Private roads was RE: right to drive cars

From: Rafal Smigrodzki (rafal@smigrodzki.org)
Date: Mon Feb 17 2003 - 10:37:41 MST

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    Daniel Ust wrote:

     (It would a lot better, here, to privatize roads and
    > then have a full free market for transportation -- instead of the
    > mixed economy we have there now. It would also, in my mind, be more
    > Extropian.:)
    >
    ### I have been thinking about this issue for a long time. It sounds very
    attractive, to have private, competing highway systems. One thing bugs me
    however - the acquisition of the land for roads would be quite difficult.
    You couldn't use eminent domain (or could you?). A single holdout on the
    path of a planned highway could demand a lot of cash, or scuttle the project
    altogether (e.g., the owner of a mountain pass). This would drive up the
    prices. Also, in certain situations, if the ownership of roads in an area
    became concentrated in one hand, there would be the risk of monopoly rents
    being extracted from the citizens.

    How could you solve these problems?

    I was thinking about using the mechanism of hostile buyout of land. Let's
    say, the local protection provider will accept a request to organize an
    auction for any real estate from a party, against the wishes of the current
    occupant. The requestor, however, has to pay a set premium over the final
    auction price if he wants to actually buy it (e.g. double the previous
    offer). If the property is sold for a price, the requestor has to pay some
    fraction of this amount of money as fee for the auction, and can only buy
    the property from the new owner at a premium (e.g. double the auction sale
    price, with part of the premium going to the original owner, and part to the
    buyer). In this way, the original owner is assured a premium over the market
    price for his land, but the price itself can only with difficulty be subject
    to speculation based on the intended use of the land. The requestor has to
    pay to request the auction, so he cannot play games. The buyer can pocket
    part of the premium, just as the original owner but in case he overpays and
    the roadbuilder changes his mind, the buyer is stuck with a piece of useless
    (for him) property, discouraging speculation. Collusion would be difficult
    and honest dealing between the original owner and the roadbuilder would be
    cheaper, eliminating the auction in most cases, I think.

    Additional considerations pertain to land with improvements.

    Sounds very complicated but so far it's the only solution without eminent
    domain I could come up with.

    Rafal

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