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IPFS News Link • Economics: Austrian

"Who Will Build the Roads?" Part 1

•, by Wendy McElroy

Much of the time, however, it is the dismissal of a complex argument and is intended to close off discussion with a glib victory.

It is annoying to answer and re-answer the same question for decades, but it is important to do so because the question "Who will build the roads?" captures a key obstacle to achieving a free economy. Namely, many people believe the private sector is either incapable of producing the goods and services society needs or that it would produce them in a destructive manner; for example, the profit-driven free market would produce such an expensive health system that the poor would be left to die.

"Who will build the roads?" There are many ways to answer this question. The Austrian economist Murray Rothbard liked to address the question by drawing a parallel. Rothbard's approach on this issue has been famously called "The Fable of the Shoes." If government had always enjoyed a monopoly on producing shoes, he observed, then someone who argued to privatize shoe-making would be viewed as heartless or moronic or both. "How could you!" defenders of the shoe monopoly would cry. "You must be opposed to the public and to poor people wearing shoes! And who would supply shoes … if the government got out of the business? Tell us that! Be constructive! It's easy to be negative and smart-alecky about government; but tell us who would supply shoes?" These defenders of a government shoe monopoly would have so closely identified government with shoe-making that an attack upon its monopoly would have become an attack on shoe-making itself and upon shoe wearers.

Rothbard's response of offering a parallel between shoe-making and road-building is powerful for several reasons.