The Privatization of Roads and Highways

16 Roads, Bridges, Sunlight, and Private Property: Reply to Tullock1

On September 1, 1992 at the Mont Pèlerin Society meeting in Vancouver, B.C., Canada, Gordon Tullock approached my young son (then, aged fourteen) and I in the hallway. He had a bone to pick with me. He stated he had heard that I favored the privatization of roads streets and highways, and that, if this were true, he was going to show me the error of my ways. I confessed that this was indeed the case.2 He proceeded to outline his objection.

Under full privatization, he charged, it would be possible for a firm to own a highway stretching from, say, Boston to Los Angeles. I agreed. Professor Tullock continued with the claim that it would then be possible for the owner to “split the country in half,” something that even the south couldn’t attain in the Civil War. How could this be accomplished? Simply by the owner refusing to build exits or entrances, or to allow any other road to bisect his own, either by building a bridge over it or a tunnel under it. Naturally, Tullock conceded to my initial reply, this would not make much economic sense, as such a highway would hardly maximize profits. Nevertheless, he insisted, his scenario constituted a reductio ad absurdum for road privatization.

During the next few years, my son and I discussed practically nothing else apart from this challenge. I wrote up the result of our many discussions, and we published this as Block and Block.3 The gist of our response to Tullock was that it would indeed be possible, even plausible, for other entrepreneurs to build tunnels under this “monopoly” road, or bridges over it, and that this would be fully consistent with the libertarian notion of homesteaded, private property rights.

Now, in Tullock,4 our debating partner once again defended his position of road socialism,5 and presumably used it to attack the notion of private, capitalistic highways we offered in Block and Block.6 I say “presumably,” since this is the usual pattern. When someone criticizes your view, and you reply, you usually defend your view, and use him to criticize those of your intellectual opponent.

But in this case, try as I may, I find it difficult to discern in Tullock7 any reference to his original point (private roads could cut the country in half), or, indeed, any answer at all to our response to this charge.

Nevertheless, I am enough of a traditionalist to want to respond to what purports to be a critique of an article of mine, even though, in this case, this is only a very rough approximation of the truth. As it happens, there is some correspondence between Tullock8 and my own work on highway privatization; however, this refers not to Block and Block,9 Tullock’s presumed target, but rather to Block.10

With this introduction, I press on to a consideration of Tullock.11

HOMESTEADING

Tullock correctly identifies the source of my own inspiration for private property with the Lockean-oriented homesteading writings of Rothbard.12 Here, in order to bring unowned land into ownership, one must “mix one’s labor with the land,” e.g., homestead it. But the University of Arizona13 professor is very much in error in stating that the homesteading principle no longer applies “in the present day world . . . [since] . . . there is practically no such [unowned] land available, hence you have to buy.”14

First of all, there are vast tracts of land, which have never been homesteaded in northern Canada, Siberia, and Alaska, to say nothing of Antarctica. And this applies as well to the gigantic Sahara and other deserts of Africa, Russia, China and elsewhere. Second, there are large reaches of land west of the Mississippi, which are claimed by the U.S. government, and administered by the Bureau of Land Management. These, too, have never been homesteaded. When and if we arrive at the free society of capitalism, there are still airplane and bridge paths, which could be owned, as well as subsurface rights, for mining and tunneling. Fourth, even were it true that there were absolutely no more land on the surface of the earth15 that is unowned, hence, if you wanted to own some of it “you have to buy,” homesteading theory would still be relevant to public policy considerations. For example, it is on the basis of homesteading that libertarians decide issues of reparations.16

Tullock seems to attack homesteading theory as based on theft: “if you look back at the chain of title of almost any existing piece of land you will find that some times in the past there was a forcible disposition of a previous owner.”17 This, unhappily, cannot be denied. It is a sad commentary, however, not on homesteading, but on man’s inhumanity to man.

As well, he objects to this doctrine on the grounds that some of its proponents, e.g., Locke, “wrote the constitution for the colony of South Carolina, which displaced [by force] a number of Indians.”18 This, too, fails as a critique, as it amounts to no more than an argument ad hominem. Stalin, presumably, believed that 2+2=4. That he did so no more casts doubt on this mathematical truism than does anything negative that can be said about Locke19 undermine homesteading.

