All Hail Big Government?

In a period (probably a short one) in which big government is under siege, it is unsurprising to see Leviathan’s advocates attempting to defend that mighty beast.  However, they’ve really gone overboard into the realm of indefensible hyperbole of late.  And I say that as someone who does not deny that the state has a proper role to play in a free society.

Exhibit A:  Vice President Joe Biden

Every single great idea that has marked the 21st century, the 20th century and the 19th century has required government vision and government incentive.  In the middle of the Civil War you had a guy named Lincoln paying people $16,000 for every 40 miles of track they laid across the continental United States. … No private enterprise would have done that for another 35 years.

Exhibit B:  Laurie Fendrich, of Hofstra University and the Chronicle of Higher Education, who thanks the federal government for everything from the lack of “lots and lots of plane crashes” to the prevention of “Endless Love Canals, without anyone or any company ever being held accountable.”  Her love letter to big government ends this way: “Me, I like having a big and powerful federal government.”

I’m not sure which argument is more problematic, though we probably should give Fendrich more slack since she is a painter and arts professor and so probably hasn’t spent a lot of time thinking about and studying these issues. 

So, Biden first.  His argument is so obviously false that debunking it is like shooting fish in a barrel.  Think about some of the defining inventions and discoveries of the last 200 years: refrigeration and the refrigerator, the sewing machine, combine harvestors, baseball, the dishwasher, etc, etc.  Did these require government vision and incentive?  Maybe patent protection helped, but I’m pretty sure that Biden was not talking about this governmental role (and there are many who would question how effective patents are at promoting the general good anyway).  Moreover, if we grant that government has recently played a larger role in the development of new ideas, that would be hardly surprising given how much money the federal government dispurses in general for research, education, infrastructure, etc.  The question is how efficient this effort has been compared to alternative uses of the scarce resources conscripted for the tasks.

As for the railroad argument, Nobel Prize winning economist Robert Fogel essentially debunked the notion that the railroad was such a big deal.  According to one summary:

[Fogel’s] master’s thesis, which later grew into a doctoral dissertation and the subject of his second book, tested the notion, he says, that railroads constituted “the greatest technological innovation of the 19th century, the engine that pushed forward the whole of the American economy.” Initially expecting to find numbers to bolster that consensus, Fogel uncovered the opposite. In Railroads and American Economic Growth: Essays in Economic History (Johns Hopkins Press, 1963), he used data on 19th-century agricultural commodities, transport costs, land value, and canal usage to dismantle what he called the “axiom of indispensability.” Even if the first rail had never been laid, he argued, the per capita income that America reached on New Year’s Day 1890, about the time the United States became the world’s largest economy, would have been delayed by only about three months.

Of course, this does not mean that the government does not have a role to play in building large-scale infrastructure like roads.  However, it does suggest that Biden’s argument about the wisdom of government pushing certain ideas or technologies that the private sector would not is overrated (especially when they come with such large price tags).

Now for Fendrich.  Do we really think that, in the absence of a large federal government, planes would today be regularly falling out of the sky?  Don’t airlines have a special incentive to make sure that this scenario does not come to pass?  Planes are expensive.  The things they hit and damage/destroy are expensive.  And imagine all of the lawsuits that would be filed by the owners of those things hit and destroyed, not to mention by the families of dead passengers (and a tort system necessary for such suits does not require the kind of big and powerful federal government Fendrich supports).  Of course, these airlines would hardly exist the way they do today if they didn’t help develop safe skies on their own, as passengers would choose alternative transportation if the cost of flying could frequently include death!  My guess is that the NTSB makes the skies marginally safer because it has powers to investigate crashes that airlines on their own or attorneys doing discovery in trials would not have.  But I think the self-interest of airlines and passengers alone makes Fendrich’s counterfactual unlikely.

As for Love Canal, the Niagara Falls Board of Education played a big role in the disaster (see here on page 2), and state government enforcing liability and performing its other proper duties could certainly handle these cases in the absence of the Federal Government.     

6 thoughts on “All Hail Big Government?

  1. Fogel’s thesis is, to put it mildly, not universally accepted, and even on Earth-Fogel you need a massive network of canals to take the place of the railroads, and that’s probably going to be built by the Feds.

    1. As for the status of Fogel’s thesis in the field, I’m willing to grant it is debatable.

      However, in response to your other point, note that my argument was as follows:

      “Of course, this does not mean that the government does not have a role to play in building large-scale infrastructure like roads. However, it does suggest that Biden’s argument about the wisdom of government pushing certain ideas or technologies that the private sector would not is overrated (especially when they come with such large price tags).”

  2. Joe Biden’s a politician, not a scholar, and I just don’t see how he’s responsible for getting the precise contributions of the railroads to the nineteenth century economy right here, particularly if you grant that Fogel’s thesis is debated. Attacking politician boilerplate for not living up to scholarly standards is something you could spend all eternity doing to no real purpose.

    1. Assuming I grant that he ought not be expected to know about the scholarly literature on railroads, the first part of his argument is still absolutely worth refuting – and he should know better even if he is a politician, especially if he is making an argument about what government ought to be doing in light of past experience.

      And why do we think that politicians shouldn’t be well-read on areas that they impact far more than mere scholars?

  3. And why do we think that politicians shouldn’t be well-read on areas that they impact far more than mere scholars?

    One reason is that scholars are supposed to have more time for reading. Of course, in this particular case, Joe Biden isn’t going to have any impact on the nineteenth-century American economy unless he invents a time machine (presumably with the support of the Federal Government.)

    As far as Biden’s “nothing happens without the Federal government” thesis, I’m not trying to defend him there–it was a foolish thing to say.

  4. The most amazing thing about Biden’s statment is not its fundamental ridiculousness; it is that he thinks making a sweeping statement about the virtue of big government is what his party needs at this point in the game. Truly stunning.

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