"Smart" Roads versus Private Roads

IBM, along with the Intelligent Transportation Society of America, is offering a $50,000 prize for the best idea that will "produce smarter infrastructure." (HT: Write On Metro) According to the New York Times:

In the United States, highway problems are exacerbated because the basic federal gasoline tax used to finance roads has not been raised since 1993. The funds the tax generates have not kept up with inflation, deterioration in highways or maintenance costs, and the revenue has also been reduced by the adoption of more fuel-efficient vehicles. Vehicles that burn less fuel pay less tax, but wear out highways at the same rate. Vehicles that consume no gasoline or diesel at all, like electrics or hydrogen, will of course pay no tax.

In consequence, I.B.M. reports, more governments are looking to supplement or replace fuel taxes. I.B.M. programmers are working on systems to charge per-mile user fees as an alternative.

Traffic congestion is a result of a simple law of economics: Demand for roads has increased at a faster rate than governments can provide a supply. And demand has increased because the cost of using the roads is hidden in gasoline and other taxes.

While charging drivers on a mileage basis might appear to be a market oriented solution, it isn't. Nor it will not solve the problem. The real solution to traffic congestion is to adopt a true market solution--privatize the roads. So long as roads remain "public" property traffic congestion will only grow worse.

As with any "public" property, the "owners" of roadways have little incentive to maximize the experience of users. Certainly, government officials must listen to the complaints of citizens, and they engage in an endless process of building new roads and expanding existing ones. But clearly government has not been able to keep up with the demand.

This is seldom a problem when a product or service is provided by a private business. The exploding demand for cell phones, computers, and other technology has not resulted in shortages, but an abundance of products and choices for consumers.

Where government officials are dominated by political considerations, private businesses are guided by the desires and needs of consumers. Where government officials ultimately impose one "solution" on the entire community, private businesses offer multiple solutions and allow consumers to pick those that best fit their interests. Where government seeks to develop a consensus and appeal to the noisiest groups, private businesses seek to offer better, cheaper, more efficient products and services.

What is true of cell phones, computers, video games, restaurants, delivery services, retail stores, and countless other businesses is equally true of roadways and infrastructure. Motivated by their desire for profits, private companies seek new and innovative ways to meet demand, and they often do so in ways that no government bureaucrat could ever imagine. And importantly, private businesses cannot force consumers to purchase their offerings; government officials can.

Admittedly, privatizing the roadways would be a complex undertaking. But the complexity in applying a principle does not negate that principle.

If IBM truly wants a "smart" solution, it should begin by recognizing the fact that individuals and businesses must be free to act on their own judgment. Recognizing and protecting the right of each individual to to think and act without interference from others--including government--is not only "smart", i.e., practical, it is also moral.

The "Right" to Hot Water

On Wednesday the Houston city council approved an ordinance requiring the Public Works Department to inspect apartment complexes every four years. Rep. Dwayne Bohac, R-Houston, authored a state bill requiring the city to enact the legislation. Bohac called this "a basic human rights bill":

The basic right is to live in a structurally sound, safe environment where there is running water at the right temperature and they (the tenants) don't have to be fearful walking through their parking lot and it's lighted correctly and the balconies aren't falling down and the pools are protected.

Such claims are to be expected from Democrats, who routinely create "rights" out of thin air. That a Republican is now doing the same shows just how far to the left the Republicans have drifted.

The Founding Fathers correctly identified our fundamental rights as life, liberty, property, and the pursuit of happiness. Such rights pertain to action, not the results of actions. Such rights sanction the individual's freedom to pursue his values and interests without interference from others.

But now we have intellectual Neanderthals like Bohac asserting that we also have a right to water that is at the "right" temperature and parking lots that are lighted "correctly". "Right" and "correctly" by whose standard? And why should that standard be imposed on every apartment owner in the city?

I certainly doubt that many (if any) Houstonians desire to live in an apartment with no hot water, dark and dangerous parking lots, and a rickety balcony. But short of fraud or negligence, apartment owners have a right to offer unkempt housing. And renters have a right to accept such housing or find an alternative more to their liking.

Apartment owners will be forced to pay a fee of $4 per unit for the inspections, which the city says will only pay for half of the cost. The remainder of the cost will come from permit fees issued by the Public Works Department. Or at least, that is what the city would like us to believe.

At the end of the day, it will be the tenants (and their fellow Houstonians) who are paying for these inspections. Rents will increase as owners seek to recover the costs of the inspections and the repairs that the city will require them to make. Mayor White, who had already been cracking down on apartment complexes, hailed the ordinance:

We've shut down, for the first time that anyone can remember, apartment buildings that had slum conditions that are not worthy of this city.

