07 August 2008

Free Market Solution to Roads

7 - Aug - 2008 From The Alaskan Command Center

Often times when an objection to the free market is raised, it is raised about roads. The debate is usually fairly simple, the free market side says that roads can be handled by the free market, and the other side saying that only government can handle roads.

Roads are important for commerce, and as such shouldn't commerce be the one dicating where roads should exist, how they should be built, how they should be maintained, and so on and so forth? If government should create roads, maintain them, and the like, how does government know where, how, why, and what roads ought to be built and how they should be maintained if it recieves no input from anyone else about them? Since government builds roads like they build everything else, poorly, do you want your hard earned money not only stolen from you, but mis-spent?

So how to transition from government roads to private roads? As one who likes to experiment, if I had the power to make the decisions, I'd do it this way. First we take a secondary street of some 5 blocks, not a main street, and we say to the owners on this street, for a period of six months, you will be responsible for the maintaince and upkeep from your property to the middle of the road, including sidewalks. We will see what the road looks like six months from then. If it works, then we pick another secondary street, or another 5 blocks of our first street. Continuing forward till we reach about 25 percent of public roads then we move to phase two. If it fails, then we try it with a different 5 block section. If it fails again, then we can decide what to do from that point. This is the process that the free market does when figuring things out.

The idea here is to make sure we try it before we buy it. The point is not to dictate how each business will take care of the street, nor punish them for their lack of taking care of the street. If we treat them as if they own the street, they will better take care of the street. The punishment for failing to maintain the street will in how the customers feel about the owners, in a commerical zone, this would be their customers deciding that the buisness doesn't care about its own property, and not want to shop there.

For residental property, punishment would be in home values. 

What if the owner doesn't want to maintain their property? Then they can hire someone to do it for them, or they can allow their neighbors to take care of the property. Here in Anchorage, Alaska, some parts of the downtown are maintained mostly by a group of businesses together who pay for people to walk the streets every morning picking up garbage and also to have security personnel walk/bike the streets.

Phase two would be along the lines of moving from public ownership/private 'lease' to transfering the actual roads to the private owners. Again using the formula of a little bit at a time and reviewing the results and then adjusting the next step after seeing the effects of the first step, until all roads are privately owned.

What about new roads? First and foremost new roads could be created quickly, starting with basic roads and then moving toward higher capacity roads, such as highways and byways. Who is going to pay for them? Obviously that is left to the private owner, perhaps he will take out a loan to build his road. Perhaps he will charge a toll to use his road. Perhaps he will group with his neighbors and do one of the above or perhaps something not even expected. The point is, if there is a need for a road you can bet your dollar that you will get your road, just as you get your gallon of milk, your gallon of gas, your home built, your car built, all without government creating them, and then delivering them to you.



Evenstar said...

I've always thought the easiest way for Government to privatise most everything would be to simply have a giant auction. The highest bidder would obviously have the most invested in the project, therefore have motivation to make it successful. Then the proceeds could be used to pay down the debt.

Selling the roads in this manner (after dividing in whatever manner seemed best, allowing subdivisions by the purchasers at their desire/convenience) would allow a variety of solutions to be attempted at the same time at NO COST to the public!

The Blank Family said...

I agree with you that that would be the easiest way. I would go so far as to support it as well. In transitioning from public to private, an objection often raised is the 'monopoly on roads' issue.

The 'what if' one man buys up all the roads and charges so much money that no one can afford to use the roads. While this is a obsurd possibility, the money required to purchase all the roads in the first place, that he could afford to maintain the roads if the price was too high in the second place, and monopolies only exist where 'governments' exist in the third place.

My own solution might be more publically acceptible to the people and to government as a whole without creating new objections, first and fore most the idea of private roads in the first place. The reason being is that it doesn't create something totally new or different in the process, it moves in small managiable steps, and transitions slowly to address problems that are created by making change.

The other problem created is that, while not a big one in my mind, the highest bidders now have some control over the businesses that reside on these streets, and the free market would handle the bidders so as not to make it totally unfavorable to the businesses, it might create stress that would be otherwise not seen in my offer.

I'm not saying I'm right, I'm just saying that this is an option. In the end the market would decide which idea is the best based on what works best. Who knows, we might see a blending of the two ideas where the businesses would finance the purchase and deligate the maintainace to the 'highest bidders'.

Evenstar said...

Indeed. Also, when trying to "buy up" a monopoly, it is generally impossible. For while someone with a lot of money may be able to buy most, when it comes down to the last few pieces, the cost on returns is likely to become too much to bear.

An example I heard once was with apples. A rich man buying another apple will eventually reach the point where the apple becomes more costly than even he can afford. Whereas a poor man might be willing to give up most of what he has to afford to buy one apple. And in this case, it is certainly possible that many "poor" individuals would group together to buy "their" road. Maybe in neighborhoods, there should be an initial offering to those on the street, but with interstates and the like I can't imagine those who own property bordering it to have much (if any) interest in maintaining it, so an auction makes the most sense.