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None of that addresses how you build the road in the first place without government assistance (or expand existing roads). Private companies can’t compel proper

None of that addresses how you build the road in the first place without government assistance (or expand existing roads). Private companies can’t compel property owners to sell land.

eru 6y ago
History provides many great examples. Your particular concern also comes up in the building of canals or railroads. So see eg https://en.wikipedia.org/wiki/History_of_rail_transport_in_Great_Britain https://en.wikipedia.org/wiki/History_of_rail_transport_in_G... and https://en.wikipedia.org/wiki/History_of_the_British_canal_system https://en.wikipedia.org/wiki/History_of_the_British_canal_s... But also have a look specifically at roads: https://en.wikipedia.org/wiki/Turnpike_trust https://en.wikipedia.org/wiki/Turnpike_trust
- learc83 6y ago
  You need to look a little more carefully into the history of railroads in Great Britain. An act of parliament was required to build most of them. And they approved the routes over the objections of local landowners. In fact many local landowners hired thugs to harass the surveyors and builders. Without government power forcing the sale of land none of those early railroads would have been built. The same thing applies to canal building in the 18th century. Government authority was used to force landowners to allow canals to be built. Again with turnpike trusts, acts of parliament were required to establish each one, and they were generally financed by community bonds. There has never been a history of private entities building a large, road or rail network through land owned by many different private owners without using the power of government to force the landowners to cooperate.
  - eru 6y ago
    You are right that the British example relies on eminent domain to some extent. But private suppliers plus eminent domain is still a far cry from nationalized roads.
    - learc83 6y ago
      So the government creates a natural monopoly for the shortest route from A to B, and then hands it off to a private entity to run it. What's the mechanism in place to prevent the private road owner from charging far more than the maintenance costs of the road? The government steps in confiscates more private land to build additional less efficient routes that they refuse to sell to existing management companies to allow for some amount of competition? The government creates regulatory bodies to oversee the private road management companies and ensure they don't charge too much? The government regularly accepts bids from different companies to handle management, and somehow manages to keep this bidding process corruption free, there are no problems from regularly handing off control to different companies, and the transaction costs for switching companies don't overwhelm the savings? The free market depends on competition to work, but with roads built through eminent domain, competition must be artificially engineered. At some point direct government ownership is the most efficient solution.
      - eru 6y ago
        > What's the mechanism in place to prevent the private road owner from charging far more than the maintenance costs of the road? Freedom of people to move their place of residence and business, and long term contracts. Basically people don't move house willy-nilly, but when they move house they can take considerations like roads and railroads etc into account. That's what they do today, too. Long term contracts assure that your decision will be valid for as long as you like to negotiate. No need for all the regulation you envision here. --- However, I do agree to an extent: private companies are not a panacea by themselves. As you can see with the sorry state of eg American banking (especially historically when branch banking was banned) or in their healthcare system or what I hear about residential internet access. What is more important is genuine competition. Alas, adding lots and lots of layers of regulation seldom works. You just get regulatory capture instead. In that case, you might make an argument that outright government ownership doesn't look too bad in comparison. Especially if you can have very local levels of government be responsible. Eg municipal waterworks seem to work reasonably well around the world. See eg https://en.wikipedia.org/wiki/Sewer_Socialism https://en.wikipedia.org/wiki/Sewer_Socialism What often works better is deliberately decreasing barriers to entry. Be that from foreign competition, local upstarts, or established firms branching out into other industries. (Eg Walmart tried to allow people to open bank accounts. You can guess at the lobbying storm from incumbents that caused.) Another good measure, but extremely unpopular in practice is to make sure your regulations are as simple as possible. For example, when you have decided to privatize some government agency, say like USPS or Amtrak, you should remove all the debts from its balance sheet and then sell it strictly to the highest bidder. In practice, that never happens. In practice, there will be a beauty contest with lots of complicated rules (eg about preserving jobs etc). Those rules give the adjudicating officials lots of leeway to decide, and thus power. Invariably, the buyer will later on renege on their promises. That's much harder if you just hold an auction in terms of cold, hard cash. (I'm parroting the suggestions of 'Just Get Out of the Way' https://www.bookdepository.com/Just-Get-Out-Way-Robert-E-Anderson/9781930865549 https://www.bookdepository.com/Just-Get-Out-Way-Robert-E-And... here. The wisdom of removal of debt from the balance sheet before selling wasn't obvious to me for a while: the idea is that any dollar of debt left on the balance sheet would decrease the sales price by roughly a dollar, but if the newly privatized company goes belly up, it would be politically impossible to avoid a bailout of the debt that existed before the privatization. In practice we'd expect the new owner to add debt back on the balance sheet shortly after the sale. But that new debt will be politically much less charged.)

