Before studying Economics, I believed as many others including modern Conservatives and Libertarians that roads should be provided by the government. Now I have changed my mind and believe that privatization of roads would work well.
I believe that the privatizations of roads would be in the form of giving the taxpayers their money back and allowing them to only pay for the roads for which they use. With “Smart Passes” this seems like an easier project than before. Many roads in the colonial days were private but people drove around the tolls. If all roads were private you would not be able to do this.
This would allow for a pricing mechanism to take place. For example, the hours of 7-9 in the morning and 3-7 in the evening would have the highest fees. This would allow some businesses to shift their hours and decrease congestion. Another benefit is construction would not happen during the day, as it would anger consumers. It would anger you if you went into the local Starbucks and they were redoing the tile on the floor during business hours. There are many other benefits to privatization but the one I truly believe in is better quality of roads.
The Economist took a look at the current road situation:
“If America does not act, say Robert Yaro of the Regional Plan Association (RPA), a body that plans the New Jersey-Connecticut region, it will have the infrastructure of a third world country.”
So what are the facts of the government funded roads and transportation system:
- First, we pay less in GDP compared to most countries; 2.4% of GDP. It’s 5% in Europe and 9% in China.
- Second, Flight delays costs $15 billion dollars a year.
- Third, road congestion costs $78 billion dollars a year; 4.2 billion lost hours and 2.9 billion lost petrol.
- Last, the National Commission wants $225 billion dollars for the next 50 years; we are spending 40%.
If David Friedman’s laws of anything the government does the private sector can do for half is true then that means we could get this done with $113 billion dollars and save all the $78 billion dollars.
Should we privatize? Or should we continue to pump money? We could even seen gas prices being lowered due to this.