WEBVTT NOTE 11. The Public Sector, II: Streets and Roads 1 00:00:00.000 --> 00:00:08.240 Chapter 11 The Public Sector 2 Streets and Roads 2 00:00:08.240 --> 00:00:13.760 Protecting the Streets Abolition of the public sector means, of course, 3 00:00:13.760 --> 00:00:21.000 that all pieces of land, all land areas, including streets and roads, would be owned privately, 4 00:00:21.000 --> 00:00:26.920 by individuals, corporations, cooperatives, or any other voluntary groupings of individuals 5 00:00:26.920 --> 00:00:28.960 and capital. 6 00:00:28.960 --> 00:00:34.780 The fact that all streets and land areas would be private would by itself solve many of the 7 00:00:34.780 --> 00:00:39.360 seemingly insoluble problems of private operation. 8 00:00:39.360 --> 00:00:45.960 What we need to do is to reorient our thinking to consider a world in which all land areas 9 00:00:45.960 --> 00:00:49.080 are privately owned. 10 00:00:49.080 --> 00:00:51.960 Let us take, for example, police protection. 11 00:00:51.960 --> 00:00:57.120 How would police protection be furnished in a totally private economy? 12 00:00:57.120 --> 00:01:02.320 Part of the answer becomes evident if we consider a world of totally private land and street 13 00:01:02.320 --> 00:01:04.200 ownership. 14 00:01:04.200 --> 00:01:09.920 Consider the Times Square area of New York City, a notoriously crime-ridden area where 15 00:01:09.920 --> 00:01:14.540 there is little police protection furnished by the city authorities. 16 00:01:14.540 --> 00:01:19.960 Every New Yorker knows, in fact, that he lives and walks the streets, and not only Times 17 00:01:19.960 --> 00:01:26.960 Square, virtually in a state of anarchy, dependent solely on the normal peacefulness and goodwill 18 00:01:26.960 --> 00:01:29.540 of His Fellow Citizens. 19 00:01:29.540 --> 00:01:35.200 Police protection in New York is minimal, a fact dramatically revealed in a recent week-long 20 00:01:35.200 --> 00:01:42.460 police strike when, lo and behold, crime in no way increased from its normal state when 21 00:01:42.460 --> 00:01:46.820 the police are supposedly alert and on the job. 22 00:01:46.820 --> 00:01:52.240 At any rate, suppose that the Times Square area, including the streets, was privately 23 00:01:52.240 --> 00:01:56.600 owned, say by the Times Square Merchants Association. 24 00:01:56.600 --> 00:02:01.840 The merchants would know full well, of course, that if crime was rampant in their area, if 25 00:02:01.840 --> 00:02:07.160 muggings and hold-ups abounded, then their customers would fade away and would patronize 26 00:02:07.160 --> 00:02:09.520 competing areas and neighborhoods. 27 00:02:09.520 --> 00:02:14.560 Hence, it would be to the economic interest of the merchants' association to supply 28 00:02:14.560 --> 00:02:20.640 efficient and plentiful police protection, so that customers would be attracted to, rather 29 00:02:20.640 --> 00:02:24.400 than repelled from, their neighborhood. 30 00:02:24.400 --> 00:02:29.720 Business, after all, is always trying to attract and keep its customers. 31 00:02:29.720 --> 00:02:35.000 But what good would be served by attractive store displays and packaging, pleasant lighting 32 00:02:35.000 --> 00:02:39.720 and courteous service, if the customers may be robbed or assaulted if they walk through 33 00:02:39.720 --> 00:02:41.960 the area? 34 00:02:41.960 --> 00:02:46.440 The Merchant's Association, furthermore, would be induced by their drive for profits 35 00:02:46.440 --> 00:02:52.760 and for avoiding losses, to supply not only sufficient police protection, but also courteous 36 00:02:52.760 --> 00:02:58.240 and Pleasant Protection Governmental police have not only no incentive 37 00:02:58.240 --> 00:03:03.940 to be efficient or worry about their customers' needs, they also live with the ever-present 38 00:03:03.940 --> 00:03:10.280 temptation to wield their power of force in a brutal and coercive manner. 39 00:03:10.280 --> 00:03:15.260 Police brutality is a well-known feature of the police system, and it is held in check 40 00:03:15.260 --> 00:03:19.960 only by remote complaints of the harassed citizenry. 41 00:03:19.960 --> 00:03:24.560 But if the private merchant's police should yield to the temptation of brutalizing the 42 00:03:24.560 --> 00:03:29.560 merchant's customers, those customers will quickly disappear and go elsewhere. 43 00:03:29.560 --> 00:03:35.000 Hence, the merchant's association will see to it that its police are courteous as well 44 00:03:35.000 --> 00:03:37.680 as plentiful. 45 00:03:37.680 --> 00:03:42.880 Such efficient and high-quality police protection would prevail throughout the land, throughout 46 00:03:42.880 --> 00:03:46.640 all the private streets and land areas. 47 00:03:46.640 --> 00:03:51.600 These would guard their street areas, merchants their streets, and road companies would provide 48 00:03:51.600 --> 00:03:57.700 safe and efficient police protection for their toll roads and other privately owned roads. 49 00:03:57.700 --> 00:04:00.800 The same would be true for residential neighborhoods. 50 00:04:00.800 --> 00:04:06.600 We can envision two possible types of private street ownership in such neighborhoods. 51 00:04:06.600 --> 00:04:12.400 In one type, all the landowners in a certain block might become the joint owners of that 52 00:04:12.400 --> 00:04:17.520 Block, let us say as the 85th Street Block Company. 