WorldSys: Austrian Home Study Course, week 24

READINGS: Walter Block’s “Free Market Transportation: Denationalizing the Roads”.

1 What is the lethal menace that Block describes in the beginning of his article?

The nationalized roadway system.

2 Describe the record of government road management in terms of fatalities?

Abysmal. Block walks through some statistics: 46,700 killed on public roads annually, over half a million in a decade, 960 on each year on Thanksgiving, 2,077 children each year under the age of five, and the macabre record goes back to about 1925.

3 Why has the government escaped opprobrium in spite of this performance?

People blame the statistics on everything except government management. I think the wider problem is a failure of imagination. In all the years I’ve spent advocating the cause of liberty, and in all the times I’ve heard people inveigh against the possibility of private infrastructure, I don’t think I’ve ever met anyone who’d given the matter 100 consecutive seconds of thought.

It simply never occurs to most people to seriously think of non-public alternatives, and when pushed on the matter they confabulate a response on the spot.

4 Aren’t road accidents really the fault of bad drivers?

They certainly bear some responsibility, but if people are routinely murdered at a restaurant we blame both the criminal and the lax security of the establishment’s owners.

5 Why should we expect private owners of roads to act more responsibly than government officials?

Because there is a profit and loss system at play in the market which is absent in government. Though there are plenty of able and intelligent bureaucrats and plenty of incompetent and foolish business people, basic economics operates on the latter in a way in which it doesn’t on the former; namely, if you run your business poorly you go out of business.

So the McRoad company must pass the same tests as every other successful enterprise, giving the consumer what is desired better than the alternative. Governments, being almost by definition a monopoly, do not have to meet this standard.

6 What incentives for safety would exist in a private road system?

The same that exist for parking lots or apartment complexes. Having people die using your product is not only bad because you’re losing paying customers but also bad because of the tremendous damage done to your reputation.

7 Wouldn’t private roads involve thousands of toll booths?

No. This objection seems to assume that sections of road would be owned by different people, each of whom would charge for using their particular section of road. But more than likely there would be road companies, just as there are parking lot companies, which would own miles of roadways and charge at some market-optimal rate.

Even if hundreds of people did own roads piecemeal it surely wouldn’t make sense for them all to try and charge for their little bit, because the road would become unusable in short order. Some entrepreneur would see the opportunity to buy tolling rights from everyone and set up a more sensible, orderly toll system which pays out dividends.

But here in 2018 we needn’t worry about this so much. Electronic payment equipment, installed on all vehicles, would make even the problem of hundreds of toll booths less troublesome, automatically charging $.00001 every time we passed one. The same profit and less mechanisms would be at play here as they are elsewhere, driving prices down.

8 Don’t we need the government tool of “eminent domain” for an orderly road network?

No. It’s worth pointing out that even with eminent domain there are limits to where roads can be built, so it isn’t as though this is a panacea. But this objection seems to hinge on there being a necessity to build a totally straight road through some piece of property. This is almost never the case, and it will usually be possible to build around the homestead of a holdout.

The fact that at some price point it will be cheaper to simply blast a path through the nearby mountains puts an upper bound on how unreasonably high a property owner’s asking price can be. This is especially true when there are several plots of land which are suitable for road-building and the owners must compete with each other for the payout from the road company.

Suppose that someone does in fact own an absolutely essential plot of land and refuses to sell. No matter, build a tunnel underneath or a bridge over the parcel; property rights don’t extend to the stratosphere, or to the center of the Earth.

9 What is Block’s answer to the charge that a road owner could hold a family hostage in their home by blocking the exit?

This isn’t an issue with various analogous situations — landlords don’t blockade tenants’ doors and demand a fee to let them leave. Flea markets don’t rent out table space and then form a barrier around a seller’s wares.

Under a free market system ‘road access’ would be a provision within any property contract, and everyone would know that comes standard when purchasing land or a home.

10 Who would decide the rules of the road?

Whoever owned the road, most likely. Questions of this sort aren’t answerable with any degree of precision beforehand.

11 How would a private system deal with traffic snarls?

As with the previous question, it’s hard to say exactly what solutions would be evolved in advance. What we can say is that private companies have a strong incentive to develop rules which allow the smooth functioning of the system and will go bankrupt if they fail, whereas the public sector does not and will not.

Under the current regime vehicles routinely get stuck in intersections and hold up traffic. Perhaps on a private road the computer monitoring system would simply bill any such infraction to encourage obedience to the rules.

12 How would “green light time” be distributed?

Likely through a bidding/auction system in which roads pay for green light time in proportion to their traffic. If they refused to do so it wouldn’t take long before motorists began to patronize competitor roads. Today something like this could probably be handled by a computer system which optimized green light times behind the scenes, charging the various intersecting roads accordingly.

13 Could road owners compete with each other?

Sure. It is sometimes presumed that they can’t because the conditions of ’perfect competition’ do not and could not prevail in infrastructure. But this is hardly a problem, because those conditions — firms small enough to not be capable of moving the price around, homogeneous and indistinguishable products, perfect information — do not and could not prevail anywhere.

14 What is “double decking”?

Building one road above another road. In various situations such a technique could prove useful.

15 Is it Block’s responsibility to completely predict the features of a private market in roads?

No, nor can it be done. One of the central claims of Libertarians and other free-market sorts is that it is not possible for an individual or a group of individuals to form plans, rules, and schedules which outperform the market. It is inconceivable, therefore, that someone could predict the exact contours of an industry which doesn’t even exist yet.

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