17. Who is Responsible for Traffic Deaths

17 Who is Responsible for Traffic Deaths?

Let us posit, if only for argument’s sake,1 that the cause of road fatalities is governmental mismanagement, and not the usual litany of explanations (e.g., speeding, drunk driving, vehicle malfunction, driver error, bad weather, etc.) Some 40,000 people lose their lives each year on U.S. highways.2 Is the government, under these assumptions, responsible for them all? One criticism of this thesis is that bureaucratic management is not at all so responsible, for if the state were not in charge of managing vehicular transportation arteries, then private enterprise would do so. In this case, we would have to subtract the number of fatalities under these alternative institutional arrangements from present statistics. Then, central planning would be liable for either fewer deaths, if under market conditions fewer people would die, or, perhaps, none at all if more fatalities occurred under these conditions. For example, if under laissez-faire capitalism for roads, say, 50,000 would perish; then, far from the government being liable for any deaths at all, it would be credited for saving 10,000 per year. Alternatively, suppose that with private property highway firms managing this resource, only 15,000 would lose their lives. Then, by subtracting this amount from the extant figure (40,000 – 15,000 = 25,000) we deduce that government was responsible for killing only 25,000, not 40,000 people.

Let us now attempt to analyze this situation and lay blame for highway fatalities where it belongs. We do the blaming, not for the sake of blaming, but, rather, in an attempt to ameliorate conditions. We can scarcely achieve improvement if we are not clear as to the cause of this calamity of roadside deaths.

So, is it likely that private enterprise would be run more efficiently in this regard than the public sector and thus kill fewer people? It is difficult to definitively arrive at any such conclusion, since what we are involved in is a contrary-to-fact conditional: at present, government owns and manages the roads. But if this were not so, and if, instead of the status quo, somehow entrepreneurs were to take over these reins, then what would be the highway death toll? To appreciate the difficulty of any such extrapolation, imagine the scenario wherein wristwatches were always manufactured by government, and now the private sector was about to take over. The questions would come thick and fast, with no obvious answer: how many companies would go into this business? What would their profits be? Where would they locate? Would wrist bands be made of leather or metal, and would these two industries be vertically integrated or not (e.g., would one firm manufacture the former, and another the latter, or would both come under the auspices of only one company)? What proportion of watches would feature Mickey Mouse, be waterproof, or feature stopwatches? Would these timepieces be sold outright, or be given as gifts to people who opened bank accounts? The reason these questions cannot be answered beforehand is because they are essentially entrepreneurial issues, not economic ones. The answers can only emerge in a market, and cannot be predicted by non-market participants, such as economists.

Despite the foregoing considerations, however, even if no exact answers can be gainsaid, it might be possible to pierce the fog to some small degree and attain some measure of information, some ballpark estimates.

For one thing, it is exceedingly probable that roads markets will outperform bureaucrats; they do so, after all, in every area of endeavor for which there are comparable statistics.3 In fact, there is even a “two to one” rule that emanates from this literature:4 for every dollar spent by private enterprise to shift a ton of garbage, pave a given distance of road, or offer a given amount of fire protection, doing such a job through the public sector will cost two dollars. If we can extrapolate from this phenomena to highway fatalities, and translate directly from cost savings into lives saved, then, employing the “two to one” rule we arrive at the result that under private control, deaths will be cut in half, from 40,000 to 20,000.

