On 05/31/2012 01:42 PM, Jed Rothwell wrote:
[...]
I have a similar set of quote for the canals that governments were
building all over Europe and the Erie canal in 1817, and the railroads
they soon subsidized, and the Transcontinental Railroad built with
Uncle Sam's loans in the 1860s, and later the transatlantic cable
(mainly a British government project) the automobile industry,
electrification, the highways, the airports, transistors, integrated
circuits, the Internet, the aerospace industry, weather satellites,
nuclear power, and all the other massive investments made by
governments in infrastructure and technology.
How pleasant! Governments take money from people through threats of
violence, to subsidize special interests.
[...]
In _every single case_ there has been a chorus of conservative people
saying "the government should not be picking winners and loses. If it
is real, it will come on its own." Maybe they were right, but most of
those technologies might have been delayed by 20 to 50 years.
If the technology is cost efficient, then the market will bring it. Even
if delayed by 20 to 50 years, this is a small price to pay for a moral
society run without threats of violence.
In every case, the overall investments made by governments has paid
back many times over. Individual ventures failed but overall the
projects succeeded.
Not true. There was no return for the people whose money was taken.
There was no poll of those people, before their money was taken, asking
if they'd be willing to invest. That's like the Mafia coming up to you
and saying, "you know that money we took from you last week? It turns
out it was a good investment, paying many times over."
The Transcontinental Railroad was arguably the best investment in
history.
For other people, maybe. But it wasn't an investment. An investment
entails risk of one's own capital. I can't take money from you, invest
it, and call it a success when it pays a good return.
People had been trying to build it for 15 years before the Civil War.
They were getting nowhere. San Francisco multi-millionaires who bet
$100,000 on poker (in 1855 dollars!) would not invest $1000 in a
railroad going back east. They had too many easy ways to make money to
run any risks.
This is another way of saying that the other investments during this
period were both profitable and of lower risk. Who knows what would have
come out of these investments if these people had had more money to
invest in the ventures they were interested in, instead of having their
money taken from them. When someone breaks a window, it's easy to see
the job that it creates for the window repair man, but no one sees who
would have benefited from that money if no window had been broken, when
the owner of that window spent the money on something else, instead.
[...]
Craig
