The Privatization of Roads and Highways

7 Compromising the Uncompromisable: Speed Limits, Parades, Cigarettes1

Libertarian, political, and economic philosophy is based on the nonaggression axiom.2 In this perspective the one act that ought to be legally proscribed is the initiation of violence against nonaggressors. There are many who disagree with this view. Some maintain that far more ought to be illegal; others that not all invasions should be. While the critics may disagree amongst themselves on many issues, most have in common the belief that laissez-faire capitalism is altogether too radical. This philosophy has been widely castigated as extremist, fanatical, and as occupying a position on the political spectrum at the very edge.

To some degree these criticisms are undoubtedly true in at least some sense. Libertarianism is indeed a principled philosophy, and any such view must appear to some as rigid or unyielding. However, it is the thesis of the present article that, for at least some issues, free enterprise actually constitutes a moderate or compromise viewpoint. Here, we consider three cases in point: roads, parades, and cigarette smoking.

ROADS

There is a furious albeit scholarly debate regarding optimal speed limits on the nation’s highways.3 It has been waxing and waning over the last several decades. On one side of this issue are those who advocate retention of the 55 mph limits on freeways. Foremost among them are the Naderites, who argue, among other things, that “speed kills.” Although President Clinton signed a bill allowing the states to post higher maximum speeds, at their discretion, it is rumored that he did so only reluctantly. Behind these opinions is a wealth of empirical data suggesting that faster traffic flows will lead to a greater number of fatalities.4

The other side is no less intent upon upholding its view point. One argument stems from freedom, not the pragmatic issue of safety: people should have the right to do whatever they wish, unless their actions constitute an explicit “border crossing” or physical invasion of another person or his property. Even if there is a statistical correlation between deaths and higher (or no) speed limits, this is not equivalent to the initiation of violence. For to go fast is not, per se, to kill someone.5

But the “speed freedom” advocates are not without a response to the claim that faster traffic is dangerous. They argue that it is not speed, but rather the variance of speed which puts motorists at risk.6 For example, if all motorists travel at between 75–80 mph, this will actually be safer than if some proceed at 40 mph (the typical minimum highway requirement) and others, cheek by jowl, at 65 mph (policemen rarely ticket anyone for excessive speed of only 10 mph).

What is the libertarian compromise between these two incompatible positions? The solution is to privatize all highways.7 With all highways, by-ways, streets, roads, thorough fares and other traffic arteries in the hands of private entrepreneurs, there would be no need for government to decide upon any speed regime. Just as the state now plays no role whatsoever regarding the color of cars, or cloths, or crayons, and thus there is no need for any public “decision” regarding these choices, the public sector would entirely absent itself from the decision concerning the rate of motorists. Just as there is now no U.S. government cloth or crayon “policy,” so, too, would there be no speed limit “policy.” Privatization is the only true compromise. Any other “solution” would be arbitrary, merely taking the limits advocated by one side, adding them to the other, and perhaps, dividing by two.8

This privatization compromise is the only one compatible with the libertarian perspective on rights.9 In that view, government nationalization of private property is tantamount to a taking,10 or, more accurately, theft.11 For the only legitimate role of government12 is to protect persons and their property from aggression, and while courts, armies and police are at least relevant to this task, highways are not.

PARADES

A similar problem on the roads arises with regard to their use for parades. Any organized march is necessarily an infringement on the scope of vehicular and pedestrian traffic; and there is no principled, nonarbitrary criterion which can unambiguously determine whether to give the nod to ordinary motorists, to a Fourth of July parade, a New York City marathon, a St. Patrick’s Day parade, or to one for the Nazis marching in Skokie, Illinois.13

The latter two cases, of course, lead to additional challenges. Should the organizers be allowed to exclude gays? On the one hand, the parade belongs to the organizers, heterosexuals of Irish descent. If they don’t want (even Irish) homosexuals to take part, that should be up to them. On the other hand, the event takes place on public property, and bisexuals and lesbians pay taxes for the creation, upkeep and maintenance of the streets just like everyone else. Should the Nazis even be allowed to carry their banners on public streets, much to the outrage of the Jewish population in Skokie, many bearing tattoos from German concentration camps, let alone have an organized march there? The American Civil Liberties Union thinks so, on the grounds of freedom of expression as the first amendment guarantees. There are those, in contrast, who think the only proper destination for such a parade would be right to jail—or right to hell—for holding and popularizing such evil views.

Fortunately, the libertarian compromise solution is able to cut though this Gordian knot of legal and moral complexities like a hot knife through butter. Again, simply privatize the streets! In one fell swoop this intractable problem is solved. It now presents no more of a difficulty than the total nonissue of whether Nazis, or Irishmen, or Martians for that matter should be allowed to rent a hotel room, or a convention center, or any other private meeting ground. Of course they should be, all of them, each and every last one. And they can exclude anyone they wish, for whatever reason, from their essentially private meeting. The foregoing was a challenging issue only because there were private people contending for public space. There is no way to solve this under conditions of public ownership, since all private parties have equal standing under any legal system based on the rule of law.14 The only solution is to reject one of the basic premises—public ownership. Then and only then is there a reasonable resolution of the issue.

This compromise, too, saves generations of judges from twisting in the wind, trying to solve the unsolvable. Right now, happily, the U.S. has no paper clip “policy.” It leaves such matters strictly to private individuals. At present, unfortunately, the state does have a highway speed limit15 and a parade policy. It is time, it is past time, that we applied the principles of free enterprise which work so well for paper clips and bubble gum16 to such contentious issues as speed limits and marching bands.

CIGARETTES

The same insights may also be applied to smoking regulations. Before analyzing this mare’s nest of contending legal philosophies, a sharp distinction must first be drawn between primary and secondary smoke. In the former case, the (alleged) harm of cigarettes is confined to the smoker himself; in the latter, it spills over onto others and thus constitutes an invasion.

One would think that in the relatively straight forward case of primary smoking, the conclusions would be clear: the (adult) user of tobacco products bears any and all risk of his actions. Certainly, particularly in this day and age of compulsory government-inspired warnings17 of the dangers of smoking, no blame can be placed at their doorstep.

Another argument is that, especially in an era of socialized medicine, harming one’s own health is really an “attack” on others, since they will be forced to bear the costs of the smoker’s subsequent ill health. In effect, this is an attempt to convert primary smoking into the secondary variety. Superficially, at least, it succeeds. For under this system, if I hurt myself physically, I hurt you financially.

But this is an entirely spurious conclusion, at least if it is interpreted as successfully converting a primary (personal) problem into secondary (social) one. For the entire transference relies on the institution of socialized medicine. Without it, if I harm myself, I’m no burden to you. Under medical socialism, since I can demand payment from you for harming myself, there is at least a case for you stop me from so doing; e.g., one might argue that it is justified for you to bar me from cigarettes. That this has even a semblance of logic behind it only furnishes further reason for repealing socialistic health plans.18

What of secondary smoke, true, direct secondary smoke, where the user impacts other parties, not by making them pay for his future (possible) illnesses, but by blowing smoke in their faces and endangering them? Pro-government economists have handled this problem of undeniable invasion under the doctrine of “market failure.”19 In this view, the market has failed, and so government must perforce step into the breach and right matters. The specific failure, here, is secondary smoke: others, nonsmokers, will be victimized by the fumes and made to undergo risk against their will.

The statist response has been to prohibit smoking in certain areas outright (hospitals, public buildings, air flights, schools, etc.), and in other contexts insist that particular areas be cordoned off and reserved for nonsmokers (e.g., compelling special, tobacco-free areas).

What of the other side of this debate? Opponents of this new regime argue that smoking is not at all akin to punching someone in the nose. For one thing, physical aggression has always been recognized as such. Assault and battery have never been legal in any country.20 And yet for most of recorded history, lighting up a butt was never totally proscribed. It is only in these hypersensitive “politically correct” times that this practice has become an issue.

A second argument is that of cause and effect. The present state of scientific medical knowledge establishes no unbroken link between cigarette usage and cancer or emphysema, etc., not for the smokers themselves, still less for second parties. The one is neither a sufficient nor necessary condition for the other. There are those who indulge all their lives and never sicken, while others never so much as touch the “vile weed,” nor live nor work near those who do, and yet succumb. (In contrast, everyone who has his nose punched sustains physical harm.) The most that can be claimed for this etiology is statistical correlation: there is a higher incidence of lung disease amongst users. But similar, merely statistical disparities arise in a plethora of cases.

Then there is the de minimis argument. Even if there is one day found to be a direct invasive harm from this quarter which is not merely statistical, it may well be minimal. That is, it may be akin to the “harm” which emanates from radio waves, low level radioactivity (similar to that caused by bricks, clay, etc.), and the breathing out of carbon dioxide which each of us engages in and without which we would all die.21 The point is that, even if there is a direct harm to other people, for the law to take cognizance of it, it must be “substantial.”

There are some people who are seriously, even fatally harmed by carbon dioxide exhalations, overhead electrical wires, radio waves, etc.; they can safely live only in an oxygen tent. If they venture out, they sustain great damage. If they do, can it reasonably be said that others—smokers, carbon dioxide exhalers (all of us), electricity users, etc., have violated their rights? Must we, in effect, halt civilization in its tracks in order to accommodate these people? Or must they bear the risk of venturing out of their oxygen tents, of “coming to the risk” as it were? Coase, Demsetz, and Posner would advise the court charged with making this decision not to forestall civilization in order to enhance the mobility of these people.22 Why? Because the costs would be too great. After all, there are many more of us than there are of them. True, any one of them might gain more than any one of us might lose, but when a cost benefit analysis is conducted, wealth can be maximized by not giving these people an outdoor oxygen tent, as it were.

The libertarian would concur in this conclusion, but for very different reasons: because normal people have homesteaded the right to engage in just these sorts of everyday activities, that if the invalids venture out of their safe havens, they must do so at their own peril.23

So which is it? Is smoking an invasion or not?

Fortunately, it is not necessary to give an answer to this essentially empirical, scientific and medical question. Thanks to the compromising, ameliorative qualities of private property rights regimes, a compromise between these two bitterly contrasting views is possible.

All that need be done is first to privatize virtually all indoor24 spaces.25 Given such institutional arrangements, the (principled) compromise could proceed.26 Each owner would decide the smoking rules for himself, and then compete with all others on not one but two grounds. First, the old one, provision of a good or service. This would be as before. Second, the competition would take place in terms of how well the smoking rules maximize profits (e.g., satisfy customers.)

For example, health food stores would compete with one another in terms of the quality and price of their vegetables—and their smoking rules. Presumably, they would be led by the “invisible hand”27 to ban smoking outright.

Bars and grills, bowling alleys and pool halls would continue to compete with each other by providing their unique services to the public. They also would do so regarding their smoking rules. In contrast, while a few might specialize in the total prohibition of tobacco, as in the health food industry, most, presumably, would not interfere with lighting up at all. Still other commercial establishments might find it most in their interests to have special smoking times (late evenings? weekends?) or areas. Many hotels feature smoking or nonsmoking rooms. Many restaurants cordon off particular areas where this habit is indulged. All of these different types of establishments have one thing in common: they would all be encouraged by the desire for profit to tailor their smoking rules—as they do everything else—to suit the tastes of their customers. The presumption is that health food consumers would lie at the opposite end of the spectrum from the denizens of pool halls in terms of appreciation for, and tolerance of, tobacco.

There are advantages to the market in this case, as there are in all others. Free enterprise is highly flexible, able to create smoking rules conforming to the desires of virtually all customers. In contrast, governmental “all-or-one” policies are likely to satisfy only the majority.28

The beauty of this market compromise plan is that people can sort themselves out according to their smoking preferences. “Teetotalers” need not venture out into emporia where any vestige of smoking is allowed, even on a part-time basis and confined to a small area. Tobacco users, too, can patronize establishments which welcome and support such choices. As long as indoor cigarette use is not defined as per se invasive,29 this compromise can satisfy far more people than any other alternative.

