[This article is excerpted from The Privatization of Roads and Highways.]
Question:Suppose the state is taken out of the equation; let’s presume private road owners can write and enforce the rules of the road. As it is in their best interest to ensure safety, the roads will be used more and therefore become more profitable. Given that this is the case, do you speculate that road rules will become more strict or less? Do you think drunk driving, speed limits, and seat belt laws would be scrapped by these private road owners — and they would instead institute a contract agreement with each driver stating that if they cause death, injury, or property damage to other travelers on these private roads, they must take full responsibility for restitution?
Walter Block:It is difficult for me to speculate as to how a free market in roads would actually operate. I’m a theoretical economist, not the entrepreneur to whom such questions would be better addressed. However, with that proviso, here are my thoughts. I speculate that some road owners would have more strict rules, others less strict, some slightly lenient, and others very lenient. Then, the market would sort things out. That is, possibly, consumer desires would impel road entrepreneurs into either a more or less strict stance — I don’t know which. Or, possibly, such diversity would endure. In some venues (bars, hockey) there are less strict rules; in others (tea parties, basketball) there are more strict rules. In hockey, for example, they allow and even encourage the players to fight; this is strictly banned in basketball. Some road owners might go one way on this, others, the other way, and the market (the blessed market, the “magic of the marketplace”) would confer greater profits on those who supply consumers with a better product (rules of the road in this case) at a lower price. I am trying to apply economic analysis as it is commonly applied to ordinary issues (bubble gum, beans, beer) to an area (roads) to which it is unusual to do so.
Question:I have heard it argued that privatizing roads will lead to cleaner air. Drivers having to pay the market price for roads would find it more costly to drive, prompting a shift to bus, trolley, train, and car-pooling. I realize this is crystal-ball gazing, but do you foresee an increase in driver cost, or a decrease? If, as I’m sure you will suggest, the bottom line decreases making driving more accessible to all, how will you answer the greens who will condemn such an assault on planet earth?
Walter Block:I foresee a decrease in cost in road use compared to now. This is the ordinary expectation when we privatize things like garbage removal, postal services. There is even a general “rule of two” promulgated by Steve Hanke, E.S. Savas, and others: it costs the public sector roughly twice as much to do anything as the private. I’d be amazed if roads were an exception.
Air pollution, with one exception to be mentioned below, is entirely a separate issue. The reason we have it at all is due to a government failure to uphold private property rights, in that pollution is merely and simply an uninvited border crossing, a trespass of dust and other particles, as it were. So, air pollution could rise, fall or stay the same as we moved to road privatization. It all depends upon the state upholding, or failing to uphold, private property rights in this domain.
The one exception is that lawsuits for pollution would be much easier with private rather than public roads. No longer would you have to sue millions of separate auto owners. Now, you could sue one or just a few road owners for being bawdy houses, not of sex, but of aiding and encouraging pollution on their property, which then leaks out onto other people’s property.1
Question:
Will there be a role for government in “urging” private property owners to sell their land to road construction companies? Building a large highway, for example, can be a daunting task. If property owners hold out and refuse to sell their property to a road company, the whole project could grind to a halt. Can government step in and encourage the sale — much the same as with the railroads of the 1800s using the government right of eminent domain?
Walter Block:Eminent domain is totally and completely inconsistent with free enterprise and libertarianism. It amounts to no more and no less than land theft. The whole point of my (and my son’s) debate with Gordon Tullock was on this issue. He said that private road ownership would be impossible without eminent domain laws (expropriation as it is called in Canada), and I (we) denied this. In a nutshell, our argument was that it is possible to burrow under holdouts’ property or bridge over it, without violating their property rights.[2]
Question:In the United States, what bureaucratic encumbrances and agencies would stand in one’s way if they were to actually start a company that intended to purchase, own, and control all roads and streets in an entire state?
Walter Block:Zoning authorities; bureaucrats in charge of land use; the Environmental Protection Agency; the Department of Transportation; the National Highway Traffic Safety Administration.
Question:How would the private ownership of roads affect metropolitan commuters? Would the costs to use streets go up? Would congestion problems decrease, remain the same, or diminish?