What is the evidence for this “two to one” claim? Khursheed and erding5 state:

Scottsdale (Arizona) saves forty-seven percent in costs by contracting out for fire protection services. In other words, if Scottsdale had chosen to have the public sector provide its fire protection, production costs would have close to doubled.6

Is there any reason to believe that private/public advantages would be even more pronounced in street and highway management than in the more pedestrian goods and services such as running a bus line or delivering the mail? There is, there is. The former is tremendously more complicated than the latter. It is sometimes said “X is too complicated to be left to the marketplace.” In point of fact, the very opposite is the case. If there is a simple function, such as, perhaps, running a lemonade stand, something that any halfway competent seven year old child could accomplish, then, maybe, the state apparatus could acquit itself not too badly in the provision of this beverage.7 In other words, if nationalize or municipalize we must for a given number of items, then it would undoubtedly be best to give over to the bureaucrats such simple and unimportant items such as lemonade, rubber bands, paper clips and their ilk, reserving more important and complex provision such as highways to the always more efficient private sector. To return to our attempts to calculate the relative efficiency of public and private enterprise, if there is a two to one rule that operates regarding easy to supply products and services, then, perhaps, this rule might be amended to a three to one rule for difficult goods, such as surface transportation. If so, then, according to our calculations, highway fatalities would be cut to a third of their present level, and we would move from 40,000 to 13,334.8

We can, however, go even further than that in this direction, far further. Bennett and DiLorenzo (1983) report that, insofar as weather forecasting is concerned, the private sector costs are only some 28 percent of what federal government forecasters do. If we can extrapolate from this (roughly) four to one bit of empirical evidence in a very different field of endeavor to road fatalities, deaths can be cut from a horrendous 40,000 to a “mere” 10,000.

But this is not at all the way that White sees matters. He states:

Block . . . attempts . . . to pin . . . the blame for all highway fatalities on the government. The argument . . . consists of two related parts: 1) all highway deaths can be causally attributed to government management; (2) the government is morally responsible for these deaths. . . .

Would the highway fatality rate be zero under a system of private ownership of the roads? There is good economic reason to suspect not. . . . It is not presently zero in private amusement parks, or in private road racing, or in private air travel. If we cannot then attribute all highway deaths to governmental administration of the highways, how many can we so attribute? I find it impossible to say, for it is impossible to know a priori what the death rate would be under private ownership and management. It does not seem so implausible to me to suppose that it might be even higher than the present rate.9

Let us first focus on attribution. Let us posit the claim that governments have murdered some 173 million of their own citizens in the last century, and that, specifically, the partial breakdown was as follows: Mao, 60 million; Stalin 20 million; Hitler, 11 million; Pol Pot, 2 million. Assume, arguendo, all of these figures10 to be true. Following White’s logic, we would not be able to make any such attribution. Why? Because all such figures ignore contrary-to-fact conditionals. To wit, had these governments not gone on their various murderous rampages, some of these people, assuredly, would have died in any case. Some would have perished, merely, of old age. Others would have died from diseases completely unrelated to statist mismanagement, and therefore could not be fairly attributed to their socialized medicine nostrums, for example.

White’s, in other words, is an improper use of the concept of “attribution.” In my view, there is no need at all to refer to such contrary-to-fact conditionals. If Hitler, for example, murdered 11 million people, then, by gum and by golly, he killed 11 million people. The fact that, say, one million of them would have died in the half decade it took the Nazi regime to accomplish this slaughter is completely beside the point. They obliterated 11 million, dagnabit, not 10 million.

But we do not need to resort to mass murderers of a gargantuan scale to make the point that White misconstrues what it is to “attribute” responsibility for an act to someone. It applies to moderate mass murderers as well. Janet Reno took responsibility for the unjustified killing of some 86 innocents including women and children at Waco,11 as did Tim McVeigh for 168 people, also including women and children, at the Murrah Federal Building in Oklahoma City.12 Perhaps—likely, even—some of these would have otherwise died of natural causes, had these nefarious deeds not taken place. Yet, we still “attribute” all 86 to Reno, and all 168 to McVeigh, this alternative possibility notwithstanding. Hence, there is no need at all to determine the contrary-to-fact conditional of how many people would have perished on the nation’s roads were they privatized, and to subtract this number from the 40,000 or so who are butchered under governmental management.

The highway fatality rate need not at all be zero under a system of private ownership to entitle us to attribute to government all the fatalities currently occurring under public sector auspices. Very much to the contrary, just as we attribute to murderers all the deaths they cause, we must do the very same thing for governmental road managers.

