Today’s quote comes from a talk by Ayn Rand, I believe from the 1960’s, about the so-called Robber Barons of the 19th century, and how they were actually the greatest benefactors of the United States, contrary to what popular history tells us. About 5 minutes into the recording, which you can find here, she made a statement that jumped out at me enough to go over it repeatedly to write it down. The groups she is referring to are the Central Pacific and Union Pacific railroads.
In both cases, the main motive of the men involved in building these railroads, though not the exclusive but the main motive, was to acquire the subsidies, not to build a railroad. More than that, there was as yet no economic need for a transcontinental railroad. There was not enough freight to justify private investment, but the government, under propaganda similar to today’s and such excuses as the prestige of the country, decided to build a railroad and it did so by means of giving subsidies to private groups.
You could very easily substitute “green energy” for “transcontinental railroad” and the quote would be applicable to current government policy. How often do we hear “We are falling behind in green energy technology!” or similar slogans when the government touts its subsidies for such projects?
I guess the old saying is true: “Those who do not learn from history are doomed to repeat it.”
Good post. Everything old is new again. And again. And again. The History Channel ran a series “The Men Who Built America” about the titans of industry in the 19th and early 20th centuries (I’ve got the DVD set). Oddly, they neglected to mention the part government played in the expansion of the railroad system and the resulting power of the railroad tycoons. Even when they did point out that, during the depression of 1873 the over-building of the railroads nearly led to their collapse due to overcapacity and the lack of freight.
I wonder how much of that overcapacity was driven by government pushing the owners of the major railroads to expand into “under-served areas”?
There is a show on AMC about the building of the railroads called “Hell on Wheels.” In it there is a scene I recall where the man in charge of building the Union Pacific chooses to not go the more direct route, but to wind around in order to get more subsidies. So while that is not the government directly pushing the railroad to build in certain areas, it certain gives the incentive to NOT build the track in the most economical manner.
Contrast that to the railroad J. J. Hill built in the northern plains without the subsidies. And it was profitable.