993 sats \ 2 replies \ @Undisciplined OP 3 Jan \ parent \ on: BuT, wHaT aBoUt ThE rOaDs? libertarian
Roads are definitely not fungible. I think it makes more sense to think of the different routes connecting two places as being imperfect substitutes for each other, with roads to all other locations in the network being imperfect complements. The problem with that framework is that the same two specific roads are complements for some people and substitutes for others.
I don't see the natural monopoly case, although there is definitely scope for rent seeking. Roads, rail, air, and sea are all in competition with each other, although one may have the technical advantage on a particular route. The nature of network effects also puts pressure on owners of particular networks to connect with other transportation networks, rather than to operate in silos.
An interesting historical note on private rail development, is that in19th century America, only the Great Northern Railroad rejected government subsidies and it was also the only profitable railroad in that era.
As for how I think privatization should proceed, I tend to be a gradualist. So, I would start with the easy stuff, like allowing home-owners associations and other neighborhood organizations to take ownership of their roads, as well as allowing private development of parallel routes where there's tons of traffic. At the same time, I would introduce mechanisms, like tolls, that introduce pay for use of state owned roads. That's where the incentive to reduce state inefficiency really starts playing a role. Retailers may want to buy some of the roads, since they may be willing to take over the costs in order to facilitate customer traffic.
I don't see the natural monopoly case, although there is definitely scope for rent seeking. Roads, rail, air, and sea are all in competition with each other, although one may have the technical advantage on a particular route. The nature of network effects also puts pressure on owners of particular networks to connect with other transportation networks, rather than to operate in silos.
Ah, I see, interesting. I definitely saw these transportation networks more isolated. But my own experience shows that I do check how walking, cycling, taking the train or even driving myself even though I don't even own a car compare in time and money when I want to go somewhere.
An interesting historical note on private rail development, is that in 19th century America, only the Great Northern Railroad rejected government subsidies and it was also the only profitable railroad in that era.
Also interesting, didn't know that. But also didn't verify that yet ;)
As for how I think privatization should proceed, I tend to be a gradualist. So, I would start with the easy stuff, like allowing home-owners associations and other neighborhood organizations to take ownership of their roads, as well as allowing private development of parallel routes where there's tons of traffic. At the same time, I would introduce mechanisms, like tolls, that introduce pay for use of state owned roads. That's where the incentive to reduce state inefficiency really starts playing a role. Retailers may want to buy some of the roads, since they may be willing to take over the costs in order to facilitate customer traffic.
Yeah, I can definitely see how it makes more sense that the people who need the roads for their own personal reasons also maintain them. Else, the tragedy of the commons strikes which is kind of what we currently see with public funded roads:
Congestion on public roads that do not charge tolls is another example of a government-created tragedy of the commons. If roads were privately owned, owners would charge tolls and people would take the toll into account in deciding whether to use them. Owners of private roads would probably also engage in what is called peak-load pricing, charging higher prices during times of peak demand and lower prices at other times. But because governments own roads that they finance with tax dollars, they normally do not charge tolls. The government makes roads into a commons. The result is congestion.
reply
The tragedy of the commons is definitely applicable, but I think it's an interesting case here. We don't only value roads for our own direct use, but also so that others can use them in ways that benefit us. So, unlike a typical tragedy of the commons, part of the value is in the openness of the commons to others.
reply