Let us now consider the analysis presented above at the outset of this chapter. According to it, if road deaths are 40,000 under the aegis of the state, and would have been 15,000 with markets providing roads, then we attribute only 40,000 – 15,000 = 25,000 fatalities to the present management. Nonsense. We hold these bureaucrats responsible for the entire amount of misery they have caused.

However, it cannot be denied that it is an interesting, nay, a fascinating question, to ask how the number of highway deaths might change with a move to privatization. White makes much of the fact that

many drivers would choose to patronize roads without low fatality rates but with other desirable features, such as no speed limit. There may currently be too few deaths on the highways, in the sense that consumers in a free market would demonstrate a preference for higher speeds over fewer deaths.13

I regard this as a wildly unreasonable speculation. No, it cannot be ruled out of court on logical grounds alone. It involves no inner self-contradiction. But it is so radically out of step with all of our empirical knowledge of how the world works. Why is the White scenario so unrealistic?

First of all, it is not clear that travel speed per se, always and at all levels, is causally related to deaths. Obviously, ceteris paribus, the faster a vehicle moves, the more likely it is to come to no good end. However, going fast, even ninety miles per hour on a clear day on a straightaway with no other vehicles within sight is undoubtedly less dangerous than weaving in and out of heavy traffic at sixty miles per hour in a thoroughfare designed for travel at thirty-five miles per hour.

Second, under free enterprise, typically, but rarely if ever under the careful supervision of the nanny state, it is possible to have your cake and eat it too. In this case, it is to attain both speed and safety. It does not much strain the imagination to suppose that under a free society, there might be some road owners who would adopt a “fast but safe” policy. For example, they might place a minimum speed requirement on their customers of, say, ninety miles per hour,14 charge more for this privilege, but keep large distances between cars. As long as the elasticity of speed with regard to price were positive, this could be a profitable entrepreneurial decision. That is, people would pay sufficiently more for being able to go fast to more than offset the road owner for loss of additional consumers.

So “speed” is really not the answer. We can have quicker transportation,15 and greater safety, both. White16 takes me to task for my insufficient defense of “daredevils and high-speed freaks . . . who prefer to travel deadlier highways.” It cannot be doubted that there are some such people. Who has not seen wild-eyed young kids drag racing on our city streets amidst normal traffic? Perhaps the best example of this barbarous behavior is Rodney King, arrested for speeding at near one hundred miles per hour through city streets.17 In White’s interpretation, private enterprise would cater to such individuals, instead of outlawing them as at present, and thus deaths would rise as we moved from public to private provision.

Nonsense on stilts. I have no doubt that the marketplace would accommodate such tastes. It does so for a plethora of weird desires;18 why not this one too? Where there is money to be made, there will be an entrepreneur arising to provide the supply. However, I draw the opposite conclusion from White regarding the implications of all this for highway fatalities. In my reasoning, people with outré tastes tend to be segregated by market forces.19 Rich live with rich, poor with poor, hippies with hippies, fundamentalists with fundamentalists. Voluntary residential patterns emerge, too, with regard to race and national origin and ethnicity,20 sexual preference,21 even age.22 Why should matters be any different as far as “daredevils and high-speed freaks”23 are concerned?

But if this is so, then such denizens would tend to congregate together with one another. Then, to be blunt about this, they would then kill each other in a voluntary manner, and stop doing so to the rest of us. Such roads would constitute a sort of “Murder Park”24 on wheels. The private “freak roads” could be offered chicken races, where two cars race toward each other at breakneck speeds, and the one who swerves away from the other at the last minute loses, and is denigrated as “chicken,” a fate worse than death for these worthies. They could try to establish land speed records in crowded conditions, in sharp contrast to those who attempt to do so in places like the Salt Flats of Utah under relatively safe conditions.25 Drag races might even become rather pedestrian. Who says that everyone should stay to the right, or even left, while driving. Surely, this is far too restrictive for the “free spirits” we are now describing. All of these rules, for that matter, are merely bourgeois prejudices.