This libertarian compromise proposal has an additional virtue: it conforms to the “politically correct” appreciation of, and support for, minority cultures.30 As it happens, Orientals in North America have not at all bought into the anti-tobacco tirade. On the contrary31 they are still very much enamored of the practice. In many cities, politically correct leftists have been willing to ban smoking in all private establishments which are “open to the public.” This shows that their hatred for tobacco is stronger than their advocacy of the rights of downtrodden minorities.

 

____________

32This chapter originally appeared as “Theories of Highway Safety,” Transportation Research Record #912 (1983): 7–10. The author wishes to thank David Kennedy, Anthony Sullivan, and the Trustees of the Earhart Foundation for the financial support necessary to write this article. The opinions expressed herein, of course, reflect the thinking of the author alone.

33Murray N. Rothbard, The Ethics of Liberty (Atlantic Highlands, N.J.: Humanities Press, 1982), pp. 85-96.

34In 1995 the federal government delegated speed regulations to the states.

35See Gilbert Castle, “The 55 MPH Speed Limit: A Cost-Benefit Analysis,” Traffic Engineering 45 (January 1976); L. Egmose and T. Egmose, “Speed Limits Save Lives,” Journal of Traffic Medicine 14 (1986): 4-5; Thomas Forester, Robert F. McNown, and Larry D. Singell, “A Cost Benefit Analysis of the 55 mph Speed Limit,” Southern Economic Journal 50 (January 1984): 631–41; Richard Fowles and Peter D. Loeb, “Speeding, Coordination and the 55-MPH Limit: Comment,” American Economic Review 79, no. 4 (September 1989): 916–21; Philip E. Graves, Dwight R. Lee, and Robert L. Sexton, “Statutes Versus Enforcement: The Case of the Optimal Speed Limit,” American Economic Review 79, no. 4 (September 1989): 932; Ezra Hauer, “Accidents, Overtaking, and Speed Control,” Accident Analysis and Prevention 3 (January 1971); A. Hoskin, “Consequences of Raising the Speed Limit,” Journal of Safety Research 17 (1986): 179–82; James Jondrow, Marianne Bowes, and Robert Levy, “The Optimal Speed Limit,” Economic Inquiry 21 (July 1983): 325–36; Dana Kamerud, “The 55 MPH.Speed Limit: Costs, Benefits and Implied Tradeoffs,” Transportation Research 17A (January 1983): 51–64; Charles Lave, “Speeding, Coordination and the 55-MPH Limit,” American Economic Review 75, no. 5 (September 1985): 1159–64; Sam Peltzman, “The Effects of Automobile Safety Regulation,” Journal of Political Economy 83, no. 4 (1975): 677–725; Paul Sommers, “Drinking Age and the 55 MPH Speed Limit,” Atlantic Economic Journal 13 (March 1985): 43. For a critique, see Walter Block, 1997. “Tobacco Advertising,” International Journal of Value-Based Management 10, no. 3, (May 1997): 221–35; idem, “Theories of Highway Safety,” Transportation Research Record #912 (1983): 7–10.

36Similarly, ownership of a gun is not the same thing as murder, even if there is a positive correction between them.

37For more on this hypothesis, see Lave, “Speeding, Coordination and the 55-MPH Limit.” For a reply, see David T. Levy and Peter Asch “Speeding, Coordination and 55-MPH Limit: Comment,” American Economic Review 79, no. 4 (September 1989): 913–15; Fowles and Loeb, “Speeding, Coordination and the 55-MPH Limit: Comment;” Donald Snyder, “Speeding, Coordination and the 55-MPH Limit: Comment,” American Economic Review 79, no. 4 (September 1989): 922. For a rejoinder to his critics, see Charles Lave, “Speeding, Coordination and the 55-MPH Limit: Reply,” American Economic Review 79, no. 4 (September 1989): 926–36. Also see Nicholas J. Garber and Ravi Gadirau, Speed Variance and Its Influence on Accidents (unpublished manuscript; AAA Foundation for Traffic Safety, Washington, D.C., July 1988).

