The Roads

I, Roads

But, who would take care of the roads! Or the airports! Or the [insert state-monopolized capital asset here]! And that’s where someone asks you a question that is impossible to answer. The Statist Roads Argument (SRA) rears its silly head.

If someone asks you how a pencil is made, I’ve come to realize you should simply say, “I see what you’re trying to do here. You’re not going to trick me.” Why? Because no one knows how a pencil is made. The point of Leonard Read’s classic “I, Pencil” is that no one person alone has the knowledge required to describe how something as simple as a pencil is made from start to finish.

The more nuanced point is this: even though no one person can tell you how a pencil is made, pencils are made. Thus, we can conclude that the existence of pencils doesn’t depend on any one person knowing how to produce pencils. Instead, it depends on a complex network of economic activity that results in a pencil.

The same is obviously true of any provision of roads without state monopolization. The how and who would take care of the roads is the same as the how and who would take care of pencils: a complex network of economic activity that results in roads.

Burden of Proof

At this point I think it’s obvious that the burden of proof is on the naysayer to show how something as ubiquitous as automobile transportation would fail despite giving people the freedom to create the complex network of economic activity that results in roads. I can give a few reasons to suspect it would not fail.

In the first place, there’s a high demand for roads. People want them. A lot. However, not every road is equal. So the upkeep for a road without government supervision would depend on how likely the road is to be used, and therefore incur maintenance costs. That is to say, if a road is valuable enough to the people that use it, they will pay for it.

This begs the question, “Can all the users coordinate in order to maintain the road?”

The typical Statist answer to this question is, “Only through government.”

Which brings me to my second point: entrepreneurs exist.

The answer on a free market is, “Yes, and that responsibility falls to the entrepreneur. The entrepreneur coordinates goods such that a specific good or service is provided by coordinating users’ demand in the form of revenue, and perpetuating the provision of said good or service using profit margin analysis. If the entrepreneur fails, he loses money. If he succeeds, he benefits by profiting, and the provision of the good continues.”

Let My People Drive!

A third reason for thinking roads would thrive is that roads are capital assets with predictable fixed costs. The marginal cost of letting another driver on the road is minimal. So the obvious solution to maximizing profit is to have as many drivers on the road as possible. It is in the interest of a road entrepreneur to allow as many people as possible on any particular toll road, excepting dangerous drivers. Variable costs are definitely the products of accidents on the fixed capital assets known as roads. Your GPS will send you to an alternate route. And there goes the day’s take.

A fourth reason is that roads are essentially nothing more than long pieces of rock. I mean, really? Roads!? The market makes fake body parts for crying out loud. Complex molecules are created by private firms in order to coordinate biological activity inside a human being and you’re worried about long pieces of rocks and metal? Shame on you.

Less Talky, More Experimenty

The real farce about the SRA is that the Statist position is merely a hypothesis, but Statists refuse to make any experiment to test it, and accept it as an already established fact.

The real test of the matter isn’t how well a Libertarian can answer an unanswerable question. It would rather be to let Libertarians have their day and let the test be made. It’s unscientific to hypothesize, “The private ownership experiment concerning roads will fail,” and then not undertake the experiment to confirm or deny this hypothesis. It’s rhetoric, plain and simple. That’s all it is.

What Statists are doing when they posit the SRA is confirming a hypothesis out of hand. So I think no matter what I write here today, it’s all beside the point if Statists are going to write off private ownership of roads by entrepreneurs based on unscientific analysis.

Until the experiment is made that confirms or denies roads can be handled by private parties, the suggestion that the same is a fact is nothing more than rhetoric.

And even without the experiment, we know at least one thing for sure: taking from one person to pay for another’s road is just as bad as taking from one person to pay for another’s car. What others posit as “public” goods are really goods enjoyed by private parties, but whose costs have been socialized by force by a bureaucracy that has exhibited an agency problem involving lack of cost control, roads being in a state of disrepair (I live in New Jersey, it’s like a virus), and the creation of artificial barriers to entry for alternative means of transportation.

The answer.