As we have seen, this doctrine is still of importance in these cases, perhaps even more so as it can point in the direction of justified reparations for such past misdeeds.20

RAILROADS AND CANALS

Professor Tullock offers us a brief economic history of U.S. railroads and canals. “Basically, there was a general permission for anybody to build another railroad across an existing railroad, normally by condemning a right of way.”21 And ditto for roads and canals. So far, so good. But then, he concluded from this situation that, “No one seems to have tried building a very high bridge or drilling a tunnel under existing railroads.”22 Of course, no one in his right mind would consider doing any such thing when the government stood ready to violate private rights through condemnation. Anyone who did would tend to bankrupt himself, while his competitors avail themselves of the coercive power of the state.

But this does not at all counteract the point made in Block and Block,23 as Tullock implies. Our point was merely that if a highway owner refused to allow “breaches” in his road (e.g., entrance and exit ramps—cloverleaves—so that traffic could flow north and south even in the face of an east-west, ocean to ocean highway), then it might well pay for other road firms to engage in large extra bridge or tunnel expenses necessary to overcome this difficulty. Tullock’s was a totally hypothetical critique of our model of private road ownership. Thus, it is to hit somewhat below the belt to claim that since in reality “[n]o one seems to have tried building a very high bridge or drilling a tunnel under [an] existing railroad”24 and this negatively impacts our point.

REAL PRIVATE OWNERSHIP ENTHUSIASTS

Tullock characterizes “The Blocks’ position as being that of real private ownership enthusiasts. They just don’t let the government have any power.”25 This, presumably, he does not mean as a compliment. Strange, this, coming from the pen, well, the word processor, of an economist celebrated as a free-market advocate. As it happens, this is a very accurate depiction of the views of one of the authors he is criticizing, but only a rough approximation of the other. In any case, it is rather beside the point of Block and Block,26 which was to show, not that it would be unwise to give the government any power, but only control over roads, streets and highways. Surely, objecting to highway nationalization,27 monopolization by government, should not count as an “enthusiasm,” i.e., the archaic synonym for “hysterical.”

     And what of the charge that my co-author and I “think that the courts are not part of the government”? According to Tullock, this is because we “have the courts making the decisions of how far up or how far down ownership extends,” instead of relying upon the legislature which has an equally poor record for making “bad errors.”28 We nowhere accept the view, forsooth, that the courts are not part of government. Nor do we wish them to decide the extensions of ownership. Rather, we favor the view that this be determined on the basis of homesteading: you can only own so far down or up as you can mix your labor with. Of course some institution has to interpret this; and who else but the courts? The legislature, in contrast, is not in the business of applying natural (homesteading) law, but rather of enacting new legislation. As far as I am concerned, we have had more than enough of the latter; we could do with a bit of the former.

THE BLOCKADE

Professor Tullock charges, “if you had private and total ownership of roads, it would be possible to purchase all of them around a given plot of land.” If so, the owner could “collect the full rental value of the enclosed land.”29 This very point was anticipated in my article of 1979. This was how I addressed it:

Thirdly, in the rare case of a holdout that possesses an absolutely essential plot, it is always possible to build a bridge over this land or to tunnel underneath. Ownership of land does not consist of property rights up to the sky or down to the core of the earth; the owner cannot forbid planes from passing overhead, nor can he prohibit a bridge over his land, as long as it does not interfere with the use of his land. Although vastly more expensive than a surface road, these options again put an upper bound on the price the holdout can insist upon.30

At this point I would only add that Tullock’s treatment suffers from being static as opposed to a dynamic one. That is, he treats the problem as occurring after the trapped homeowner has built his house. Now, in effect, he must cede its entire value to the encroaching road owner. Had our author stopped to ask about the motivations of the homeowner for building in the first place, he would have realized that the highway corporation would have to entice him into doing this. And the only way it could accomplish this task would be by contractually ensuring him that it would never do any such thing.

THE ROAD MAP

Tullock “normally challenge[s] proponents of private roads to draw a road map in which competitive roads are shown.” This is possible, he concedes, in the case of limited-access highways, but we won’t be able to say for sure “until we have at least ten years of experience.” However, we have had limited access toll highways for centuries! Indeed, the first highways were private turnpike toll roads.31 Surely, according to this timetable, we should long ago have attained the information necessary to answer this question.32

It is entirely another matter, for Tullock, when it comes to “minor roads,” by which I assume he meant city streets, byways, alleys, avenues, lanes, etc. Here, he repeats his “challenge,” which “no one has ever met” to illustrate this schema on a map. And he underscores the importance of doing just that: “I would not like the only road from my house to be owned by a monopolistic income maximizer.”33

There are two alternative competing definitions of competition and monopoly, which have currency in the economics literature. According to the mainstream or neoclassical one,34 competition requires that a homogenous good be sold by thousands of small “competitors,” each of whom earns zero profits since there is full information about all aspects of the business and entry and exit are costless. Monopolistic elements enter whenever any of these conditions are missing altogether or even attenuated. There is no possible way that private roads could be competitive in this sense. Indeed, there is serious question whether any industry can fit this bill. The main reason for this definition is to support antitrust legislation.

