But, I should add that the oil companies would most likely not get in the road business. They are good at finding oil, refining it, and supplying it to society. They are not good at planning, building, and maintaining infrastructure. Oil companies are not investing in the current privatizations, such as the PA turnpike. They even pool from different types of investors, although certain oil companies may decide to form strategic alliances with certain infrastructure companies.

When a private firm becomes too corrupt to sustain itself, it will fail, and more appropriately sized firms will take it’s market share. The big dig is the perfect example of the public overseeing a project that would be better done by a private entity. Of course, there were many private consultants and contractors, but the overall incentive to save money can be overridden by personal ambitions, or political clout of the public agency. But, when a public agency is corrupt, it doesn’t fail, it just drains more money from taxpayers.

The essence of economics is that one party takes advantage of an inefficient transaction or an ignorant party and as a result profits. If the world was fair, we wouldn’t have markets nor money and everyone would simply trade with one another for what they need.

I don’t think the essence of economics is one party getting over on another. (although it does happen) In a typical transaction, both parties look at the transaction in relation to other opportunities to spend/invest money or provide goods and services. If everyone traded for what they needed, that would be considered a market, by definition. Money is just a representation of value, that can be traded like goods.

keep their roads and sell them to us as they wish. That is the desired objective, but without the lobbyists. But, even with the lobbyists, its better than the current situation. It is better to have the roads owned, operated, maintained, and sold by the private companies than the current socialized system. Currently, the costs are spread throughout society, while the benefits are enjoyed by the users. This has lead to the “tragedy of the commons” and overuse of roads, automobiles, and thus gas.

You’re right that larger scales allow for greater efficiency, however processes on a larger scale also create a wider window for corruption to seep through. As the process becomes more efficient, there are more opportunities for someone to throw a wrench in the line and ask for some grease to fix it. I’ve seen tons and tons of instances of it here in Massachusetts from the Big Dig with its countless issues to the Mass Pike, which was supposed to shut down years ago, to the MBTA which has the highest paid public official and one of the worst track records.

In essence, that is the problem with large scale processes, they require large amounts of capital and the most likely way that large amounts of capital accumulates in one place is through some corrupt mean. The essence of economics is that one party takes advantage of an inefficient transaction or an ignorant party and as a result profits. If the world was fair, we wouldn’t have markets nor money and everyone would simply trade with one another for what they need.

A free market is a great solution for we are far away from having a free market. However, the big issue with a free market is everything has to be reset; otherwise, the rich will attempt to bypass the free market in order to maintain their current wealth. The free market was restricted to protect the public from rich tyrants but now restrictions are constantly put in place to protect the rich tyrants from the public!

Right now, if we set up a free market for roads your long-term concern would become very, very valid. The rich (whether real people or fake people, e.g. corporations) would seize up the roads and would immediately go about hiring lobbyists, lawyers, contractors, security, analysts and anyone else who could help them keep their roads and sell them to us as they wish.

That would be interesting if the oil companies owned the roads. I guess it would be in their best interest to keep costs of gas low. OR keep roads cheap. They are complementary products. I doubt they would view bicycles as much of a threat.

Small units are not universally better. For many industries, efficiency can be gained through larger scale.

However, roads are potentially a huge industry that would not easily be consolidated. For example, the PA Turnpike was just leased for 12.8B. That’s already an extremely large scale investment of capital that is not easy to put together.

In a free market, firms would naturally tend towards optimal size. Businesses that are too small, may be consolidated with other firms to a more efficient scale, while companies that become too large will either have to downsize to compete, or fail.

My long-term concern, based on your point is that these huge road companies would become very powerful lobbyists…

If we completely privatized roads, what would happen to bicyclists when the oil corporations buy up all the roads and ban un-motorized vehicles? The problem is not public vs. private, the problem is big vs. small. Small, local units (decentralized power) are way more efficient than big, unwieldy behemoths looking to centralize power in their own hands.

Down with big government and big business, up with us.

For example, I spent five years designing infrastructure for the public sector. There is a complete lack of innovation. I was forced to use antiquated design standards and only use technologies that were compatible with the public agency’s severely lagging approved systems. And then, my designs were reviewed by several bureaucracies. Each bureaucracy would have me make changes to designs simply because their engineers weren’t bright enough to understand the modern techniques I used to design and modern methods I recommended. Had my clients been private companies, I can only imagine how much more innovative and cost-effective the designs would have been. I couldn’t stay in an industry that rejected innovation.

I assume the same goes for the other bureaucracies you mention. The post office, schools, parks, etc. have no incentive to innovate since resources are better allocated to finding ways to get more money from their funding source to make improvements.

So, I predict that in the years to come we will look at the developing world for transportation innovation. The private infrastructure business will usher in new ideas that have been suppressed by the developed world’s socialized infrastructure planning.

- UPS/FedEx vs. the USPS
- Private schools vs. public schools, especially religious schools, and higher education
- Private housing vs. public housing
- Private gardens vs. public parks

But more to the point, I think that one thing that we’re both overlooking is that private businesses have a huge incentive to innovate and to be inventive. That is, without stifling bureaucracies, a yet-uninvented way of moving people might emerge that goes beyond highways vs. subways. For that matter, you could say that this has already happened with telecommuting and Internet commerce, which have made many trips obsolete.

One could debate whether mass transportation or highways get more subsidies. But it seems indisputable that transportation itself, regardless of mode, is subsidized. In whose interest is it to have people travel more (by *any* means) than they would if they had to pay the actual cost? (I think that was a rhetorical question…)