53 00:04:17.520 --> 00:04:22.840 This company would then provide police protection, the costs being paid either by the homeowners 54 00:04:22.840 --> 00:04:28.240 directly or out of tenants' rent if the street includes rental apartments. 55 00:04:28.240 --> 00:04:34.400 Again, homeowners will of course have a direct interest in seeing that their block is safe, 56 00:04:34.400 --> 00:04:39.960 while landlords will try to attract tenants by supplying safe streets in addition to the 57 00:04:39.960 --> 00:04:45.720 and the more usual services such as heat, water and janitorial service. 58 00:04:45.720 --> 00:04:52.420 To ask why landlords should provide safe streets in the libertarian fully private society is 59 00:04:52.420 --> 00:04:58.720 just as silly as asking now why they should provide their tenants with heat or hot water. 60 00:04:58.720 --> 00:05:05.120 The force of competition and of consumer demand would make them supply such services. 61 00:05:05.120 --> 00:05:22.120 Furthermore, whether we are considering homeowners or rental housing, in either case the capital value of the land and the house will be a function of the safety of the street as well as of the other well-known characteristics of the house and the neighborhood. 62 00:05:22.120 --> 00:05:32.120 Safe and well-patrolled streets will raise the value of the landowner's land and houses in the same way as well-tended houses do. 63 00:05:32.120 --> 00:05:40.120 Crime-ridden streets will lower the value of the land and houses as surely as dilapidated housing itself does. 64 00:05:40.120 --> 00:05:46.120 Since landowners always prefer higher to lower market values for their property, 65 00:05:46.120 --> 00:05:53.120 there is a built-in incentive to provide efficient, well-paved and safe streets. 66 00:05:53.120 --> 00:05:59.120 Another type of private street ownership in residential areas might be private street companies, 67 00:06:29.120 --> 00:06:34.480 Flourishing use of the streets by landlords and automobiles will raise the profits and 68 00:06:34.480 --> 00:06:41.280 stock values of the street companies. An unhappy and decaying regard for streets by their owners 69 00:06:41.280 --> 00:06:47.040 will drive the users away and lower the profits and the stock values of the private street companies. 70 00:06:47.920 --> 00:06:53.440 Hence the street-owning companies will do their best to provide efficient street service, 71 00:06:53.440 --> 00:07:00.080 including police protection to secure happy users. They will be driven to do this by their desire 72 00:07:00.080 --> 00:07:06.960 to make profits and to increase the value of their capital and by their equally active desire not to 73 00:07:06.960 --> 00:07:13.440 suffer losses and erosion of their capital. It is infinitely better to rely on the pursuit of 74 00:07:13.440 --> 00:07:19.840 economic interest by landowners or street companies than to depend on the dubious altruism 75 00:07:19.840 --> 00:07:26.000 of Bureaucrats and Government Officials. At this point in the discussion, someone is bound to 76 00:07:26.000 --> 00:07:32.160 raise the question, if streets are owned by street companies and granting that they generally would 77 00:07:32.160 --> 00:07:37.840 aim to please their customers with maximum efficiency, what if some kooky or tyrannical 78 00:07:37.840 --> 00:07:43.360 street owner should suddenly decide to block access to his street to an adjoining homeowner? 79 00:07:43.920 --> 00:07:49.360 How could the latter get in or out? Could he be blocked permanently or be charged an 80 00:07:49.360 --> 00:07:58.960 The answer to this question is the same as to a similar problem about land ownership. 81 00:07:58.960 --> 00:08:03.920 Suppose that everyone owning homes surrounding someone's property would suddenly not allow 82 00:08:03.920 --> 00:08:06.960 him to go in or out. 83 00:08:06.960 --> 00:08:13.080 The answer is that everyone in purchasing homes or street service in a libertarian society 84 00:08:13.080 --> 00:08:18.600 would make sure that the purchase or lease contract provides full access for whatever 85 00:08:18.600 --> 00:08:32.600 with this sort of easement provided in advance by contract, no such sudden blockade would be allowed, since it would be an invasion of the property right of the landowner. 86 00:08:32.600 --> 00:08:39.600 There is of course nothing new or startling in the principle of this envisioned libertarian society. 87 00:08:39.600 --> 00:08:46.600 We are already familiar with the energizing effects of interlocation and inter-transportation competition. 88 00:08:46.600 --> 00:08:52.680 For example, when the private railroads were being built throughout the nation in the 19th 89 00:08:52.680 --> 00:08:58.400 century, the railroads and their competition provided a remarkable energizing force for 90 00:08:58.400 --> 00:09:01.440 developing their respective areas. 91 00:09:01.440 --> 00:09:07.620 Each railroad tried its best to induce immigration and economic development in its area in order 92 00:09:07.620 --> 00:09:12.760 to increase its profits, land values, and value of its capital. 93 00:09:12.760 --> 00:09:19.720 each hastened to do so, lest people and markets leave their area and move to the ports, cities 94 00:09:19.720 --> 00:09:23.640 and lands served by competing railroads. 