Let’s call this Building the Island #2. (Intro) (#1)…
One of the big objections that anarcho-libertarians face is on the question of roads. Without taxation, how would roads be provided and maintained? The main justification for this objection is that roads, stop signs, etc. are non-excludable public goods. In other words, you cannot make people pay for each use, and you cannot exclude non-payers.
Two decades ago—long before I had crossed the last bridge to Anarchist Island—I heard a convincing partial reply, which was essentially this: We can at least privatize limited-access roads (freeways, interstates, etc.). The argument was simple: you can make people pay for those (at the time, by means of tolls at entry points), so profit-making companies can provide such roads. And indeed, some already do.
As a limited-government conservative at the time, I thought, Good, there’s one way we could get government out of our business. But then I immediately wondered how we could do the same thing with general-access roads: city streets, rural roadways, neighborhoods, etc. In typical fashion, I assumed I knew the answer and did not look any further to see if anarchists have any good ideas on general-access roads. And my fellow conservatives generally seemed to have the same objection, so I figured I was probably right. Those are much more like typical public goods, I thought, and would be impossible to privatize. (Reinforcing that view was my memory of the terrible experiences I had on ultra-rural private mountain roads when I was looking at land in Montana. I will tell you that story tomorrow.)
Okay, so we know that limited-access roads can be done privately. The people who use them can be made to pay for them, and they can be profitable. (One of the many nice things about this is that only the people who use them are made to pay for them. Compare that with forced taxation, which—like Montgomery Burns’ Omni-Net—catches everyone in its claws, whether they use a particular road or not.)
But how can this be done with general-access roads? You cannot have a toll booth every couple of miles, goes the typical objection, and that is basically true. But you can use transponder technology—the same tech that has now been installed on many freeways to replace manned tollbooths.
To understand how this could work conveniently with general-access roads, consider the following two facts:
Markets tend towards harmonization
A market economy is the result of millions of voluntary transactions, which, without any central direction, produce a constantly adjusting equilibrium of prices, wages, and resource allocation. But it is not chaos—it is what is called spontaneous or emergent order. This phenomenon turns chaos into order, the same way millions of speakers produce a common language without any direction.
At one point, bricks, beds, and lumber were all different sizes. This was causing problems, so the market solved it. Now, there are standard sizes for bricks, beds, and lumber. Sometimes, private organizations like the National Association of Manufacturers help with this process, but it happens either way.Markets tend toward efficiency.
Calculators were $400 dollars when they first came out. Now, they might as well give them away as prizes in boxes of Cracker Jacks. My first computer had a dinky 230 MB hard drive and 4 MB of RAM, and it cost $3,000. Now I have a $500 phone that is thousands of times more powerful, and I can hold it in my hand.
It would take me years and cost me tens of thousands of dollars to make one pencil from scratch, but because of economies of scale, Eberhard Faber cranks out millions of them for pennies each.
Markets produce better quality at lower prices. Governments do the exact opposite.
With that in mind, imagine you wake up tomorrow and government is gone. (It’s easy if you try.) We still have to get around—how do we do it?
In a free economy, entrepreneurs go where the profit is. Some would buy roads and use transponders to charge for their use. Intentional communities and other sorts of polities would form, and some might prefer to own and maintain their own roads. Really big companies would buy really big roads, or a lot of miles of roads. There would be no shortage of people looking to get in on a new entrepreneurial frontier.
But how would we get a transponder into every car?
We do it now. Everyone who wants to drive on interstates throughout the eastern U.S. now has a transponder. (I assume the same is the case out west, though I have not been out there in a while.) What I am describing is no different, except that the few people who currently only drive on general-access roads and never see an interstate would have to get transponders too. And they would.
But how would we make them all get the same kind of transponder?
The same way that beds, bricks, and lumber all have standard sizes. We would not have to make them. Markets harmonize because it is in their interest to harmonize. Transponder and receiver technology would standardize just like everything does.
But wouldn’t we have a riot of transponder receivers all over the place?
