Road pricing enters the Overton window in the UK.

This is supermassive news. Road pricing essentially means a network of CCTV cameras tracking all movement on the nation’s roads. Astonishingly, we already have this:

“Every time you make a car journey already, you’ll be on CCTV somewhere. The difference is that, in future, the car’s index plates will be read as well,” said Frank Whiteley, Chief Constable of Hertfordshire and chairman of the Acpo steering committee on automatic number plate recognition (ANPR).

One perverse incentive generated by the system is that driving over 100mph may help you evade detection. The network is also presumably only concentrating on major routes, so escaping to Brazil via B-roads remains a possibility for now.

I’m really not shocked that the government is trying to expand its citizen-monitoring programme; what’s shocking is how they have inadvertently come to endorse the arch-liberal scheme of road pricing. Road-usage tracking is the enabling technology for the complete privatisation of roads.

From volume 3 of the report:

1.35 The Stern Review argued that prices should be used to reflect the externalities associated with climate change. The same is true for congestion: users should pay the full costs of their journey, including a carbon price and a congestion price.

(Is congestion an externality? I suppose it is. When 2 million consumers tried to buy 100,000 PS3s last week, the congestion was dealt with by said PS3s ending up on eBay for $3,000.)

Road pricing is eminently fair: busy roads like the M25 need more maintenance, and it stands to reason that the people who pay for the M25 should be those that use it most, and not those living in, say, Aberdeen. The converse of this is that Londoners shouldn’t pay for Scottish roads. This is a political problem, since rural places can’t afford their own high quality roads. The vast network of well-lit, well-marked, well-maintained and metalled country lanes exists because of mass-subsidisation by the taxpayer.

There is a very good reason why cities came about: because transport is expensive, and having people and things live closer to each other means less transport is necessary. It makes good economic sense to live in high-density cities, and poor economic sense to live out in the middle of nowhere. The aforementioned subsidisation of country roads has so distorted the transport market that nobody seems to notice these costs, but with only dirt tracks connecting London to, say, Skegness, it would instantly become a lot more expensive and unpleasant to live in Skegness.

Nevertheless, living in a low-density area is enjoyable. People escape to the country. It’s quieter, it smells nicer, the houses are bigger, crime is lower, and nature is good for the soul. Would it be so enjoyable if driving to the out-of-town Waitrose was harder? Would it be so enjoyable if going anywhere else was a major ordeal, and if nobody ever came to visit? Undoubtedly no. Rural house prices would plummet in places that couldn’t afford their own road links (and roads are very expensive).

I controversially submit that this is how it should be.

The largely-wealthy population in the countryside should not be subsidised by the largely-poor population in the cities. Even from a redistributivist theory of political economy, that would be bizarre. There is a direct cost to living in remote, inaccessible, yet beautiful, places, and those who choose to do so should not expect the rest of us to pay it.

An end to the mass-subsidisation of roads would inevitably increase the cost of some, while reducing the cost of others. In satellite cities, a high road price due to a small market would make traditional rail links more economically viable. This is how it always used to be, and for mass transport of goods, trains really are better.

Of course, while the idea that roads should pay for their own maintenance may have entered the Overton window, the idea that people should pay for their own lifestyles has not. The government will not let country roads fall into disrepair as people refuse to pay for them, so the entire scheme may yet end up as just another excuse to expand the database state and keep tabs on law-abiding citizens.

A slightly useful explanation of the rights and wrongs of limited liability.

I think it could be expressed more clearly, but it does seem that the idea of limited liability is a perfectly logical conclusion of the right to contract. I think I understand this.

When an individual mortgages his house by specifying that the only collateral is the house itself, both the lender and the borrower accept some risk, but the borrower is not obliged to surrender anything more than the house in the event of a default. The parties agree, and a contract is formed. This doesn’t seem immoral or irrational or bad in any way.

Similarly, when a shareholder invests in a corporation, he is not obliged to surrender anything more than the value of his investment in the event of a corporate collapse. Creditors of the corporation must exercise caveat emptor when dealing with the corporation: if they don’t like the fact that the corporation may go bankrupt and be unable to perform its obligations, they shouldn’t deal with it.

For third parties who are harmed by the activities of the corporation, tort law need not give the decision makers of the corporation an easy ride. If an executive orders toxic waste to be dumped into the sea, it is the executive who should go to jail, not the investors.

Finally, any attempt to end limited liability will be circumvented by ordinary contracts, unless draconian laws are passed limiting the ability to use a contract to transfer risk. That’s essentially the whole point of a contract, so it’s not going to happen any time soon.