95 00:09:23.640 --> 00:09:29.240 The same principle would be at work if all streets and roads were private as well. 96 00:09:29.240 --> 00:09:34.600 Similarly, we are already familiar with police protection provided by private merchants and 97 00:09:34.600 --> 00:09:36.680 organizations. 98 00:09:36.680 --> 00:09:43.200 In their property, stores provide guards and watchmen, banks provide guards, factories 99 00:09:43.200 --> 00:09:48.220 employ watchmen, shopping centers retain guards, etc. 100 00:09:48.220 --> 00:09:53.280 The libertarian society would simply extend this healthy and functioning system to the 101 00:09:53.280 --> 00:09:55.580 streets as well. 102 00:09:55.580 --> 00:10:00.320 It is scarcely accidental that there are far more assaults and muggings on the streets 103 00:10:00.320 --> 00:10:04.240 outside stores than in the stores themselves. 104 00:10:04.240 --> 00:10:10.000 This is because the stores are supplied with watchful private guards, while on the streets 105 00:10:10.000 --> 00:10:14.800 we must all rely on the anarchy of government police protection. 106 00:10:14.800 --> 00:10:20.660 Indeed, in various blocks of New York City there has already arisen in recent years, 107 00:10:20.660 --> 00:10:25.960 in response to the galloping crime problem, the hiring of private guards to patrol the 108 00:10:25.960 --> 00:10:32.920 blocks by voluntary contributions of the landlords and homeowners on that block. 109 00:10:32.920 --> 00:10:38.760 on theseividings has already been substantially reduced. The problem is that these efforts 110 00:10:38.760 --> 00:10:44.760 have been halting and inefficient because those streets are not owned by the residents, 111 00:10:44.760 --> 00:10:49.920 and hence there is no effective mechanism for gathering the capital to provide efficient 112 00:10:49.920 --> 00:10:56.520 protection on a permanent basis. Furthermore, the patrolling street guards cannot legally 113 00:10:56.520 --> 00:11:02.720 be armed because they are not on their owner's property, and they cannot, as store and other 114 00:11:02.720 --> 00:11:10.000 Under-property owners can challenge anyone acting in a suspicious but not yet criminal manner. 115 00:11:10.000 --> 00:11:18.720 They cannot, in short, do the things, financially or administratively, that owners can do with their property. 116 00:11:18.720 --> 00:11:24.400 Furthermore, police paid for by the landowners and residents of a block or neighborhood would 117 00:11:24.400 --> 00:11:28.600 not only end police brutality against customers. 118 00:11:28.600 --> 00:11:33.840 This system would end the current spectacle of police being considered by many communities 119 00:11:33.840 --> 00:11:41.600 as alien imperial colonizers, there not to serve but to oppress the community. 120 00:11:41.600 --> 00:11:47.020 In America today, for example, we have the general rule in our cities of black areas 121 00:11:47.020 --> 00:11:52.880 patrolled by police hired by central urban governments, governments that are perceived 122 00:11:52.880 --> 00:11:56.840 to be alien to the black communities. 123 00:11:56.840 --> 00:12:02.240 This supplied, controlled and paid for by the residents and landowners of the communities 124 00:12:02.240 --> 00:12:05.800 themselves would be a completely different story. 125 00:12:05.800 --> 00:12:11.980 They would be supplying and perceived to be supplying services to their customers, rather 126 00:12:11.980 --> 00:12:16.920 than coercing them on behalf of an alien authority. 127 00:12:16.920 --> 00:12:22.700 A dramatic contrast of the merits of public versus private protection is provided by one 128 00:12:22.700 --> 00:12:24.880 block in Harlem. 129 00:12:24.880 --> 00:12:31.420 On West 135th Street between 7th and 8th Avenues is the station house of the 82nd Precinct 130 00:12:31.420 --> 00:12:34.160 of the New York City Police Department. 131 00:12:34.160 --> 00:12:39.500 Yet the august presence of the station house did not prevent a rash of night robberies 132 00:12:39.500 --> 00:12:42.400 of various stores on the block. 133 00:12:42.400 --> 00:12:49.720 Finally, in the winter of 1966, 15 merchants on the block banded together to hire a guard 134 00:12:49.720 --> 00:12:52.440 to walk the block all night. 135 00:12:52.440 --> 00:12:58.680 The Guard was hired from the Leroy V. George Protection Company to provide the police protection 136 00:12:58.680 --> 00:13:03.080 not forthcoming from their property taxes. 137 00:13:03.080 --> 00:13:08.840 The most successful and best organized private police forces in American history have been 138 00:13:08.840 --> 00:13:15.680 the railway police, maintained by many railroads to prevent injury or theft to passengers or 139 00:13:15.680 --> 00:13:17.120 freight. 140 00:13:17.120 --> 00:13:22.360 The modern railway police were founded at the end of World War I by the protection section 141 00:13:22.360 --> 00:13:29.760 of the American Railway Association. So well did they function that by 1929, freight claim 142 00:13:29.760 --> 00:13:37.720 payments for robberies had declined by 93%. Arrests by the railway police, who at the 143 00:13:37.720 --> 00:13:44.800 time of the major study of their activities in the early 1930s totaled 10,000 men, resulted 144 00:13:44.800 --> 00:13:50.420 in a far higher percentage of convictions than earned by police departments, ranging 145 00:13:50.420 --> 00:13:54.500 from 83% to 97%. 146 00:13:54.500 --> 00:14:00.260 Railway police were armed, could make normal arrests, and were portrayed by an unsympathetic 147 00:14:00.260 --> 00:14:08.540 criminologist as having a widespread reputation for good character and ability. 148 00:14:08.540 --> 00:14:13.740 Street Rules One of the undoubted consequences of all land 149 00:14:13.740 --> 00:14:19.020 areas in the country being owned by private individuals and companies would be a greater 150 00:14:19.020 --> 00:14:34.020 The character of the police protection and the rules applied by the private police would depend on the wishes of the landowners or street owners, the owners of the given area. 151 00:14:34.020 --> 00:14:47.020 Thus, suspicious residential neighborhoods would insist that any people or cars entering the area have a prior appointment with a resident, or else be approved by a resident with a phone call from the gate. 152 00:14:47.020 --> 00:14:57.020 In short, the same rules for street property would be applied as are now often applied in private apartment buildings or family estates. 153 00:14:57.020 --> 00:15:06.020 In other, more raffish areas, everyone would be permitted to enter at will, and there might be varying degrees of surveillance in between. 154 00:15:06.020 --> 00:15:13.020 Most probably, commercial areas, anxious not to rebuff customers, would be open to all. 155 00:15:13.020 --> 00:15:22.020 All this would give full scope to the desires and values of the residents and owners of all the numerous areas in the country. 156 00:15:22.020 --> 00:15:29.020 It might be charged that all this will allow freedom to discriminate in housing or use of the streets. 157 00:15:29.020 --> 00:15:31.020 There is no question about that. 158 00:15:31.020 --> 00:15:39.020 Fundamental to the libertarian creed is every man's right to choose who shall enter or use his own property, 159 00:15:39.020 --> 00:15:43.020 Provided, of course, that the other person is willing. 160 00:15:43.020 --> 00:15:52.020 Discrimination, in the sense of choosing favorably or unfavorably in accordance with whatever criteria a person may employ, 161 00:15:52.020 --> 00:15:57.020 is an integral part of freedom of choice, and hence of a free society. 162 00:15:57.020 --> 00:16:06.020 But, of course, in the free market, any such discrimination is costly and will have to be paid for by the property owner concerned. 163 00:16:06.020 --> 00:16:11.700 Suppose, for example, that someone in a free society is a landlord of a house or a block 164 00:16:11.700 --> 00:16:13.460 of houses. 165 00:16:13.460 --> 00:16:18.020 He could simply charge the free market rent and let it go at that. 166 00:16:18.020 --> 00:16:20.020 But then there are risks. 167 00:16:20.020 --> 00:16:25.020 He may choose to discriminate against renting to couples with young children, figuring that 168 00:16:25.020 --> 00:16:29.060 there is a substantial risk of defacing his property. 169 00:16:29.060 --> 00:16:35.020 On the other hand, he may well choose to charge extra rent to compensate for the higher risk, 170 00:16:35.020 --> 00:16:40.700 So that the free market rent for such families will tend to be higher than otherwise. 171 00:16:40.700 --> 00:16:45.160 This in fact will happen in most cases on the free market. 172 00:16:45.160 --> 00:16:51.060 But what of personal, rather than strictly economic, discrimination by the landlord? 173 00:16:51.060 --> 00:16:55.780 Suppose for example that the landlord is a great admirer of six-foot Swedish Americans 174 00:16:55.780 --> 00:17:00.620 and decides to rent his apartments only to families of such a group. 175 00:17:00.620 --> 00:17:05.960 In the free society it would be fully in his right to do so, but he would clearly suffer 176 00:17:05.960 --> 00:17:09.560 a large monetary loss as a result. 177 00:17:09.560 --> 00:17:14.480 For this means that he would have to turn away tenant after tenant in an endless quest 178 00:17:14.480 --> 00:17:18.080 for very tall Swedish Americans. 179 00:17:18.080 --> 00:17:24.040 While this may be considered an extreme example, the effect is exactly the same, though differing 180 00:17:24.040 --> 00:17:29.560 in degree, for any sort of personal discrimination in the marketplace. 181 00:17:29.560 --> 00:17:34.680 If, for example, the landlord dislikes redheads and determines not to rent his apartments 182 00:17:34.680 --> 00:17:41.000 to them, he will suffer losses, although not as severely as in the first example. 183 00:17:41.000 --> 00:17:47.660 In any case, any time anyone practices such discrimination in the free market, he must 184 00:17:47.660 --> 00:17:53.880 bear the costs, either of losing profits or of losing services as a consumer. 185 00:17:53.880 --> 00:17:59.200 If a consumer decides to boycott goods sold by people he does not like, whether the 186 00:17:59.200 --> 00:18:16.200 All property owners, then, in a free society, would set down the rules for use of or admission to their property. 187 00:18:16.200 --> 00:18:27.200 The more rigorous the rules, the fewer the people who will engage in such use, and the property owner will then have to balance rigor of admission as against loss of income. 188 00:18:27.200 --> 00:18:32.640 A landlord might discriminate, for example, by insisting, as George Pullman did in his 189 00:18:32.640 --> 00:18:38.320 company town in Illinois in the late 19th century, that all his tenants appear at all 190 00:18:38.320 --> 00:18:41.460 times dressed in jacket and tie. 191 00:18:41.460 --> 00:18:47.220 He might do so, but it is doubtful that many tenants would elect to move into or remain 192 00:18:47.220 --> 00:18:53.640 in such a building or development, and the landlord would suffer severe losses. 