Walter Block:Road privatization would help everyone, except for bureaucrats, politicians, “civil servants” employed by present statist road managers, etc. I claim that the cost of street use would decrease. See the “rule of two” mentioned above. Congestion problems would decrease, as peak-load pricing (charging more during rush hours than at 3 a.m., which irons out the variations in demand during the day) would become the order of the day. Right now, the government engages in anti-peak-load pricing, which exacerbates the problem. They commonly sell monthly tickets to bridges, tunnels, etc., at a cheaper price per trip than otherwise. But who uses such tickets? Employees, not casual shoppers, visitors. And when do they use these tickets? Precisely during rush hours.
Nor is this any accident. The principle holds true (congestion is a government failure) in many other cases too. Compare congestion during Christmas with the post office and private firms. The former tells you not to mail during the peak-load times; the latter roll up their sleeves, put on extra workers, and satisfy consumers.
Question:How can you reconcile burrowing under someone’s property with such issues as mineral rights? At what point above and below do property rights stop?
Walter Block:There are two theories on this. The first, the erroneous one, is called the ad coelum doctrine. Here, if you own an acre of land on the surface of the planet, you own territory right down to the center of the earth, in narrowing circles; e.g., your property comes to a point there (along with everyone else’s). In effect, you own a cone (think ice cream cone) of land, with the top, the acre on the surface of the earth, and the bottom point at its center. Also, your property extends into the heavens, in ever widening circles, again in a cone like formation. The problem with this, for the libertarian who bases property rights on the Locke-Rothbard-Hoppe theory of homesteading, is that you did nothing at all to mix your labor with the land 1,000 miles below the surface. As a practical matter, moreover, you would have the right to forbid airplanes from traveling over your acreage, even 30,000 feet above. Remember, according to this mischievous doctrine, your ownership extends from the core of the earth upward, to an indefinitely far distance. What this implies for ownership of other planets is just another reductio ad absurdum of this view.
In the latter, correct homesteading view, you own only that which you mix your labor with. If you farm, you own only as far down as the roots of your plants; maybe just a few feet more, to preclude anyone from doing something under your land that disturbs your crops. Say, ten feet down or so, depending upon the texture of the earth. If you build a house, then your property extends in a downward direction only so far as to preclude anyone else from caving in your house from below; again, the exact distance would depend upon how firm is the earth below your foundation. If your house extends downward for fifty feet, you might own, say, to one hundred feet below.
Merely farming or building a house, then, gives you no mineral rights whatsoever. Someone else could drill for oil, or mine tin, or whatever, five thousand feet below your property, if they were there first. Thus, there is no reason, in principle, that the hold out against the road developer could always preclude the latter from building a tunnel under, or a bridge over, this land.
Question:Would building a structure above someone’s land, effectively covering their home, be an invasion of their property rights?
Walter Block:It depends upon how high above. Yes, it would or might well be an invasion if you built ten or one hundred feet above, but maybe not if you did so two hundred feet above, and almost certainly not if you did so four hundred feet above.
Question:Can you elaborate on the hypothetical road privatization of one or more municipalities in Saskatchewan?
Walter Block:In rural Saskatchewan there is a good gravel road built to the doorstep of every farmhouse. Yet many highways are filled with potholes and are quite treacherous to travel. Currently, the municipalities create and upkeep local roads, and the province does so for the highways.
Municipal property taxes, which pay for roads and schools, among other things, are too high for the liking of most land owners. Tax revolts have recently ignited in southern Saskatchewan by farmers who were simply too pinched to pay land taxes.
One option to reduce taxes that has been suggested is for two or more municipal districts to combine and pool resources and share administration costs. This should, in theory, lower taxes. Another idea, which I would like to promote, is the privatization of all municipal services and the dismantling of this third level of government all together in rural areas.
Why launch road privatization in rural Saskatchewan? Because you would have a far greater chance of influencing the opinions of a few hundred farmers of the privatization of a rural municipality than you would have of convincing city people that they could live without city hall. Farmers are already self-reliant. They snowplow their own roads for instance. And Saskatchewan, where the taxes are high and the rural voters are alienated by the urban/socialist dominated legislature, is a great place to harness discontent.