Undoubtedly, more complexes will be shuttered, resulting in fewer housing options for low-income renters. The higher demand for the smaller housing supply will also cause prices to increase. The net economic result of the ordinance will be devastating to low-income renters.

In their rush to "help" these tenants the city tramples on the legitimate rights of the property owners, as well as the rights of the tenants. White and his cronies on city council can go home to their cushy homes, sip martinis, and pat themselves on the back for "helping" the poor and downtrodden. And when the housing supply shrinks, the city will come to the "rescue" once again and provide assistance for those who cannot afford housing.

This ordinance--like all laws that violate property rights--will distort the market. It will have repercussions that the city did not, and cannot, anticipate. And then the city will use the resulting problems to justify more intervention.

The fact is, a market exists for low-income rental housing--if there wasn't, such housing would not be available. By its very nature, such housing will be low quality. Some government officials believe that nobody should have to live in such conditions. And they are correct--short of government edicts nobody has to live in such conditions.

Rather than protect the rights of all individuals--including the right to offer substandard housing, and the right to live in such apartments--government officials want to simply make it go away. But their commandments will not make the demand for such housing disappear--they will only make the situation worse.

Houston's Tunnel System: A Lesson in Self-Interest

We are often told that infrastructure, such as roads, bridges, water, and sanitation must be provided by government. Private individuals and businesses we are also told, cannot and would not provide such crucial facilities. Houstonians can find ample evidence that such claims are false simply by looking at downtown. Or more accurately, by looking below downtown.

One of Houston's hidden gems, and to me one of its most endearing features, is the downtown tunnel system. The tunnel system, which began in 1931, is more than 6 miles long and connects dozens of downtown buildings. And perhaps the most interesting part is, the entire system is privately owned and operated.

The tunnel is essentially an underground mall with restaurants, retail stores, doctors, and other services available for downtown workers. The system also allows pedestrians to travel from building to building without confronting traffic, rain, or heat. These amenities have become so important to downtown workers that new buildings downtown consider it crucial to connect to the system.

While statists argue that large projects such as the tunnel system requirement government involvement, the tunnel system demonstrates that private businesses can and do work together cooperatively. Doing so makes each individual building more valuable and provides additional revenue to the building owner. In short, the building developers are, as a recent Chronicle story put it, "acting in mutual self-interest."

The virtue of self-interest is generally maligned. It is usually viewed as a dog-eat-dog scenario, in which each individual pursues his own interests to the detriment of others. But as the tunnel system demonstrates, the pursuit of one's self-interest is nothing of the sort. Working together often has benefits for each party involved, and when individuals are free of government controls they are able to judge each situation and act accordingly.

The view that an individual's self-interest can only be achieved at the expense of others is one of the most destructive consequences of altruism. Those who hold such a view are, as Ayn Rand put it, confessing

their own belief that to injure, enslave, rob or murder others is in man’s self-interest—which he must selflessly renounce. The idea that man’s self-interest can be served only by a non-sacrificial relationship with others has never occurred to those humanitarian apostles of unselfishness, who proclaim their desire to achieve the brotherhood of men.

To the altruist life requires sacrifice, whether of oneself to others or of others to oneself. The only issue is who will sacrifice and who will benefit. Politically, we see this made manifest in the special interest groups that clamor for government favors. We see it in restrictions on individual liberty in the name of the "common good". We see it in the growing number of schemes to redistribute wealth. All of these examples--and countless more--are the logical result of altruism. All require some individuals to sacrifice for the alleged benefit of others, with the result that the political process becomes a battle to determine the victims and the victimizers.

The tunnel system is a refutation of this view. It demonstrates that businesses that are seeking their own self-interest--more profits through higher occupancy rates and higher rents--can accomplish this without harming others. By working together they make their individual buildings more attractive to tenants and their employees, which benefits everyone, including the tenants, employees, and owners in other buildings.

These are the types of cooperative actions that are only possible when men are free of government controls and regulations. When men are free to act according to their own rational judgment, they find innovative solutions that are impossible for government bureaucrats to even imagine.

As an example, and in stark contrast to the private tunnel system, numerous downtown government buildings are also connected by tunnels. Unlike the private system, these tunnels are not well maintained, are drab and unattractive, and are completely empty of retail shops and restaurants (this may have changed since my last visit several years ago, but I doubt it). They serve a single purpose and offer no amenities.

I love Houston's glorious skyline, and my adoration goes much deeper--both literally and figuratively. The majestic skyscrapers throughout downtown rest on more than concrete foundations. Their construction was made possible by the ethical principles demonstrated below street level--free men pursuing their own self-interest.