have it at all is due to a government failure to uphold private property rights, in that pollution is merely and simply an uninvited border crossing, a trespass of dust and other particles, as it were. So, air pollution could rise, fall or stay the same as we moved to road privatization. It all depends upon the state upholding, or failing to uphold, private property rights in this domain.
Dr. Block [send him mail] is a professor of economics at Loyola University New Orleans, and a senior fellow of the Ludwig von Mises Institute. He is the author of Defending the Undefendable and Labor Economics From A Free Market Perspective. His latest book is The Privatization of Roads and Highways.