Question:So here are some questions these farmers will need answered before they would sign on to such an experiment in laissez-faire capitalism:
If a company bought up and operated as a business all of the roads in one or more municipalities, how would it best collect revenue from the users of these roads? Note that in an area perhaps one hundred miles squared there may be a few hundred points of entry from non-company territory. There will also be visitors, some frequent and some not. Perhaps these local roads will need to be paid for in full by locals?
Walter Block:It is hard to say how they would best collect revenue from the users of these roads. This is an entrepreneurial decision. It is like asking, before the advent of Disney World, would they charge by the ride or have an entrance fee? Would they make it cheaper if you purchased a week-, month-, year-long ticket?
Now that I’ve ducked your eminently reasonable question, let me speculate about it. One possibility would be a charge per mile, depending upon the time of day, day of the week. Another would be a fixed fee. A third would be some combination, thereof. Perhaps the road owner (likely to be a company the shares of which are owned by the local farmers) would allow choice in this regard to its customers. Those road companies that served consumers well would profit and be able to expand, those that did not would suffer losses, and would be more likely taken over by better managers. Probably, visitors would be charged more, unless the place was trying to attract tourists.
Let’s look at private roads in malls. Some allow you to park for free, if they want to encourage attendance. Others charge a fee, unless you make a purchase. Practices vary. So might they in Saskatchewan. All we can say is that if different pricing policies long endure, then they all satisfy consumer needs. If not, the efficient ones will out-compete the inefficient ones.
Question:Heavy trucks which haul grain and livestock down these gravel roads are responsible for much of the degradation. Perhaps the drivers of these trucks would need to pay more road access fees than would drivers of cars and pickup trucks?
Walter Block:Here I am on firmer ground. We once did have private roads, several centuries ago. They charged more for heavier wagons, horses, and more axles. They also charged based on the width of a wheel. A lot for thin wheels, which churned up the dirt roads (think ice skates), and less for wide wheels, which tamped them down (think steam rollers). I have little doubt that heavy trucks would pay more, lots more. Possibly, they would be charged inversely to the pressure in their tires.
On the other hand, if we had private roads, we would most likely have economic freedom all around. This means, in effect, no unions. But organized labor ruined the railroads. Without railroad unions, the railroads would likely carry most freight, and those big trucks would be far scarcer on the highways (confined to short hauls). So, this question might be moot.
Question:Many of these country roads come to a dead end at one farmers’ house. In effect, the road is a “driveway” which is primarily used by that one farm family. Would a farmer be able to buy his own road?
Walter Block:Sure. Why not? That is like asking, would someone be able to buy his own newspaper, restaurant, shoe store. Of course, anyone can bid for anything he wants in a free society. On the other hand, there is such a thing as specialization and the division of labor. It is likely that there will arise road specialists, who could take these tasks off the hands of the farmers (with the agreement of the latter). In similar manner, not every farmer is his own carpenter, plumber, roofer, restaurateur, etc.
Question:What if an individual bought a road that led to his farmyard but, in addition, was also used (during the era of state owned roads) by a neighbor to reach an otherwise cut-off piece of property? Now, for some reason (perhaps the two neighbors hate each other) the new owner of the road decides to deny passage to his neighbor. What are the likely resolutions to this problem?
Walter Block:I cover this question in chapter 1 of this book. Suppose you live on a street, and all of a sudden its owner says either you can’t get out onto the street at all, or he’ll charge you one million dollars each time you do so. Do you have to ride a helicopter, or become a great pole-vaulter, to get off your own property? Not at all! Under present institutional arrangements, before you buy a house or any piece of property, you get title insurance. You want to be protected against anyone else claiming he really owns the house you just bought. Well, in an era of private roads, you would also buy access insurance. You wouldn’t want to be trapped on your own property. No one would buy any real estate at all unless he were sure that this sort of entrapment couldn’t happen to him. Indeed, it is in the financial interest of the owner not to do this, since he wants to attract, not repel, people from living adjacent to his road, so that he can make more profit from them.
Question:If a man wants to live alone in a rural area where there currently is no road — would he likely bear the brunt of the cost of building and maintaining it? Once built will he own it?
