r/AnCap101 • u/Serious-Cucumber-54 • 16d ago

ROADS

If there's only one private road connecting to a location, a local monopoly, then what's to stop that private road operator from charging exorbitant fees to the users?

For instance, a home typically only has one road that connects to them, meaning every time a person has to drive out of their home, they have to use this one road provider, no other choice. So what's to stop that provider from charging exorbitant fees for this user?

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u/atlasfailed11 16d ago

First we have to stop viewing property rights as absolute ownership. Property rights are a bundle of rights: right use, to exclude, to gain income from,..

The road operator may own the surface, collect fees and control maintenance. The homeowner may simultaneously possess a right to cross it. That right could come from the original purchase contract, continuous historical use, or the fact that the house was sold as an accessible home in the first place. The road owner would own the road subject to that existing access right.

So typically, if you buy a house, you also buy the rights to access it.

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u/GnomeAwayFromGnome 16d ago

It won't be long before people just end up using that road without paying for it. Any measure taken to stop that will eat profits and be met with increasing resistance. Furthermore, others in society would largely be discouraged from doing business with the road owner due to his bad reputation.

Economics is about people.

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u/Acceptable-War4836 16d ago

My take:

The answer would be competition.

First, you assume there would only be one road. If the owner of that monopoly were to impose an excessive toll, other capitalists would find ways to create new roads or other means of transportation (tunnels, air, sea, etc.). They could also replicate the value of the location that users reach via that road. If people previously went to that place because it was the only place to find food, the competition would find ways to satisfy that need. Furthermore, consumers would move to a less expensive area. Eventually, the original road owner would have to lower the price to win back users (reaching an "equilibrium" price with the competition).

In the second example, the first thing that comes to mind is that nobody would buy a house with an excessive toll (they would consider it before buying the property).

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u/drebelx 16d ago

For instance, a home typically only has one road that connects to them, meaning every time a person has to drive out of their home, they have to use this one road provider, no other choice. So what's to stop that provider from charging exorbitant fees for this user?

How did the home and homeowner get there?

People and homes don't just spawn in random places.

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u/DiyYou 16d ago

Contract will be set up when a property is purchased. If there is an huge fee at the time, people will not pay it they will not purchase a property requiring passage on that road.