Private business built this country

Published 8:55 am Wednesday, September 25, 2013

In a recent letter to the editor, Diane Kadrmas charged that it is government, not private enterprise, that built this country. I believe she is in error. Every day this summer, I drove a stretch of Interstate 90 through Austin that was undergoing maintenance. I saw the occasional yellow pickup with the Minnesota Department of Transportation logo on it, but the large equipment actually performing the work did not. Instead, I read things like “PCI Roads,” “Diamond Surface,” and “Safety Signs” on them. The government is not building these roads. Private enterprise is. Government has no resources of its own. It redirects resources for these projects from other individuals and private enterprises.

Whether we’re talking roads, medical or agricultural research, space exploration or what-have-you, the resources to accomplish these projects already exist. The industries that perform the work receive them by government redirection. I don’t dispute that there are in fact many projects that government has redirected resources for and that we derive a great amount of benefit from them. But free trade finds the most efficient use of resources. Resources used by mandate or subsidy are, from an economic sense, wasted. Somewhere, some other economic activity failed to occur because those resources were taken from someone else. What that was, we may never know.

Let’s take an example from history: The great Transcontinental Railroad was completed by the Union Pacific and Central Pacific railroad companies. The stakeholders in those companies had no experience in railroads, engineering or construction. They overextended credit and were fraught with illegal activities, exploited legal loopholes and cut corners, in order to finish faster than the other and obtain a greater share of the bounty afforded by the Pacific Railroad Act. What we’ll never know is whether some third company, say MacNamara Railway Inc., which did have the experience, was unable to develop technology that could have been used to complete that railroad with far less effort and cost.

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Some of the first mountain tunnels and passes were blasted using gunpowder and nitroglycerine. When dynamite was invented in 1867, it proved to be far safer and more effective. Had they waited and used dynamite from the outset, it could have been cheaper with fewer lives lost. Perhaps another company could have developed an even better explosive. Perhaps further metallurgical research by steel companies could have discovered better formulations for the rails making them lighter and stronger using metals that were in greater abundance and easier to produce.

I’ve taken a few liberties with “what-ifs,” and appreciate you allowing me to make my point. But, Diane, I’m not interested in receiving more benefits on average than what it costs others in taxes. I would prefer to know that what I have achieved, I achieved on my own. Where I do agree is that regulations are crafted by private enterprise and pushed by their lobbyists, but are the ones incapable of producing by their own motive power and prevailing under natural competition. The effects are not obvious, but they are certainly destructive.


Erik Schminke