The Privatization of Roads and Highways

14 Roads, Bridges, Sunlight, and Private Property Rights1

Suppose there to be a system of private roads and highways.2 Suppose, further, that a single firm were to own a highway stretching from Boston to Los Angeles. One objection to such a state of affairs is that it would effectively cut off the northern and southern parts of the United States from one another, something that even the Civil War was unable to accomplish.3

Upon first glance, this is a silly objection. Certainly any firm rich and powerful enough to have obtained ownership rights to a facility of such gigantic proportions,4 could never act in so arbitrary and capricious a manner. How could it make any profits whatsoever, much less maximize them, if it refused to allow people to use their road to travel in any direction they wished? If it didn’t allow, nay, encourage, other road companies to provide north south transit corridors bisecting its own holdings,5 it would vastly reduce the value of its own property. A road with no entries and no exits except for terminal points in Boston and L.A. would have a far lower capital value than an ordinary limited access highway. This objection takes a good thing—limited-access, high-speed corridors—and escalates it beyond comprehension. Presumably, this firm didn’t come to occupy so exalted an economic position by acting in this way, and will soon return to the economic obscurity from which it once sprang if it did so now. Surely, any president who organized the business in this way would be quickly shown the door by the board of directors. And any board of directors that fails to uphold such fiduciary responsibility would soon feel the wrath of the stockholders.6

But on further reflection, it can be charitably interpreted as something far more profound. Critics can readily admit to the unlikelihood of such a scenario eventuating.7 Instead, he can posit a situation where it could occur, given a specific concatenation of events. For example, accept for a moment road privatization,8 and assume that an heir has come into possession of such a radically limited access highway. Suppose that the firm is owned in the form of a single proprietorship and that this beneficiary cares not one whit for preserving capital values, let alone expanding them. Is this, then, a reductio ad absurdum of road privatization?

Again, there are problems. How was it possible, in the first, to amass the wherewithal necessary to put together a highway with no entrance or exits for 3,000 plus miles?9 It is not within the realm of reality, even one so heavily contrived. After all, an objection, even a theoretical one, must have some connection to a real state of affairs if it is to be relevant to it. Alternatively, if the road were a normal one when owned by the benefactor, it would be extremely difficult for the beneficiary to unilaterally cut off transverse roads. (Presumably, these are overpasses; otherwise the limited-access nature of the highway would be obviated.) There would likely be long term contracts, even permanent ones, which stipulate that the owner of the overpass has a right to continue to maintain his amenity.

Nevertheless, we pass over these criticisms to Tullock’s objection,10 if only for the sake of argument. That is, we take it as a given that there is a road owner of a zero-access highway stretching across the entire country who absolutely refuses to contractually arrange for exit and entry points, or for overpasses bisecting his property. Moreover, we assume that either there are no taxes, which would force him into bankruptcy,11 or if there are, he has sufficient funds to enable him to stay in business for the foreseeable future. Even under these more challenging conditions we still deny the claim that private enterprise highways can drive a wedge through an entire country.

AD COELUM

How, then, can we maintain the viability of private property rights in this context? Simple. All that need be done is apply the Lockean12 and Rothbardian13 theory of property rights. On this basis, another road entrepreneur can build an overpass above this limited-access highway, or a tunnel, burrowing underneath it. This will nip in the bud any incipient fear that private property rights in roads is so impractical, so untenable, that it can rip the nation into two parts.

Upon this “modest proposal,” a criticism will immediately leap to mind. What about the private property rights of the road owner? According to the critics of homesteading theory, any attempt to breach his “airspace” or “underground space” is a violation of property rights. Therefore, we can have only one of two things: either full respect for private property rights or the existence of privately owned highways and national inviolability. That is, if the road owner’s private property rights are fully protected, no one will be able to build an under- or overpass, since this would interfere with his use of his holdings.

This criticism is predicated on interpreting Locke, Rothbard, and the libertarians as favoring the ad coelum doctrine. In this view, if a person owns an acre of land on the surface of the earth, he possess a narrowing cone extending down to the very center of the planet, and a widening cone extending upward into the heavens.

But this is a travesty of property rights and no advocate of this system defends it. On the contrary, the enemies of private property rights offer it as an example of how such law would operate were we ever so foolish as to put it in place. The Friedmans, father and son, have long dismissed homesteading based, private property rights on this basis as a libertarian fetish or mantra.

Says David Friedman:

A court in settling disputes involving property, or a legislature in writing a law code to be applied to such disputes, must decide just which of the rights associated with land are included in the bundle we call “ownership.” Does the owner have the right to prohibit airplanes from crossing his land a mile up? How about a hundred feet? How about people extracting oil from a mile under the land? What rights does he have against neighbors whose use of their land interfere with his use of his?. . . . It seems simple to say that we should have private property in land, but ownership of land is not a simple thing. . . . There is no general legal rule that will always assign it to the right (person).14

Says Milton Friedman:

How many times have you heard someone say that the answer to a problem is that you simply have to make it private property? But is private such an obvious notion? Does it come out of the soul?

I have a house. It belongs to me. You fly an airplane over my house, 20,000 feet up. Are you violating my private property? You fly over at 50 feet. You might give a different answer. . . . Are you violating my private property? Those are questions to which you can’t get answers by introspection. They are practical questions that require answers based on experience. Before there were airplanes, nobody thought of the problem of trespass through air. So simply saying “private property” is a mantra, not an answer. Simply saying “use the market” is not an answer.15

But this is the classical straw-man ploy: assign an argument to your opponent, refute it, and then declare victory. Yes, if the ad coelum doctrine were the position of those who advocate property rights and road privatization, then their view would be untenable. For how could anyone justify building a bridge over someone else’s highway, against his will, on these grounds? Not only would the firm own the airspace over the highway, it would own it all the way up to the heavens. The enterprise would have the right to forbid airplanes from flying overhead. Surely, it could legally prevent an over- (or under-) pass from being built.

