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Safety very often pays, except when it doesn't.
Yesterday, two cars were involved in an accident on the government-maintained road in front of our house. Nobody was hurt, but thousands of dollars of damage was done to the cars. Momentsa ago, there was an accident on the state-run freeway at 270 and 70 resulting in property damage, and an hour ago, someone was hurt in an accident on Hilliard-Rome road, which is owned and managed by the state. It's very clear that government-run roads are completely unsafe.
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Yesterday, two cars were involved in an accident on the government-maintained road in front of our house. Nobody was hurt, but thousands of dollars of damage was done to the cars. Momentsa ago, there was an accident on the state-run freeway at 270 and 70 resulting in property damage, and an hour ago, someone was hurt in an accident on Hilliard-Rome road, which is owned and managed by the state. It's very clear that government-run roads are completely unsafe.

Sometime it is the drivers who are unsafe. No matter how well built a road is and how well maintained there will always be mishaps because of careless driving or DUI.

Where the state monopolies are really at fault is in the area of deferred maintenance and enforcing weight limits. The States won't rigorously enforce weight limits on trucks (overloaded trucks can beat the shit out of surfaces and bridges), nor do the States spend enough money on inspection of bridges and repair of potholes which are often caused by frost heaves and defective drainage. State ownership and operation is no guarantee of road quality (lack of incentive and perverse incentives are at work). Even so, most accidents and mishaps are caused by poorly driven vehicles or poorly maintained vehicles.

My definition of a surprise on the road is seeing a truck weighing station that is actually open. When was the last time you saw that and how often?

ruveyn

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(hypothetical)

Road Company X sees more than the usual number of accidents or safety issues on its roads. It gets sued occasionally but it only pays actual damages and can afford to take the hits. Problem is, its the company that has got the most direct route from Chicago to Milwaukee, and maybe its the cheapest too since they cut all those corners on infrastructure. No other business can enter the market because there are not enough property owners willing to sell to make a similar route available. So we put up with the crap roads from Road Company X because its the only alternative, and Road Company X knows it. That doesn't mean RCX completely gouges its customers and blatantly ignores safety issues or logical inconsistencies in its designs. It stops short of the point where customers seriously consider alternatives.

Did I mention Road Company X owns the big daily newspapers in Chicago and Milwaukee, its mouthpieces to downplay criticism?

I guess being a bit over the top but maybe thats because its late and I'm tired. But this whole idea of privatized roads doesn't make any sense to me.

(hypothetical)

I am a regular traveler between Chicago and Milwaukee. I notice that RCX is skimping on their maintenance and basic safety of the road. I mention it to the company as a complaint. They do nothing. Soon the dangers become so prevalent that I can not justify using RCX's "product" so I choose to take a little more time and select an alternate route. I don't stop there though. This inconvenience pisses me off and I will tell everyone I know that I do not travel on RCX roads because they are unsafe.

Before you say it doesn't matter, and that I am only one person I will point out the huge lawsuits leveled against Car companies (the exploding Fiero) are a result of individuals banding together to punish a company for shoddy work.

As for your point about media... Media is global all you have to do is Google overpass collapse laval and you get 2,410 hits, this shows that control of 2 regional newspapers will scarcely dent the media feeding frenzy the first time someone dies and negligence is suspected.

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What if one person has a monopoly on all roads in a given area. He charges extreme prices, middle class and lower class people cannot pay the price so cannot use the road. Only the upper class can. But becuase the pric eis so high, the owner gets money.

Monopoly pricing is not necessarily high pricing. It is price that will maximize profit low enough to discourage folks from finding alternatives. A rational monopolist will not cut himself off (in the medium and long run) from the source of his profit. Even the Telephone Company which was a regulated monopoly increased the quality of its service by investment in better technology for carrying and switching calls. The reason we have transistors is that Bell Labs needed a technology to break the call switching log-jam. And this from a legal and regulated monopoly.

The notion that a monopolist will attempt to reduce his neighbors to penury and misery simply does not hold up to critical examination. When WalMart was a virtual monopoly among the Big Box retailers, their policy was not to gouge customers, but encourage a lot of buying with attractively low prices. The goal was volume and profit maximization, not reducing the buying public to penury.