None of that addresses how you build the road in the first place without government assistance (or expand existing roads). Private companies can’t compel property owners to sell land.

eru 6y ago

History provides many great examples. Your particular concern also comes up in the building of canals or railroads. So see eg https://en.wikipedia.org/wiki/History_of_rail_transport_in_Great_Britain https://en.wikipedia.org/wiki/History_of_rail_transport_in_G... and https://en.wikipedia.org/wiki/History_of_the_British_canal_system https://en.wikipedia.org/wiki/History_of_the_British_canal_s... But also have a look specifically at roads: https://en.wikipedia.org/wiki/Turnpike_trust https://en.wikipedia.org/wiki/Turnpike_trust

learc83 6y ago
You need to look a little more carefully into the history of railroads in Great Britain. An act of parliament was required to build most of them. And they approved the routes over the objections of local landowners. In fact many local landowners hired thugs to harass the surveyors and builders. Without government power forcing the sale of land none of those early railroads would have been built. The same thing applies to canal building in the 18th century. Government authority was used to force landowners to allow canals to be built. Again with turnpike trusts, acts of parliament were required to establish each one, and they were generally financed by community bonds. There has never been a history of private entities building a large, road or rail network through land owned by many different private owners without using the power of government to force the landowners to cooperate.
- eru 6y ago
  You are right that the British example relies on eminent domain to some extent. But private suppliers plus eminent domain is still a far cry from nationalized roads.
  - learc83 6y ago
    So the government creates a natural monopoly for the shortest route from A to B, and then hands it off to a private entity to run it. What's the mechanism in place to prevent the private road owner from charging far more than the maintenance costs of the road? The government steps in confiscates more private land to build additional less efficient routes that they refuse to sell to existing management companies to allow for some amount of competition? The government creates regulatory bodies to oversee the private road management companies and ensure they don't charge too much? The government regularly accepts bids from different companies to handle management, and somehow manages to keep this bidding process corruption free, there are no problems from regularly handing off control to different companies, and the transaction costs for switching companies don't overwhelm the savings? The free market depends on competition to work, but with roads built through eminent domain, competition must be artificially engineered. At some point direct government ownership is the most efficient solution.
    - eru 6y ago
      > What's the mechanism in place to prevent the private road owner from charging far more than the maintenance costs of the road? Freedom of people to move their place of residence and business, and long term contracts. Basically people don't move house willy-nilly, but when they move house they can take considerations like roads and railroads etc into account. That's what they do today, too. Long term contracts assure that your decision will be valid for as long as you like to negotiate. No need for all the regulation you envision here. --- However, I do agree to an extent: private companies are not a panacea by themselves. As you can see with the sorry state of eg American banking (especially historically when branch banking was banned) or in their healthcare system or what I hear about residential internet access. What is more important is genuine competition. Alas, adding lots and lots of layers of regulation seldom works. You just get regulatory capture instead. In that case, you might make an argument that outright government ownership doesn't look too bad in comparison. Especially if you can have very local levels of government be responsible. Eg municipal waterworks seem to work reasonably well around the world. See eg https://en.wikipedia.org/wiki/Sewer_Socialism https://en.wikipedia.org/wiki/Sewer_Socialism What often works better is deliberately decreasing barriers to entry. Be that from foreign competition, local upstarts, or established firms branching out into other industries. (Eg Walmart tried to allow people to open bank accounts. You can guess at the lobbying storm from incumbents that caused.) Another good measure, but extremely unpopular in practice is to make sure your regulations are as simple as possible. For example, when you have decided to privatize some government agency, say like USPS or Amtrak, you should remove all the debts from its balance sheet and then sell it strictly to the highest bidder. In practice, that never happens. In practice, there will be a beauty contest with lots of complicated rules (eg about preserving jobs etc). Those rules give the adjudicating officials lots of leeway to decide, and thus power. Invariably, the buyer will later on renege on their promises. That's much harder if you just hold an auction in terms of cold, hard cash. (I'm parroting the suggestions of 'Just Get Out of the Way' https://www.bookdepository.com/Just-Get-Out-Way-Robert-E-Anderson/9781930865549 https://www.bookdepository.com/Just-Get-Out-Way-Robert-E-And... here. The wisdom of removal of debt from the balance sheet before selling wasn't obvious to me for a while: the idea is that any dollar of debt left on the balance sheet would decrease the sales price by roughly a dollar, but if the newly privatized company goes belly up, it would be politically impossible to avoid a bailout of the debt that existed before the privatization. In practice we'd expect the new owner to add debt back on the balance sheet shortly after the sale. But that new debt will be politically much less charged.)