Yes, the death rate of this small tiny ilk might well sky-rocket,26 but that would reduce the overall death rate from vehicle fatalities, as they killed each other off, and left alone the general public which suffered all too long from their depredations. So White’s assessment that road owners might well cater to dangerous drivers tells against his very own thesis that this implies more overall traffic fatalities. Says White: “The speedy driver has a right to endanger himself and others by speeding so long as the road owner and they consent. And consent they do, if they enter a clearly-marked no-speed-limit highway.”27 Yes, dangerous (not merely “speedy”) drivers are a menace to all other motorists. But if they voluntarily slaughter one another, this will make it less likely they will pulverize us, not more likely. I stand by my contention that private entrepreneurs will “generally find it profitable . . . to virtually eliminate highway deaths.” Yes, a few weirdos will perish under free enterprise, and bad cess to them.

White now moves on to a different issue:

Is government . . . criminally responsible for these deaths? The answer to this question hinges on whether we consider individuals to be coerced into driving on dangerous highways. In a sense they are not, if voluntarily entering a government highway ipso facto constitutes a waiver of liability claim against accidental fatality. In a sense they are, if government has legally prohibited potential highway entrepreneurs from offering alternative roads.28

Again, White takes on the role of apologist for governmental depredations. Of course the apparatus of the state “has legally prohibited potential highway entrepreneurs from offering alternative roads.”29 The road socialists could scarcely maintain their monopoly over this vital command post of the economy were this not true. This being the case, it is exceedingly difficult to see how motorists can be considered to be “voluntarily entering a government highway.” Nor is it possible to see how an act taken under duress can “constitute a waiver of liability claim against accidental fatality.”

Here is the scenario. First, the government banishes, by legislative fiat, all chance at relatively safe private roads, leaving as the only alternative governmental, hell-hole highways. Then, given that it would be impossible for masses of people to travel on nongovernment road and street options such as helicopters, motorists venture out onto these booby trapped traffic arteries and are slaughtered like flies. Along comes White who asserts that, since the put upon public “voluntarily enter[ed] a government highway, [this] ipso facto constitutes a waiver of liability claim against accidental fatality.” Using “logic” of this sort, we can conclude that if a gunman forces a victim to jump to his death off the roof of a skyscraper by threatening to shoot him if he does not, the latter “voluntarily” plunged to the concrete below. No. When government precludes private highways by threatening violence against all those who would provide these services, and as a result the people have little or no alternative but to patronize these death traps, we may not at all conclude that their entrance onto the public streets and highways was a “voluntary” one. Very much to the contrary, when you eliminate a safe alternative, “allowing” people to venture out onto a very much more dangerous one, you are forcing them to make this choice under duress. So, yes, the government is very much criminally responsible for the deaths they cause, all of them, not just those subtracted by the number who would perish on private roads, White to the contrary notwithstanding.

As I write this, I read an editorial in the local paper, The Times-Picayune entitled “111 is greater than 53.”30 According to the editorialist, in the two years prior to the repeal of the mandatory helmet law for motorcyclists in Louisiana, there were 53 fatalities for drivers of this vehicle, while the comparable figure for a similar time period afterward was 111. Yes, but every one of those 53 was what we can characterize as a coercive death: drivers were laboring under a coercive law. Similarly, every one of those 111 was what we can characterize as a “voluntary” death: drivers were free to assume these risks or not. (Helmet wearing is not illegal when it is not mandated.) A similar point may be made in comparing road fatalities under public and private aegis.

