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29 March 2012updated 26 Sep 2015 7:46pm

Even libertarians don’t want private roads

Can you ever have free-market highways?

By Alex Hern

Just missing the UK news agenda, the Atlantic has a post up on road tolls and private highways. In a reversal of the norm for discussions of high degrees of privatisation, its merely a theoritical concern for Americans, but has deeply practical relevence for Brits.

Timothy B. Lee writes:

While I’m generally sympathetic to the idea of privately-managed roads, I’ve become convinced that the broader vision of “free-market roads” is a conceptual confusion. In the abstract, the idea of competing, privately-owned roads has a lot of appeal. But the more I think about it, the less sense it makes. Roads are deeply intertwined with governments. They always have been and as far as I can see they always will be. This means that they’ll never be truly private in the sense that other private companies like restaurants or shoe factors can be.

Assembling the land needed for a long-distance road is prohibitively expensive without government assistance. Unsurprisingly, private roads almost never come into existence without extensive government assistance. And that means that the profitability of a “private” road depends crucially on how many competing roads the government allows to exist.

Lee is no anti-privatisation zealot, either. An adjunct scholar with the high-libertarian Cato Institute, he’s exactly the sort of person who would love to support the government taking a back seat on provision of transportation.

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It is noteable that the government’s plans don’t involve large scale private road-building, but the lesser challenge of handing over the maintanence and development of existing roads to private investors on extremely long-term leases. If the private companies do so purely through existing funding, then the issue is merely one of comparative efficiency of the public and private sector, and the privatisation is just a showy, irreversible outsourcing. But if, as Cameron suggested, they are allowed to charge tolls on new capacity, then that carries additional risks.

As Lee argues, because any large scale road-building (which surely includes things like adding extra lanes to motorways, cited by Cameron as something which could be funded through tolls) requires massive public support, through use of eminent domain to assemble the land and no-compete clauses to prevent revenue streams from drying up, tolls on previously public roads represent, at least in part, a tax on mobility.

There is one key difference between the American and British contexts, though; in the UK, competition – of a sort – exists. Freight is frequently moved through the rail network as well as the roads, and shipping is far more useful in a country which is never further than 70 miles from the sea. Of course, true competition means avoiding “too-big-to-fail” scenarios; for now, the idea of reposessed roads might be a bit much to handle.

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