Fortunately, there is an entirely different definition of competition and monopoly, a far more reasonable one. In the Austrian view,35 a competitive industry is one in which there is free (not costless!) entry; that is, no law exists which prohibits newcomers from taking part. How many firms actually choose to conduct business, and what proportion of total industry sales or employment or profit or anything else they account for, is strictly irrelevant. An industry can be competitive in this sense with one, two, a dozen, a hundred or a thousand firms in it, as long as there is no restricted entry. In contrast, a monopoly is a company that enjoys legal barriers, which keep out actual and potential competitors.

It will be clear from this Austrian definition that monopolistic roads are necessarily governmental, while competitive ones are necessarily private. Thus, Tullock, in his fear of a monopoly road owner surrounding his house, is rather misguided. He already has one such!

But what about this author’s fear that the “monopolistic income maximizer” would take advantage of him by charging him such high prices for access to his home that the entire value of it would be dissipated? As we have seen, this is a non-issue. If a private road owner completely surrounds Tullock’s house, of course, no one else can compete, but this would be due to the fact that the relevant private property rights would already be owned, and, thus, not available to another competitor. Since there would be no legally prohibited entry, apart from this, Tullock’s scenario would count, for the Austrian, as a competitive one. However, it is extremely unlikely that any homeowner would put himself in such a position without contractually obligating this competitive road owner to specify an attractive, e.g., competitive price for access before he purchased the house in question. Thus, full competition takes in the dynamic Austrian—not the static, neoclassical—sense.36

PRIVATE “GOVERNMENTS”

Tullock himself mentions yet another competitive scenario: his own “Sunshine Mountain Ridge Homeowners (sic) Association.”37 This is competitive in precisely the sense specified. The Sunshine Association had to compete with all other condominiums in the neighborhood in order to attract would-be homeowner Tullock. Although a private road-owning concern, they must have guaranteed to our author that he would be permitted access to the home they were trying to sell him; he wouldn’t have made the purchase unless the package deal (home plus access) was worth more to him than the sale price.

Does Tullock admit defeat, since here is the quintessential case of what Block and Block38 specified: a viable, private, competitive road-owning firm which does not exploit its customers? He does not. Instead, he claims that Sunshine “behaves just like a government.” It features “collective ownership . . . and functions by holding elections among the individual owners.”39

In other words, when his challenger is met (I can draw a “map” of the private Sunshine roads which are not limited access highways, but rather “minor” traffic arteries), he attempts to escape unscathed. This really will not do. The Sunshine Association is no more like a government than a fish is like a bicycle. Yes, both organize elections. But so does the local chess, bridge or flower club. Would Tullock also characterize these as governmental? I wouldn’t put it past him.

Anyone who can so mischaracterize political economic reality as to label a private club, a totally voluntary association, as a government, is capable of practically anything.

States Schumpeter in this regard:

the state has been living on a revenue which was being produced in the private sphere for private purposes and had to be deflected from these from these purposes by political force. The theory that construes taxes on the analogy of club dues or of the purchase of the services of, say, a doctor only proves how far removed this part of the social sciences is from scientific habits of mind.40

There is all the world of difference between the club dues and entry fees “imposed” by the Sunshines of the world and the taxes levied by the government. In the former case, they sell Tullock a house, and the right to use their road; but this is their own private property, and they have every right to ask whatever price they wish. In the latter case, government forces the Tullocks of the world to pay taxes for “services” they may or may not favor. If they refuse to enter this “deal,” they are threatened with incarceration.

But isn’t the government just like a gigantic club, in that we all have initially agreed to the constitution, under which government asks us to uphold our end of the bargain and pay whatever taxes (club dues) a majority decides? Not a bit of it. This response is simply not available to Tullock. The simple fact of the matter is that none of us now living, nor even anyone at the beginning of the United States, signed any such document.41 Do we not give voluntary assent to the government merely by continuing to live where we are and to pay taxes? No more than we would give assent to a highway man42 by paying him under the threat of a gun; no more than do we give consent to robbery in the inner cities by continuing to live in these dangerous areas.

COMPULSION

Tullock has an easy answer to the question he has posed for himself. Is there a problem with a “monopolistic” private owner (for the Austrians, a veritable contradiction in terms)? Well, then, “we just compel owners of roads to permit people to cross them.”43 How convenient, at least for the compeller, if not the compellee. But how to reconcile this with a much vaunted reputation as a free market advocate?

