This debate started when the liberal claimed that a completely land-locked state can never seceed because they would “free ride” from the US military.
I was amused that he claims that only the government can build roads, and dismisses any private roads in history.
liberal:
To take an example, suppose you live at the very edge of your development. You want people to build a road so that you can drive to work in the morning instead of taking 3x as long to walk there. The contractors ask you for $100,000 to build the road, money that you don’t have. Once the road is built, however, any of the 100 people in your development will be able to use it (it’s not your property because it will also have to go through your neighbors’ property in order for it to be a “road” and not “a patch of asphalt”) ; however, because only YOU would have to pay for the total cost of the road, chances are the road will never exist, or at least not exist in an ideal state. Hence, macroeconomic imperfection: no one’s wants are being satisfied.
me:
On your second thought experiment. So the guy who want his own private road is dumb, and takes out a massive $100,000; its worth it too him. The road is built, and his neighbors start using it. Since the road is free of charge to the neighbors, the road will become overused, the road will depreciate in capital value. In a more realistic scenario, this guy would go in knowing that, people could free ride, as well as the road company. Private entrepreneurs and investors are much more savvy and long-sighted than government planners, and in a private road system, property titles and means for exclusion can still emerge, for goods we see now as ‘public’. The fact a road, can be private property, or some corporate entity, is a strong incentive to maintain the capital value of the road, thus a system of road maintenance- and exclusion from non-payers.
liberal:
This is simply not feasible. As I said earlier, in order for a road to be, you know, a ROAD, and not just a patch of asphalt, it has to have access into and around various bits of different property. If you have a road going through the property of 10 houses, you can’t say “every house can only use the part of the road going through their property”, because then all everyone has is a small bit of land on which to play hopscotch.
Let me use a clearer example if you still have problems understanding. If you need a highway to drive 40 mins to work, and so does everyone else in your neighborhood, how are you going to create an excludable means of getting it built and using it?
me:
Stretching the thought experiment, to an imaginary world, where there are only private roads, or a lot of private roads. Private roads were the first roads in America, so its not unfeasible. You have many roads that all have market value, people free riding is the incentive to exclude in order to maintain the value of the road- the health of road companies.
A road company can have many creative means for singling out people who don’t pay for a road. For example a road company can have a system of registration for road users, and microchips. If through a basic computer system, similar to how some roads have electronic sensors to count traffic, the company can single out road users who aren’t registered.
Now i think your rebuttals to non-public roads is unique, because most interventionists frame the free-rider problem, as a problem of positive externatlities where the beneficiaries dont pay. There is no problem of a private road not being able to charge its users. But the general objection is that society benefits from roads and not directly paying for them.
The objection is that a private owner need only charge a price for the highway usage roughly equal to the benefit of transport fees gained by efficient transportation.
overall the existence of positive externalities is not an exuse for government to prove a service that might yield a positive externality. We all benefit from the risks entrepreneurs take, but the government doesn’t take over investment. If the problem of free riders were real, no one would risk money in a business venture because some people in society would benefit from a venture they never directly pay for.
liberal:
We’re not talking about a road company. No company can “own” a road because a road would have to go through multiple people’s property. For instance, you may have to put a road through my garden to actually reach the place you want to go to. Once you do that, you can’t arbitrarily say “Buy a microchip or you can’t use this road” because it’s not YOUR road, it’s a road that is partially in multiple peoples’ land.
“If the problem of free riders were real, no one would risk money in a business venture because some people in society would benefit from a venture they never directly pay for”
Lol?
When you run a hamburger stand, you will receive payment for the hamburgers that you sell. No one free rides, because anyone who uses your service is also paying for it.
On the other hand, say you run a research firm. Your job is to create and sell designs for cars. Let’s assume that the horribly statist system of intellectual property does not exist and think about this situation. You put money into a business and pay people to come up with designs. You sell this design to manufacturer x, who pays you some money. However, once manufacturer x releases the product, the design is reverse engineered and used by manufacturers y, z, a, b, c and d. Is your business going to be successful if only a small fraction of your client have to actually pay for your product?
me:
http://en.wikipedia.org/wiki/Private_highway
http://en.wikipedia.org/wiki/Long_Island_Motor_Parkway
True, but the entrepenuers, thousands of them who differ their consumption (horrors saving), to build meat factories and farms, have a bunch of pesky free riders (society), people who benefit from living in a world where scarcity of food is handled by private firms. the general proletariat the class of high time preference, free ride from the low time preference capitalists. There is no excuse that a private road, cannot in some form exclude the actual users of the road who don’t pay. Like the government which creates its own way of extracting revenue, and a private firm can collect revenues, its really not rocket science.
“Is your business going to be successful if only a small fraction of your client have to actually pay for your product?”
heee not so likely. Maybe company X can take advantage of financial markets, and purchase stock and options of y,z,a,c in anticipation of their windfall- screwy whatever. /but intellectual property emerges from natural law. a non state enforcement of intellectual property can exist, as long as people view “stealing” of ideas as an aggression against private property- its treated like theft of material objects. the government taking over intellectual property, is just differing a private want to a public means.
There’s a lot more stuff in the debate, and of course there were insults and asinine comments-he made that i edited out