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The Essence of Libety

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Liberty knows no compromise

A Condensed Version of For a New Liberty: The Libertarian Manifesto by Murray N. Rothbard

Compiled by

Dr. Jimmy T. (Gunny) LaBaume

Chapter 11: The Public Sector, II: Streets and Roads

Protecting the Streets

Abolition of the public sector would mean that all land, including streets and roads, would be privately owned. One of the first questions is usually, How about police protection in a totally private economy? Consider the crime-ridden Times Square area of New York City where little protection is furnished by the city. Suppose that a “Merchants Association” privately owned the streets. The merchants know that it would be in their best economic interest to supply efficient, courteous and pleasant police protection. Otherwise, they would loose their customers.

Governmental police have no incentive to be efficient. They are also constantly tempted to wield their power of force in a brutal and coercive manner. But, if the merchant's police acted that way, customers would quickly disappear and go elsewhere. Hence, the merchants would see to it that their police are courteous as well as plentiful.

It would be the same for residential neighborhoods where there are two possible types of private street ownership. In one, the landowners in a certain block might become the joint owners of a “Block Company." The company would provide police protection, which would be paid for by the homeowners and/or out of tenant rents. Obviously, homeowners have a direct interest in safe streets and landlords attract tenants by supplying safe streets. Furthermore, the capital value of the properties would be a function of the safety of the street. Safe streets would raise the value while crime-ridden streets would lower it.

Another type of private ownership would be the private street company. In this case, the company would own only the streets and not the buildings and would charge the landowners for their services. Safe, well-lit, and well-paved streets would induce landowners and tenants and therefore increase the profits and stock values of the street companies.

Under either type of ownership, it is infinitely better to rely on the economic interest of landowners and/or street companies than on the dubious "altruism" of government bureaucrats and politicians.

But, what if some tyrannical street owner or surrounding homeowners suddenly decided to block access? Actually, this difficulty could be handled much like we handle it now with government owned roads—by an "easement" contract. Before purchasing a home or street services, everyone would make sure that their contract provides full access for the specified term.

In the 19th century, private railroads were a driving force in the developing of their service areas. Each railroad tried to induce immigration and economic development in its area in order to increase its profits, land and capital values. The same principle would be at work if all streets and roads were private with police protection provided by private organizations.

Today, many property owners provide security services within their property—e.g. bank guards, factory watchmen, shopping centers guards, etc. A libertarian society would simply extend this system to the streets. Think about it, today there are far more assaults, robberies, muggings, rapes and murders on the “public's” streets outside the stores than there are in the privately owned stores themselves.

In New York City in recent years landlords and homeowners have hired private guards to patrol their blocks with their own voluntary contributions. And, crime on these blocks has been substantially reduced. But, these efforts are inefficient because the residents do not own the streets. So, street guards cannot legally be armed, nor can they challenge anyone acting suspiciously, because they are on the “public's property.”

Not only would police paid for by the landowners and residents end police brutality against customers, it would also put an end to police being considered as alien "imperial" colonizers, as they are in many neighborhoods and areas of the country today. The difference is that residents and landowners would be supplying services to their customers instead of coercing them on behalf of an alien authority.

A shining example of private police forces in American history is the railway police.

Street Rules

One of the consequences of all land being privately owned would be a greater richness and diversity of neighborhoods. For example, suspicious neighborhoods might require anyone entering the area have an appointment or be approved by a resident. (These are the same rules as are now often applied in private apartment buildings or family estates.) On the other hand, in other neighborhoods, everyone would be permitted to enter at will. Then, of course, there would be varying degrees of surveillance in between. Commercial areas would likely be open to all.

Some accurately object that this would allow "discrimination." It would. But, it is every man's fundamental right to choose who shall enter or use his property. "Discrimination" is an integral part of freedom of choice, and hence of a free society. But, especially with regard to commercial properties, such discrimination is costly. That too is acceptable because it will be the property owner who will pay the cost.

Suppose a landlord choose to discriminate against couples with young children due to the substantial risk of their defacing his property. He is free to refuse to rent to them or he might choose to charge extra rent to compensate for the higher risk. In fact, this is what happens in most cases on the free market.

But, instead of economic discrimination, what about personal discrimination? Suppose a landlord is an admirer of six-foot Swedish people and decides to rent only to that group. That would be fully within his right. However he would surely suffer a substantial monetary loss because of having to turn away tenant after tenant. Anytime anyone practices such "discrimination" in the free market, it will cost him either in the form of lost profits or lost services as a consumer.

