Entrepreneurs Build The Roads-And Government Closes Them

Posted: January 10, 2015 in Uncategorized

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By Matt McCaffrey | JANUARY 9, 2015

Last year, British entrepreneur Mike Watts made headlines when he opened England’s first private toll road in more than a hundred years.

The road has now been closed, but its brief history provides a sad (and all-too-typical) example of how government sabotages entrepreneurs and hurts their customers.

The basic story is as follows: after a local motorway was destroyed last February by a landslide, Watts and his wife put their life savings into building a small access road that allowed drivers to avoid a costly detour.

The toll road was an instant success, and Watts started to recoup his money by charging £2 per vehicle.

(Out of goodwill he also allowed many free riders to use the road, including to emergency vehicles.)

However, his success quickly attracted the attention of local government, which immediately set about trying to undermine the venture.

In a time-honored tactic, officials first questioned the safety of the road.

But after travelers saw it was perfectly reliable, the Bath and North East Somerset Council turned to more bureaucratic measures, obliging Watts to pay a £3,500 tax bill along with £25,000 in surveyor’s fees and ecological assessments.

Yet the road continued to attract large numbers of customers, not to mention worldwide media attention.

Increasingly embarrassed by Watts’ success and its own failure, the Council poured an additional £660,000 (for a total of £2.66m) into fixing the damaged motorway ahead of schedule.

Watts managed to keep his road open despite these political obstacles, but ultimately he failed to turn a profit.

Yet his idea was a good one.

In fact if anything, it was too good—the toll road didn’t fail the market test, only the political test.

Watts estimates he’s about £10,000 short on his money costs, so without the fees, he’d be £18,500 ahead.

It just goes to show that in the marketplace, solving a problem quickly and cheaply makes you wealthy; in politics, it makes you a target.

Yet despite all the trouble Watts has had to endure, he remains confident he made the right decision: “People ask, would I do it again?

And I say: ‘Yes, I would!’”

His optimism should serve as an example, but it also illustrates an important point: a strong entrepreneurial spirit, and the ethic of human service that goes with it, can’t be crushed by bureaucracy.

http://mises.org/blog/entrepreneurs-build-roads%E2%80%94and-government-closes-them

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