According to Tullock, “not even the Blocks would favor a monopoly owning all roads in the near vicinity of their homes. In essence, they would be converted into renters or their landlord would be.”44 We have already seen how innocuous is the Sunshine Association’s ownership of such streets.

In any case, what is wrong with renting houses, if that is the preference of the private “monopoly” street owner? Alternatively, if the occupiers of the homes want to own, not rent, all they need do is patronize a different private “monopoly” road firm. In such a way, competition is brought to bear in this industry.

 

_____________

45This chapter first appeared as Walter Block, “Roads, Bridges, Sunlight and Private Property: Reply to Gordon Tullock,” Journal des Economistes et des Etudes Humaines 8, no. 2/3 (June–September, 1998): 315–26.

46At that time I had already published on this topic: Walter Block, “Free Market Transportation: Denationalizing the Roads,” Journal of Libertarian Studies 3, no. 2 (Summer, 1979): 209–38; Zoning: Its Costs and Relevance for the 1980s (Vancouver, B.C.: Fraser Institute, 1980): 299–330; “Theories of Highway Safety,” Transportation Research Record 912 (1983): 7–10; “Public Goods and Externalities: The Case of Roads,” Journal of Libertarian Studies 7, no. 1 (Spring, 1983): 1–34. Subsequently I have published, Walter Block, “Road Socialism,” International Journal of Value-Based Management 9 (1996): 195–207; 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; and Michelle Cadin and Walter Block, “Privatize the Public Highway System,” The Freeman 47, no. 2 (February 1997): 96–97.

47Block and Block, “Roads, Bridges, Sunlight and Private Property Rights.”

48Gordon Tullock, “Comment on ‘Roads, Bridges, Sunlight and Private Property,’ by Walter Block and Matthew Block,” Journal des Economistes et des Etudes Humaines (1998): zx. Reprinted in the present volume as chapter 15.

49It seems harsh, even to me, to characterize Gordon Tullock, who has done more work than most economists to defend the institution of private and free enterprise, as a “socialist.” However, the shoe seems to fit, at least in this one case. After all, he does advocate that only government, and not the marketplace, should be allowed to own and manage highways. Were he to have done so for practically any other good or service (e.g., steel, the Post Office, autos, etc.) there would be no question but that this was socialism. Why then in this case does it appear so harsh to characterize these views in this manner? Perhaps it has to do with the widespread and deeply ingrained feeling of inevitability of state roadways, and the utter impossibility of any private alternatives. Good antidotes to this view include Block, “Free Market Transportation: Denationalizing the Roads;” Murray N. Rothbard, For a New Liberty (New York: Macmillan, 1973); William C. Woolridge, Uncle Sam, The Monopoly Man (New Rochelle, N.Y.: Arlington House, 1970); Gerald Gunderson, “Privatization and the 19th-Century Turnpike,” Cato Journal 9, no. 1 (Spring/Summer, 1989): 191–200; Dan Klein, “The Voluntary Provision of Public Goods? The Turnpike Companies of Early America,” Economic Inquiry (October 1990): 788-812; Dan Klein, John Majewski, and Christopher Baer, “Economy, Community and the Law: The Turnpike Movement in New York, 1797–1845,” Journal of Economic History (March 1993): 106–22; idem, “From Trunk to Branch: Toll Roads in New York, 1800–1860,” Essays in Economic and Business History 11 (1993): 191–209; Dan Klein and G.J. Fielding, “Private Toll Roads: Learning From the Nineteenth Century,” Transportation Quarterly (July 1992): 321–41; idem, “How to Franchise Highways,” Journal of Transport Economics and Policy (May 1993): 113–30; idem, “High Occupancy/Toll Lanes: Phasing in Congestion Pricing a Lane at a Time,” Policy Study 170 (November 1993); Gabriel Roth, A Self-Financing Road System (London: Institute of Economic Affairs, 1966); Gabriel Roth, Paying for Roads: The Economics of Traffic Congestion (Middlesex, U.K.: Penguin, 1967); idem, The Private Provision of Public Services in Developing Countries (Oxford: Oxford University Press, 1987); Madson Pirie, Privatization in Theory and Practice (London: Adam Smith Institute, 1986); Robert W. Poole, Jr., Private Tollways: Resolving Gridlock in Southern California (Los Angeles: Reason Foundation, 1988); idem, Privatizing Wisconsin’s Interstate Highways (Los Angeles: Reason Foundation, 1996), Policy Study 203 (April).