Walter Block:Yes, he would bear the full brunt of making the road, just like he now bears the full brunt of carting bricks, plaster, cement, to this out-of-the-way place. And of course, he would then own the road, just like he now owns his house. There would be no government subsidy, such as provided by the post office, to deliver mail at out-of-the-way places for the same price as that which one obtains in the city, where it is cheaper to deliver mail, thanks to economies of scale.
Question:Ditching government. Let’s say that laissez-faire capitalists within a particular municipality are successful at substituting a free-market enterprise for every local, state-run service; education, roads, sewer, etc. Let’s say that local taxes peel back to about 50 percent of their former levels (even though they should be zero because the government now provides zero services). How do you think that local citizens can work together to eject the municipal government? Or do you think it is possible? Keep in mind free-market solutions are now proven to work better and a majority of the local population understands that the local government is a useless bunch of bandits.
Walter Block:I’m not sure I fully understand this question. The only way to eject any government (municipal, state, federal) is to have a near majority or more of libertarians who vote the rascals out of office.
Question:Did the original inhabitants of North America “own” the land? Did they have “property rights” and was this land stolen from them (the Indians) by the white man? If so what is the antidote to this wrongdoing? Do “we,” the current owners of this land, give it back when and where an heir to the original owners can be found? Can there be parallels drawn between property stolen from the Russian or Cuban aristocracies in the communist revolutions with property stolen from Indians in North America? What’s the difference? These questions are all relevant to road building, since if the Native Americans really own virtually all the land, and they do not wish to sell it for roads, that pretty much ends expanding this form of transportation. If reparations are paid to them in the form of land, we may be forced to destroy most of our highways.
Walter Block:First of all, even if I accept your premise in its entirety, that the Indians really own most of the territory of the United States, it is by no means clear that they would wish all or even most of the roads to be turned back into farmland or forests or hunting preserves, or whatever. Surely, most of this acreage is worth far more in support of highways and streets than for these other purposes. If the Natives own it, why would they want to suffer the vast economic losses entailed in such conversions? Because farms and woodlands are more consistent with their “culture”? Unlikely in the extreme. They now preside over a plethora of western-oriented gambling establishments, due to loopholes in the law, and it is difficult to argue that these are part of their traditions. No, profit maximization is no monopoly of white, blacks, or orientals.
Second, it is by no means clear that the Indians are the rightful owners of anything like the entire United States. Under libertarian law, they could justly claim only those parts of the land that they homesteaded, or occupied, not hunted over. They owned those paths that they used to get from their winter to their summer places. This is based on the Lockean-Rothbardian-Hoppean homesteading theory. I estimate that they owned, in this way, at most 1 percent of the land in the United States.[3]
The antidote to land theft, and some land was indeed stolen from the Indians, is reparations, or, better yet, return of the stolen land. Yes, indeed, “we” the current owners of this land must give it back when and where an heir to the original owners can be found. But possession is properly 9/10ths of the law. The present owner is always presumed to be the rightful owner. The burden of proof to the contrary falls upon he who would overturn such property titles. This applies to all claimants, throughout history, without exception. There is no statute of limitation on justice for the libertarian. However, the further back in time you go, especially if there was no written language, the harder it is to meet this burden of proof. In the case of the Indians, lacking a written language, and the theft having taken place so many years ago, there is little hope for much in the way of justified land reparations. In Canada, the courts have allowed the testimony of tribal elders to be determinative in such matters. But a proper court would dismiss this as mere hearsay.
Question:I have heard that you are working on a new book. Can you tell us a little bit about it — and when it will be ready for our consumption?
Walter Block:My new book, to be published by the Ludwig von Mises Institute, will be on road privatization. It will be based on my extant publications on this subject, plus lots of new material not previously published. Possibly, material generated in this present interview process will be used in it. Let me turn things around a bit: I have got a question for you: what would be a good title for the book? The working title is something like “Road Privatization,” but, hopefully, we can do better.
Question:I just wanted to ask what you think is the outlook for the future of liberty currently, and also what projects or actions you believe to be effective, and get some advice for libertarians (and other liberty lovers) to take in order to live more freely. After all, roads will not be privatized unless the climate for freedom is far greater than at present.