A monopoly cannot exist long term without government backing. In a free market, high prices will encourage alternative products and services. If a monopoly cannot be beat in head on competition, it can be outflanked by alternatives.

ruveyn

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(hypothetical)

I am a regular traveler between Chicago and Milwaukee. I notice that RCX is skimping on their maintenance and basic safety of the road. I mention it to the company as a complaint. They do nothing. Soon the dangers become so prevalent that I can not justify using RCX's "product" so I choose to take a little more time and select an alternate route. I don't stop there though. This inconvenience pisses me off and I will tell everyone I know that I do not travel on RCX roads because they are unsafe.

Before you say it doesn't matter, and that I am only one person I will point out the huge lawsuits leveled against Car companies (the exploding Fiero) are a result of individuals banding together to punish a company for shoddy work.

As for your point about media... Media is global all you have to do is Google overpass collapse laval and you get 2,410 hits, this shows that control of 2 regional newspapers will scarcely dent the media feeding frenzy the first time someone dies and negligence is suspected.

To reiterate, safety is only one of many potential inconveniences to motorists, as mentioned earlier, of this privatization plan. RCX's Chicago-Milwaukee road may also be highly congested. Maybe it has few places to pull off and rest. Maybe alternative routes are just too expensive, or are unwilling to allow your truck to traverse its roads because they are owned by a rival company, your trucks don't meet their specs, etc.

A lot more thought has to go into how to implement this kind of idea.

Ownership of the media is a huge opportunity to shape public opinion. Why do you think Rupert Murdoch is so intent on gobbling up media outlets? Your example happens to be one that that represents the rare story that achieves national media attention. National media comb local media outlets for stories, they don't have the resources to do their own groundwork, especially now. That's why local media is so important, it truly shapes public perception.

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A lot more thought has to go into how to implement this kind of idea.

I am curious, not to mention somewhat baffled, by why you ascribe these problems to privatization as such when they can and do occur with publicly-owned roads. As I see it, it's rather like complaining that a private road might have potholes. Well, sure -- and public roads do have potholes, so what does that prove regarding privatization? Boil it down and you have either the owner responsible to a rational consideration, namely, the willingness of actual customers to pay, or to an irrational consideration, namely, the caprice of bureacrats and the power of pull of politicians. Yet for some reason you see vice in private ownership and virtue in public ownership. Why?

I will grant you this much: it is possible that with private roads, some roads -- namely, those for which the customers are unwilling to pay the needed costs -- there will be a few more potholes in them (let's say) than with a public ownership scheme in which the mayor (who happens to live on the road) can exercise his pull. So what? There will be fewer potholes on the roads with the customers who are willing to pay. In a free market the money is going to exactly where it ought to go, and people are getting exactly what they are willing and able to pay for. If that means an extra pothole or two on Mulberry Lane, it means an extra pothole or two on Mulberry Lane. If no one is willing to pay, then maybe it means closing Mulberry Lane. Maybe you live on Mulberry Lane and don't want to pay the costs of upkeep or miss the days when you and your neighbors could enjoy the use of funds from the public treasury for the unearned upkeep of your road, yet for the tiny extra inconvenience of having to actually pay your way, you are now willing to toss out Man's Rights. I just don't get it.

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Boil it down and you have either the owner responsible to a rational consideration, namely, the willingness of actual customers to pay, or to an irrational consideration, namely, the caprice of bureacrats and the power of pull of politicians. Yet for some reason you see vice in private ownership and virtue in public ownership. Why?

I don't why you have become obsessed with potholes, the dimensions of the problem as I see are far larger in scope.

I don't see vice in private ownership, its just that no one has outlined how it could be done vis a vis roads. I believe it is a rational consideration that the system be morally implemented, but it must work too. As I see it, there are a limited number of areas where the dimensions and impact are far reaching and ubiquitous (like the road system), that some kind of quasi government organization must be set up to manage it. That is, one that is privately run but government owned. So if a company or consortium fails at making the system run efficiently they can be ousted in favor of a more competent one. Other such organizations would oversee ecosystems, and the air traffic control system, perhaps other things. If someone can find a way to privatize roads, ecosystems, the air traffic control network, etc., then I am all for it.

