Is it possible to privatize roads?
This question often weighs heavily on those who see the competitive market as the best means of achieving a wide distribution of resources at the lowest cost to the consumer. Like money, roads have become crucial to facilitating transactions in a global economy marked by a deep division of labor. But since land isn’t terribly abundant, orthodox economics would suggest that roads are best left to the public sphere. Since neighborhood streets are often looked at as common property, the prospect of their privatization appears detrimental to commerce. Yet both of these impressions are in error. Not only are the state and its merry band of robbers incapable of producing results as efficient as what the private sector could realize, but privatized roads would be more capable of setting the stage for smoother, more expansive travel than their socialized counterparts are.
To understand the inefficiency of the public sector, it becomes necessary to understand what wealth generation actually is. Success in the private sphere is equated with achieving a profit. Success in a government bureaucracy is fundamentally different and can be simple to gauge if using the right metric. If task completion is all that is necessary to assume that benefits outweigh costs, then any activity performed by government officials can be deemed a de facto success. With the U.S. unemployment rate at 8.1%, say Congress passes another fiscal stimulus with a price tag of $1 trillion that would instantly “get people back to work.” Millions are employed to dig holes around the country and then fill them back up for one year. The unemployment rate plummets, and the president declares victory. Mission accomplished, right?
Even blue-collared Joe Public would see such a “jobs” program was a waste and likely a political buy-off. One trillion dollars was just spent paying people to produce virtually nothing. Yet the original goal to bring down the unemployment rate was technically met. It was a redeeming success, worthy of a lavish vacation in Las Vegas. But it was clearly not an optimal use of resources.