As it happens, however, this is not at all the perspective of the libertarian advocate of private property rights. Instead, he takes a position based on the homesteading principle. In this view, one starts off with ownership of one’s own person. Then, when one is the first to “mix one’s labor” with hitherto unowned virgin territory, one can legitimately claim ownership rights over the latter. A person can own land, but not an extended cone from the heavens to the core of the earth—because by stipulation, he has only mixed his labor with property on the surface of the earth.

How far up, then, do the surface owner’s rights extend? Where is the boundary between his domain and that of an airplane or overpass builder? This cannot be pinpointed precisely. It is impossible to defend any arbitrary answer, such as “100 feet up into the air.” The obvious retort to that, as the Friedmans never tire of reminding us, is, “Why not 99 or 101 feet?” Instead, the Lockean homesteader offers a principle, and asks in cases of dispute that the courts determine the precise height in any given case. But there is a principle under which such determinations may be made: property boundaries are to be placed where home-steading, local custom and common enjoyment, and the context, indicate. For example, how low can the plane fly? If it is over wheat fields, very, very low indeed (five feet? ten feet?), so long as the crops cannot be damaged by such activity, and the only admixture of labor to the land was in the form of such plantings.

On the other hand, if the landowner put in a three-story house, he also owns a “penumbra” of air above it, enough so as to enjoy the ordinary amenities of home ownership. This might be defined both in terms of height and number of flights of airplanes per day. The answer to the puzzle in this case would be in the thousands of feet.16

A crucial element for the homesteading philosophy is chronological order.17 If the airport was already in operation when the farmer homesteaded the ground, then the latter cannot do anything that would interfere with the use that was prior in time. Here, we assume that the airport claimed not only the physical rights to the land on which the runways are located, but also the surrounding egress routes. That is, such a farmer would be forever precluded from erecting a large building in the flight path of the airplanes, without the permission of the airport owner.

On the other hand, if the settler were there first, and constructed a skyscraper, the airline would not only have to tailor its flight paths to accord with the existing buildings, but would also not be allowed to create a level of noise incompatible with the ordinary, quiet enjoyment of such real estate.

Well, how high must the overpass be so as to not interfere with the road owner’s amenities? According to homesteading theory, it can be as low as the builder desires, provided only that it does not interfere with rights homesteaded by the highway company. This, in turn, would be determined by the firm’s ability to provide its clients, the motorists, with a traffic lane. Since the tallest of the trucks that use the highway are no more than thirty feet high, as at least a first approximation we may say that the bottom of the overpass can be as low as say, thirty-five feet off the ground.18

THE UMBRELLA

We have thus far answered the objection of Tullock. The main highway bisecting the country cannot be used to cut off one section from the other. Any tendency to do that would be met by other road firms who would erect overpasses, or tunnels, allowing north-south traffic.

But we cannot conclude at this point, since there are many other criticisms to our position. Here is a simple one. Not only do trucks use the highway, but sometimes—rarely it is true but sometimes—the highways are used to transport far larger objects, such as oil drilling rigs, houses, barns, Ferris wheels, etc. Often they are, of course, broken down into smaller pieces. This facilitates conveyance, but only at price. However, at other times, these are carried from one point to another as they are, in their entirety. Then, the capacity of the highway to service them requires a height of, say, 100 feet or more.

The response to this is relatively easy. Either the bottom of the overpass must be 100 feet or so from the ground, or it must be in the form of a drawbridge, which can accommodate such traffic, however rare. The highway owner may be said to have homesteaded such a right. An overpass which did not allow for this would thus limit his control over his property.19

A more complex objection is the following: If it is all right for a bridge to be built over a highway, against the objections of the road owner, why is it not legitimate for a person to create a very large umbrella over an entire city, blocking rain, snow, sunlight, and a view of the sky? For this is exactly what is being done to the highway owner, only on a vastly smaller scale.

With this objection, the position of the private road advocate is seemingly rendered precarious. For he must now either renounce highway privatization, or embrace a situation where living in cities20—any city—would become well nigh untenable. Are there any replies open to him? Fortunately for his position, there are.

First, he could put forth the de minimis argument: that blocking out the sun and rain for a small patch of highway is significantly, and thus relevantly, different from doing this for an entire city. He could maintain that the pain and suffering undergone by a motorist traveling from Boston to L.A., forced to travel under several scores of overpasses during the 3,000-mile trip, would be nothing compared to rendering an entire city all but uninhabitable. He could insist, furthermore, that there is more than a scale difference involved. Or, alternatively, that the sheer divergence in scope renders an otherwise similar situation dissimilar.

But for all this, however, there is still the nagging doubt that the analogy is a good one. If someone may erect a bridge over a patch of highway, he would, on this principle, be justified in building an umbrella over an entire city.

VIEW OWNERSHIP

This charge is further buttressed by the claim that, under free enterprise, views can be owned. If so, the would-be builder of the bridge cannot be allowed to engage in this activity for an entirely separate reason: not only because he is infringing on the property right of the “monopoly” road owner, but because he is cutting off his view.

Based upon a superficial analysis, there is some coherence in this position. After all, if views cannot be owned, much of the property value of “view properties” will be lost. For example, if the owner of the ocean21 can erect a large fence preventing shoreline property owners from looking out upon it, their property will be worth far less than it is now under present institutional arrangements. As against that, it is not so much that this system will imply a loss of value as much as a transfer. For if the ocean owner can threaten to build a fence, he can also charge for not erecting it as well.22 In this case the homeowner’s loss ought to be offset by the ocean owner’s gain.

But a stronger defense for the impossibility of view ownership is that it would over-determine property rights. A well functioning system would not allow for any intrinsic conflicts. That is to say, property rights must be specified in such a way as to prevent two different people from each owning the same right. But this is precisely the flaw in the concept of view ownership. If A owns a view, he should be able to alter it in any way that suits him, and prevent anyone from changing it without his permission; this, after all, is the essence of ownership. But if this view includes B’s house, A may dictate the color, shape, size, etc., of this dwelling. That however, would play havoc with the idea of B owning his own abode. Not only could A prevent B from creating this building, he could also preclude him from tearing it down, as that too, would change his view.