Walter Block:When I started in the libertarian movement, in around 1963 or so, there were probably, literally, one hundred libertarians in the entire world. Now, using that word, libertarian, in the same way as earlier, there must be tens of thousands of us, if not hundreds of thousands. We have made great strides. In the early days, if I didn’t know the person as a libertarian, they probably weren’t one. Now, there are entire libertarian organizations, let alone individuals, of which I’m entirely unaware.
I think the prospects for increasing our numbers is great. Maybe not for increasing them proportionately, since it is easier to grow in percentage times when you have virtually zero. If we doubled our size once a year in the early days, we might still be able to do so once every few years, nowadays.
But, we face obstacles. Two of the greatest exponents of the philosophy, who stand head and shoulders over everyone else in terms of the numbers of people they’ve converted to the one, true faith, have recently passed away (Murray Rothbard and Ayn Rand). This will make our task far more difficult.
Question:How should we proceed? In the same old ways: writing, lecturing, teaching at university, promoting the Libertarian Party. I don’t think we have any comparative advantage in rabble rousing, or in picking up the gun.
Walter Block:My natural inclination is to refuse to answer this question (I know, I know, I have already started to answer it; don’t ask). My reason for this “refusal” is that the prospects for liberty have nothing to do with my own commitment to the process of trying to obtain it. That is, I am going to keep trying, at exactly the same pace, no matter what the prospects are. My reasoning has little to do with the likelihood of success. I do it because I think it’s my moral obligation to do it, because I want to pass on to the next generation the flag, or the torch or the banner that’s been passed on to me, and because it is just so much fun.
However, you’ve asked me a civil question, so I suppose I should take a hack at it. So, here it goes. I’m a pessimist on the outlook for liberty. I think humans are hard-wired, based on sociobiological consideration, to be anti-freedom. We, as a species, have lived for millions of years in groups of twenty to thirty in caves and forests, where markets couldn’t, or anyway, didn’t function. As a result, I contend, we are not biologically built to appreciate markets. Every time I get a new freshman class, I have to demonstrate to their utter amazement and consternation that minimum wages don’t help the poor, that free trade does, that markets, not welfare, help the poor, etc., etc. I think the reason for this is not merely the TV programs they’ve seen, or children’s books (for how, then, do we explain them?) but rather that our species is biologically biased against economic freedom. It will always be a hard slog to promote liberty.
Looking back over history, over the entire world, there are very few instances of freedom we have had. Yes, two hundred years ago in the United States and Great Britain; but these were aberrations. As social scientists, we do not have to explain these statistical outliers; rather, we have to account for the 99.99 percent of human history where freedom is not an ideal. It is perhaps a testimony to the libertarian movement that the freedom philosophy has rarely been stronger throughout all of history, but in only a dozen or so countries.
What are the best means of attaining freedom? Well, I’m a methodological individualist on this (as on most things). That is, different strokes for different folks. Some will best be convinced by folk songs, or movies, or novels (e.g., Atlas Shrugged). Some by teachers and writers (my own comparative advantage, plus this best suits my personality). Some by political parties, or by a move to New Hampshire, or by setting up a new country.
Interviewers
Bruce Armstrong, Troilus Bryan, Mike Cust, Chris Delanoy, Jeff Dick, Matthew Johnston
Notes
[1] See on this the magnificent Murray N. Rothbard, The Ethics of Liberty (Atlantic Highlands, N.J.: Humanities Press, 1982).
[2] See also Walter Block and Richard Epstein, “Debate on Eminent Domain,” NYU Journal of Law & Liberty 1, no. 3 (2005): 1144–69. Listen to it at www.mises.org/multimedia/mp3/Block-Epstein.mp3.
[3] See on this several articles I wrote on the topic: Walter Block, “On Reparations to Blacks for Slavery,” Human Rights Review 3, no. 4 (July–September): 53–73; Walter Block and Guillermo Yeatts, “The Economics and Ethics of Land Reform: A Critique of the Pontifical Council for Justice and Peace’s ‘Toward a Better Distribution of Land: The Challenge of Agrarian Reform’,” Journal of Natural Resources and Environmental Law 15, no. 1 (1999–2000): 27–69.
- 1[1] See on this the magnificent Murray N. Rothbard, The Ethics of Liberty (Atlantic Highlands, N.J.: Humanities Press, 1982).