Edited by Publius
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I don't why you have become obsessed with potholes, the dimensions of the problem as I see are far larger in scope.

I don't see vice in private ownership, its just that no one has outlined how it could be done vis a vis roads. I believe it is a rational consideration that the system be morally implemented, but it must work too. As I see it, there are a limited number of areas where the dimensions and impact are far reaching and ubiquitous (like the road system), that some kind of quasi government organization must be set up to manage it. That is, one that is privately run but government owned. So if a company or consortium fails at making the system run efficiently they can be ousted in favor of a more competent one. Other such organizations would oversee ecosystems, and the air traffic control system, perhaps other things. If someone can find a way to privatize roads, ecosystems, the air traffic control network, etc., then I am all for it.

Companies go out of business all the time, some with a whimper, some with a bang. I can see your concern when something is so necessary that (in your view) it needs to function always but I disagree with your gloomy assessment of the implications.

Lets say RCX owns Hwy 1 between Washington and NYC, (with Hwy 1 being the most direct, most used and most dependable route) and RCX due to an Enron type implosion ceases to function one day what would happen. You would have us believe that RCX would be so vital, that that route is so necessary that the cost of that interruption would in some way cripple the functioning of the economy or society.

I say that even if there were a temporary and unforeseen interruption the market would find a way to continue just as it did when Enron went down. Vehicles would find alternate routes, and the now defunct RCX would soon be divided up amongst competetors and start ups.

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Lets say RCX owns Hwy 1 between Washington and NYC, (with Hwy 1 being the most direct, most used and most dependable route) and RCX due to an Enron type implosion ceases to function one day what would happen. You would have us believe that RCX would be so vital, that that route is so necessary that the cost of that interruption would in some way cripple the functioning of the economy or society.
Chances are, the creditors of RCX would want Hwy 1 to continue to be open for business. I dont see why the road could not continue to be in use while the courts arrange for its auction.
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  • 6 months later...
What if one person has a monopoly on all roads in a given area. He charges extreme prices, middle class and lower class people cannot pay the price so cannot use the road. Only the upper class can. But becuase the pric eis so high, the owner gets money.

Without doing any math, let's think about what this implies. How many times do you see a $50,000 income earner living in a neighborhood of $500,000 income earners? How do the road companies make any money by charging higher than market rates for roads in any given community?

You set your price according to your market, like in any other business. That's why you find a lot of "ordinary joes" shopping at Walmart and not so much at Bijan (on Rodeo Drive). The same would apply to roads.

Incidentally, those high class roads might also have features and benefits that everyone would want, inspiring a lot of folks to become successful instead of mediocre. Might also cut down on the riff raff and crime too in a similar fashion that high class neighborhoods with high rents and property values drive out crime and "riff raff" by barring entry through economic power.

I say that even if there were a temporary and unforeseen interruption the market would find a way to continue just as it did when Enron went down. Vehicles would find alternate routes, and the now defunct RCX would soon be divided up amongst competetors and start ups.

...and because LBOs would be unrestricted, you may not even have that problem with large companies.

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  • 3 months later...

John Stossel has this interesting article on private roads.

An excerpt:

Under President Obama’s stimulus plan, the government will spend billions of your dollars building new roads and fixing old ones.

They say they’ll do it efficiently. I say, bull; government has never before been efficient. It isn’t going to start now.

Need proof? How about rush hour?

Rush hours from hell are not natural phenomena. They’re man made — more precisely, politician-made. But what if commuting didn’t have to be a horrendous experience? What if, for example, someone wanted to add some lanes to a road or build an entirely new road?

It’s happening. Private road builders are doing it. They built a double-decker underground highway in Paris. A 45-minute trip now takes 10 minutes. Three hundred-fifty cameras watch for traffic delays or accidents. Once the camera detects a problem, a crew rushes to tow the obstacle away so traffic keeps moving.