Even if views cannot be owned by the very nature of things, this still rescues private ownership only partially. This doctrine can now deflect the charge about the bridge obstructing the view, but it is still vulnerable to the one about it interfering with the sunlight, rain, etc., and other accoutrements of property ownership.

One possible defense against the Tullock position is the claim that sunlight, rain, wind, etc., cannot be owned. If so, there is one less objection to the erection of the overpass. Is it possible to maintain that even these things cannot be owned? No. One practical implication of this admission would be that no farming could take the place; at least not if a malevolent person wished to erect a gigantic umbrella above the fields, cutting off the necessary wind, rain, and sunlight. But we need not resort to mere pragmatism—which is unworthy of us—to make our case. Homesteading of these weather amenities is very much in “keeping with the land,” when a man homesteads a piece of land, he also does so with regard to the sunlight, rain, etc. All are necessary to bring in the crops.

Aha!, says the critic. This may be all and well for farms, but cities are an entirely different matter. Without doubt there are some metropolitan areas, which began as farming communities. And in these cases, the homesteading by the farmers of wind, rain, sunlight, etc., could pass over to the downtown landlords when they purchased the agricultural land, so endowed. Here there is no problem: the umbrella cannot be installed because the owners of city land own the rights to weather. They did not homestead these amenities on their own, but they purchased them from the farmers who did “mix their labor” with them.

However, there are some cities, which did not begin their life in such a manner. Rather than being converted from cleared and planted acreage, they started as trading depots, manufacturing and trade centers, etc. Here, there can be no claim of Lockean homesteading for rain, sunlight, etc. City life is able to function quite well in the dark.23 Can the “umbrella monster” objection hold sway at least in this case?

ANTICIPATION

One way to obviate it would be to conjure up a case where this threat was anticipated. Suppose you owned some (not ex-agricultural) city property, and wanted to benefit24 from the sunlight and rain. How could you preclude the construction of the “umbrella” which would block out the sun and rain for yourself, and cooperatively, with and for your surrounding neighbors? One possibility would be to erect a very large tower, or even a stick, so high that it would render practically impossible the placing of a tarpaulin over the city.25 What steps might be taken by your opponent in these very hypothetical circumstances? Well, he could26 build his umbrella with a hole in it to accommodate your stick. It would be a strange looking umbrella, but it might still function so as to achieve its task: blocking out the sunlight and rain, and thus supporting Tullock’s objection to building bridges over private highways without their owner’s permission.

Suppose that there were not one but several (dozens?) of large poles erected in the city, with the sole purpose of obviating the tarp monster. This would not entirely succeed, since even with an umbrella, which resembled a Swiss cheese, enough harm might still be done to the inhabitants of the city to render Tullock’s objection a powerful one.

But the defense is not without at least one more reply. Instead of stationary sticks, it could construct them so as to rotate at the top. If so, and again on the assumption that equal technology mandates equal heights for the stick(s) and the tarp, this would not entirely reduce the offense to a rubble. It would all depend on how big the holes were in the “Swiss” cheese relative to its total area, and whether such a “Swiss” cheese could still be supported, and how much damage to the inhabitants below it would be capable of rendering.

There is at least enough uncertainty in such a scenario to render the road privatization argument immune from the objection that building a bridge over someone else’s highway would not create the antinomy of unlivable cities. That is to say, the bottom line on the stick-umbrella mental experiment is not an overwhelming win for the Tullock side of the debate. It might just be that, given the natural advantages of twirling sticks over the tarp, one could build the bridge over the highway without setting up a principle of private property rights that would unduly disaccommodate the city dweller.

Nevertheless, just for argument’s sake, and to make the case for road privatization as difficult as possible,27 we are going to concede to the offense the “win” in this competition. That is, we posit the notion that, if someone may with impunity build a bridge over the private road owner’s property, there is no reason he cannot erect a monster umbrella over a city, blocking out its sunlight and rain. We further suppose that this would not only be of great harm, but would be intolerable. On the basis of our discussion of poles, tarps, “Swiss” cheese, etc., we conclude that it is a violation of private property rights to build the tarp over the city. If so, we must perforce also concede Gordon Tullock’s point that as far as a building is concerned, a private roadway stretching from Boston to L.A. would indeed cut the country into two parts, and each part off from the other. All this follows from our stipulation.

But only if we are discussing an ordinary bridge. Happily, for the case for road privatization—insofar as it depends upon connecting the country by leaping over the private road—it is possible to specify a bridge in such a manner so as to overcome this objection.

Suppose the bridge were not opaque, but built of glass. This would allow the sun to come shining through. There would of course still be a problem with the rain. Suppose, further, then, that the bridge were not built of solid material, but rather a mesh, or grid; as long as the holes were not too big, a roadway constructed in this manner could both support vehicular traffic and also allow the rain to fall on the highway below pretty much as it otherwise would have. Further, the whole structure could be made in the form of a drawbridge, in case the initial road owner wanted to transport an oversize (overheight) parcel.

CONCLUSION

What, then, can we conclude from this discussion? The resolution is that Tullock’s support of road socialism must fail. It is without merit, first and foremost due to the possibility of bridging over, or tunneling under, the “hostile” road owner. Second, it can fail if we conclude, on the basis of private property rights consideration, that no one could build the umbrella over the city, due to the practical power of defensive poles. Alternatively, Tullock’s view may be disregarded even if the tarp does block out the sun and the rain, provided that this is deemed as desirable, i.e., is an external economy, not a diseconomy. Fourth, and finally, we need not acquiesce in road socialism even if the offense is given the nod over the defense on the tarp question, and the tarp is interpreted as a negative diseconomy, provided that the overpass is drawbridge, built of glass mesh.

But the Tullock side of the debate is not without one further possible objection: the hostile road owner, like the city folk, can build a series of sticks both upward and downward, in an attempt to forestall the erection of an over- (under-) pass. But here, unlike in the city case, the clear winner is the “offense;” that is, the road owner (defender) will have to place sticks throughout the 3,000 mile extent of his holdings, every ten feet or so, otherwise a traversing tunnel or bridge can be built. Even if we grant him a two-year start—something he is by no means necessarily entitled to—his is a tremendously expensive and daunting task. In contrast, all the “offense” needs to do is succeed once every dozen miles or so, the average distance between access points on modern, limited-access highways.

