Zak Slayback on Privatizing Highways

July 28th, 2011

Zak Slayback is one of the star interns at the Harlan Institute. He wrote a really great piece on privatizing highways.

Yet the guise of competition continues as centralized planners auction off the rights to build their central plans. Furthermore, the signals sent via the price mechanism in a free market system allow the market to adjust to any changes much more quickly and efficiently than the current centrally-planned model under which we operate.

Knowledge is not something that can be aggregated and centrally-planned for a Department of Transportation bureaucrat to determine. Knowledge is something that must be acquired in small bits throughout the market, risks must be taken to acquire knowledge and no one man, or group of men for that matter, will posses the knowledge necessary to perfectly plan any specific endeavor. Why leave this, whatFriedrich Hayek, the Austrian economist and Nobel laureate, called the “knowledge problem”, to a group of individuals who are insulated from any signs and information translated to them via price signals? Major investments, especially those that require a large amount of information to property operate, such as highways, should be left to the system which best responds to market signals and the price mechanism: the free market.

Finally, there is a major moral issue at play when building any public works project, but especially highways: who pays for the highway and with what money? Under the current system, public works projects are paid for by the public. Who is “the public” and what gives moral authority to central planners to determine that all taxpayers in a given population should be forced to pay for the planners’ project? While it could be argued that public highways benefit an entire area, should those who decide against using the highway and its related infrastructure be forced to pay for it? This is perhaps the largest flaw with any argument favoring the public completion of Route 219. Using public funds to finish a highway that the entire public has not directly consented to is coercion.

The state is not some kind of benevolent deity that reaches out from Harrisburg or Washington and grants the public its own highways; the state must fund its creations, and because the state cannot create wealth, it must forcibly take this wealth from the populace. The French political economist Frederic Bastiat expands on this concept of destroyed wealth in his essay “What is Seen and What is Not Seen,” but he can be proficiently summed up in a simple quote: “everyone wants to live at the expense of the state. They forget that the state wants to live at the expense of everyone.”

Read it, and try to grasp that Zak is only 17. When I was 17 I had no idea who Hayek or Bastiat were. Really, unbelievable. Keep your eye on him.