They did a similar thing in California, too, on Highway 91. Instead of building a brand-new road, a private developer added two lanes in the median strip of an existing highway. The beauty of it: Unlike government work, the private highway is all voluntary.

The last paragraph is great too:

Why then do some congressmen say you shouldn’t sell public highways?

Gov. Daniels has an answer: “There are people, frankly, in Congress, who can’t abide the thought that you might be able to pay for something without going down there and kissing their ring for the money.”

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Road Company X sees more than the usual number of accidents or safety issues on its roads. It gets sued occasionally but it only pays actual damages and can afford to take the hits. Problem is, its the company that has got the most direct route from Chicago to Milwaukee, and maybe its the cheapest too since they cut all those corners on infrastructure. No other business can enter the market because there are not enough property owners willing to sell to make a similar route available. So we put up with the crap roads from Road Company X because its the only alternative, and Road Company X knows it. That doesn't mean RCX completely gouges its customers and blatantly ignores safety issues or logical inconsistencies in its designs. It stops short of the point where customers seriously consider alternatives.

What if Putzville, Alabama, a small town of 200 people, had just one hotel/lodging business. The owners would cut corners on infrastructure, and the quality of the hotel would be really sub-par. The rooms would be full of cockroaches, the building would creek like its about to collapse, the tap water would be full of dangerous bacteria and the toilets dont flush. They would charge 15 dollars a night, and no other business can enter the market because there are no property owners willing to sell. So, we put up with Hotel Putzville because its the only alternative, and Hotel Putzville knows it. That doesnt mean that the hotel completely gouges its customers and blatantly ignores hygiene issues or flaws in the buildings structural designs. It stops short of the point where customers seriously consider alternatives.

I guess you can think of many alternatives to staying at Hotel Putzville if you have business to do in Putzville.

- Staying at Niceville, Alabama in a nice hotel, located 40 miles from Putzville and making the commute to Putzville in the morning.

- Sleep in your car

- Staying up all night

- considering whether going to Putzville really is worth the trouble

etc. etc.

Similarly, with your example:

- taking the train

- taking an airplane, or driving as close to the place you are going and then taking the plane

- driving extra slow and carefully

- considering whether going to the place you were going to really is worth the trouble

etc. etc.

Also, i wanted to point out:

That doesnt mean that the hotel completely gouges its customers and blatantly ignores hygiene issues or flaws in the buildings structural designs. It stops short of the point where customers seriously consider alternatives.

You have pretty much described any business.

The reason a greyhound bus doesnt have airbags and life jackets for its passangers is because the customers are not going to change to a limo service because Greyhound doesnt offer these features. Hence, greyhound stops short of the point where customers seriously considers alternatives. The reason why the average Dodge Avenger isnt fitted with military grade armor, run-flat tires and an air cushion that makes it float on water is because the customers are not going to buy a military tank because the Dodge Avenger doesnt have these features. Hence, Dodge stops short of the point where customers seriously considers alternatives.

Edited by JJJJ
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  • 1 year later...

The purpose of some roads will be for safe passage for motorists. Maybe, maybe not. The purpose of the roads will be to make money. The safety of motorists is only important insofar as it serves that purpose. What is the standard of "safe", and who gets to decide? How would the public even know if a road is safe?

The purpose of the OWNER of the road is to make money (providing that he does not need to use it himself).

The purpose of the USER is that it provides safe and pleasurable passage for motorists.

These 2 entities TRADE with each other. The USER satisfies the purpose of the OWNER ($$$) and the OWNER satisfies the purpose of the USER (safe, pleasurable passage).

There is no 'maybe not' with respect to 'safe passage for motorists' involved here if a profitable, voluntary exchange of goods and services are to be conducted.

The OWNER is free to install whatever standards to his road that he sees fit to the goal of making as much money as possible. If he is irrational, reality will soon inform his pockets.

For e.g., a speed limit too low maybe influence drivers away from his frustratingly time wasting route. A speed limit too high may cause drivers to feel unsafe and thus choose alternate routes. Or, it may turn out that nobody cares about a speed limit anyway and he figures out that the Autobahn model is the way to go. Personally I guess that the latter would be the case and that restrictions on drunk driving would be more important to the USER.