You can’t really assume that any specific ownership type or maintenance process for roads would prevail in the market due to its dynamic nature. It might be the case that some roads would be owned and cared for directly by the people who have property on the road. In other cases, people on the same street all get together and hire a road maintenance company that receives regular fees and fixes potholes when they come about. In yet another possibility, a toll collection company would take care of roads.

In order to see how roads would be provided without the government, one simply has to let people take care of the roads themselves.

So who would take care of the roads absent a state monopoly? The same people who make pencils. That’s who.

About these ads
  1. Brendan Comenius
    September 21, 2012 at 10:03 am | #1

    This post is interesting. It is an important topic. But, it doesn’t use on any historical evidence to support assertions. There is a lot of history about roads before state provision. In my hometown, an early industrial city in Pennsylvania, there were three “turnpikes” in and out. It may be a “long piece of rock”, but they had to cross over people’s farms and traverse steep grades and gullies. They needed bridges. They needed drainage culverts to keep the water off and diverted from wiping out the road. They needed maintenance against freezing and thawing and cracking. They need repairing from ruts made by wagon wheels going over the same spots day in and day out. Throughout the 19th century we have written accounts in personal diaries and newspaper clippings about the endless traffic jams and hours of productive time wasted because there were not enough roads into the burgeoning city. Once a road gets built, the owners of that road do whatever they can to keep another from being built. Controllers of local capital and banks will not want to expand competition for their business since that will lower their price. And, the coordination you say will just happen takes a long time. And, some private property owners will not grant right-of-ways. So, the whole community is stymied.

    The pencil example is a good one. But, pencils like every other industrial product emerged in “complex network of economic activity” precisely because they had access to transportation to move raw materials in and finished goods out. If that infrastructure had not been in place, those individual pencil makers would have collected themselves somewhere else. The metals industry is a case in point. The Founders worked hard to recruit metallurgy guilds from German-speaking countries to come here. They tried to get them to settle along the ridges in Western PA where they could find all the iron ore, coal, and other raw materials they needed. Even then, the roads going to those ridges were built by the British Military for their campaigns against the French. They were not built by the Penn Family, nor any “emergent” road building eco-system. Yet, all the attempted settlement development occurred only along those roads. The metal industry “complex network of economic activity” only emerged in the river valleys only after the canal system was built. The early furnaces and town plots laid out on the ridges by the Penn Family to attract them have been ruins in the woods since the 1830s.

    Only once the state built the canal system did transportation in and out of our town enable our community to flourish. The state built canal brought those German metal makers by the long-boatload. Then the private railroaders got control of those right-of-ways and extended railroads across the country which created the industrial age. The skills and “complex network of economic activity” to produce iron rails and then steel ones had been established here. And, that system enabled other systems like the pencil system, or the musical instrument system in South Bend, or the tyre and rubber system in Toledo, etc. to take root in many places.

    In Cotton Kingdom from about 1853, Frederick Law Olmstead shows how few roads and bridges there were in the Deep South because of the lack of need by the people in control of those very minimalist states. The Plantation owners who controlled local politics did not need roads or bridges when they had wharfs for their goods along the rivers. The Deep South was the epitome of Libertarian small government. There was unemployment and underdevelopment which continued in the Deep South long after the Civil War and Reconstruction, even to this very day. Olmstead show the big difference in unemployment rates between the Deep South and NY and PA where state canal systems enabled transportation and flourishing of human work. Lack of community development in the South shows in their very high unemployment and poverty rates amongst blacks and whites both! And, on top of that they needed Jim Crow to keep everybody’s eyes off the bosses!

    Getting capital together for these projects is very difficult. Even before the Revolution, George Washington, his brothers, Fairfax cousins, Wall Street, and London City banks, etc. couldn’t get the money together to build the Potomac canals to the Ohio. After the Revolution, Congress had to pass a bill to build the National Road. That was the only way to connect the Ohio Valley to the Coast fast enough to seize the opportunity.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


Get every new post delivered to your Inbox.

Join 27 other followers

%d bloggers like this: