"Private" highways

The Washington Post today had a very interesting, but also depressing, article on the Bush administration's latest effort at corporatizing what is currently socialized: the roads. The United States, unlike countries in Europe, has largely resisted calls for the "privatization" of the nation's highways and highways-to-be (of which we have many). As a result, the government, by some estimates, spends 10% of our GNP on highway and parking subsidies.

Already, there are some conceptual issues with private highways. Firstly, and most obviously, highways derive their value from the millions of miles of auxiliary, feeder roads. These are almost never private, except in rare cases of large office parks, malls, etc. Oftentimes, the road itself was built with public money and is being privatized – it is quite possible (and likely) that in the absence of that road, no private builder would be willing to construct it. And finally, these so-called private companies make use of eminent domain, taking on quasi-governmental roles and acquiring land at non-market rates. In Colorado, the legislature banned the use of eminent domain in the building of private roads, and the governor vetoed it. The end result was an agreement whereby the state DOT makes the call, which makes me wonder how Colorado Senator Wiens could say with a straight face: "no private toll-road company will be able to condemn the private property of a Colorado citizen, period, end of story."

But as the article continues, the contradictions become startling. First of all, the focus is on a federal program that took $850 million away from the regular budget in earmarks from the Democrats (I get the feeling a lot of it was mass transit-related), which has so far not led to the construction of any highways. The money is the same money that Bloomberg wanted to use for New York's congestion fee idea. These supposedly-free market roads were not only benefitting from the government's power of eminent domain, but also received (along with private freight lines) $15 billion in tax-exempt bonds, essentially a subsidy. Pseudo-private roads have become a big industry – attracting over $100 billion in 2006. And then there's the cascading patronage, with a healthy exchange of high-salaried executives between private road operators and builders and federal government.

To me, this seems like another effort by the Bush administration to cash in on libertarian rhetoric while putting in forth plans that subsidize favored industries. The idea that a private company could ever independently build the kinds of roads that we're used to in America and be profitable while doing it is as absurd as thinking that mercenaries would have any clients if governments stopped hiring them. What these crypto-libertarians are looking to do is privatize government and have it perform the same function, and since that's obviously impossible, they settled with just corporatizing it.