Private roads

There are no fare on private roads

The stowaway effect is often cited as an argument by supporters of the idea, in particular Murray Rothbard, as an excuse to privatize the road network: since traffic congestion results from a request for transport infrastructure, they can be perceived as any other shortage - in this case, a shortage roads, alleys, exits and other infrastructure. Considering the market price formation mechanism a more reasonable method of satisfying demand than central planning, Peter Samuel in his book compares American traffic jams with Soviet lineups in stores ^[1] :

“The failure of the communist model in Russia was exacerbated by a constant shortage of stores. Empty shelves of supermarkets and convenience stores, lines of visitors who stood idle for hours every week for no apparent purpose became the embodiment of system errors, and at the same time a source of great personal discontent and even rage. Communism failed , because prices were not mobile enough to match supply and demand, because the main purpose of the store was distribution, not earnings - since all revenues went to the state treasury and They weren’t used to improve the assortment or quality of service. Today, in the supposedly “capitalistic" America, we are experiencing the problems of communism - the provision of irresponsible monopoly bureaucracy for services that are not priced on most of our roads. Our symbol of shortages, our counterpart to Soviet lineups in stores , there are daily traffic jams on motorways. There are no market prices for trips during rush hours. There is no cash flow directly from users of the road to managers in order to either use the existing Sliding ability of the most reasonable way to meet the needs of drivers using it or adjust it for their needs. "

Original text

"In Russia communism's failure was epitomized by constant shortages in stores. Empty shelves in supermarkets and department stores and customers in line, wasting hours each week, became the face of the system's failure, as well as a source of huge personal frustration, even rage Communism failed because prices were not flexible to match supply and demand; because stores were bureaucracies, not businesses; and because revenues went into a central treasury and did not fuel increased capacity and improved service. We in supposedly capitalistic America suffer communism - an unpriced service provided by an unresponsive monopolistic bureaucracy - on most of our highways. Our manifestation of shortage, our equivalent of Russian lines at stores, is daily highway backups. There is no price on rush-hour travel to clear the market. There is no revenue stream directly from road users to road managers to provide incentives either to manage existing capacity to maximum consumer advantage or to adjust capacity to demand. "

Privatization Stimulates Infrastructure Development

According to B. G. Meyer, “It is obvious that an increase in the number of toll roads has led to an improvement in their general condition. ^[2] ” Street Smart claims that Brazil saves up to 20% and Colombia up to 50% on the transfer of road maintenance to the private sector ^[3] .

Private crime below

Bruce Banson believes that privately owned roads will allow local residents to prevent the development of crime, exercising their right to prevent undesirable elements ^[4] . He notes that St. Louis Private Avenue had better crime rates than adjoining public streets ^[5] . The Market for Liberty also claims that private roads will be better managed, as their owners will be able to concentrate on real crime, rather than harmless offenses ^[6] :

A private corporation which owned streets would make a point of keeping its streets free of drunks, hoodlums, and any other such annoying menaces, hiring private guards to do so if necessary. It might even advertise, "Thru-Way Corporation's streets are guaranteed safe at any hour of the day or night. Women may walk alone with perfect confidence on our thoroughfares." A criminal, forbidden to use any city street because all the street corporations knew of his bad reputation, would have a hard time even getting anywhere to commit a crime. On the other hand, the private street companies would have no interest in regulating the dress, "morals," habits, or lifestyle of the people who used their streets. For instance, they wouldn't want to drive away customers by arresting or badgering hippies, girls in see-through blouses or topless bathing suits or any other non-aggressive deviation from the value standards of the majority. All they would ask is that each customer pay his dime-a-day and refrain from initiating force, obstructing traffic, and driving away other customers. Other than this, his life-style and moral code would be of no interest to them; they would treat him courteously and solicit his business.

Private roads attract small business

Mutualist Kevin Carson considers transportation costs to be a natural negative cost of production associated with an increase in scale. He believes that government subsidies to infrastructure contribute to the dominance of corporations in the economy, making large and centralized corporations artificially more successful ^[7] . Carson also emphasizes that in some cases centralized production did not appear before the development of roads funded by taxpayers and other state infrastructure projects ^[8] . As transportation costs increase disproportionately with the size of the firm, according to Carson, natural barriers will be created in the free market for corporate growth and expansion, and small businesses will have a number of natural advantages.

In most of the Earth’s territory, the landscape does not involve the construction of a large number of parallel highways, which turns roads into a natural monopoly. Krueger states that this "will lead to an extremely irrational expenditure of land resources." In the case when there is only one road between points A and B, the main advantage of privatization disappears - competition. In the absence of regulation, the owner of such a private road will be inclined to set a sky-high monopoly price, which will result in huge profitability for the owner, however, the benefit for other participants in such a transaction is doubtful. The initial lump-sum payment can cover the final overthrow of the monopoly, however, distribution difficulties arise here, since income from using private roads can extend to the entire region, but only a small part of the region’s population, which will bear the entire load, will need to use this particular road. There are also difficulties in determining the current value of the road in the long term. So, for example, 407 ETR (a road in the Canadian province of Ontario, which is in concession) was leased for three billion, and subsequently was estimated at 10 billion ^[9] .

While alternative local roads and other modes of transport may provide some competition, in other cases this is inappropriate, especially for goods and goods.

As a counter-argument for this point of view, the fact that the only highway connecting two points will still be forced to compete with trains, planes and other roads is usually cited. ^[10]

Toll road

1. ↑ http://www.cato.org/pubs/pas/pa-231.html
2. ↑ https://web.archive.org/web/20061215043310/http://www.lp.org/lpn/9801-highways.html
3. ↑ http://www.ncpa.org/sub/dpd/index.php?Article_ID=11223
4. ↑ Benson, Bruce L. (1998). To Serve and Protect: Privatization and Community in Criminal Justice . New York University Press . p. 159.
5. ↑ Benson (1998), p. 85
6. ↑ Tannehill, Linda and Morris. The Market for Liberty . p. 61.
7. ↑ http://www.thefreemanonline.org/featured/the-distorting-effects-of-transportation-subsidies/
8. ↑ http://members.tripod.com/kevin_carson/sitebuildercontent/sitebuilderfiles/Chapter3.pdf
9. ↑ Alexander, Doug. CPP Investment Board to Buy 10% of 407 Toll Road for About $ 878 Million
10. ↑ Walter Block. The Privatization of Roads and Highways . Ludwig von Mises Institute (18 August 2014). Date of treatment September 28, 2019.