Hello all,
I wonder about the following scenario :
Imagine a free market society where every piece of land has a rightful owner. How is it possible to build railways, streets or other larger infrastructure without a state ?
If someone tries to do so it would drive up the price of land in the area, because the builder would need a certain parcel, otherwise the already bought parcels would not be useful at all.
How would this play out in the long run ?
Thanks
Norbert
This is not a direct reply to your Norbert…but…I find it depressing how human knowledge gets lost.
This used to be done mainly without the state. Roads were made chiefly by the private sector relatively not too long ago. Only after a few decades of the state nationalizing it or simply weighing in its heavy hand, and the common public wonders how they could do without the state? Doesn’t this depress anyone else?
I am aware of this. But how did they manage this problem ? The Wild West does not count,because the land had no owner - in the practical sense.
I feel your pain. It is depressing.
Norbert
Hi Norbert,
there is no problem. The builder would negotiate with every owner he wants to buy the land from before he buys any parcel. In that way no single owner is in a position of greater power than anybody else.
But even in scenario where the builder already bought every parcel but one, there is no problem. He would just have to pay the real market price for the last parcel. If that price is too high for his project to be still profitable…tough luck. But thats not different to any other project in a free market. Land is a scarce resource and is priced accordingly. Just try to open a small shop in the center of a major city and you will see that almost all your profit will go to the landlord. That’s how it is supposed to be. Otherwise the land would not be put to the most productive use and we would just waste scarce resources. And that’s exactly what eminent domain does.
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V
Walter Block has covered this extensively.
Roads and railroads were have been privately built even in the populated areas such as the Eastern U.S. See here. I don’t really see any insurmountable problem with paying market prices, but even if all the land was owned and the none of the owners would sell (or the price is just too high), the builders could simply go under the land.
So let’s see…
The potential negative impact to the free market solution is that the landowner gets more money for his land or may not sell at all.
The real negative impact to the government solution is that the landowner is forced to give up his land at a predetermined price all for the “good” of others.
I don’t see the problem with the free market solution.
In the case of the wild west, the railroad became the homesteader by laying tracks, building stations and building towns in places where nothing existed, and may still not have existed to this day. And, these railroads did increase the property values along the way.
I agree that it is indeed a sad state of affairs when people cannot see how life is without the state. The idea of, “how do you do this without the government?”, is actually kind of scary. But, I would suggest to you sir that you read and Essay called I, Pencil by Leonard E Read. He basically wrote this because people had what I would call a disconnect of knowledge about how the Mail service worked without a government, and it did for a number of years. This may not be an answer to your question directly, it really offers a different point of view on life without the state. Here is the link, it’s a fantastic essay:
PS. Reading about the man himself I found particularly enlightening as well.
That seems like an excessively restrictive assumption.
IDK. If all land is already owned, doesn’t that presuppose some sort of infrastructure?
This question really asks about “the holdout”, where one owner refuses to sell except at an exorbitant and unrealistic price.
Someone else suggested that the builder ought to negotiate with all the owners in advance. If he chose several possible routes, he could even do a reverse auction. These methods would be sufficient to avoid “the holdout” problem. Otherwise, you just don’t build the road in the first place…
Someone call up Tom Woods and make him write his next book:
“You mean the market used to do THAT?”
That was a fantastic read. Thank you!
For inter-city travel: airports, road owners, railroad owners, etc. would all compete for business.
For intra-city travel: helipads, street owners, and subway owners would compete for business.
And obviously, for larger amounts of travel, you could have ships and so on.
Make sense?
Not in europe. Imagine you want to build a railway today.
Just as a clarification: I personally believe that the market is better in general. Nevertheless : These questions come up and it is important to have thought them through. I just wanted some help in this regard and got it from you all and I am grateful for that.
ok first off, what is the criteria by which you decide whether infrastructure should be constructed with other peoples money ?