38For answers to objections that this is impossible, would create chaos, would not work, would be an abomination, or would be akin to Solomon’s decision to cut the baby in half and give each part to two contending mothers, see Walter Block, “Free Market Transportation: Denationalizing the Roads,” Journal of Libertarian Studies 3, no. 2 (Summer 1979); Daniel Klein, “The Voluntary Provision of Public Goods? The Turnpike Companies of Early America,” Economic Inquiry (October): 788–812; Dan Klein, John Majewski, and Christopher Baer, “Economy, Community and the Law: The Turnpike Movement in New York, 1797–1845,” The 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; “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, The Private Provision of Public Services in Developing Countries (Oxford: Oxford University Press, 1987); Murray N. Rothbard, For a New Liberty (New York: Macmillan, 1973); William C. Wooldridge, Uncle Sam, The Monopoly Man (New Rochelle, N.Y.: Arlington House, 1970).

39Any such procedure, moreover, would encourage “strategic” behavior: each side would have an incentive to exaggerate its real goal, so as to bring the judgment closer in conformity to its own wishes.

40See on this Bruce L. Benson, “Land Use Regulation: A Supply and Demand Analysis of Changing Property Rights,” Journal of Libertarian Studies 5, no. 4 (Fall, 1981); Antony Flew, “Could There Be Universal Natural Rights?” Journal of Libertarian Studies 6, nos. 3/4 (Summer/Fall, 1982): 277–88; Tibor Machan, ed., “Against Nonlibertarian Natural Rights,” Journal of Libertarian Studies 2, no. 3 (Fall, 1978): 233–38; Douglas B. Rasmussen, “A Groundwork for Rights: Man’s Natural End,” Journal of Libertarian Studies 6, no. 1 (Winter, 1980): 65–76.

41Richard Epstein, Takings: Private Property and the Power of Eminent Domain (Cambridge, Mass.: Harvard University Press, 1985).

42Lysander Spooner, No Treason (Larkspur, Colo.: Pine Tree Press, [1870] 1966).

43If indeed it has one. For support of this contention, see Robert Nozick, Anarchy, State, and Utopia (New York: Basic Books, 1974). See Epstein, Takings; for a critique see Rothbard, For a New Liberty; Hans-Hermann Hoppe, A Theory of Socialism and Capitalism: Economics, Politics and Ethics (Boston: Dordrecht, 1989); idem, The Economics and Ethics of Private Property: Studies in Political Economy and Philosophy (Boston: Kluwer, 1993); David Friedman, The Machinery of Freedom: Guide to a Radical Capitalism, 2nd ed. (La Salle, Ill.: Open Court, 1989); Bruce Benson, “Enforcement of Private Property Rights in Primitive Societies: Law Without Government,” Journal of Libertarian Studies 9, no. 1 (Winter, 1989).

44Sometime issues of this sort can be matter of life or death. Much of the fighting in Belfast, for example, can be traced to the organization of rival parades on the part of the Catholic and Protestants in that city. As a matter of fact, Northern Ireland’s “annual marching season” is the occasion for bitterness between the two rival factions.

45See F.A. Hayek, Law, Legislation and Liberty (Chicago: University of Chicago Press, 1973).

46Even when the federates give over these decisions to the fifty states, the latter are still part of government.

47When is the last time either of these products were in the news as a problem?

48For the libertarian, this is a clear and present violation of free speech rights. For the right to speak freely also implies the right to maintain silence. As to charges of fraud against tobacco companies, as long as they do not claim that cigarettes and cigars are “safe,” they should not be made to bear any of the attendant risks. And this applies even in the absence of such warning, during the time when they were not compulsory. On this see Walter Block, “Coase and Demsetz on Private Property Rights,” Journal of Libertarian Studies 1, no. 2 (Spring, 1977): 111–15.