50Block and Block, “Roads, Bridges, Sunlight and Private Property Rights.”

51Gordon Tullock, “Comment on ‘Roads, Bridges, Sunlight and Private Property,’ by Walter Block and Matthew Block,” Journal des Economistes et des Etudes Humaines 7, no. 4 (December 1996): 589–92.

52Ibid.

53Block and Block, “Roads, Bridges, Sunlight and Private Property Rights.”

54“Free Market Transportation: Denationalizing the Roads.”

55Tullock, “Comment on ‘Roads, Bridges, Sunlight and Private Property’,” by Walter Block and Matthew Block.” All otherwise unidentified page citations refer to article.

56See Rothbard, For a New Liberty; Murray N. Rothbard, The Ethics of Liberty (Atlantic Highlands, N.J.: Humanities Press, 1982): 54, 85–96; also see Hans-Hermann Hoppe, The Economics and Ethics of Private Property: Studies in Political Economy and Philosophy (Boston: Kluwer, 1993); Robert W. McGee, “The Fatal Flaw in NAFTA, GATT and All Other Trade Agreements,” Northwestern Journal of International Law & Business 14, no. 3 (1994): 549–65; Tibor Machan, “A Defense of Property Rights and Capitalism,” in Introducing Applied Ethics, Brenda Almon, ed. (Oxford, England: Blackwell, 1995), 260–71; and Bruce L. Benson, “The Impetus for Recognizing Private Property and Adopting Ethical Behavior in a Market Economy: Natural Law, Government Law, or Evolving Self-Interest,” Review of Austrian Economics 6, no. 2 (Spring, 1993): 4380.

57At the time of the writing of this article, Tullock was a professor at the University of Arizona. However, at present time, 2007, he is located at George Mason University.

58Tullock, quoted in chap. 15, p. 311.

59We pass over the fact that according to homesteading theory, the oceans, seas, rivers and lakes of the planet are also fair game. As well, this applies to the moon, to Mars, to the asteroids, and indeed any other real estate, which may one day become available for human utilization.

60See Walter Block, “On Reparations to Blacks for Slavery,” Human Rights Review 3, no. 4 (July-September, 2002): 53-73.

61Gordon Tullock, quoted in chap. 15, p. 312.

62Ibid.; bracketed material added.

63It is hard to see why we should blame Locke for the actions of the South Carolinians.

64The libertarian starting point in all such cases is that possession is nine points of the law; e.g., the burden of proof is on those who would transform extant property titles. This is unfortunate for the Indians, who kept no written records, and for theft that occurred in antiquity, for which no written records have survived, since it will be all the more difficult to meet this burden. However, libertarian homesteading theory may well have important implications for more recent theft, such as that which occurred to the Japanese Americans during World War II, and even for the children of black slaves in America, who might reasonably claim what is now the property of the children of southern plantation owners who benefited from this outrage (on this see Walter Block, “On Reparations to Blacks for Slavery,” Human Rights Review 3, no. 4 (July–September 2002): 53–73; Walter Block, Geoffrey Brennan and Kenneth Elzinga, eds., Morality of the Market: Religious and Economic Perspectives (Vancouver: Fraser Institute, 1985); and Murray N. Rothbard, The Ethics of Liberty (Atlantic Highlands, N.J.: Humanities Press): 54, 85–96.

65Tullock, chap. 15, p. 312.

66Ibid.

67Block and Block, “Roads, Bridges, Sunlight and Private Property Rights.”

68Tullock, chap. 15, p. 312.

69Tullock, “Comment on ‘Roads, Bridges, Sunlight and Private Property’,” p. 590.

70Ibid.

71Responsible for the death of some 30,000 or more Americans on an annual basis for many decades, see Walter Block, “Free Market Transportation: Denationalizing the Roads,” Journal of Libertarian Studies 3, no. 2 (Summer, 1979).

72Tullock, “Comment on ‘Roads, Bridges, Sunlight and Private Property’,” p. 590.

73Ibid. Our author states, “Incidentally, the Blocks seem to think that I believe that owners of the roads would prohibit people from crossing rather than charge them a toll.” He now regrets saying anything that would be so interpreted. But he need not. He stated this in our conversation, not as likelihood as to what private owner would do, but what he could do, the better to refute our notion of private road ownership. Obviously, any rational profit-seeking road owner would do no such thing. But he certainly would have the power to do so if he wished, under the legal provisions of a private property rights oriented free society, which allowed private ownership. It was the burden of Block and Block, “Roads, Bridges, Sunlight and Private Property Rights,” to show that even in this unlikely scenario the case for privatization need not be embarrassed.