193 00:18:53.640 --> 00:18:59.160 The principle that property is administered by its owners also provides the rebuttal to 194 00:18:59.160 --> 00:19:03.560 a standard argument for government intervention in the economy. 195 00:19:03.560 --> 00:19:09.680 The argument holds that, after all, the government sets down traffic rules—red and green lights, 196 00:19:09.680 --> 00:19:13.960 driving on the right-hand side, maximum speed limits, etc. 197 00:19:13.960 --> 00:19:20.040 Surely everyone must admit that traffic would degenerate into chaos if not for such rules. 198 00:19:20.040 --> 00:19:26.040 Therefore, why should government not intervene in the rest of the economy as well? 199 00:19:26.040 --> 00:19:29.680 The fallacy here is not that traffic should be regulated. 200 00:19:29.680 --> 00:19:32.380 Of course, such rules are necessary. 201 00:19:32.380 --> 00:19:38.760 But the crucial point is that such rules will always be laid down by whoever owns and therefore 202 00:19:38.760 --> 00:19:41.840 administers the roads. 203 00:19:41.840 --> 00:19:46.320 Government has been laying down traffic rules because it is the government that has always 204 00:19:46.320 --> 00:19:50.240 is owned and therefore run the streets and roads. 205 00:19:50.240 --> 00:19:56.040 In a libertarian society of private ownership, the private owners would lay down the rules 206 00:19:56.040 --> 00:19:58.440 for the use of their roads. 207 00:19:58.440 --> 00:20:05.000 However, might not the traffic rules be chaotic in a purely free society? 208 00:20:05.000 --> 00:20:10.860 Wouldn't some owners designate red for stop, others green or blue, etc.? 209 00:20:10.860 --> 00:20:15.420 Wouldn't some roads be used on the right-hand side and others on the left? 210 00:20:15.420 --> 00:20:17.300 Such questions are absurd. 211 00:20:17.300 --> 00:20:22.900 Obviously, it would be to the interest of all road owners to have uniform rules in these 212 00:20:22.900 --> 00:20:28.580 matters so that road traffic could mesh smoothly and without difficulty. 213 00:20:28.580 --> 00:20:34.020 Any maverick road owner who insisted on a left-hand drive or green for stop instead 214 00:20:34.020 --> 00:20:39.540 of go would soon find himself with numerous accidents and the disappearance of customers 215 00:20:39.540 --> 00:20:41.340 and users. 216 00:20:41.340 --> 00:20:47.420 The private railroads in 19th century America faced similar problems and solved them harmoniously 217 00:20:47.420 --> 00:20:50.160 and without difficulty. 218 00:20:50.160 --> 00:20:53.000 Railroads allowed each other's cars on their tracks. 219 00:20:53.000 --> 00:20:56.500 They interconnected with each other for mutual benefit. 220 00:20:56.500 --> 00:21:01.780 The gauges of the different railroads were adjusted to be uniform, and uniform regional 221 00:21:01.780 --> 00:21:06.540 freight classifications were worked out for 6,000 items. 222 00:21:06.540 --> 00:21:12.620 Furthermore, it was the railroads and not government that took the initiative to consolidate 223 00:21:12.620 --> 00:21:19.180 the unruly and chaotic patchwork of time zones that had existed previously. 224 00:21:19.180 --> 00:21:27.140 In order to have accurate scheduling and timetables, the railroads had to consolidate, and in 1883 225 00:21:27.140 --> 00:21:33.700 they agreed to consolidate the existing 54 time zones across the country into the four 226 00:21:33.700 --> 00:21:36.100 which we have today. 227 00:21:36.100 --> 00:21:40.980 The New York Financial Paper, the Commercial and Financial Chronicle, exclaimed that the 228 00:21:40.980 --> 00:21:47.740 laws of trade and the instinct for self-preservation effect reforms and improvements that all the 229 00:21:47.740 --> 00:21:55.860 legislative bodies combined could not accomplish. 230 00:21:55.860 --> 00:22:01.500 Pricing Streets and Roads If in contrast we examine the performance 231 00:22:01.500 --> 00:22:07.340 of Governmental Streets and Highways in America, it is difficult to see how private ownership 232 00:22:07.340 --> 00:22:11.700 could pile up a more inefficient or irrational record. 233 00:22:11.700 --> 00:22:16.520 It is now widely recognized, for example, that federal and state governments, spurred 234 00:22:16.520 --> 00:22:21.460 by the lobbying of automobile companies, oil companies, tire companies and construction 235 00:22:21.460 --> 00:22:27.660 contractors and unions, have indulged in a vast over-expansion of highways. 236 00:22:27.660 --> 00:22:33.180 The highways grant gross subsidies to the users, and have played the major role in killing 237 00:22:33.180 --> 00:22:35.740 railroads as a viable enterprise. 238 00:22:35.740 --> 00:22:42.300 Thus, trucks can operate on a right-of-way constructed and maintained by the taxpayer, 239 00:22:42.300 --> 00:22:46.700 while railroads had to build and maintain their own trackage. 240 00:22:46.700 --> 00:22:53.620 Furthermore, the subsidized highway and road programs led to an over-expansion of automobile-using 241 00:22:53.620 --> 00:22:59.620 Suburbs, the coerced bulldozing of countless homes and businesses, and an artificial burdening 242 00:22:59.620 --> 00:23:01.540 of the central cities. 