Today, I was listening to CATO’s Daily Podcast about transportation with Samuel Staley of the Reason Foundation. I started listening to him talk about the best ways to plan highway systems and said to myself, “Oh boy, here we go again another so-called “free-market” person talking about how the government can ‘pave our way out of congestion’.” “We’ve got the space, and we’ve got the land, and we’ve got the wealth” to pave away congestion. That’s a very collective “we” for a supposed free-market person to use.
But, after about 5 minutes of that, he goes into how we now have the technology to privatize highway use and are 15 years away from the technology to privatize even local roads. Now we’re talking.
We need to actually begin to tie those traditional market mechanism to the products that are being developed and implemented at the local level, and that’s something we’ve never been able to achieve before. It’s an exciting time for transportation policy.
If, transaction costs are no longer the obstacle to privatization, society needs to start shattering these bureaucracies and selling the roads to the private sector.
I think the biggest hurdles to privatization are peoples’ perception/biases and politics. People never paid for roads before, so it’ll take effort to convince them it is not as free as the air we breath…
Rationalitate says
June 10, 2008 at 5:16 pmDoes he argue that “privatization” should include the right not only to run the road how you see fit, but also to tear up the road altogether?
Stephen Smith says
June 10, 2008 at 5:16 pmDoes he argue that “privatization” should include the right not only to run the road how you see fit, but also to tear up the road altogether?
MarketUrbanism says
June 10, 2008 at 6:07 pmThat’s a very interesting thought. I’ve never heard that argument before.
I’m trying to imagine a situation where the highest and best use would bring enough value to justify the demolition costs and opportunity cost of lost tolls.
It’s definitely plausible, especially in extremely dense locations.
Market Urbanism says
June 10, 2008 at 6:07 pmThat’s a very interesting thought. I’ve never heard that argument before.
I’m trying to imagine a situation where the highest and best use would bring enough value to justify the demolition costs and opportunity cost of lost tolls.
It’s definitely plausible, especially in extremely dense locations.
MarketUrbanism says
June 10, 2008 at 6:19 pmNo doubt, they should be fully privatized as you say. However, I can only imagine that the privatized highways will be significantly regulated, and liquidation would not be permitted. (unfortunately)
Market Urbanism says
June 10, 2008 at 6:19 pmNo doubt, they should be fully privatized as you say. However, I can only imagine that the privatized highways will be significantly regulated, and liquidation would not be permitted. (unfortunately)
Rationalitate says
June 10, 2008 at 10:15 pmBecause if you’re not allowed to use the land for anything other than a highway, then I see “private” roads as only a very marginal improvement over the status quo, and certainly nothing to get excited about. In fact, they might actually do the “market urbanism” cause harm rather than good, because people will then associate these roads with a free market in transportation and land use. Sort of like how the United States’ relatively free market in medicine and healthcare has engendered significant backlash against the private model of healthcare provision, despite the fact that the American system is still very heavily regulated and manipulated, and a legitimate free market in healthcare probably wouldn’t even involve insurance (at least for anything other than catastrophic needs, and perhaps a insurance for mothers to pay before they give birth to cover the probability of their child being born with some sort of debilitating illness) to begin with.
Stephen Smith says
June 10, 2008 at 10:15 pmBecause if you’re not allowed to use the land for anything other than a highway, then I see “private” roads as only a very marginal improvement over the status quo, and certainly nothing to get excited about. In fact, they might actually do the “market urbanism” cause harm rather than good, because people will then associate these roads with a free market in transportation and land use. Sort of like how the United States’ relatively free market in medicine and healthcare has engendered significant backlash against the private model of healthcare provision, despite the fact that the American system is still very heavily regulated and manipulated, and a legitimate free market in healthcare probably wouldn’t even involve insurance (at least for anything other than catastrophic needs, and perhaps a insurance for mothers to pay before they give birth to cover the probability of their child being born with some sort of debilitating illness) to begin with.
MarketUrbanism says
June 10, 2008 at 10:39 pmI agree, but I think it’s much more than “marginal.” If a scenario where the highway is demolished for other uses were even feasible in some situation, it would have to be extreme.
I think to radically liberalize the road system over night is not practical. And some form of privatization is better than none.
What if street parking spaces were sold? (as they should be) Is it likely that the space could be used a lawn? What if a restaurant used it for seating? It could happen, and it would almost definitely be a good thing…
The thing is, we are so far from that. For the public to allow it, it would have to be incremental, or something revolutionary would have to happen. (like one of us being elected President or ‘Market Urbanism’ becoming bigger than Elvis 🙂 )
In fact, they might actually do the “market urbanism” cause harm rather than good, because people will then associate these roads with a free market in transportation and land use.
I guess I’d be willing to take that chance…
Plus, it seems that many people already associate our system as “free-market”.
Market Urbanism says
June 10, 2008 at 10:39 pmI agree, but I think it’s much more than “marginal.” If a scenario where the highway is demolished for other uses were even feasible in some situation, it would have to be extreme.
I think to radically liberalize the road system over night is not practical. And some form of privatization is better than none.
What if street parking spaces were sold? (as they should be) Is it likely that the space could be used a lawn? What if a restaurant used it for seating? It could happen, and it would almost definitely be a good thing…
The thing is, we are so far from that. For the public to allow it, it would have to be incremental, or something revolutionary would have to happen. (like one of us being elected President or ‘Market Urbanism’ becoming bigger than Elvis 🙂 )
In fact, they might actually do the “market urbanism” cause harm rather than good, because people will then associate these roads with a free market in transportation and land use.
I guess I’d be willing to take that chance…
Plus, it seems that many people already associate our system as “free-market”.
Rationalitate says
June 11, 2008 at 4:23 pmPersonally I think the best first step would be selling roads in high-density metropolises like NYC. These are the ones that have the highest obvious opportunity cost, and also the ones that could be most profitably converted into alternative transportation rights of ways (imagine how many high-rises, pedestrian foot paths, and rail rights-of-ways could be crammed along one of Manhattan’s main roads). Of course, it might also be more difficult because NYC already has a well-established, and well-subsidized mass transit system. Unlike most parts of the US, you’d probably have to shut this down/privatize it before you begin to see real private mass transit.
Stephen Smith says
June 11, 2008 at 4:23 pmPersonally I think the best first step would be selling roads in high-density metropolises like NYC. These are the ones that have the highest obvious opportunity cost, and also the ones that could be most profitably converted into alternative transportation rights of ways (imagine how many high-rises, pedestrian foot paths, and rail rights-of-ways could be crammed along one of Manhattan’s main roads). Of course, it might also be more difficult because NYC already has a well-established, and well-subsidized mass transit system. Unlike most parts of the US, you’d probably have to shut this down/privatize it before you begin to see real private mass transit.
MarketUrbanism says
June 11, 2008 at 4:45 pmThat’s exactly what came to mind when I was trying to think of feasible scenarios.
It could work with just air-rights too. Think of the proposed Hudson Yards project in Manhattan. What if they bought part of the highway along the river? The project could make a very valuable connection to the river. Even the air rights have high value.
Desirable locations along waterways may be the first place to look.
Market Urbanism says
June 11, 2008 at 4:45 pmThat’s exactly what came to mind when I was trying to think of feasible scenarios.
It could work with just air-rights too. Think of the proposed Hudson Yards project in Manhattan. What if they bought part of the highway along the river? The project could make a very valuable connection to the river. Even the air rights have high value.
Desirable locations along waterways may be the first place to look.