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From: janw@inmet.UUCP
Newsgroups: net.politics.theory
Subject: Re: Roads And Telephony
Message-ID: <28200496@inmet.UUCP>
Date: Wed, 1-Jan-86 21:40:00 EST
Article-I.D.: inmet.28200496
Posted: Wed Jan  1 21:40:00 1986
Date-Received: Sat, 4-Jan-86 22:13:20 EST
References: <343@ihnet.UUCP>
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Nf-From: inmet!janw    Jan  1 21:40:00 1986


[   Karl Dahlke ihnp4!ihnet!eklhad]
[an extremely lucid and informative piece on natural monopolies
in roads and communications by Karl Dahlke]

Some statements, however, are made or implied but not substantiated.

>Some have demanded a controlled experiment, but I could not accept
>the costs and risks associated with such an experiment,

Why do you think there are any costs - and costs to  whom  ?  The
experiment  would  consist in *changing the rules* over a certain
area (like a state) - obviously on a  voluntary  basis.  The  im-
mediate  result  would  be *gain* - less taxes - to the local ci-
tizens; and *no loss* to the government (it would  save  on  road
building). The long term result would be loss (bad roads) - or gain
to the state, depending on success or failure.. Thus, there  is
a  *risk*,  but  also  a  chance  of gain, i.e. a *gamble*, but a
voluntary one (well, at least on the part of local *majority*).

>while there are no theoretical arguments favoring private control of roads.

There are *some*.
First, government intervention *in itself* is a social evil,  ir-
respective  of  economic  results. Thus, even somewhat *inferior*
economic performance might not be too great a cost to get rid  of
the Big Brother.

Second, it usually costs the government twice as much to do  any-
thing. Why doesn't that include road building and maintenance ?

Then again, toll roads can be exploited  more  rationally -  e.g.
lower toll off peak hours, thus encouraging better traffic condi-
tions.  A private company - even a monopoly - would have a market
incentive to find such cost-saving solutions.

>Why should this monopoly be handled privately while others are not?
                                               ^^^^^^^^^^^^^^^^^^^^
This begs the question: why shouldn't *all* natural monopolies
be private and *unregulated* ? In your own  excellent expose,
you described how a phone company would keep its monopolistic
position - through *low rates*. Well, let it !

Finally, in a surge of intellectual honesty, let me throw  in  an
argument  for  the other side: historically, good road systems do
correlate with centralized governments. (E.g., Roman and Inca Em-
pires). European feudalism, though highly progressive economical-
ly, had a dismal record on roads. (On bridges, not bad  at  all).

The reasons, however, seem  obvious:  such  road  systems  helped
maintain centralized control and were built by those who wanted
such control, opposed by those  who  didn't.  These  reasons  are
hardly valid now.

			Jan Wasilewsky