Yes and no. We would have as many as there are road owners and as many as each road needed in order properly to charge people for use. Keep in mind, though, that each individual homeowner is unlikely to become an owner of his own fifty feet of street frontage. Markets tend to find more efficient ways to do things, not less. Market forces do no reward stupidity. Road-owning corporations would form. They would find a way to deliver better quality at lower prices or be replaced by someone who could. They would find a way to make receivers smaller, more inconspicuous, more efficiently placed, etc. That is how this works.
Okay, so what if an HOA neighborhood of 100 homes owns its neighborhood streets? How can they afford, on the meager revenue from the one transponder at their one entry point, to repave their roads when needed?
Reminder—market forces push products towards higher quality and lower prices. Governments incentives are the opposite. On TV, you hear fictional “public servants” talking about “not wasting the taxpayers’ money.” That is TV. In reality, there are no strong incentives to be efficient with tax dollars. Tax money is taken by force, and the taxpayer cannot simply “vote with his wallet” and give his tax money to a different government.
If private companies owned the roads and had to pay millions for their upkeep, you can be danged sure that they would find ways to make those roads last longer. And longer. And then longer still. Their incentive is to keep costs down and raise profits.
Government’s incentive is to get the road paved well enough to stop taxpayers from bitching about potholes for a while, cheaply enough so that they can claim to have been “good stewards” of your tax money, and in time for the next election…oh, and also to make sure to use union labor, and contractors who are the cousins of big campaign contributors or whatever. More frequent road construction means more contracts for cousins and campaign contributors. Incentives are perverse.
The market is different. If market forces were at work, roads would last many years longer. The little HOA would have a much longer stretch of time to accumulate the money needed to do minor repairs and the occasional major overhaul.
Also, because of economies of scale, re-paving companies would not simply do one little job a a time—first Road Corporation A’s 30 miles, then the little HOA’s one mile, and so forth. Acme Pavers would go to twenty road owners at once and say, “Hey, we’re repaving roads in this area, and we can give you a bulk rate. If you go with us rather than PaveCorp, we’ll give you a 20 percent discount and guarantee the road will last for 40 years. And as a further incentive for going with us, we will fix any heave or cracks for ten years, free of charge.” And they can make that guarantee because the profit motive has compelled them to perfect a new type of road material that doesn’t crack for decades.
In other words, true competition pushes excellence and rewards consumers with better deals at lower prices. True competition does not exist with the roads today. Consequently, tax money is being forcibly extracted for the “privilege” of driving on crappy roads that always seem to be either in a state of disrepair, or are being repaired slowly and inefficiently, causing weeks of traffic. (Is I95 heading through the Carolinas EVER not being repaired?)
Are you starting to get the idea? Roads would not only be possible without government—they would be better.
Note also that we would not have the same roads in the same places. The original incentive for having this many roads was so that the king could tax all his subjects. (Can’t tax ‘em if the tax collector can’t reach ‘em.) If market and human incentives guided the development of roads, they would look different. How, exactly, I do not know—we do not have a crystal ball to look into the counterfactual reality where it happened that way. In all likelihood, we would have more roads where we need them and fewer where we don’t. They would not serve human needs perfectly, because nothing is perfect, but they would serve human needs better.
You get that markets do a better job of making shoes and cars. Why do you think they would not do a better job of making roads? That is not a rhetorical question: I want to know what you think. What is holding you back on this?
I love this so much. Ah, I am dreaming now. I love this world. I will end my reading on that note. That's a positive end for the night! Thanks for the great ideas. Harmonizing, the very notion.
Thanks for writing about this! Roads are one of those things governments took over so long ago, people don't even remember a time before government roads - but it didn't always used to be that way. This is a favorite strategy of governments - take over necessities (so-called public goods) and then rewrite the history books so it sounds like without government, there would be no roads, no healthcare, no defense, etc.
If you don't mind my plug, here's my take on roads in a stateless society https://www.libertarianprepper.com/p/without-government-who-will-build-the-roads