Free-Market Transport Policies: A Short Introduction.
Libertarians want to reduce the amount of government involvement in the transport sector. Indeed, anarcho-capitalists would prefer it if there was no role for the state whatsoever. Roads and railways would be privately owned and would not receive subsidies from taxpayers. At the same time, there would be no special taxes imposed on transport users (such as fuel duty). The price that drivers or passengers paid would be decided by the owners of the infrastructure, guided by the price mechanism, rather than imposed by government diktat (for example, the regulation of train fares or the setting of fuel duty rates). Bureaucratic bodies such as the Department for Transport or Transport for London would be abolished since there would no longer be any role for them.
The environmental impacts of transport would be addressed primarily through the free operation of land markets, although some forms of legal redress might also be possible in certain circumstances. Accordingly, the abolition of state town-planning regulations is essential if a free-market in transport is to be achieved. A voluntary system of private planning is required for the 'internalisation' of externalities via the land market.
Property developers and the owners of private settlements could compete with one another to attract residents, with environmental features forming an important element in the market. For example, some developments could be promoted as clean and quiet. On these sites there could be restrictions on certain types of vehicles, perhaps at certain times. Environmentalists could even develop settlements where cars were banned. However, they would not be able to impose their views on other property owners. A variety of 'environmental packages' would be possible and would reflect diverse subjective preferences in a far more refined manner than 'one size fits all' government policies.
Large scale environmental impacts, such as global warming, perhaps present greater problems for the libertarian case. 'Market' solutions like emissions trading are possible but these are rigged markets in the sense that the overall level of emissions would be under political control. Furthermore, it is not yet clear whether any measured warming is the result of human behaviour or natural processes (such as changes in solar radiation or volcanic activity). Nor can the magnitude of any hypothetical costs or benefits be objectively determined. It can be argued that any harmful effects of any anthropogenic global warming could be ameliorated by the application of libertarian principles. In other words, it is contended that state policies designed to address climate change are likely to be more harmful to human welfare than a reliance on free markets and property rights.
The anthropogenic global warming hypothesis has yet to proven. Natural climate change is, however, a constant process. Changes in the Earth's orbit, as well as variations in solar output and volcanic activity, mean climatic conditions are in a constant state of flux. Fortunately, free-markets enable individuals to adapt to new circumstances. In contrast, the socialist policies advocated by environmentalists would severely hamper attempts to cope with climate change. For example, strict regulation and high taxation would reduce the rate of technological innovation.
In a free market, congestion would be tackled in three key ways. User prices could be increased to reduce the number of vehicles, capacity could be increased to allow for more users, or economic activities could be dispersed from the congested areas (this last option would once again require the liberalisation of the planning system).
COMPULSORY PURCHASE/ EMINENT DOMAIN
Compulsory purchase, the forced appropriation of private land by the state, would not be an available option if libertarian principles were adhered to. Thus, road builders would have to purchase land through voluntary exchange. Of course, one way to increase capacity without having to consolidate strips of land would be to convert unprofitable railways and canals into highways.
FOR A MORE THOROUGH EXPOSITION OF FREE-MARKET TRANSPORT POLICIES SEE "RAIL IN A MARKET ECONOMY" IN THE RAILWAYS, THE MARKET AND THE GOVERNMENT, AVAILABLE AS A FREE DOWNLOAD FROM THE INSTITUTE OF ECONOMIC AFFAIRS.