So, all property owners in a free society would make the rules for access to their property—the more rigorous the rules, the fewer the number of people who will be attracted. In other words, he will have to balance rigor of admission against loss of income.

Then there is the concern about traffic rules. The argument goes that, if it were not for government setting down traffic rules, the roads would degenerate into chaos. Not necessarily. In our libertarian society, such rules will be laid down by whoever owns the roads. But then that raises the question of whether or not the rules would be "chaotic." Again, that would not likely be the case because, obviously, it would be in the interest of all road owners to have uniform rules so that traffic could mesh smoothly. Any maverick road owner would soon find himself with numerous accidents (and law suits) and a disappearing customer base.

Again, private railroads in the 19th century offer an example. They were faced with similar problems but solved them without difficulty. It is also interesting (but not surprising) to note that it was the railroads and not government that consolidated the previously existing chaotic patchwork of time zones.

Pricing Streets and Roads

Upon examination of the performance of governmental streets it is difficult to see how private ownership could possibly be more inefficient or irrational. Governments, spurred by lobbyists from automobile, oil and tire companies, construction contractors and unions, have grossly over-built highways. This, of course, subsidizes the users while killing the railroads. It has led to over-growth of suburbs, coerced bulldozing of homes and businesses, and artificial burdening of the central cities. The urban auto-using commuter has been particularly subsidized which, in turn, has brought burgeoning traffic congestion to the cities.

And it is the general taxpayer, instead of the using motorist, who pays. The gasoline tax is paid per mile regardless of the highway being used or the time of day of the trip. So, users of the lower-cost rural highways are taxed to subsidize the users of the higher-cost urban expressways.

The price of the more highly demanded urban roads is far below the free-market price. The result is a chronic shortage of road space—e.g. traffic congestion—in urban areas while roads in rural areas go virtually unused. Instead of a rational pricing system, government has tried to solve the problem by building still more roads by mulching the taxpayer for yet greater subsidies and thereby making the shortage even worse.

Furthermore, instead of relieving traffic congestion this has enabled commuters to move farther from their downtown jobs. It has also caused the relocation of firms from downtown to the suburbs, which puts jobs out of reach of many inner city residents.

With a rational pricing system, private road owners would charge tolls. Greater demand at peak hours would lead to higher toll charges until congestion would be eliminated. Some commuters would car pool while others would take busses or trains. Others might shift their times of work and some would even give up and move back to the city. Furthermore, the higher profits from such a pricing system will attract private firms into building more roads, bridges and tunnels. In other words, road building will be governed by the efficient demand and cost calculations of the marketplace—not by politically connected pressure groups.

In the case of private urban streets, a system of tollgates at every block would not be economic. Instead, parking would be priced heavily in response to the demand and owners would charge more, rather than less, for longer all-day parking. Furthermore, street owners might require anyone driving on their streets to buy a license (sticker) and they might require anyone driving at peak hours to buy a more costly license. There are other ways, for example: With modern technology it might be feasible to equip cars with a meter which would register miles and might even speed up on congested streets at peak hours. The car owner would then receive a bill at the end of the month.

In any case, the rational pricing for streets and highways would be an easy problem for private enterprise to solve. The free market has solved far more difficult problems so all that is needed is to give it a chance to work.

If all transportation were freed from subsidies, controls, and regulations, it would be reasonable to expect railroads would be used primarily for long-haul freight, airlines for long-range passenger service, trucks for short-haul freight, and busses for public commuter travel.

Private roads have worked well in the past. For example: In England, before the 18 th century, government roads were badly constructed and poorly maintained—so much so that they could never have supported the Industrial Revolution. However, it was private turnpike companies that established the network of roads which made England the envy of the world. The owners of these companies were usually landowners, merchants, and industrialists in the area served by the road. They covered their costs by charging tolls. Also, since it was mutually beneficial, they linked up with each other to form an interconnected network of roads throughout the land.

In the United States private companies built the great turnpike network throughout the northeastern states. These were the first really good roads in the united States . These toll roads were built and operated by private corporations, which were largely financed by the merchants and property owners along the routes. Furthermore, they voluntarily linked themselves into an interconnected network. So, as in all other endeavors, private enterprise proved superior in road building and ownership to the backward operations of government.

Continue to the next chapter...

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