74See Block, “Free Market Transportation: Denationalizing the Roads,” p. 218.

75See Block, “Free Market Transportation: Denationalizing the Roads,” Klein, “The Voluntary Provision of Public Goods? The Turnpike Companies of Early America,” Klein, Majewski, and Baer, “Economy, Community and the Law: The Turnpike Movement in New York, 1797–1845”; idem, “From Trunk to Branch: Toll Roads in New York, 1800-1860,” Klein and Fielding, “Private Toll Roads: Learning From the Nineteenth Century”; idem, “How to Franchise Highways.”

76Tullock, “Comment on ‘Roads, Bridges, Sunlight and Private Property’,” p. 590. It cannot be denied that private turnpikes only started centuries ago, but did not remain in business all during that time. They failed, for the most part, when government refused to uphold law against theft of services, by not punishing those who avoided payment for road usage. However, these private roads did last for far more than a mere ten years. Also, if we count railroads as “roads,” then we have another large source of empirical information of the sort Tullock is seeking.

77Ibid.

78Which need not be cited since it is so prevalent in the profession.

79For an Austrian critique of neoclassical monopoly theory, see Dominick Armentano, Antitrust and Monopoly: Anatomy of a Policy Failure (New York: Wiley, 1982); Dominick Armentano, Antitrust Policy: The Case for Repeal (Washington, D.C.: Cato Institute, 1991); Don Armstrong, Competition vs. Monopoly (Vancouver, B.C.: Fraser Institute, 1982); Walter Block, “Coase and Demsetz on Private Property Rights,” Journal of Libertarian Studies 1, no. 2 (Spring, 1977); Walter Block, Amending the Combines Investigation Act (Vancouver, B.C.: The Fraser Institute, 1982); idem “Libertarianism vs. Libertinism,” Journal of Libertarian Studies 11, no. 1 (Fall, 1994); Donald Boudreaux and Thomas J. DiLorenzo, “The Protectionist Roots of Antitrust,” Review of Austrian Economics 6, no. 2 (1982): 81–96; Jack High, “Bork’s Paradox: Static vs Dynamic Efficiency in Antitrust Analysis,” Contemporary Policy Issues 3 (1984–1985): 21–34; Fred McChesney, “Antitrust and Regulation: Chicago’s Contradictory Views,” Cato Journal 10 (1991); Murray N. Rothbard, Power and Market: Government and the Economy (Menlo Park, Calif.: Institute for Humane Studies): chap. 1 and pp. 87–90; William F. Shugart II, “Don’t Revise the Clayton Act, Scrap It!,” Cato Journal 6 (1987): 925; Fred L. Smith, “Why Not Abolish Antitrust?,” Regulation (January–February 1983): 23.

80This is of course not the “perfect” competition of the neoclassical. It is the rivalrous competition of the Austrians.

81Tullock, “Comment on ‘Roads, Bridges, Sunlight and Private Property’,” p. 591.

82Block and Block, “Roads, Bridges, Sunlight and Private Property Rights.”

83Tullock, “Comment on ‘Roads, Bridges, Sunlight and Private Property’,” p. 591.

84Joseph A. Schumpeter, Capitalism, Socialism and Democracy (New York: Harper, 1942): 198; emphasis added.

85A handful of men signed the Declaration of Independence, a very different document. Even had these few signed the Constitution itself, how could that commit the millions of others alive at the time to “club” membership.

86Lysander Spooner, No Treason (Larkspur, Colo.: Pine Tree Press, [1870] 1966).

87Tullock, “Comment on ‘Roads, Bridges, Sunlight and Private Property’,” p. 591.

88Ibid.

