On Sep 30th, the day before the National Day of China,
millions of Chinese drivers on the expressways got stuck in the enormous
traffic jams. It was not because of inclement weather or heavy traffic
controls. Instead, it was because during the four national holidays, the
expressways were free to use under a new policy. Everyone wanted to grab the
deal and millions of cars squeezed into the roads. In my opinion, “free” is
rather expensive and intervention of government will deeply harm the expressway
firms. Government should cancel all price controls in expressway tolls and let
the market decide the price. This would be the best and most efficient way.
Everyone knows that free is good. However, sometimes you
have to pay much more than you get from the free goods. As we saw on the news,
millions of cars rushed into the expressways and the roads were totally
congested. Millions of drivers and their families got stuck in the huge traffic
jams for more than ten hours. Many people were forced to change their travel
plans. Thousands of freight trucks were also stuck in the traffic. Some people
even paid more than time and money; a young man missed the last time to see his
father in the long traffic jam, only because he wanted to save the $40 toll.
[i] Apparently, since people tend to overuse free goods, the toll-free policy
will result in huge losses in society. Since the social loss is much greater
than the benefits drivers get, it would be more reasonable to charge people for
using the expressways instead of opening the gates free for everyone.
In addition, if you think requiring expressways to give free
access to cars during holidays is as normal as free admission in public museums
and public parks, you are making a big mistake here. The expressways in China
are not public infrastructures. They are mostly constructed and owned by
private firms. They are self-financing and seek their revenue from toll. Would
it be normal if the government requested all the grocery stores not to charge
people for buying groceries during national holidays? Would it be normal if the
government requested Apple store to distribute free iPhones to everyone during
Christmas? Yes, offering the “free thing” may be a social welfare.
Nevertheless, government does not have the right to deprive the rights of
private firms in charging people from using their goods.
In addition, any government intervention in a fully
functional market will lead to disruption and inefficiency. The expressway
market is highly efficient and it has been proved by the fact that China’s
expressways network became the longest highway system in a short 24 years,
while it took the United States over 50 years since the Congress passed the
Federal Aid Highway Act in 1956. Private firms are willing to invest, operate,
and maintain their expressways since there is huge revenue from tolls. On the
other hand, drivers pay to enjoy the convenience of a good expressway network.
This win-win status quo will be disrupted if government tries to lower the
tolls or even set it free. Private firms will hesitate to step into the
expressway market, and the maintenance and continued operation of expressways
will face difficulties due to financial issues. On the other hand, those who
really need to use expressways will be squeezed out by free-riders.
Government should cancel all expressways price control,
which will work best for the whole society. Any interruption of a perfectly
functional market like the Chinese expressway firms will disturb the economic
process that allows resources to go where they are most needed and will cause
inefficiency and social loss. Government intervention in expressway toll
pricing will not increase any social welfare but instead will lead to chaos in
the market of expressway firms and obstruct the future construction of
expressways.