Further, increasing technology necessarily works against the “defender.” Assume that every year innovations make it possible to extend the length of sticks, or bridges and tunnels, by, say ten feet. This would mean that the “monopolist” road owner would have to go through the process every year, that is, beat out its opposition over a 3,000 mile length, when all the opposition has to do is to succeed in a few hundred discrete points. By contrast, the Nazi defenders had an easy task trying to anticipate where the Allies would land.

Notice how far the advocates of road socialism have to go in order to even mount an interesting attack on highway privatization. At a time when tens of thousands of people are being killed28 on the highways and byways of the nation, instead of calling for privatization, Tullock is instead placing philosophical roadblocks in its path. He does so by inventing, not only a contrary-to-fact, conditional scenario, but by being granted, only for the sake of argument, the reasonableness of supposing that a road owner would not positively welcome access roads, and overpasses. This, of course, is unlikely in the extreme. We have contemplated such a strange occurrence only because it allowed us to wrestle with some highly theoretical objections to road privatization. We should, however, not lose sight of just how improbable a situation we have been dealing with.

 

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29This chapter first appeared as Walter Block and Matthew Block, “Roads, Bridges, Sunlight and Private Property Rights,” Journal des Economistes et des Etudes Humaines 7, no. 2/3 (June–September 1996): 351–62.

30For a defense, elucidation, explication of this contention, both on logical and historical grounds, see Walter Block, “Free Market Transportation: Denationalizing the Roads,” Journal of Libertarian Studies 3, no. 2 (Summer, 1979): 209–38; idem, Zoning: Its Costs and Relevance for the 1980s (Vancouver, B.C.: Fraser Institute, 1980): 299–330; idem, “Theories of Highway Safety,” Transportation Research Record 912 (1983): 7–10; idem, “Public Goods and Externalities: The Case of Roads,” The Journal of Libertarian Studies 7, no. 1 (Spring, 1983): 1–34; Murray N. Rothbard, For a New Liberty (New York: Macmillan, 1973); and William C. Woolridge, Uncle Sam, The Monopoly Man (New Rochelle, N.Y.: Arlington House, 1970). This literature contends with dozens of objections to the system, but not the one discussed in the present paper.

31Even had the South prevailed in battle, there is no reason to believe that commercial relationships, akin to those that now take place between Canada or Mexico and the U.S., would not presently occur between the two halves of the country.

32For the monopoly objection to private roads, see, in addition to the literature mentioned above, Dominick Armentano, The Myths of Antitrust (New Rochelle, N.Y.: Arlington House, 1972); idem, Antitrust and Monopoly: Anatomy of a Policy Failure (New York: Wiley, 1982); Murray N. Rothbard, For a New Liberty; Walter Block, “Coase and Demsetz on Private Property Rights,” Journal of Libertarian Studies 1, no. 2 (Spring 1977): 111–15; Don Armstrong, Competition vs. Monopoly (Vancouver, B.C.: Fraser Institute, 1982).

33Or undertake this task on its own account.

34That is, on the assumption that people like Michael Milken were allowed to orchestrate “unfriendly” takeovers of recalcitrant management.

35And this, for two reasons. First, it is exceedingly politically naive to think that an advanced industrial country such as the U.S. would ever move so close to a radically free society for privatization to occur to this extent. The public choice and “iron triangle” literature gives us good and sufficient reason for this supposition. Second, and less importantly, it is unlikely that a firm that found itself in this position would act in this manner, for reasons given in the text.

36If only, ultimately, to show the flaws in such a system, at least in the view of the advocates of road socialism.

37Strictly speaking, Tullock’s objection had to do with traffic arteries crossing over this Boston–L.A. highway, not with access. But as long as there are entry and exit points every few miles, the worst this “highway monopolist” can do is make people go out of their way for a few minutes. He certainly cannot render one side of the country asunder from the other.

38In the terms of George P. Fletcher, “Paradoxes in Legal Thought,” Columbia Law Review 85 (1985): 1263–92. Tullock is attempting to show that the concept of private road ownership amounts to an “antinomy.”

39He is not going to be earning much money on his holdings. Even low real estate taxes would quickly bankrupt him, thus depriving us of an opportunity to wrestle fully with the objection.

40John Locke, “An Essay Concerning the True Origin, Extent and End of Civil Government,” in Two Treatises of Government, Peter Laslett, ed. (Cambridge, Cambridge University Press, 1960), vols. 27 and 28.

41Rothbard, For a New Liberty and The Ethics of Liberty (Atlantic Highlands, N.J.: Humanities Press, 1982).

42David Friedman, “How to Think About Pollution; or Why Ronald Coase Deserved the Nobel Prize,” Liberty 5, no. 3 (January 1992): 58.

43Milton Friedman, “Say ‘No’ to Intolerance,” Liberty 4, no. 6 (July 1991): 18–20.

44In the many, many thousands of feet far away from airports, because it is likely that he took possession of his abode before there were any or many low flights in his neighborhood. However, if he lives near an airport, which homesteaded these rights before he or the original homeowner did, then the airplane owners have the right to continue to take off and land, even if it means interfering with his quiet enjoyment of his home.

45This is in sharp contrast to the Coasean Law and Economics tradition of the University of Chicago school of thought. There, property rights disputes are not settled by resort to prior use and homesteading. On the contrary, determination is made in a manner contrived so as to supposedly maximize wealth. In the real world of positive and extensive transaction costs, the court in effect is asked to weigh the value of the right (noise, egress, whatever) to the farmer and the airport owner. For a critique of this system as a socialistic usurpation of property rights, see Block, “Coase and Demsetz on Private Property Rights,” pp. 111–15; Roy E. Cordato, Welfare Economics and Externalities in an Open Ended Universe: A Modern Austrian Perspective (Boston: Kluwer); David Gordon, “Toward a Deconstruction of Utility and Welfare Economics,” The Review of Austrian Economics 6, no. 2 (1993): 99–112; Hans-Hermann Hoppe, The Economics and Ethics of Private Property: Studies in Political Economy and Philosophy (Boston: Kluwer, 1993); Gary North, The Coase Theorem (Tyler, Tx.: The Institute for Christian Economics, 1992).