In the case of other safety devices that the public may not know about, it would be in his best interest to boldly showcase certificates awarded him by various private rating companies which the public are familiar with (otherwise they would be worthless as persuasive devices).

The free market would weed out useless, unpopular and un-needed standardizations in every industry.

Who wants to by a car with a shoddy braking system? If this hardly ever happens anyway, the public will not be overly wary about it and a rating company specializing in rating auto braking systems would not even get off the ground. If there are a significant amount of unfortunate incidences due to auto braking system failure, then the public may be moved to buy a car only if it displays a certificate from a respected rating company approving its braking system. The car manufacturer would be then well advised to publicly advertise the fact that he purchased and passed such an inspection from a reputable auto brake rating company for his car model.

There would be a myriad of these rating companies, some general, some specialized, cropping up all over. There may be even rating companies that rate other rating companies. There may be an auto rating company that rates an entire car by simply choosing the best combination of rating companies for each of a car's functions and putting their own 'super' rating on it. The possibilities are endless but rest assured that it would be done in a much more superior fashion to the government.

Jobs would increase. Wealth would increase. No one would be taxed for such a service. Anywhere there is a need for safety, a market for rating companies would be created.

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  • 2 weeks later...
  • 5 months later...

I'm a newb here, but I would like to ask how the following situation with private roads could be dealt with.

Lets say I purchase a ring of property completely surrounding another person or persons property. Then, lets say that I am a jerk and put up a fence not letting anyone in or out of their property by crossing my ring. How do you deal with that? I ask because, without any regulation, some people seek to extort others rather than produce.

Suntzu00

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I'm a newb here, but I would like to ask how the following situation with private roads could be dealt with.

Lets say I purchase a ring of property completely surrounding another person or persons property. Then, lets say that I am a jerk and put up a fence not letting anyone in or out of their property by crossing my ring. How do you deal with that? I ask because, without any regulation, some people seek to extort others rather than produce.

Suntzu00

I actually made a similar inquiry some time ago here and the answers I got were more than satisfactory (see 2046's reply for an answer regarding "encirclement")

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I'm a newb here, but I would like to ask how the following situation with private roads could be dealt with.

Lets say I purchase a ring of property completely surrounding another person or persons property. Then, lets say that I am a jerk and put up a fence not letting anyone in or out of their property by crossing my ring. How do you deal with that? I ask because, without any regulation, some people seek to extort others rather than produce.

Suntzu00

You have the right to not be unlawfully restricted in the use of your property. Property rights, properly and well-defined, are a great fix to an amazing assortment of problems that people never consider, including many forms of pollution, and other things with respect to the environment (fishing zones etc.), for instance. This is why so many advocates of liberty give so much applause and importance to them, they are very much a necessary foundation of a free, advanced, rights-respecting society. This is just another instance: by what right may you impede in the use of someone else's right to the function and operation of their property through the exercise of your own?

Edited by CapitalistSwine
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I'm a newb here, but I would like to ask how the following situation with private roads could be dealt with.

Lets say I purchase a ring of property completely surrounding another person or persons property. Then, lets say that I am a jerk and put up a fence not letting anyone in or out of their property by crossing my ring. How do you deal with that? I ask because, without any regulation, some people seek to extort others rather than produce.

Suntzu00

Hello. You are confusing regulations with justice. Without resort to a judicial system backed by force and ultimately by a proper civil code, people can extort others. Notice however that the people that tend to extort other, are not the same than those who tend to produce. Wouldn't it be great for producers to be able to live far from extortionists?

I condone preview answers but on the matter of "encirclement" I just want to share this alternative view: Dynamic Geography

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I'm a newb here, but I would like to ask how the following situation with private roads could be dealt with.

Lets say I purchase a ring of property completely surrounding another person or persons property. Then, lets say that I am a jerk and put up a fence not letting anyone in or out of their property by crossing my ring. How do you deal with that? I ask because, without any regulation, some people seek to extort others rather than produce.

Suntzu00

The solution is called an easement. It has been part of the common law for centuries.

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