Without Government, Who Would Build the Roads?

In the past I have discussed Anarcho-Capitalism, the system of organizing a society based on the free market instead of the government. I began by discussing that absent of government there would still be a market for protection, police, and crime investigation, and a free market would provide these things because profit would be available to those who supply security. I discussed how different security companies would interact to avoid chaos, and how based on the desire to live a happy, healthy life, the market (customers) would demand companies which avoid violence in favor of negotiations with other companies based on prewritten contracts, and eventually a third party “arbitration agency” which companies would use to avoid the costs of mini-war, and avoid violating their customers contracts. Essentially there would be a clause in everyone’s security company contract that says the company will not go to bat for you if you actually commit a crime. Since these companies have incentives to solve crimes, they would most likely perform their investigative jobs better than the government currently does.

If you are confused you might want to start by reading the first post I wrote on this subject. But what I wanted to talk about today is the fact that most people never even imagine a society without government. People mostly default to imaging a riot, burning buildings, looting criminals, and widespread death and destruction. This is a pavlovian response that has been conditioned by government and its agents (the media) throughout each of our lives. I started by talking about police because protection is one of our most base needs, so we default to wondering how we would be safe without government. But there are plenty of other things that government currently does, which would also be fulfilled in a free market society without government–and it would be done better because of the incentives a company has to provide a product based on demand, and turn a profit.

Think about the incentives politicians have to provide us with government benefits. Just their jobs, which many “useful idiot” voters provide them time and time again, despite poor performance. What if the entity that was responsible for building roads could go out of business if it did a bad job? In a free market, a better company would take its place. Currently we have to beg and plead for our government to correctly use our tax dollars in order to provide us with good roads. Too many of those dollars are siphoned off by greedy politicians, and well meaning but ineffective government programs.

People want roads, and other people want profits (we all want some degree of profit to get us the things we need in life, it is not a bad thing). The desire for profits makes some people respond to the demand for roads with a supply of roads. Since roads are shared by many people, you may think that the government needs to pay for them, so that everyone could use them. But why not cut out the middleman–the government–and just leave it to the people who need the roads most to build them? Maybe if you live on a dead end street with 3 other houses, you put up with a dirt road because who would be willing to pay for your road? Maybe you and your neighbors put your money together and pave your dirt road at some point.

But you might live on a busy street with businesses; businesses that want people to be able to access them on smooth well maintained roads. Problem solved, now the business payed for something that you will be able to benefit from. Maybe a shipping company teams up with other companies in the area who need to move their goods, and builds a highway. Since they don’t want their money wasted, they restrict access and make it a toll road. Other companies need to use the road, and decide to pay the toll–after all, they have the money to spend on things like tolls, because they don’t have to spend it on taxes. But if the tolls are too excessive, there will be a market for another road to be built in order to compete and drive prices for using the road down.

If the toll roads cause gridlock, road companies may start teaming up with each-other to sell subscriptions. “Subscribe to toll road A company and get access to all toll road B company roads!” because the two companies have a mutually beneficial agreement. “Subscribe to toll road C company now and 50 cents of every dollar you pay for the first 6 months will go towards buying cars for families in need”. “For one low price subscribe to the Toll Road Association and  get access to every road in the country”. The free market solves these types of things because there is profit to be gained in doing so. Since no one is forcefully restricted from competing, prices are driven down, and quality up by companies vying for your business. If you are dissatisfied with a company for any reason, there is always one waiting to take your business and give you what you want.

Its a useful exercise to consider different things which the government provides, and think about how they would be provided in a free market. If there is a market for charity, those charities will exist. Right now many people pay their taxes and assume they have contributed to helping others, but the government is really bad and inefficient at helping the poor and needy. Since we do not want to see people starve, be homeless, or left to their own devices if they are unable to take care of themselves, markets would arise to fulfill these things. With all the leftover money not going to government in taxes, people would be much more willing to throw some money towards charities. And even if they were not willing to give up their money to charity, companies that they patronize will see a profit in providing charity, because it attracts customers.

A restaurant may have a free meal program once a month for the hungry. A school would give out 20 scholarships a year subsidized by those enrolled at the school. A security company would offer protection to those who could not afford it, because their customers feel better about themselves when they contribute to society’s safety. The only difference is that these things would be done better, because they would have to be done better to compete. The government takes away the competition by force, and monopolizes certain industries and services, leaving us with no choice if we are not satisfied with the quality and price.

Everyday I hear about another private company dropping their healthcare coverage for part time workers or retirees, because the government has made it too expensive through regulation in Obamacare. At one point those companies decided to offer healthcare to their employees in order to attract and retain good workers, but the government stepped in and has ruined a good situation for a lot of people by using force in the economy. Give anarcho-capitalism some thought. Next time you use a vital government service, ask yourself if that service could be absorbed and improved by the free market. I think that in an honest assessment, you will find that incentives are the key to quality goods and services.