46To discuss the problem of who would be responsible for the automobile pollution generated in the tunnel would take us far a field. The interested reader is referred to Murray N. Rothbard, “Law, Property Rights, and Air Pollution,” in Walter Block, ed., Economics and the Environment: A Reconciliation (Vancouver, B.C.: Fraser Institute, 1990).

47The same analysis applies to a real edifice of 100 feet in height, or an imaginary case where the road owner transports something much larger. Consider the transportation of the Eiffel Tower from Boston to Los Angeles along his road, in order to forestall the creation of any overhead bridges. This, too, would fail, because the drawbridge overpass would allow for the infrequent, theoretical and threatened movement of such a structure.

48Were the technology sufficient, this objection could be expanded to include the whole world. Why be content with placing a big umbrella above a single city, if one had the option of placing the entire globe in a gigantic cloth envelope, which would in like manner keep snow, rain and sun off the surface, and, for good measure, interfere with the evaporation process?

49If we are contemplating full private ownership of roads and highways, there is no reason to be behind when it comes to bodies of water such as oceans, lakes and rivers. See Walter Block, “Institutions, Property Rights and Externalities: The Case of Water Quality,” in Agriculture and water Quality: Proceedings of an Interdisciplinary Symposium, Murray H. Miller, J.E. FitzGibbon, Glenn C. Fox, R.W. Gillham and H.R. Whiteley, eds. (Guelph, Ont.: Guelph Centre for Soil and Water Conservation, 1992) for a defense of this proposition.

50For the case in behalf of legalizing such blackmail, see Walter Block, “Trading Money for Silence,” University of Hawaii Law Review 8, no. 1 (Spring 1986): 57–73; Walter Block and David Gordon, “Blackmail, Extortion and Free Speech: A Reply to Posner, Epstein, Nozick and Lindgren,” Loyola of Los Angeles Law Review 19, no. 1 (1985): 37–54.

51And of course there are those critics who claim it can function better in this manner.

52Outside of the “public good” literature see Jeffrey Rogers Hummel, “National Goods vs. Public Goods: Defense, Disarmament and Free Riders,” Review of Austrian Economics 4 [1990]: 88–122; Murray N. Rothbard, “Toward a Reconstruction of Utility and Welfare Economics,” The Logic of Action One: Method, Money, and the Austrian School (Cheltenham, U.K.: Edward Elgar, 1997). Where economists seem very certain that some phenomena are unmitigated “goods” (e.g., national defense) and other unmitigated “bads” (e.g., species extinction), common sense and elementary subjectivism (Ludwig von Mises, Human Action ; James M. Buchanan, Cost and Choice: An Inquiry into Economic Theory ; James M. Buchanan and G.F. Thirlby, L.S.E. Essays on Cost [New York: New York University Press, 1981]) tells us that what is pleasurable to one person is disutility to another. “One man’s meat is another man’s poison.” Or to give a more modern example, perfume undoubtedly creates external economies for some, but others are allergic to it and thus for them it is a diseconomy. There can be no doubt that what some fear and loathe as the “umbrella monster” would be positively welcome by others as a great boon. After all, one of the benefits of modern shopping mall is the ability to shut out the weather, whatever it is on any given day.

53The analysis, but in the other direction, applies to the tunnel. In the one case, the stick would be erected in an upward direction. In the other case, it would aim downward. I owe this point to Matthew Block.

54We ignore the case where either you or he could build a better, higher stick. We assume that technology is equal between the two combatants in this strange contest. If anything, the (slight) natural advantage is against the tarp monster. He has to build, not one, but four sticks, so as to hang his gigantic cloth between them; or, if he creates an umbrella, which by definition has only one pole, he has to build it more strongly than the mere defensive stick. For he would have to ensure it was strong enough to carry acres of cloth, a task not required by the defender.

55Winning debates over the bodies of straw men is an unedifying exercise.

56For a view that this is not due to alcoholism, or vehicle speed, or any of the other dozens of phenomena apologetics for road socialism put forth as explanatory variables, but rather to lack of privatization, see Block, “Free Market Transportation: Denationalizing the Roads;” Zoning: Its Costs and Relevance for the 1980s; “Theories of Highway Safety;” “Public Goods and Externalities: The Case of Roads;” Rothbard, For a New Liberty; Woolridge, Uncle Sam, The Monopoly Man.

