Archive for August, 2010


August 16, 2010


Another good show from Stossel. The main points are:

  • if public or subsidized transportation networks can’t pay for themselves (let alone turn a profit), how do we know that they were worth the investment?
  • the incentives of private companies yield much more efficient services than their government-run counterparts, yielding better quality and lower prices.

If anything, I would bring a few words of caution:

  • don’t confuse privatization and contracting out: yes, private contracting does have some benefits, but it is susceptible to a number of bad incentives (some are funded with taxed resources, the contract is still managed by government, and government merely leases out the resource while keeping a legal monopoly).
  • don’t confuse the free-market with an absence of rules: as much as I find the experiments with removing the street signals encouraging, they only illustrate the failure of government in innovating and the mistake of assuming chaos and the worst of people absent strict rules; but you should not use them to argue that less rules is always better. Privately run roads would still have rules, maybe even more (who knows); but the important part is that the rules would be subject to the competitive forces.

I recommend Walter Block’s work (The Privatization of Roads and Highways (pdf), talk) for more detailed analysis of the question of road privatization.