This author further beclouds the real issues when he says:

It is an important libertarian principle that we judge government by the same standards we apply to ordinary criminals. The question is: does liability fall on the landowner for an accident involving two other parties on his premises?31

White is absolutely correct when he calls for equal treatment of public and private or “ordinary” criminals.32 But there are none of the latter in the present scenario; here, there are only the government criminals who prevent private entrepreneurs from setting up road and highway businesses, and the contrary-to-fact conditional, selfsame private entrepreneurs who would set up road and highway businesses were they only allowed to do so by law. So the question: “does liability fall on the landowner for an accident involving two other parties on his premises?” must be answered for only these two, government criminals33 and private entrepreneurs, not any “ordinary criminals.”

The first issue has already been answered: yes, the road socialists cause some 40,000 highway fatalities, and they are morally, and should be legally, responsible for all of them. Suppose now a system of private highways on which, say, five thousand people die annually. Should the private road owners be legally responsible for any of them? It all depends upon the contract in operation between these entrepreneurs and their customers. If nothing at all is specified, we must resort to implicit contracts, a dangerous legal arena. But, while we cannot fully and confidently predict the operation of a now nonexistent highway industry, it seems altogether likely that the private road owners would insist upon contracts not holding themselves liable for whatever few fatalities still occurred in this venue. That being the case, White’s question can be answered definitively: in the free society, no street owner would be liable for any traffic deaths that occurred on his premises.

This, of course, is not to deny that present day courts would have none of this. Given our litigious society, there is no doubt that private road owners would be subjected to all sorts of law suits by those who had been hurt in traffic accidents.34 It is unlikely in the extreme that judges of this ilk would allow such contracts. Most probably, they would be rendered null and void for being against “the public interest,” or “public policy.” But we are now discussing law in the free society, not in its present fever swamp. Under libertarian law, contracts between “consenting capitalists”35 would not be set aside in so cavalier a manner.

_____________

36Many of the other chapters in this book make precisely this case. Here, then, we merely assume it to be true.

37For the official statistics, see http://www.publicpurpose.com/hwy-fatal57+.htm.

38Says William L. Megginson and Jeffrey M. Netter, “From State to Market: A Survey of Empirical Studies on Privatization,” Journal of Economic Literature 39 (June 2001): 380: “Research now supports the proposition that privately owned firms are more efficient and more profitable than otherwise comparable state-owned firms.”

39According to E.S. Savas, How to Shrink Government: Privatizing the Public Sector (Chatham, N.J.: Chatham House Publishers, 1982), p. 93: “the cost of municipal (solid waste collection) service (is from) 61 to 71 percent greater than the cost . . . of contract collection.” Stated Steve H. Hanke, “Money and the Rule of Law in Ecuador,” Speech given in Quito, Ecuador (October 2003): “The public cost incurred in providing a given quantity and quality of output is about twice as great as private provision. This result occurs with such frequency that it has given rise to a rule-of-thumb: ‘the bureaucratic rule of two’.” For more on this, see Steve H. Hanke, “Privatization,” in James Eatwell, Murray Milgate and Peter Newman, eds., The New Palgrave: A Dictionary of Economics (London: Macmillan Press, 1987), pp. 976–77. For further cost comparisons, all to the denigration of the public sector, see James T. Bennett, Better Government at Half the Price (Boston: Gree Hill Publishing, 1980); Thomas erding, ed., Budgets vs. Bureaucrats: The Sources of Government Growth (Durham, N.C.: Duke University Press, 1977); James T. Bennett and Thomas DiLorenzo, “On Weather Forecasting,” Journal of Labor Research (1983); idem, Unfair Competition: The Profits of Non-Profits (New York: Hamilton Press, 1989); Robert Poole, Cutting Back City Hall (New York: Reason Press, 1976); E.S. Savas, “Refuse Collection,” Journal of Urban Analysis (1979).

40Aayisha F. Khursheed and Thomas E. erding, “Organizing Government Supply: The Role of Bureaucracy,” in Fred Thompson and Mark T. Green, eds., Handbook of Public Finance (New York: Marcel Dekker, 1998): 46–47.

41See on this also R. Ahlbrandt, “Fire Protection,” Public Choice (1973).