• 1*This chapter first appeared as Walter Block and Matthew Block, “Roads, Bridges, Sunlight and Private Property Rights,” Journal des Economistes et des Etudes Humaines 7, no. 2/3 (June–September 1996): 351–62.
• 2The number of people who were victims of motor vehicle accidents in 1976, in Accident Facts (Chicago: National Safety Council, 1977), p. 13.
• 3The number of road and highway deaths in the decade, 1967–1976, in ibid.
• 4Data for 1968, in ibid., p. 57.
• 5Data for 1969, in ibid., p. 60.
• 6Data for 1969, in ibid.
• 7Statement by Charles M. Noble, distinguished traffic engineer who served as director of the Ohio Department of Highways, chief engineer of the New Jersey Turnpike, and was recipient of the Matson Memorial Award for Outstanding Contributions to the Advancement of Traffic Engineering. Charles M. Noble, “Highway Design and Construction Related to Traffic Operations and Safety,” Traffic Quarterly (November 1971): 534; emphasis added.
• 8Accident Facts, p. 13.
• 9Sam Peltzman, Regulation and Automobile Safety (Washington, D.C.: American Enterprise Institute for Public Policy Research, 1975), pp. 8–9.
• 10David M. Winch, The Economics of Highway Planning (Toronto: University of Toronto Press, 1963), p. 87.
• 11Strictly speaking, this is far from the truth. Before the nineteenth century, most roads and bridges in England and the U.S. were built by quasi-private stock companies.
• 12William C. Wooldridge, Uncle Sam, The Monopoly Man (New Rochelle, N.Y.: Arlington House, 1970), pp. 7–9.
• 13Gabriel Roth, Paying for Roads: The Economics of Traffic Congestion (Middlesex, England: Penguin, 1967), p. 16; emphasis added. See also:
• 14The present author wishes to express a debt of gratitude to the two trailblazers into this subject: Jarret B. Wollstein, Public Services under Laissez Faire (New York: Arno Press, 1974), and Murray N. Rothbard, For a New Liberty (New York: Macmillan, 1973), pp. 202–18.
• 15William Vickrey, “Pricing and Resource Allocation in Transportation and Public Utilities,” American Economic Review (May 1963): 452; and “Breaking the Bottleneck by Sophisticated Pricing of Roadway Use,” General Motors Quarterly (Spring, 1974): 24.
• 16Says Rothbard:
• 17F.A. Hayek, The Constitution of Liberty (Chicago: University of Chicago Press, 1960), p. 160.
• 18I owe this point to David Ramsey Steele, of the Department of Sociology, University of Hull.
• 19We assume away here the presence of psychic income phenomena. See Walter Block “Coase and Demsetz on Private Property Rights,” Journal of Libertarian Studies 1, no. 2 (Spring, 1977): 111–15.
• 20George M. Smerk, Urban Transportation: The Federal Role (Bloomington: Indiana University Press, 1965), p. 228.
• 21Robert Haveman, The Economics of the Public Sector (New York: John Wiley and Sons, 1970), p. 23. For a telling criticism of the “control over price” confusion, see Murray N. Rothbard, Power and Market (Menlo Park, Calif.: Institute for Humane Studies, 1970), pp. 87–90.
• 22Cf. Israel Kirzner, Competition and Entrepreneurship (Chicago: University of Chicago Press, 1973).
• 23Alfred W. Stonier and Douglas C. Hague, A Textbook of Economic Theory, 3rd ed. (New York: John Wiley and Sons, 1964), p. 104.
• 24See Lionel Robbins, An Essay on the Nature and Significance of Economic Science (London: Macmillan, 1932).
• 25Kirzner, Competition and Entrepreneurship, pp. 122–23.
• 26Wilfred Owen, The Metropolitan Transportation Problem (Washington, D.C.: Brookings Institution, 1956), p. 119.
• 27John Burchard, “Design and Urban Beauty in the Central City,” in James Q. Wilson, ed., The Metropolitan Enigma (Garden City, N.Y.: Doubleday, 1970), p. 245; emphasis added.
• 28Noble, “Highway Design and Construction Related to Traffic Operations and Safety,” pp. 546–47.
• 29Roads, Bridges, Sunlight, and Private Property Rights*
• 30Were a government to demand the sacrifice of 46,700 citizens each year, there is no doubt that an outraged public would revolt. If an organized religion were to plan the immolation of 523,335 of the faithful in a decade, there is no question that it would be toppled. Were there a Manson-type cult that murdered 790 people to celebrate Memorial Day, 770 to usher in the Fourth of July, 915 to commemorate Labor Day, 960 at Thanksgiving, and solemnized Christmas with 355 more deaths, surely the New York Times would wax eloquent about the carnage, calling for the greatest manhunt this nation has ever seen. If Dr. Spock were to learn of a disease that killed 2,077 children under the age of five each year, or were New York City’s Andrew Stein to uncover a nursing home that allowed 7,346 elderly people to die annually, there would be no stone unturned in their efforts to combat the enemy. To compound the horror, were private enterprise responsible for this butchery, a cataclysmic reaction would ensue: investigation panels would be appointed, the justice department would seek out antitrust violations, company executives would be jailed, and an outraged hue and cry for nationalization would follow.
• 31Were a government to demand the sacrifice of 46,700 citizens each year, there is no doubt that an outraged public would revolt. If an organized religion were to plan the immolation of 523,335 of the faithful in a decade, there is no question that it would be toppled. Were there a Manson-type cult that murdered 790 people to celebrate Memorial Day, 770 to usher in the Fourth of July, 915 to commemorate Labor Day, 960 at Thanksgiving, and solemnized Christmas with 355 more deaths, surely the New York Times would wax eloquent about the carnage, calling for the greatest manhunt this nation has ever seen. If Dr. Spock were to learn of a disease that killed 2,077 children under the age of five each year, or were New York City’s Andrew Stein to uncover a nursing home that allowed 7,346 elderly people to die annually, there would be no stone unturned in their efforts to combat the enemy. To compound the horror, were private enterprise responsible for this butchery, a cataclysmic reaction would ensue: investigation panels would be appointed, the justice department would seek out antitrust violations, company executives would be jailed, and an outraged hue and cry for nationalization would follow.
• 32Were a government to demand the sacrifice of 46,700 citizens each year, there is no doubt that an outraged public would revolt. If an organized religion were to plan the immolation of 523,335 of the faithful in a decade, there is no question that it would be toppled. Were there a Manson-type cult that murdered 790 people to celebrate Memorial Day, 770 to usher in the Fourth of July, 915 to commemorate Labor Day, 960 at Thanksgiving, and solemnized Christmas with 355 more deaths, surely the New York Times would wax eloquent about the carnage, calling for the greatest manhunt this nation has ever seen. If Dr. Spock were to learn of a disease that killed 2,077 children under the age of five each year, or were New York City’s Andrew Stein to uncover a nursing home that allowed 7,346 elderly people to die annually, there would be no stone unturned in their efforts to combat the enemy. To compound the horror, were private enterprise responsible for this butchery, a cataclysmic reaction would ensue: investigation panels would be appointed, the justice department would seek out antitrust violations, company executives would be jailed, and an outraged hue and cry for nationalization would follow.