243 00:23:01.540 --> 00:23:07.300 The cost to the taxpayer and to the economy has been enormous. 244 00:23:07.300 --> 00:23:12.420 Particularly subsidized has been the urban auto-using commuter, and it is precisely in 245 00:23:12.420 --> 00:23:18.060 the cities where traffic congestion has burgeoned along with this subsidy to over-accumulation 246 00:23:18.060 --> 00:23:20.220 of their traffic. 247 00:23:20.220 --> 00:23:25.460 Professor William Vickrey of Columbia University has estimated that urban expressways have 248 00:23:25.460 --> 00:23:32.400 been built at a cost of from 6 cents to 27 cents per vehicle mile, while users pay in 249 00:23:32.400 --> 00:23:38.720 gasoline and other auto taxes only about 1 cent per vehicle mile. 250 00:23:38.720 --> 00:23:44.420 The general taxpayer, rather than the motorist, pays for maintenance of urban streets. 251 00:23:44.420 --> 00:23:55.420 Furthermore, the gasoline tax is paid per mile, regardless of the particular street or highway being used, and regardless of the time of day of the ride. 252 00:23:55.420 --> 00:24:09.420 Hence, when highways are financed from the General Gasoline Tax Fund, the users of the low-cost rural highways are being taxed in order to subsidize the users of the far higher cost urban expressways. 253 00:24:09.420 --> 00:24:16.420 Rural highways typically cost only two cents per vehicle mile to build and maintain. 254 00:24:16.420 --> 00:24:23.420 In addition, the gasoline tax is scarcely a rational pricing system for the use of the roads, 255 00:24:23.420 --> 00:24:28.420 and no private firms would ever price the use of roads in that way. 256 00:24:28.420 --> 00:24:35.420 Private business prices its goods and services to clear the market, so that supply equals demand, 257 00:24:35.420 --> 00:24:39.420 and there are neither shortages nor goods going unsold. 258 00:24:39.420 --> 00:24:44.420 The fact that gasoline taxes are paid per mile, regardless of the road, 259 00:24:44.420 --> 00:24:48.420 means that the more highly demanded urban streets and highways 260 00:24:48.420 --> 00:24:54.420 are facing a situation where the price charged is far below the free market price. 261 00:24:54.420 --> 00:25:01.420 The result is enormous and aggravated traffic congestion on the heavily traveled streets and roads, 262 00:25:01.420 --> 00:25:18.420 A Rational Pricing System would, at the same time, maximize profits for road owners and always provide clear streets free of congestion. 263 00:25:18.420 --> 00:25:28.420 In the current system, the government holds the price to users of congested roads extremely low and far below the free market price. 264 00:25:28.420 --> 00:25:34.420 The result is a chronic shortage of road space reflected in traffic congestion. 265 00:25:34.420 --> 00:25:42.420 The government has invariably tried to meet this growing problem not by rational pricing but by building still more roads, 266 00:25:42.420 --> 00:25:49.420 socking the taxpayer for yet greater subsidies to drivers and thereby making the shortage still worse. 267 00:25:49.420 --> 00:25:59.420 Frantically increasing the supply while holding the price of use far below the market simply leads to chronic and aggravated congestion. 268 00:25:59.420 --> 00:26:02.420 It is like a dog chasing a mechanical rabbit. 269 00:26:02.420 --> 00:26:09.420 Thus, the Washington Post has traced the impact of the Federal Highway Program in the nation's capital. 270 00:26:09.420 --> 00:26:16.420 Washington's Capitol Beltway was one of the first major links in the system to be completed. 271 00:26:16.420 --> 00:26:22.540 When the last section was opened in the summer of 1964, it was hailed as one of the finest 272 00:26:22.540 --> 00:26:24.660 highways ever built. 273 00:26:24.660 --> 00:26:31.420 It was expected to a. relieve traffic congestion in downtown Washington by providing a bypass 274 00:26:31.420 --> 00:26:37.740 for north-south traffic, and b. knit together the suburban counties and cities ringing 275 00:26:37.740 --> 00:26:39.820 the capital. 276 00:26:39.820 --> 00:26:46.900 What the Beltway actually became was a, a commuter highway and local traffic circulator, 277 00:26:46.900 --> 00:26:52.460 and b, the cause of an enormous building boom that accelerated the flight of the white and 278 00:26:52.460 --> 00:26:56.140 the affluent from the central city. 279 00:26:56.140 --> 00:27:01.320 Instead of relieving traffic congestion, the Beltway has increased it. 280 00:27:01.320 --> 00:27:09.120 Along with I-95, 70 South, and I-66, it has made it possible for commuters to move farther 281 00:27:09.120 --> 00:27:33.920 What would a rational pricing system, a system instituted by private road owners, look like? 282 00:27:33.920 --> 00:27:38.960 In the first place, highways would charge tolls, especially at such convenient entrances 283 00:27:38.960 --> 00:27:44.440 Toll charges to cities as bridges and tunnels, but not as is charged now. 284 00:27:44.440 --> 00:27:49.880 For example, toll charges would be much higher at rush hour and other peak hour traffic, 285 00:27:49.880 --> 00:27:54.000 for example, Sundays in the summer, than in off hours. 286 00:27:54.000 --> 00:28:00.360 In a free market, the greater demand at peak hours would lead to higher toll charges, until 287 00:28:00.360 --> 00:28:05.200 congestion would be eliminated and the flow of traffic steady. 