• 1*This chapter first appeared as Walter Block, “Roads, Bridges, Sunlight and Private Property: Reply to Gordon Tullock,” Journal des Economistes et des Etudes Humaines 8, no. 2/3 (June–September, 1998): 315–26.
• 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.
• 29Z. Haritos, “Theory of Road Pricing,” 13 Transportation Journal (Spring, 1974): 57.
• 30Smerk, Urban Transportation, p. 228.
• 31Even if someone intends, for some reason, to purposefully invest in a “losing” proposition, we would still deny, ex ante, that he intends to worsen his position. That people act in order to benefit themselves is an axiom of economics. If a person intends to lose money through his investment, it could only be because, by so doing, he thinks he will increase his psychic income by enough to more than compensate himself for his loss of money. In short, he is engaging in charity.
• 32Roth, Paying for Roads, p. 61.
• 33Herbert D. Mohring, “Urban Highway Investments,” in Robert Dorfman, ed., Measuring Benefits of Government Investments (Washington, D.C.: Brookings Institution, 1965), p. 240.
• 34Haritos, “Theory of Road Pricing,” p. 56.
• 35Winch, The Economics of Highway Planning, p. 3.
• 36For an explanation of “monopoly as a government grant of exclusive privilege, see Rothbard (1971), pp. 586–619.
• 37James M. Buchanan, “The Pricing of Highway Services,” National Tax Journal 5, no. 2 (June 1952): 97. See also Smerk, Urban Transportation, p. 179; and Norman L. Cooper, Urban Transportation: An Answer (Bloomington: Bureau of Business Research, Indiana University, 1971), pp. 1, 15.
• 38Herbert Mohring, “Urban Highway Investments,” in Robert Dorfman, ed., Measuring Benefits of Government Investments (Washington, D.C.: Brookings Institution, 1965), p. 248.
• 39O.H. Brownlee and Walter W. Heller, “Highway Development and Financing,” American Economic Review (May 1956): 235.
• 40Wohl, “Must Something Be Done About Traffic Congestion?,” pp. 407–08.
• 41Morris, “Freeways and the Urban Traffic Problem,” p. 523.
• 42Dyckman, “Transportation in Cities,” p. 143. See also Owen, The Metropolitan Transportation Problem, p. 109.
• 43Bish and Kirk, Economic Principles and Urban Problems, p. 139. See also Anthony Downs, Urban Problems and Prospects (Chicago: Markham Publishing, 1970), p. 176; William Vickrey, “Maximum Output or Maximum Welfare? More on the Off-Peak Pricing Problem,” Kyklos 24 (May 1971): 305, Thompson, A Preface to Urban Economics, p. 334; Meiburg, “An Economic Analysis of Highway Services,” pp. 648, 653; Wohl, “Must Something Be Done About Traffic Congestion?,” p. 406; and Sam Yagar, “Potential Demand Response to Improved Roadway Service,” Traffic Quarterly (January 1973): 133. Gabriel Roth, Paying for Roads: The Economics of Traffic Congestion (Middlesex, England: Penguin) objects as follows: “It is doubtful whether cities as we know them today could ever be designed to accommodate all the vehicles that would appear if free uncongested roads were made available to them” (p. 15).
• 44Such prohibition would, of course, be inconsistent with a pure free-market system.
• 45Roads, Bridges, Sunlight, and Private Property: Reply to Tullock*
• 46Were 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.
• 47Were 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.
• 48Were 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.
• 49Were 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.
• 50Were 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.
• 51The 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.
• 52By the “middle thirties,” indeed, nearly one-half million people had fallen victim to traffic fatalities.
• 53Vehicle 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).
• 54Further, 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.
• 55We 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.
• 56Today, 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.
• 57[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.
• 58Let 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.
• 59Consider 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.
• 60This 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.
• 61For 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.
• 62Just 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.
• 63A 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.
• 64On 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.”
• 65A 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.
• 66Therefore, 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.
• 67The 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.
• 68Instead 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.
• 69We 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.
• 70The 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.
• 71On 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.
• 72It 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.
• 73There is joint road consumption by consumers with different demand functions. The road is not as good as steel which may be produced to different specifications of quality and dimensions. The economic characteristics necessitate the production of one kind of road for all users at any given place.
• 74Another objection charges that competition among roadway entrepreneurs would involve wasteful duplication. Says George M. Smerk: “[C]ompetition between public transport companies, particularly public transit firms with fixed facilities, would require an expensive and undesirable duplication of plant.”
• 75We must first of all distinguish between investment ex ante and ex post. In the ex ante sense, all investment is undertaken with the purpose of earning a profit. Wasteful overbuilding or needless duplication cannot exist in the ex ante sense; no one intends, at the outset of his investment, that it should be wasteful or unprofitable. Ex ante investment must of necessity, be non-wasteful.