49This “logic” also applies to eating fatty foods, failing to brush one’s teeth, not getting enough exercise, etc. Taken to its logical conclusion, socialized medicine thus implies a world of Big Brother controlling you for your own good.

50For critics of this view, see Tyler Cowen, ed., The Theory of Market Failure: A Critical Examination (Fairfax, Va.: George Mason University, 1988); Jeffrey Rogers Hummel, “National Goods vs. Public Goods: Defense, Disarmament, and Free Riders,” Review of Austrian Economics 4 (1990): 88–112; Ludwig von Mises, Human Action (Chicago: Regnery, 1966); Murray N. Rothbard, Man, Economy, and State, 2 vols. (Princeton, N.J.: D. Van Nostrand, 1962).

51De jure, that is. De facto, unfortunately, is entirely a different matter. But de jure is itself important. At least it shows an ideal direction for the law, even if it is not always upheld in actual police work or court decisions.

52Murray N. Rothbard, “The Present State of Austrian Economics.” Working Paper from the Ludwig von Mises Institute (November 1992). Reprinted in The Logic of Action One: Method, Money, and the Austrian School (Cheltenham, U.K.: Edward Elgar Publishing, 1997), pp. 111–72. Reprinted in Journal des Economistes et des Etudes Humaines 6, no. 1 (March 1995): 43–89.

53See Ronald Coase, “The Problem of Social Cost,” Journal of Law and Economics 3 (October 1960): 1–44; Harold Demsetz, “Toward a Theory of Property Rights,” American Economic Review 57 (1976): 347–59; idem, “Ethics and Efficiency in Property Rights Systems, in Time,” in Mario Rizzo, ed., Uncertainty and Disequilibrium: Explorations of Austrian Themes (Lexington, Mass.: D.C. Heath, 1979); Richard Posner, Economic Analysis of Law, 3rd ed. (Boston: Little Brown, 1986). For a critique of these three economists in particular, and of their “Law and Economic Philosophy” in general, see Block, “Coase and Demsetz on Private Property Rights”; idem, “Ethics, Efficiency, Coasean Property Rights and Psychic Income: A Reply to Demsetz,” Review of Austrian Economics 8, no. 2 (1995): 61–125; Roy E. Cordato, Welfare Economics and Externalities in an Open Ended Universe: A Modern Austrian Perspective (Boston: Kluwer, 1992); Elisabeth Krecke, “Law and the Market Order: An Austrian Critique of the Economic Analysis of Law,” paper presented at the Ludwig von Mises Institute’s Austrian Scholar Conference, New York City, October 9–11, 1992; Gary North, Tools of Dominion: The Case Laws of Exodus (Tyler, Tx.: Institute for Christian Economics, 1990); idem, The Coase Theorem (Tyler, Texas, Institute for Christian Economics, 1992).

54See John Locke, “An Essay Concerning the True Origin, Extent and End of Civil Government,” Vols. 27–28, in Peter Laslett, ed., Two Treatises of Government (Cambridge: Cambridge University Press, 1960); Rothbard, For a New Liberty; Hoppe, The Economics and Ethics of Private Property.

55No one, even anti-tobacco extremists, allege that smoking is rights violative outdoors. That is why we commonly see corporals’ guards of tobacco adherents engaging in these practices just outside the doors of hospitals, universities office buildings, etc., even in the dead of winter.

56Under libertarian anarchism, the problem is totally solved; there are no public spaces at all, indoor or outdoor; under limited government libertarianism, the problem is not entirely solved, since there would, presumably, be some indoor public space (e.g., devoted to courts, armies and police) but at least the problem would be strictly confined to these few areas.

57In contrast, the “unprincipled” compromise would be to allow all or most or much public property to remain under government control—either outright ownership or regulation—and then, say, take half of it and allow smoking and on the other half not. Or to allow “democracy” to decide where smoking may occur and where not.

58Usually associated with Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (New York: Modern Library, [1776] 1965). However, Murray N. Rothbard, Classical Economics: An Austrian Perspective on the History of Economic Thought (Cheltenham, U.K.: Edward Elgar, 1995), vol. 2, calls into question this linkage.