288 00:28:05.200 --> 00:28:08.920 But people have to go to work, the reader will ask. 289 00:28:08.920 --> 00:28:13.800 Surely, but they don't have to go in their own cars. 290 00:28:13.800 --> 00:28:18.080 Some commuters will give up altogether and move back to the city. 291 00:28:18.080 --> 00:28:19.920 Others will go in carpools. 292 00:28:19.920 --> 00:28:23.960 Still others will ride in express buses or trains. 293 00:28:23.960 --> 00:28:29.040 In this way, use of the roads at peak hours would be restricted to those most willing 294 00:28:29.040 --> 00:28:33.420 to pay the market clearing price for their use. 295 00:28:33.420 --> 00:28:38.300 Companies too will endeavor to shift their times of work so as to come in and leave at 296 00:28:38.300 --> 00:28:40.940 staggered hours. 297 00:28:40.940 --> 00:28:44.660 Weekenders would also drive less or stagger their hours. 298 00:28:44.660 --> 00:28:50.700 Finally, the higher profits to be earned from, say, bridges and tunnels, will lead private 299 00:28:50.700 --> 00:28:53.540 firms to build more of them. 300 00:28:53.540 --> 00:28:59.300 Road building will be governed not by the clamor of pressure groups and users for subsidies, 301 00:28:59.300 --> 00:29:05.860 by the Efficient Demand and Cost Calculations of the Marketplace. 302 00:29:05.860 --> 00:29:10.820 While many people can envision the working of private highways, they boggle at the thought 303 00:29:10.820 --> 00:29:13.300 of private urban streets. 304 00:29:13.300 --> 00:29:15.400 How would they be priced? 305 00:29:15.400 --> 00:29:17.860 Would there be toll gates at every block? 306 00:29:17.860 --> 00:29:23.820 Obviously not, for such a system would be clearly uneconomic, prohibitively costly to 307 00:29:23.820 --> 00:29:26.780 the owner and driver alike. 308 00:29:26.780 --> 00:29:31.700 In the first place, the street owners will price parking far more rationally than at 309 00:29:31.700 --> 00:29:33.020 present. 310 00:29:33.020 --> 00:29:38.740 They will price parking on congested downtown streets very heavily in response to the enormous 311 00:29:38.740 --> 00:29:40.140 demand. 312 00:29:40.140 --> 00:29:45.540 And contrary to common practice nowadays, they will charge proportionately far more 313 00:29:45.540 --> 00:29:49.620 rather than less for longer all-day parking. 314 00:29:49.620 --> 00:29:56.020 In short, the street owners will try to induce rapid turnover in the congested areas. 315 00:29:56.020 --> 00:30:00.060 All right for parking, again, this is readily understandable. 316 00:30:00.060 --> 00:30:03.520 But what about driving on congested urban streets? 317 00:30:03.520 --> 00:30:05.660 How could this be priced? 318 00:30:05.660 --> 00:30:08.060 There are numerous possible ways. 319 00:30:08.060 --> 00:30:12.960 In the first place, the downtown street owners might require anyone driving on their streets 320 00:30:12.960 --> 00:30:19.340 to buy a license, which could be displayed on the car as licenses and stickers are now. 321 00:30:19.340 --> 00:30:25.080 But furthermore, they might require anyone driving at peak hours to buy and display an 322 00:30:25.080 --> 00:30:28.080 Extra Very Costly License. 323 00:30:28.080 --> 00:30:30.000 There are other ways. 324 00:30:30.000 --> 00:30:35.440 Modern technology may make feasible the requirement that all cars equip themselves with a meter, 325 00:30:35.440 --> 00:30:41.120 a meter which will not only click away per mile, but may speed up in a predetermined 326 00:30:41.120 --> 00:30:45.960 manner on congested streets and roads at peak hours. 327 00:30:45.960 --> 00:30:50.080 Then the car owner could receive a bill at the end of the month. 328 00:30:50.080 --> 00:30:56.720 A similar plan was set forth a decade ago by Professor A. A. Walters. 329 00:30:56.720 --> 00:31:02.520 The particular administrative instruments which might be used include special mile-ometers, 330 00:31:02.520 --> 00:31:05.360 similar to those used by taxis. 331 00:31:05.360 --> 00:31:10.940 The special mile-ometers would record mileage when the flag is up, and a charge would be 332 00:31:10.940 --> 00:31:13.240 levied on this mileage. 333 00:31:13.240 --> 00:31:19.780 This would be suitable for large urban areas such as New York, London, Chicago, etc. 334 00:31:19.780 --> 00:31:24.580 Big-up streets could be specified for certain hours of the day. 335 00:31:24.580 --> 00:31:29.300 Vehicles might be allowed to travel on those streets without a special mile-ometer, provided 336 00:31:29.300 --> 00:31:32.840 that they bought and displayed a daily sticker. 337 00:31:32.840 --> 00:31:37.840 The occasional traffic on sticker authority would have been charged more than the maximum 338 00:31:37.840 --> 00:31:42.220 amount paid by those on mile-ometer authority. 339 00:31:42.220 --> 00:31:45.640 The supervision of the scheme would be fairly simple. 340 00:31:45.640 --> 00:32:00.320 Professor Vickery has also suggested that TV cameras at the intersections of the most 341 00:32:00.320 --> 00:32:06.160 congested streets could record the license numbers of all cars, with motorists sent a 342 00:32:06.160 --> 00:32:11.480 bill each month in proportion to all the times that they crossed the intersection. 343 00:32:11.480 --> 00:32:18.480 Alternatively, he proposed that each car could be equipped with the Oxford electronic metering device. 