I often say that the only role of government should be to protect my borders, pave my roads, and provide a fair justice system (certainly, there are a few more bare essentials, i.e. fire department, local police force, etc.). Yet, in a recent article on RealClearMarkets entitled Let’s Privatize Our Roadways, writer Steven Malanga argues that the emerging free market trend lies in privatizing our roads. Yet, what happens if the service being provided by the private sector is not satisfactory? The free market answer is: “then don’t use the roads. If the people are not using the roads, then the private sector must logically adapt.”
The free market is a beautiful entity in that it gives the parties involved the freedom and discretion to enter a contract in self-interest in the hopes of gaining a particular benefit or objective. You have a decision whether or not to enter that contract. The free market also enables those that do not want to partake in the contract the ability not to do so. In essence, the free market offers pure, uninhibited choice at the most simplistic level.
However, when applying roadways to the free market, the product in question is not a good or service that one can willingly choose not to use, largely due to the fact that roads are a necessary public good. Roads enable our society to properly function. The development of our cities, infrastructure, and way of life are made possible due to the fact that goods and services are easily transferable through the use of roadways, highways, and interstates that allow for goods to be moved. Without roadways, our society and our way of life can simply not be. Suburbs would not exist due to the fact that the majority of jobs are held in large metropolitan areas; our economy could not function. In short, the people lack the choice not to use the roadways, therefore inhibiting their ability to properly opt-out of the agreement.
If the roadways are in the hands of a private firm and the product is not satisfactory, then there is very little, if anything, that the public can do about it. Yet, if the roadways remain in the hands of the federal government and the product continues to remain unsatisfactory, the legislators responsible for the poor quality of the roads will be held accountable; their jobs in danger due to the almighty power of democracy.
I’m not against privatization. As a matter of fact, I agree with privatizing several areas of government. Yet, the one thing that the government provides that the private sector does not in terms of necessary public goods is checks and balances. So when the state and local government willingly relinquish their control of our roadways to the private sector, are we privatizing the roadways or is the government outsourcing their responsibility? If we begin by privatizing the roadways, then what will we privatize next? The military? Waaaaait a minute…
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I have to disagree with your assessment on several grounds.
First, you don’t have to use roadways: while the cost of doing so might be high, one could live in a city, not own a car, and walk everywhere they need to go on sidewalks. If we apply your argument to electricity–which is generally provided by the market–I would say that one is inconvenienced more by not using electricity than not using roadways, yet are you going to call for the nationalization of the electric grid? I think not.
I also notice you mention defense and civil justice as something the government is by nature supposed to provide: I agree and so does our US Constitution. Where does the Constitution mention anything about providing infrastructure? Nowhere.
You mention that private roads trap consumers in a way that public roads do not. You ignore the most fundamental aspect of markets: competition. Unlike with government there is competition in the private sector that keeps up incentive for quality.
Lastly, you say:
Congress has the lowest approval rating in history, we are engaged in a war that over 70% of the people are against, over half of the bridges in the country have been deemed deficient, our economy is moving toward recession, and we have more incumbents now than ever! If you really think that government is able to be checked like you describe, then I have a bridge I will sell you…cheap…
You say: “You mention that private roads trap consumers in a way that public roads do not. You ignore the most fundamental aspect of markets: competition. Unlike with government there is competition in the private sector that keeps up incentive for quality.”
You read my post, but apparently you didn’t read the article. Here are two quotes:
1.) “Chicago Mayor Richard Daley did the same with the city’s Skyway, which investment bankers estimated was worth $900 million. Instead, it fetched $1.8 billion from an international group that will run and maintain it for 99 years.”
2.) “In Pennsylvania, Gov. Ed Rendell’s plan to lease the Turnpike has met with tough opposition, even though a private group has offered an astounding $12.8 billion to operate the road for 75 years.”
Private contracts for 99 years? 75 years? Doesn’t sound like there’s much room for competition OR incentive for quality, eh?
Secondly, how many congressional Republicans lost their seats in 2006 as a result of supporting the war in Iraq? Plenty. How many congressional Republicans will lose their seats in 2008 due to our “economy…moving toward recession?” Even more. Yes, there are checks and balances.
Thank you for the comment.
I have to respectfully agree with “The Radical”. The overall tone of your argument is anti-privatization of public goods, not anti-exclusive-private-contracting. I’m very skeptical of anyone that equates the two as the same. They’re not. Free markets are not about exclusive monopolistic contracting.
Even with that said, I’m still not totally convinced that exclusive private contracting is as bad as you put it. It’s still more market-friendly than total government control, giving consumers more choice than they had before. As evidence, I will ask you to click and watch the following reason.tv video.
NickyCheese’s last blog post..The film The Killing Fields
Given that the government is running our retirement plans, I think the government needs to get out of a lot of sectors before roads.
I, and the overwhelming majority of the country, do not want to risk poorly managed roads at the altar of free-markets.
The overall tone of my argument is NOT “anti-privatization of public goods,” it is anti-privatization of public goods that the public “CANNOT willingly opt-out of.” As I said in the post, I believe in privatization when the two parties involved have the CHOICE whether or not to take part. When it comes to roadways, they do not have that choice.
I think road maintenance should remain the responsibility of government because the core function of government is to protect its citizens in an emergency, and in an emergency situation, public roads are essential for allowing citizens to evacuate, to allow emergency vehicles to come to the aid of the injured or trapped or in danger.
You may choose to not use roads, as TheRadical suggested. But if you have a heart attack, are you going to call 911 for an ambulance, or are you going to walk to the hospital?
Also, TheRadical suggested that people who live in cities do not use roads. This statement is ridiculous, as city dwellers use public transportation such as buses, taxis and trains-all of which use public roads and rails to get around. The island of Manhattan is 13 miles long. If you think New Yorkers are walking from one end of Manhattan to the other to get to work every day, you are out of your mind.
I think the Silent Majority is making this a bigger deal than it is. Keep in mind that the governments mentioned in the article LEASED not sold these highways to these corporations. As mentioned, if the lease holders fail to live up to the terms of the agreement, the leased will be revoked and the company can literally lose billions of dollars.
Government loses billions of dollars every day and no one gets fired and no agencies are shut down. In fact the only change that government makes after wasting is to propose tax hikes.
I think highways, bridges and tunnels should be the only thing leased out to private companies because they are the thoroughfare least utilized by emergency vehicles and because only a minority of the general public use bridges, highways and tunnels on a frequent basis.
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