42Although the question would surely arise, “Would you buy lemonade from the government?”

43It will be readily appreciated that these numbers are used for illustration purposes only, and have no basis in any actual statistics.

44Lawrence H. White, “Comment on Block,” unpub. manuscript, p. 1.

45See on this Robert Conquest, The Great Terror (Edmonton, Alberta: 1990); ibid., The Harvest of Sorrow (New York: Oxford University Press, 1986); Stephane Courtois, Nicolas Werth, Jean-Louis Panne, Andrzej Paczkowski, Karel Bartosek and Jean Louis Margolin, The Black Book of Communism: Crimes, Terror, Repression, trans. from French by Jonathan Murphy and Mark Kramer (Cambridge, Mass.: Harvard University Press, 1999); R.J. Rummel, Death by Government (New Brunswick, NJ: Transaction Publishers, 1994); ibid., Democide: Nazi Genocide and Mass Murder (New Brunswick, N.J.: Transaction Publishers, 1992); ibid., Statistics on Democide (Charlottesville, Va.: Center on National Security and Law, University of Virginia, 1997).

46http://www.Firearmsandliberty.com/waco.massacre.html.

47Strange why one of these two has been executed, and the other, not.

48White, “Comment on Block,” p. 2.

49If it were a three-lane highway, the “slow” lane might be obliged to travel at 90 mph, the medium lane at 110 and the fast lane at 130.

50Do you ever strictly adhere to statist speed limits? If you do, you’ll find that you are by far the slowest vehicle on the roadway. Do 50 in a 50 mph zone and people will give you the finger for clogging up traffic; ditto for 60 and 70 mph. Why do the road socialists perpetrate this policy on us? For one thing, if they inculcate rules that everyone breaks, there will always be a “criminal” to fine. For another, and more ominously, it may well be part of the phenomenon against which Ayn Rand, “America’s Persecuted Minority: Big Business,” in Capitalism: The Unknown Ideal. (New York: Signet, 1967), warned us. By converting all of us into lawbreakers, the government can rely upon our guilt to better rule us.

51White, “Comment on Block,” pp. 2–3.

52For an analysis of this episode, see Walter Block, “Decentralization, Subsidiarity, Rodney King and State Deification,” European Journal of Law and Economics 16, no. 2 (November): 139–47.

53Sado-masochism, child pornography, fetishes that beggar description.

54On market zoning, see Bernard Seigan, Land Use Without Zoning (Toronto: D.C. Heath).

55Thomas Sowell, Race and Economics (New York: Longman, 1975); idem, Ethnic America (New York: Basic Books, 1981); idem, The Economics and Politics of Race: An International Perspective (New York: Morrow, 1983); idem, Race and Culture: A World View (New York: Basic Books, 1994).

56Richard Posner, Sex and Reason (Cambridge, Mass.: Harvard University Press, 1992).

57Young people congregate in Manhattan, older ones in Florida.

58I assume that there is a large difference between a high-speed freak and a person who merely wishes for quicker transit time, i.e., that the former will take other risks that the latter would reject out of hand.

59Murder Park is an imaginary institution where people are given loaded pistols, and agree to shoot one another. For further explication of this vital industry, see Walter Block, “Kuflik on Inalienability: A Rejoinder,” unpublished ms.; idem, “Radical Privatization and other Libertarian Conundrums,” International Journal of Politics and Ethics 2, no. 2 (2002): 165–75.

60The record is currently 763 miles per hour; www.landspeed.com/(11/103).

61The Darwin Awards “commemorate the remains of individuals who contribute to the improvement of our gene pool by removing themselves from it in really stupid ways.” See on this www.darwinawards.com/(11/1/03).

62White, “Comment on Block,” p. 3.

63Ibid.

64Ibid.

65October 31, 2003, p. B6.

66White, “Comment on Block,” pp. 3–4.

67My paper, Block (2004b), is an attempt to do just that.