• 76while it is possible to envisage competition in the provision of roads connecting points at great distances apart—as occurred on the railways in the early days—it is not possible to envisage competition in the provision of access roads in towns and villages, for most places are served by one road only. A highway authority is in practice in a monopoly position. If any of its roads were to make large profits, we could not expect other road suppliers to rush in to fill the gap. If losses are made on some roads, there are no road suppliers to close them down and transfer their resources to other sectors of the economy.
• 77Says Mohring, “But indivisibilities do exist in the provision of transportation facilities. Each railroad track must have two rails, and each highway or country road must be at least as wide as the vehicles that use it.” In similar vein, says Haritos, “To get from A to B, you need a whole lane, not just half, for the full distance, not half of it.” And, in the words of Peter Winch, “indivisibility of highways makes it impractical to have competing systems of roads, and the responsible authority must therefore be a monopoly.”
• 78Says Mohring, “But indivisibilities do exist in the provision of transportation facilities. Each railroad track must have two rails, and each highway or country road must be at least as wide as the vehicles that use it.” In similar vein, says Haritos, “To get from A to B, you need a whole lane, not just half, for the full distance, not half of it.” And, in the words of Peter Winch, “indivisibility of highways makes it impractical to have competing systems of roads, and the responsible authority must therefore be a monopoly.”
• 79Says Mohring, “But indivisibilities do exist in the provision of transportation facilities. Each railroad track must have two rails, and each highway or country road must be at least as wide as the vehicles that use it.” In similar vein, says Haritos, “To get from A to B, you need a whole lane, not just half, for the full distance, not half of it.” And, in the words of Peter Winch, “indivisibility of highways makes it impractical to have competing systems of roads, and the responsible authority must therefore be a monopoly.”
• 80We do not believe that the existence of indivisibilities is enough to guarantee monopoly, defined by many as a situation in which there is a single seller of a commodity. There are indivisibilities in every industry, and in all walks of life. Hammers and nails, bicycles and wheelbarrows, locomotives and elevators, tractors and steel mills, professors and podiatrists, ballet dancers and bricklayers, musicians and motorists, ships and slippers, buckets and broomsticks, none of them can be chopped in half (costlessly) and be expected to produce just half of what they had been producing before. A railroad needs two rails (with the exception, of course, of the monorail), not one, or any fraction thereof. Also, in order to connect points A and B, it must stretch completely from one point to the other. It may not end halfway between them, and offer the likelihood of transportation between the two points.
• 81(e) Expanding roads. One of the most popular antidotes to congestion is to build more roads. This solution, benefiting from the seeming presence of common sense, has attracted widespread attention and praise. As Buchanan reports, “the recommended solutions usually take the form of expansion and reconstruction of the highway system, all of which involve considerable additional investment of resources in highways and streets.” Mohring goes even further. In his view,
• 82Currently, the only technique being employed to an appreciable extent to alleviate urban traffic congestion is investment in additional highway capacity. Some of these additions to capacity have involved widening or otherwise altering existing arterial streets, but most of them have involved the construction of entirely new, high-speed, limited-access expressways.
• 83without raising the amounts spent by highway users, excess demand also can be cured by drawing on the general taxpayer to increase the supply—as some auto manufacturers and the American Automobile Association will testify.
• 84Oft-times, in addition to calling for increased roadway investments, specific designs are also advocated. Wohl, for example, favors building roads to bypass Central Business Districts of large cities since “through traffic as a proportion of downtown street traffic . . . usually ranges between 30 and 60 percent.” And Morris, in a thinly disguised call for an increased roadway supply, favors “using urban freeway design criteria which give preference to considerations of peak hour capacity rather than off-peak travel time.”
• 85Oft-times, in addition to calling for increased roadway investments, specific designs are also advocated. Wohl, for example, favors building roads to bypass Central Business Districts of large cities since “through traffic as a proportion of downtown street traffic . . . usually ranges between 30 and 60 percent.” And Morris, in a thinly disguised call for an increased roadway supply, favors “using urban freeway design criteria which give preference to considerations of peak hour capacity rather than off-peak travel time.”
• 86Additional accommodation creates additional traffic. The opening of a freeway designed to meet existing demand may eventually increase that demand until congestion on the freeway increases the travel time to what it was before the freeway existed.
• 87A second reason why new routes congest prior to forecast is simply that when transportation capacity increases and peak-hour time decreases, fewer drivers will take the trouble to beat the rush. Instead, they will travel closer to the time of their actual preference. Thus as traffic capacity increases, there is a shortening of the rush hour, but very little reduction in congestion during the new shorter peak-hours of travel.
• 88The answer lies in the concept of price: when charges are prohibited, i.e., when there is a zero price for highway use, then and only then, attempts to build our way out of congestion are doomed to failure. As long as highway services are “free”—as long as people pay for them whether they use them during peak periods or not, and pay no more for this use than for nonuse—then the “equilibrium” phenomenon will tend to consign to failure all attempts to cure congestion by adding to the highway stock. Private enterprise, too, would “fail” if it were prohibited from charging a price for services rendered.