13 thoughts on “Without Government, Who Would Build the Roads?

  1. I do think government has its uses in the following areas:

    1. Management of externalities (transactions that harm neither party, but harm a third party, i.e. pollution)
    2. Contract law and enforcement. I suppose it’s possible that a third party can be hired to enforce the binding contract and it would be subject to the same flaws as government enforcement.
    3. National defense. Once again, a third party could manage this, but I’m not sure it would be as well organized.
    4. Interstate commerce regulation. And not the free-for-all liberals espouse through the commerce clause… I’m talking real regulation to ensure states aren’t throttling others. The only reason I think government is best to tackle this is because I don’t think any other organization is big enough to handle it unless we bring in foreign influence. But who knows — under the anarcho-capitalism model, we may have no states.
    5. The organization of common law. Our government has failed miserably in this, but I’m talking about simple things that all sane, nonpsychotic people would agree are “good” laws, like “don’t kill people”. Of course, government has a tendency to run rampant with law and make everything worse by piling on more and more legislation.

    As a libertarian, I see the appeal in the utter removal of government, but I do believe it has a (very limited, very constrained) place in society.

    • Unfortunately I believe the main problem becomes keeping it small and constrained which led me to explore anarcho-capitalism. When America was founded, we were doing pretty well with a libertarian-ish government, but inevitably things got centralized, and here we are. Essentially anything that we want solved now would be solved if there was a market for it, since we are technically still the government, it requires the people to want something to happen in order to make it happen. Anarcho capitalism would essentially cut out the middleman (government), and allow the market to solve the problems where government shows its incompetence.

      I believe things like pollution would still be solved without government in an anarcho-capitslist society. Many people would “subscribe” to law enforcement that includes the clause of keeping them safe from externalities, so the big company would go to bat for the individuals harmed by a different big company, and the incentive would be attracting and keeping customers. I believe our government has less incentive to solve these problems now.

      As for contracts, interstate commerce, and common law; again these are things individuals influence through their elected officials. Since we are pretty bad at choosing elected officials, it seems voting with our dollars on what the common law is would be better. It would be up to private companies to craft their policy, in a way that would attract customers. Everyone wants protection against murderers, and almost everyone would accept the clause that if they murdered someone, their coverage would be dropped. When you get down into more confusing matters, the private companies would still have more incentive to solve these things quickly and peacefully, and the people (consumers of the product) would still be crafting law by who they patronize.

      And finally national defense would remain just defense, and not aggression, because of companies’ need to turn a profit. This could be organized in a number of ways, the free market would determine the best way. Security companies could team up to offer all customers national defense, or each security company could contract out national defense to a third party, and serve as the middle-man between their customers who want individual protection, in order to also provide the larger society with protection from hordes and the like.

      Anything the government does that we need would be fulfilled would be by the market, because there would be incentive to do so: profit.

      • Great points, and you’ve given me a lot to think about on the topic. I agree that all these services can be provided by an anarcho-capitalist state, but I find it a bit of a stretch that it will be the most effective method. But it’s never really been done before, so unfortunately we don’t have any quantitative data on the topic.

        We do, however, have hard data on the problem of government growth, and we know that it will ALWAYS be a problem. I share your hesitation to give a group of individuals unilateral control over a populace. “Absolute power” and all that.

        Another question about anarcho-capitalism: In the early stages, how would a society prevent a government from springing up? Man’s nature is to make order out of chaos, and usually the end result is the formation of a governing body to create laws with the intent of serving the common good. And we already know how that plays out. What kind of incentives can be provided to the power hungry to prevent the formation of a government?

    • That is also a very good point. I have only discussed this topic twice, so thanks for reminding me, I’ll mention that next time. Since living off welfare would not be a viable option for living as comfy a life of your peers under these conditions, you are surely correct that fewer people would want to (or be able to) “live off the system”. And, since private charities would want to be effective and save money, they would only get help to those who really need it. It would be the difference between people who can’t work and people who won’t work. Right now there is no incentive for many who won’t work to do so.

  2. I think the best way to go about creating an anarcho capitalist society would be to slowly shrink government and allow the private sector to spring into action in the areas which, piece by piece, are allowed to work in the free market. Of course we would have to end all government subsidies, grants, bailouts and other kinds of crony capitalism first. Then, we would have to choose which sector will be eliminated first. Give companies time to form, and set a date that the government agency will be ended. “The department of transportation will cease to exist in one year”. The government would then sell the current roads on behalf of the taxpayers, and refund the entire amount of money to the taxpayers in a pre-determined fashion (so that it doesn’t breed new crony capitalist ties). I think once the government started allowing private enterprises to take the place of government programs, the free market would usher in the change because of the lower cost and better product of the previously government provided service.

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