Liberty Maven

Using the words “state” and “force” in a title may be redundant, but this time the market is doing its job forcing the states to reevaluate holding certain physical assets. Many states in America are desperate for money. A few states have started considering  selling off public roads, lands, infrastructure, and services to help with the bottom line.

From an AP article:

ST. PAUL, Minn. – Minnesota is deep in the hole financially, but the state still owns a premier golf resort, a sprawling amateur sports complex, a big airport, a major zoo and land holdings the size of the Central American country of Belize.

Valuables like these are in for a closer look as 44 states cope with deficits.

Like families pawning the silver to get through a tight spot, states such as Minnesota, New York, Massachusetts and Illinois are thinking of selling or leasing toll roads, parks, lotteries and other assets to raise desperately needed cash.

I’d much rather this be done willingly rather than in desperation. Initially I can’t help but applaud such moves toward privatization. However, I wonder if the desperation road is marked with elusive potholes.

What happens if roads are privatized and tolls are collected? Wouldn’t that force more people on the public roads? This point is brought up in the AP article.

Taxpayers, too, can lose out if the arrangements don’t work — and sometimes even if they do, said Mark Price, a labor economist with the Keystone Research Center in Harrisburg, Pa. Higher tolls on privatized roads can push drivers onto state-operated roads, wearing them down faster and raising public costs over time.

“You’re privatizing some profits in this process and socializing some losses,” Price said.

The libertarian solution to this side effect would be that all roads be made private. However unlikely, there are definite benefits to this approach. For an interesting discussion on this topic listen to Walter Block on “Road Socialism” with Lew Rockwell.

Some will also be concerned about the purchaser of these public assets. What if foreign countries buy them? How will they be managed properly? Could a foreign power utilize their ownership of our infrastructure against us?

I largely believe that this worry is overblown. There are two parties in any transaction. Are the states selling the property going to agree to a deal like this? Contrary to what the sensationalists on the right think,  I seriously doubt the state of New York would agree to sell the Tappan Zee Bridge to Iran, for instance.

Ultimately, I find this news more positive than troubling. In this day and age of  “change” it is refreshing to witness steps toward free market ideas, even if the steps are baby steps and are being made out of desperation rather than principle.