Roads in a Market Economy.

• Author: Poole, Robert W., Jr.

Over the past 30 years, the federal government alone has spent some $79 billion subsidizing mass transit in a vain attempt to get Americans out of their cars. Yet we have more drivers than ever, and those drivers are driving more miles on average. And despite the large sums spent on carpooling propaganda and facilities over the past decade, the fraction of Americans driving alone to work increased from 65 percent in 1980 to 74 percent in 1990, while carpooling, transit use, walking, and bicycling all declined.

Americans prize personal mobility, but we pretty much take our roads for granted - except when they fail to meet our needs. Unfortunately, they are meeting our needs less and less well. According to the latest tally by the Texas Transportation Institute, Americans wasted $48 billion in 1992 stuck in urban traffic congestion. Potholes and rough pavements take a toll on our cars and trucks that is likely to get worse instead of better. As cars use less gas, the principal sources of highway funding - federal and state taxes of a fixed amount per gallon - are failing to keep pace with our increased driving and the resulting wear and tear on the roads.

All of which suggests that the time is ripe to fundamentally rethink how we provide roads. Longtime transport economist Gabriel Roth has done just that in this provocative new book, published on both sides of the Atlantic. Roth contrasts the management and operation of highway systems with those of the U.S. telecommunication system. In both cases, users employ their own equipment in a network made available by a variety of interconnected providers. As Roth notes, "Both roads and telecommunications are subject to congestion at specific times and places. However, the telecommunications sector - unlike the roads sector - has learned how to avoid the extremes of congestion and over-investment. It does this by adopting pricing rules and investment criteria developed in market economies to make the best use of scarce resources. In a nutshell: those who provide telecommunications services raise prices at periods of peak demand, and the increased revenues generated thereby attract the required additional investment to expand peak-period capacity."

Roth's premise is that we would have much more user-friendly roads if the road system were set up on commercial principles more like the telecommunications system's. Specifically, this would mean that, like telecom companies, road providers should have...