68I apologize for the continual use of this phrase. I find I am quite unable to resist.

69If you can sue gun manufacturers for crimes committed with their product, there is no limit to the search for deep pockets or for perversions of liability. See on this Rothbard (1982b).

70Robert Nozick, Anarchy, State, and Utopia (New York: Basic Books, 1974), p. 163 speaks of “capitalist acts between consenting adults.”

1The number of people who were victims of motor vehicle accidents in 1976, in Accident Facts (Chicago: National Safety Council, 1977), p. 13.
2The number of road and highway deaths in the decade, 1967–1976, in ibid.
3Data for 1968, in ibid., p. 57.
4Data for 1969, in ibid., p. 60.
5Data for 1969, in ibid.
6Statement 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.
7Accident Facts, p. 13.
8Sam Peltzman, Regulation and Automobile Safety (Washington, D.C.: American Enterprise Institute for Public Policy Research, 1975), pp. 8–9.
9David M. Winch, The Economics of Highway Planning (Toronto: University of Toronto Press, 1963), p. 87.
10Strictly 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.
11William C. Wooldridge, Uncle Sam, The Monopoly Man (New Rochelle, N.Y.: Arlington House, 1970), pp. 7–9.
12Gabriel Roth, Paying for Roads: The Economics of Traffic Congestion (Middlesex, England: Penguin, 1967), p. 16; emphasis added. See also:
13The 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.
14William 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.
15Says Rothbard:
16F.A. Hayek, The Constitution of Liberty (Chicago: University of Chicago Press, 1960), p. 160.
17I owe this point to David Ramsey Steele, of the Department of Sociology, University of Hull.
18We 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.
19George M. Smerk, Urban Transportation: The Federal Role (Bloomington: Indiana University Press, 1965), p. 228.
20Robert 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.
21Cf. Israel Kirzner, Competition and Entrepreneurship (Chicago: University of Chicago Press, 1973).
22Alfred W. Stonier and Douglas C. Hague, A Textbook of Economic Theory, 3rd ed. (New York: John Wiley and Sons, 1964), p. 104.
23See Lionel Robbins, An Essay on the Nature and Significance of Economic Science (London: Macmillan, 1932).
24Kirzner, Competition and Entrepreneurship, pp. 122–23.
25Wilfred Owen, The Metropolitan Transportation Problem (Washington, D.C.: Brookings Institution, 1956), p. 119.
26John 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.
27Noble, “Highway Design and Construction Related to Traffic Operations and Safety,” pp. 546–47.
28Z. Haritos, “Theory of Road Pricing,” 13 Transportation Journal (Spring, 1974): 57.
29Smerk, Urban Transportation, p. 228.
30Even 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.
31Roth, Paying for Roads, p. 61.
32Herbert D. Mohring, “Urban Highway Investments,” in Robert Dorfman, ed., Measuring Benefits of Government Investments (Washington, D.C.: Brookings Institution, 1965), p. 240.
33Haritos, “Theory of Road Pricing,” p. 56.
34Winch, The Economics of Highway Planning, p. 3.
35For an explanation of “monopoly as a government grant of exclusive privilege, see Rothbard (1971), pp. 586–619.
36Were 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.
37Were 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.
38Were 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.
39Were 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.
40Were 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.
41The 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.
42By the “middle thirties,” indeed, nearly one-half million people had fallen victim to traffic fatalities.
43Vehicle 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).
44Further, 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.
45We 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.
46Today, 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.
47[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.
48Let 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.
49Consider 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.
50This 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.
51For 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.
52Just 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.
53A 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.
54On 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.”
55A 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.
56Therefore, 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.
57The 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.
58Instead 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.
59We 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.
60The 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.
61On 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.
62It 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.
63There 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.
64Another 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.”
65We 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.
66while 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.
67Says 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.”
68Says 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.”
69Says 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.”
70We 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.

The Privatization of Roads and Highways