Even among advocates of capitalism, there are many misconceptions about how roads might operate in a free society. One of the most common of these misconceptions is the belief that if all roads were private property, a road owner might charge outrageous rates or close his road entirely.
There are several reasons for such misconceptions:
- There is a failure to look at the marketplace. While there may be few examples of private roads, we can learn lessons from other goods and services.
- There is a tendency to project government methodology into a free market. For example, toll roads are often viewed as a free market solution to traffic congestion. So it is assumed that, in a free society, all roads would be toll roads. (Toll roads are not a free market solution. Any “solution” that involves government intervention is not, and cannot be, a free market solution.)
- There are few examples of private roads. Consequently, we have limited opportunities to examine actual examples.
Let us look at each of these.
The marketplace is filled with millions of businesses. I have yet to see or hear of a single business that invested millions of dollars into a product or service, and then immediately refused to sell that product or service. For example, a baker does not buy the equipment and ingredients to bake bread, fill his warehouse with loaves, and then refuse to sell his product. Businesses invest in equipment and materials in order to produce values. And they produce values in order to sell them for a profit. How does this relate to roads?
It is highly unlikely that a company would invest millions, if not billions, of dollars to build or purchase a road, and then close that road. No rational businessman is in the business of wasting money. We don’t see computer makers, or software publishers, or contractors, or any other business invest tons of money and then let their investment rot. Why does it seem conceivable that a road owner would engage in such conduct? Why would we laugh at the idea of bankers, printers, grocers, and retailers throwing their money away, but find it entirely plausible that road owners would? That brings us to point #2.
Simply because something is privately owned does not mean that the owner will charge for its use. Consider the yellow pages. These are distributed for free by the publisher, who derives his revenues from advertisers. A more current example is Google. The use of its search engine, email, and many other services are free. Despite giving away many of its services, Google is immensely profitable. In short, when men are free to act on their own judgment, they often find it advantageous to give something away and derive their revenue from other sources.
The same is true of roads. Consider a typical subdivision with dozens, and perhaps hundreds, of streets. It is often believed that ownership of the streets would reside with some business, which could arbitrarily set outrageous prices. While this is a widely held view, the actual facts demonstrate otherwise.
Many subdivisions contain privately owned streets. Ownership is typically vested in the home owners’ association, and maintenance fees are assessed to the property owners. These fees and other details are stipulated in the deed restrictions for the community and are a part of the contract that is signed when the property is purchased. Similar types of arrangements would likely occur in business districts.
It is also highly likely that some roads would require the payment of tolls. These types of roads would likely be owned by companies devoted to building and operating such roads.
In the above discussion, I used the word “likely” when describing how roads might be owned in a capitalist society. The reason I say “likely” is that I do not know how free men will choose to use their property. Some visionary like Steve Jobs might create models that I could not begin to imagine. When men are free, they find creative ways to produce the values that we want and need. It is true of computers, cell phones, televisions, and roads. Freedom is the only free market solution.