• 33Were a government to demand the sacrifice of 46,700 citizens each year, there is no doubt that an outraged public would revolt. If an organized religion were to plan the immolation of 523,335 of the faithful in a decade, there is no question that it would be toppled. Were there a Manson-type cult that murdered 790 people to celebrate Memorial Day, 770 to usher in the Fourth of July, 915 to commemorate Labor Day, 960 at Thanksgiving, and solemnized Christmas with 355 more deaths, surely the New York Times would wax eloquent about the carnage, calling for the greatest manhunt this nation has ever seen. If Dr. Spock were to learn of a disease that killed 2,077 children under the age of five each year, or were New York City’s Andrew Stein to uncover a nursing home that allowed 7,346 elderly people to die annually, there would be no stone unturned in their efforts to combat the enemy. To compound the horror, were private enterprise responsible for this butchery, a cataclysmic reaction would ensue: investigation panels would be appointed, the justice department would seek out antitrust violations, company executives would be jailed, and an outraged hue and cry for nationalization would follow.
• 34Were a government to demand the sacrifice of 46,700 citizens each year, there is no doubt that an outraged public would revolt. If an organized religion were to plan the immolation of 523,335 of the faithful in a decade, there is no question that it would be toppled. Were there a Manson-type cult that murdered 790 people to celebrate Memorial Day, 770 to usher in the Fourth of July, 915 to commemorate Labor Day, 960 at Thanksgiving, and solemnized Christmas with 355 more deaths, surely the New York Times would wax eloquent about the carnage, calling for the greatest manhunt this nation has ever seen. If Dr. Spock were to learn of a disease that killed 2,077 children under the age of five each year, or were New York City’s Andrew Stein to uncover a nursing home that allowed 7,346 elderly people to die annually, there would be no stone unturned in their efforts to combat the enemy. To compound the horror, were private enterprise responsible for this butchery, a cataclysmic reaction would ensue: investigation panels would be appointed, the justice department would seek out antitrust violations, company executives would be jailed, and an outraged hue and cry for nationalization would follow.
• 35The immediate need was to get the country out of the mud, to get a connected paved road system that would connect all county seats and population centers with mudless, dustless roads. These were the pioneering years. Safety, volume, and traffic operations were not considered a problem. But by the middle thirties there was an awakening and a recognition that these elements were vital to efficient and safe operation of the highway system.
• 36By the “middle thirties,” indeed, nearly one-half million people had fallen victim to traffic fatalities.
• 37Vehicle speed . . . alcohol consumption . . . the number of young drivers, changes in drivers’ incomes . . . the money costs of accidents. . the average age of cars . . . the ratio of new cars to all cars (because it has been suggested that while drivers familiarize themselves with their new cars, accident risk may increase) . . . traffic density . . . expenditures on traffic-law enforcement by state highway patrols . . . expenditures on roads . . . the ratio of imports to total cars (because there is evidence that small cars are more lethal than large cars if an accident occurs) . . . education of the population . . . and the availability of hospital care (which might reduce deaths if injury occurs).
• 38Further, David M. Winch cites another reason for public apathy: the belief that “[m]any persons killed on the roads are partly to blame for their death.” True, many victims of road accidents are partly responsible. But this in no way explains public apathy toward their deaths. For people killed in New York City’s Central Park during the late evening hours are also at least partially to blame for their own deaths; it takes a monumental indifference, feeling of omnipotence, absent-mindedness or ignorance to embark upon such a stroll. Yet the victims are pitied, more police are demanded, and protests are commonly made.
• 39We must realize that just because the government has always built and managed the roadway network, this is not necessarily inevitable, the most efficient procedure, nor even justifiable. On the contrary, the state of affairs that has characterized the past is, logically, almost entirely irrelevant. Just because “we have ‘always’ exorcised devils with broomsticks in order to cure disease” does not mean that this is the best way.
• 40Today, most Americans probably feel the telegraph naturally belongs within the private sphere, and few doubt the Post Office should naturally be a public monopoly. “Naturally,” however, in such a context means only that’s-the-way-it’s-been-for-as-long-as-we-can-remember, an Americanized version of Pope’s declaration that “Whatever is is right.” Yet few could think of a convincing a priori rationale for distinguishing the postal from the telegraphic mode of communication. At least one Postmaster General could not: in 1845 his Annual Report prophesied intolerable competition from the telegraph and suggested it might appropriately be committed to the government. At that early stage in its history, the telegraph might conceivably have become a government monopoly for the same reasons the Post Office already was, but the mere passage of time has obliterated any consideration of whether they were good reasons or bad reasons.
• 41[T]here is a[n] approach to the problem of traffic congestion—the economic approach—which offers a rational and practical solution. . . . The first step is to recognize that road space is a scarce resource. The second, to apply to it the economic principles that we find helpful in the manufacture and distribution of other scarce resources, such as electricity or motor cars or petrol. There is nothing new or unusual about these principles, nor are they particularly difficult. What is difficult is to apply them to roads, probably because we have all been brought up to regard roads as community assets freely available to all comers. The difficulty does not lie so much in the technicalities of the matter, but rather in the idea that roads can usefully be regarded as chunks of real estate.
• 42Let us now turn to a consideration of how a free market in roads might operate. Along the way, we will note and counter the intellectual objections to such a system. All transport thoroughfares would be privately owned: not only the vehicles, buses, trains, automobiles, trolleys, etc., that travel upon them, but the very roads, highways, byways, streets, sidewalks, bridges, tunnels, and crosswalks themselves upon which journeys take place. The transit corridors would be as privately owned as is our fast food industry.
• 43Consider now a road whose main function is to facilitate through traffic. If it is owned by one person or company, who either built it or bought the rights of passage from the previous owners, it would be foolish for him to install dozens of toll gates per mile. In fact, toll gates would probably not be the means of collection employed by a road owner at all. Now there exist highly inexpensive electrical devices which can register the passage of an automobile past any fixed point on a road. Were suitable identifying electronic tapes attached to the surface of each road vehicle, there would be no need for a time-wasting, labor-costly system of toll collection points. Rather, as the vehicle passes the check point, the electrical impulse set up can be transmitted to a computer which can produce one monthly bill for all roads used, and even mail it out automatically. Road payments could be facilitated in as unobtrusive a manner as utility bills are now.
• 44This does indeed appear frightening, but only because we are not accustomed to dealing with such a problem. It could not exist under the present system, so it is difficult to see how it could be solved by free-market institutions. Yet, the answer is simple: no one would buy any plot of land without first insuring that he had the right to enter and leave at will.
