Dinwar:
Just a note, I specified the small town limitation in the original scenario...it wasn't an addition. But I do admit the example was contrived, and not intended to be directly realistic. However, I am going somewhere with it...please bear with me and don't take it too personal
From my example, everyone who has responded has basically come up with "roads would be communal property", or some derviation thereof. Fair enough, I can agree with that. That's essentially what we have today...the city government builds and maintans roads, using taxes collected fromt eh residents and/or tolls and traffic fines, whatever.
Now, let's expand the scenario a bit. Town A has it's community roads, that extend out to the next two towns (B on the east, and C on the west).
So suppose Town A decides to block the roads between B and C? Let's say, for the sake of argument, that town C has opened a new store that sells more cheaply than the stores in Town A (they're a larger town, so get advantages of scale). This is driving Town A's business to lower profits. So Town A gets together and places a large toll on traffic headed from Town A out the road that leads to Town C...enough to counteract any savings that would be had by people going to Town C.
Or, even worse, because it is their property, they simply don't allow anyone who isn't a resident of Town A to leave on the road to Town C.
Yes, Town B or Town C could build a road around, but roads are expensive. Adn they site were they are for a reason...they're geenrally built on the path that people need to travel, along the best route (inexpensive to build and relatively direct). So any secondary road is not as good as the original.
In this scneario, the person who is most productive (Town C's store) is penalized for that very fact by it's competitors. This type of practice is still common today, when there aren't laws covering it...not specifically with roads but with other aspects of manufacturing and sales. Many of the obvious ways to exploit it (such as blocking off roads) are illegal or unworkable under current law.
The onyl way around this thype of event that I can see is, again, communal roads, but now not just one town but extended to neighboring towns. And then again, the same type of thing can happen so you extend the communal property idea between regions, etc.
Basically, you'd end up with a national communal road system...much like the government does today with public roads.
So, the only difference I can see between this idea, and having government-run public roads, is that in the government model there are procedures and policies in place for the people to have a say (at some level) in the roads, and remove those running it if enough people think fail to live up to expectations or handle it appropriately.
In the O-ism scenario, this would be run by whoever happened to be in the contract handling roads, and there would not necessarily be any means of redress involved for grievences. Roads could be closed, allowed to fail, built cheaply, or tolled as a means to control various localities, or favorably influence allied businesses while harming others.
Basically, in a best case scenario I don't see how it would be any different from public roads, except you wouldn't call it's leaders "government".
Adn the same would hold true for almost any necessary public works: water, sewage, power, and similar.
For that matter, look at health care in the U.S. Would a completely free market actually improve this? Or would it simply make better medicine available to those who, by work, luck, or chance of birth, were able to afford it at the cost of letting the poor die?
This is the point I was heading towards: In a best case scenario, O-ism looks a lot like government with a different name. In a worst case scenario, those who have are rewarded more than those who don't, even if they start with the same drive and ability...and those who have can takes steps to make sure those who don't never can.