This was originally posted on Live Oaks on September 8, 2010. Comments have not been migrated.
If you made a list of the places that you spend the most time waiting in line, I suspect that virtually all of those places would be some government agency or department. These government agencies have no incentive to provide fast and efficient service, because they have captive “customers.” You must go to the government to get your driver’s license renewed, or to obtain a building permit, or a myriad other activities, and there is no private alternative.
On the other hand, private businesses continually face competition. If one business routinely has long lines consumers will go elsewhere.
While it is probably impossible to calculate all of the time wasted by government mandates, controls, and regulations, the Texas Department of Transportation (TDT) recently released a study that provides a hint as to the time we waste on government roads.
The most congested roadway segment in Texas in 2009 was in Harris County, according to the data. Topping the list was the 9.3-mile stretch of road on Interstate 45 from Beltway 8 North to Interstate Highway 610, where the annual delay per mile was 484,630 hours and drivers dealt with 4.5 million hours of delay during the year.
This one section of road created a delay of nearly 1 hour for every man, woman, and child in the Houston metropolitan area. And that doesn’t include all of the other congested highways and roads in Harris and adjoining counties.
TDT calculated that the cost of these delays amounted to $21.75 per hour. All told, traffic delays cost Houstonians tens of millions of dollars every single year. Despite these costs in time and money, we are continually told that only government can build, own, and operate roads.
The government’s monopoly on roadways is the cause of traffic congestion. First, consumers have no viable options (other than another government monopoly–mass transit). Second, consumers do not directly bear the cost of their use. Because government roads are supported through taxes, rather than user fees (or something similar) consumers have little incentive to modify their driving habits.
All goods and services exist in a limited quantity, including the roadways. Prices are the means by which goods and services are allocated to those who value them most highly. But in the case of roadways, use is “free” and there is no pricing mechanism to moderate traffic. If the roadways were privately owned, the owners would seek to maximize efficiency by raising prices during periods of peak demand.
For two reasons I won’t begin to attempt to explain how private roads could and do work. First, such an explanation would take far more space than a single blog post. Second, I won’t claim to know what creative solutions entrepreneurs will come up with when they are motivated by the opportunity to profit.
But I will point out that it wasn’t that long ago that defenders of the postal service claimed that private mail delivery would never work. Today, companies like FedEx and UPS are sapping customers from the postal service. And this is despite that fact that the USPS still enjoys a monopoly on first-class mail. In other words, to the extent that private businesses are free, not only can they provide they provide services, they do so more efficiently than the government. Consumers agree, as evidenced by their voluntary choice to use the private businesses.