What Happens with the Roads under Liberalism?
Roads and traffic are often brought up in discussions about liberalism. How will roads be financed? Who has to pay for what? Will there be private tolls everywhere?
This is an important question, and the answers illustrate much of the essence of liberalism. According to liberalism, the individual is free, and most are able to make independent and rational choices. We will see how this way of thinking applies to the question of traffic – which is privatized in a liberal society.
Supply and Demand
An entrepreneur wants to offer a product, thus creating value for others. In this way, he creates profit for himself, while wealth is increased and society as a whole benefits from it.
This applies to all products and services – even roads. Therefore, an entrepreneur must find the solution people are willing to pay for and use, unless he wants to go bankrupt.
When it comes to building roads in new areas, the roadbuilders have a couple of alternatives. Either they have to buy the property where the roads are going to be built, or they have to enter into an agreement with the property owners. The government cannot expropriate property for road purposesl.
Different Ways of Making Money
Road companies can earn money in different ways. The best thing for a company is to have happy customers and users, and you do not get those by putting as many obstacles in their way as possible, such as with high prices and tollbooths everywhere.
In a liberal society, there are almost unlimited solutions you can offer those who use the roads. You could, for example, utilize advertizing billboards along the road, or set up automatic tolls for subscribers.
It the users appreciate the product, which they usually do with useful offerings like roads, they will be all too happy to pay. It might even happen that the largest transport companies enter into agreements with the road companies, so everything is paid for that way.
There are many possibilities.
More Decentralized Solutions
Another question that begs an answer is roads in residential areas, business districts, and city centers. These can be financed the same way as above, but here another solution arises as well.
Households in a housing association usually pay a fee to the community, which are used for things like cleaning hallways between apartments, maintaining common areas, radiator systems, and so on.
The same principle can be applied to the road outside the house. That way, the homeowners, by signing a lease agreement, are duty bound to pay for the road outside, the same way they do for other services. This also applies to business districts.
It is not a given that this needs to be the solution. In liberalism, people have individual freedom, so it is up to imaginative people to come up with a peacedul and effective solution for various problems.
- All roads are privately owned in a liberal society
- An entrepreneur will come up with the solution that is best for the customers in order to create more profits
- When people have individual freedom, they are free to find the most effective solutions to problems
- The same is true for roads – they can be financed in countless different and userfriendly ways