• 45For one thing, these are not the kinds of questions that can be answered in advance with any degree of precision, and not only in transportation. The same limitations would have faced early attempts to specify industrial setups in computers, televisions, or any other industry. It is impossible to foretell the future of industrial events because, given a free-market situation, they are the result of the actions of an entire, cooperating economy, even though these actions may not be intended by any individual actor. Each person bases his actions on the limited knowledge at his disposal.
• 46Just as private universities, athletic stadiums, etc., now enforce rules whose purpose is the smooth functioning of the facility, so might road owners levy fines to ensure obedience to rules. For example, automobiles stuck in an intersection could be registered by the road’s computer-monitoring system, and charged an extra amount for this driving infraction, on an itemized bill.
• 47A similar result would take place with two street owners, no matter what the property dispersal. It is easy to see this if the larger street company owns the intersections. The larger company would simply keep a high proportion (2/3, 3/4, or perhaps even 4/5) of green light time for itself, selling only the remaining small fraction to the intersecting side street. But much the same result would ensue if the smaller road owned the common intersections! Although the relatively lightly traveled road company might like to keep the lion’s share of the green lights for itself, it will find that it cannot afford to do so. The more heavily traveled street, representing a clientele willing and able in the aggregate to pay far more for green light privileges, will make it extremely tempting for the small street owner to accept a heavy payment, in order to relinquish most of its green light time. In other words, the customers of the main street, through indirect payments via the main street owner, will bid time away from the smaller number of customers using the minor street. This principle is well established in business, and is illustrated every time a firm sublets space, which it could have used to satisfy its own customers, because it receives more income subletting than retaining the premises for its own use.
• 48On the rare occasions when the feasibility of private road ownership has been considered by mainstream economists, it has been summarily rejected, based on the impossibility of competition among private road owners. Seeing this point as almost intuitively obvious, economists have not embarked on lengthy chains of reasoning in refutation. Thus, says Smerk, rather curtly, “Highways could not very well be supplied on a competitive basis, hence they are provided by the various levels of government.”
• 49A number of conditions must be met if the private sector of the economy—the market system—is to function efficiently. Indeed, these conditions are essential if the private sector is to perform in the public interest. . . . [I]t is the absence of these conditions which often gives rise to demands for public sector [government] action.
• 50Therefore, the objection to private roads on the ground that they are inconsistent with perfect competition cannot be sustained. It is true that this industry could not maintain the rigid standards required for perfect competition, but neither can most. In pointing out that perfect competition cannot apply to roads, we have by no means conceded that competition between the various road owners would not be a vigorous, rivalrous process. On the contrary, were we to allow that perfect competition could apply to roads, we would then have to retract our claim that vigorous competition could also ensue. For perfect competition and competition in the ordinary sense of that word (implying rivalry, attempts to entice customers away from one another) are opposites, and inconsistent with each other.
• 51The shape of the average revenue curve [demand curve] of the individual firm will depend on conditions in the market in which the firm sells its product. Broadly speaking, the keener the competition of its rivals and the greater the number of fairly close substitutes for its product, the more elastic will a firm’s average revenue curve be. As usual, it is possible to be precise about limiting cases. One limiting case will occur when there are so many competitors producing such close substitutes [the perfectly competitive model] that the demand for the product of each individual firm is infinitely elastic and its average revenue curve is a horizontal straight line. This will mean that the firm can sell as much of its product as it wishes at the ruling market price. If the firm raises its price, then, owing to the ease with which the same, or a very similar, product can be bought from competitors, it will lose all its customers. If the firm were to lower its price, it would be swamped by orders from customers wishing to take advantage of its price reduction. The demand—and the elasticity of demand—for its product would be infinite.
• 52Instead of concentrating on the maximization of ends, assuming given scarce means, as does the Robbinsian notion of perfect competition, the market-process view makes the realistic assumption that the means, although scarce, are in no way given; rather, knowledge of them must actively be sought out. The allocation of scarce means among competing ends is a passive procedure when the means and the ends are known. All that need be done can be accomplished by a suitably programmed computer. But the active seeking out of the ends and the means in the first place is a task that can be accomplished only by entrepreneurial talent: active, not passive. The entrepreneur, denied his crucial role in the perfectly competitive world view, takes center stage in the market-process conception.
• 53We have seen that the market proceeds through entrepreneurial competition. In this process market participants become aware of opportunities for profit: they perceive price discrepancies (either between the prices offered and asked by buyers and sellers of the same good or between the price offered by buyers for a product and that asked by sellers for the necessary resources) and move to capture the difference for themselves through their entrepreneurial buying and selling. Competition, in this process, consists of perceiving possibilities of offering opportunities to other market participants which are more attractive than those currently being made available. It is an essentially rivalrous process . . . (which) . . . consists not so much in the regards decision-makers have for the likely future reactions of their competitors as in their awareness that in making their present decisions they themselves are in a position to do better for the market than their rivals are prepared to do; it consists not of market participants’ reacting passively to given conditions, but of their actively grasping profit opportunities by positively changing the existing conditions.
• 54The Port of New York Authority Bus Terminal helps relieve mid-Manhattan traffic congestion. Approximately 90% of intercity bus departures and intercity bus passengers from mid-Manhattan originate at this terminal. The diversion of this traffic on overhead ramps from the terminal to the Lincoln Tunnel has been equivalent to adding three cross-town streets.
• 55On one short span of East River Drive [in New York City] there are grassed terraces carried over the traffic lanes right out to the edge of the East River, a special boon for nearby apartment dwellers. The solution was perhaps triggered by the fact that space between the established building lines and the river was so narrow as to force the superposition of the north and south lanes. But this did not do more than suggest the opportunity. Applause goes to those who grasped it, but none to those who with the good example in view so consistently ignored it thereafter.
• 56It seems clear that, ultimately, many urban freeways will become double or triple-deck facilities, with upper decks carrying the longer distance volumes, possibly with reversible lanes, and probably operating with new interchanges to avoid flooding of existing interchanges and connecting streets.