59If that. When was the last time an election was decided upon this one issue alone?

60Even actual explicit violence cannot be defined as per se invasive. This would allow no scope for adult consensual sado-masochism, nor for boxing, wrestling, judo, karate tournaments, which each participant agrees to enter the ring, knowing that the mutual goal is the infliction of (limited) violence. This applies, as well, to the present case. No one could venture into a privately owned establishment which clearly indicates that smoking is allowed, and then logically object to the practice, no more than could a boxer legally complain about being punched in the ring. For an alternative and in my opinion incorrect view on the “manly sport,” see Gary North, Tools of Dominion: The Case Laws of Exodus (Tyler, Texas: Institute for Christian Economics, 1990), p. 344.

61Obviously, this holds true only for those who value political correctness.

62See for example British Columbia Report 21 (August 1996): 16.

• 1*This chapter originally appeared as “Theories of Highway Safety,” Transportation Research Record #912 (1983): 7–10. The author wishes to thank David Kennedy, Anthony Sullivan, and the Trustees of the Earhart Foundation for the financial support necessary to write this article. The opinions expressed herein, of course, reflect the thinking of the author alone.
• 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.
• 32Compromising the Uncompromisable: Speed Limits, Parades, Cigarettes*
• 33Were a government to demand the sacrifice of 46,700 citizens each year, there is no doubt that an outraged public would revolt. If an organized religion were to plan the immolation of 523,335 of the faithful in a decade, there is no question that it would be toppled. Were there a Manson-type cult that murdered 790 people to celebrate Memorial Day, 770 to usher in the Fourth of July, 915 to commemorate Labor Day, 960 at Thanksgiving, and solemnized Christmas with 355 more deaths, surely the New York Times would wax eloquent about the carnage, calling for the greatest manhunt this nation has ever seen. If Dr. Spock were to learn of a disease that killed 2,077 children under the age of five each year, or were New York City’s Andrew Stein to uncover a nursing home that allowed 7,346 elderly people to die annually, there would be no stone unturned in their efforts to combat the enemy. To compound the horror, were private enterprise responsible for this butchery, a cataclysmic reaction would ensue: investigation panels would be appointed, the justice department would seek out antitrust violations, company executives would be jailed, and an outraged hue and cry for nationalization would follow.
• 34Were a government to demand the sacrifice of 46,700 citizens each year, there is no doubt that an outraged public would revolt. If an organized religion were to plan the immolation of 523,335 of the faithful in a decade, there is no question that it would be toppled. Were there a Manson-type cult that murdered 790 people to celebrate Memorial Day, 770 to usher in the Fourth of July, 915 to commemorate Labor Day, 960 at Thanksgiving, and solemnized Christmas with 355 more deaths, surely the New York Times would wax eloquent about the carnage, calling for the greatest manhunt this nation has ever seen. If Dr. Spock were to learn of a disease that killed 2,077 children under the age of five each year, or were New York City’s Andrew Stein to uncover a nursing home that allowed 7,346 elderly people to die annually, there would be no stone unturned in their efforts to combat the enemy. To compound the horror, were private enterprise responsible for this butchery, a cataclysmic reaction would ensue: investigation panels would be appointed, the justice department would seek out antitrust violations, company executives would be jailed, and an outraged hue and cry for nationalization would follow.
• 35Were 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.
• 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.
• 38The 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.
• 39By the “middle thirties,” indeed, nearly one-half million people had fallen victim to traffic fatalities.
• 40Vehicle 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).
• 41Further, 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.
• 42We 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.
• 43Today, 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.
• 44[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.
• 45Let 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.
• 46Consider 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.
• 47This 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.
• 48For 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.
• 49Just 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.
• 50A 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.
• 51On 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.”
• 52A 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.
• 53Therefore, 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.
• 54The 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.
• 55Instead 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.
• 56We 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.
• 57The 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.
• 58On 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.
• 59It 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.
• 60There 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.
• 61Another 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.”
• 62We 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.