344 00:32:18.480 --> 00:32:26.480 Each car would then emit its own unique signal, which would be picked up by the device placed at the given intersection. 345 00:32:26.480 --> 00:32:36.480 In any case, the problem of rational pricing for streets and highways would be an easy one for private enterprise and modern technology to solve. 346 00:32:36.480 --> 00:32:41.480 Businessmen on the free market have readily solved far more difficult problems. 347 00:32:41.480 --> 00:32:45.480 All that is needed is to allow them the room to function. 348 00:32:45.480 --> 00:33:00.480 If all transportation were set completely free, if the roads, airlines, railroads and waterways were freed of their labyrinthine networks of subsidies, controls and regulations in a purely private system, 349 00:33:00.480 --> 00:33:04.480 How would the consumers allocate their transportation dollars? 350 00:33:04.480 --> 00:33:08.480 Would we return to railroad travel, for example? 351 00:33:08.480 --> 00:33:17.480 The best estimates of cost and demand for transportation predict that railroads would become the main staple for long-haul freight, 352 00:33:17.480 --> 00:33:26.480 airlines for long-range passenger service, trucks for short-haul freight, and buses for public commuter travel. 353 00:33:26.480 --> 00:33:35.480 While railroads, in short, would stage a comeback for long-haul freight, they would not be revivified for much passenger service. 354 00:33:35.480 --> 00:33:52.480 In recent years, many liberals who have become disenchanted with the overbuilding of highways have been calling for massive discouragement of highway use and the subsidizing and building of subways and commuter railways on a vast scale for urban traffic. 355 00:33:52.480 --> 00:33:58.480 But these grandiose schemes ignore the enormous expense and waste that would be involved. 356 00:33:58.480 --> 00:34:06.480 For even if many of these highways should not have been built, they are there, and it would be folly not to take advantage of them. 357 00:34:06.480 --> 00:34:17.480 In recent years, some intelligent transportation economists have raised their voices against the massive waste involved in constructing new rapid transit railroads, 358 00:34:17.480 --> 00:34:39.480 It is not difficult to envision a network of private, unsubsidized and unregulated railroads and airlines, but could there be a system of private roads? 359 00:34:39.480 --> 00:34:42.480 Could such a system be at all feasible? 360 00:34:42.480 --> 00:34:46.480 One answer is that private roads have worked admirably in the past. 361 00:34:46.480 --> 00:34:57.480 In England, before the 18th century, for example, roads, invariably owned and operated by local governments, were badly constructed and even more badly maintained. 362 00:34:57.480 --> 00:35:09.480 These public roads could never have supported the mighty industrial revolution that England experienced in the 18th century, the revolution that ushered in the modern age. 363 00:35:09.480 --> 00:35:17.440 The vital task of improving the almost impassable English roads was performed by private turnpike 364 00:35:17.440 --> 00:35:24.440 companies, which, beginning in 1706, organized and established the great network of roads 365 00:35:24.440 --> 00:35:27.740 which made England the envy of the world. 366 00:35:27.740 --> 00:35:33.440 The owners of these private turnpike companies were generally landowners, merchants and industrialists 367 00:35:33.440 --> 00:35:39.320 in the area being served by the road, and they recouped their costs by charging tolls 368 00:35:39.320 --> 00:35:42.080 at Selected Toll Gates. 369 00:35:42.080 --> 00:35:47.080 Often the collection of tolls was leased out for a year or more to individuals selected 370 00:35:47.080 --> 00:35:50.120 by competitive bids at auction. 371 00:35:50.120 --> 00:35:55.760 It was these private roads that developed an internal market in England and that greatly 372 00:35:55.760 --> 00:36:01.040 lowered the costs of transport of coal and other bulky material. 373 00:36:01.040 --> 00:36:05.800 And since it was mutually beneficial for them to do so, the turnpike companies linked up 374 00:36:05.800 --> 00:36:12.280 with each other to form an interconnected road network throughout the land, all a result 375 00:36:12.280 --> 00:36:16.440 of private enterprise in action. 376 00:36:16.440 --> 00:36:21.120 As in England, so in the United States a little later in time. 377 00:36:21.120 --> 00:36:27.140 Faced again with virtually impassable roads built by local government units, private companies 378 00:36:27.140 --> 00:36:32.840 built and financed a great turnpike network throughout the northeastern states from approximately 379 00:36:32.840 --> 00:36:41.240 1800 to 1830. Once again, private enterprise proved superior in road building and ownership 380 00:36:41.240 --> 00:36:47.400 to the backward operations of government. The roads were built and operated by private turnpike 381 00:36:47.400 --> 00:36:54.840 corporations, and tolls were charged to the users. Again, the turnpike companies were largely 382 00:36:54.840 --> 00:37:01.000 financed by merchants and property owners along the routes, and they voluntarily linked themselves 383 00:37:01.000 --> 00:37:07.000 turns into an interconnected network of roads, and these turnpikes constituted the first 384 00:37:07.000 --> 00:37:10.000 really good roads in the United States.