The field of transportation provides a dramatic opportunity for the successful application of competitive principles. With the exception of the railroads, the rights-of-way—i.e., highways, waterways, and airways—are free public ways open to all on equal terms, subject only to police regulation in the interests of public order and safety. This ancient concept of a free public way is one of the oldest and most fundamental ideas in man's long quest for freedom. It provides a solid ideological basis for free competition in the transportation of goods and persons. Since we have free public ways and the technology for their effective utilization, the way is open to use them in accordance with our tradition of freedom. If we would only do so there would be no private monopoly by virtue of exclusive privilege; no private monopoly over access and use; no exercise of monopoly power in the form of discriminatory rates and services for use of these public ways. The whole elaborate structure of privilege that now legalizes and sustains private monopoly in the field of transportation could be discarded; the fumbling bureaucracy that now purports to regulate in the public interest but actually uses the powers of government to protect and subsidize monopoly could be transformed into an efficient police system for the maintenance of maximum competition in the provision of transportation services.
In order to effect this transition to a freer and more competitive system, two basic changes in policy would be required. First, all public ways—highways, waterways, and airways (including airports)—would have to be expanded and modernized to render them adequate for the increased volume of traffic that a low-cost, competitive system of transportation would generate. Present facilities are grossly inadequate, even for the traffic that moves under existing restrictions, and would be hopelessly deficient if these restrictions were removed. Provision of adequate facilities will require very large public investment, the magnitude of which is indicated by current proposals to invest over $100 billion in highways alone. Yet such investment is a necessary precondition for the exercise of maximum freedom in transportation, for if adequate public ways are lacking, such freedom cannot flourish. Public investment in free public ways, then, is par excellence a device for creating freedom of economic opportunity. This has been true from time immemorial and is perhaps more true in the modern economy than at any previous stage in history.
Second, restrictions on entry, whether by grants of privilege or private aggression, should be minimized so that men might be free to compete in supplying transportation service. This action, at one fell
swoop, would destroy the foundations of monopoly power in transportation and usher in a regime of competition. Specifically, it would involve decontrol of entry into highway, waterway, and air transportation. The authority of the Interstate Commerce Commission to restrict entry into highway and waterway transportation by refusal to grant certificates of public convenience and necessity should be rescinded. In the case of air transportation the "grandfather" clause in the Act of 1938 should be repealed, the Civil Aeronautics Board instructed to certificate additional carriers, and contracts for carrying the United States Mail let on a competitive bid basis. Entry into these fields thereafter should be expanded substantially, subject to uniform police regulations designed to insure public order and safety. Consistent with this action, other economic regulations, particularly control of rates and service, should be discarded in favor of competitive rate and service determination. If the public were adequately protected in respect to safety and performance by rigorous police regulation, freedom of entry and competitive rate-making would take care of the price and service problems satisfactorily.
Once government ceased to be a grantor of privilege and nursemaid for monopoly, its hands would be free and its position uncompromised for vigorous enforcement of the antitrust laws to maintain a healthy state of interindustry and interservice competition among the alternative forms of transport. Continuous vigilance would be required to prevent mergers of competing firms in the same field and mergers of firms providing alternative services; to stamp out conspiracies to fix rates, limit service, allocate territory, prorate traffic, or bar entry; and, above all, to prevent discrimination which, if allowed to proceed unchecked, will eventually destroy competition and lead to the restoration of monopoly. The role contemplated for government, then, is a twofold one: first, police regulation to insure public order and safety; second, antitrust enforcement to maintain a maximum degree of competition. If government lived up to its responsibility in these respects the nation's transportation services could be organized and conducted largely on a competitive basis. Even if the results fall short of ideal, or perfect, competition, as most assuredly will be the case, the net gain to society from the strengthening of competitive forces would be significant.