Without government, who will build the roads?

I frequently hear the misguided belief that only government can build roads. In fact, I would say most people generally believe that building roads is a traditional function of government (it’s not). This is often an attempted and misguided criticism of libertarianism. The belief that only government can build roads draws a fallacious conclusion. I do not believe our only means to build roads is through extorting people for money (taxes). Roads are mostly paid for by taxes on gas consumption at the pump, which are currently about 3x more than the corporate profit per gallon. More government spending does not equate to better roads, nor is it a sustainable solution. The same people who complain about our crumbling infrastructure refuse to entertain privatization of major roadways and infrastructure, and their only solution is to spend more tax money. If you ever hear “more government spending” as a solution to anything, chances are the person saying that is either oblivious, a politician, or a paid-for-parrot like Paul Krugman.

It is often overlooked that well over half of infrastructure in the US is privately owned and operated. Communication structures, which span the entire country, make up the majority of private infrastructure. Rail roads, including the ones used by government-owned Amtrak, are entirely private. Despite being private infrastructure, I still have a cellphone signal and CSX is still making shipments. There are also major highways in Illinois, Virginia, and California that are privately owned at zero cost to the tax payer. The first major roads in the US were built out of commercial shipping interests, particularly in the Northeast. Even local roads were built to accommodate employee access to work and customer access to businesses. In the 19th century, there were about 2,500 private companies operating over 30K miles of roads. Today, private roads are few and far between.

Privatizing roads does not mean you will never pay another dime for roadway infrastructure, but I do believe that private money is allocated more efficiently. We would save billions in tax dollars, which is crucial given our massive public debt. Using GPS technology and precise odometer counts, a commercial or consumer vehicle can track exactly what they owe for using the roads – as opposed to arbitrarily collecting taxes at the pump that is spent on who the hell knows.

As with many functions of government, managing our complex road system is an incredibly wasteful and politically profitable one. When the government builds a road (or anything), it is much different than a private entity doing the same. Government and their contractors, through its own self-regulation, must adhere to incomprehensible legalese. As a result of regulatory and other inefficiencies, these projects have massive cost overruns, delays, and often go flat broke. If you live anywhere near I-95, you know what I mean. In many states, there are cost over runs on 55% of projects that range from 10% to over 30%. Although this may seem low, many government public works projects, such as Boston’s Big Dig, cost exponentially more than originally estimated and take lifetimes to complete. Massachusetts actually bailed out the Big Dig project 3,200 times, but never demanded accountability. The project ended up costing 7x more than the original estimate. Can you imagine that happening in a private business? At the federal level, money is spent inefficiently on low priority projects and for non-road purposes – mostly urban transit subsidies. Across all divisions of government, infrastructure funds are used as political capital, which causes more delays and inefficiency.

Any economics textbook will address the inefficiencies a monopoly can cause within a market. We have inexplicably failed to extend that basic premise to roads and public works, and now our infrastructure is falling apart. If the free market can turn a room-sized computer into a handheld device, surely it is capable of building roads. Despite an obvious market and a history of privatization, we continue to allow government to mismanage projects and neglect our crumbling infrastructure. Privatization will lead to innovation, waste reduction, and a value add sector of our economy.

“A traffic jam is a collision between free enterprise and socialism. Free enterprise produces automobiles faster than socialism can build roads and road capacity.” – Andrew Galambos

Sources and more info:

http://www.downsizinggovernment.org/transportation/federal-highway-funding#4

http://www.oppaga.state.fl.us/reports/pdf/9722rpt.pdf

http://docs.lib.purdue.edu/cgi/viewcontent.cgi?article=1482&context=jtrp

http://www.washingtonpost.com/local/why-costs-often-creep-on-public-works-projects/2014/05/14/d588bac8-db8a-11e3-8009-71de85b9c527_story.html

http://www.cato.org/sites/cato.org/files/pubs/pdf/tbb-0309-17.pdf

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